Isis Pharmaceuticals Inc.
) reported a net loss of 24 cents per share in the first quarter of
2012, above the year-ago loss of 20 cents but a penny below the
Zacks Consensus loss Estimate. Revenues increased 9.9% to $23.2
million, missing the Zacks Consensus Estimate of $27 million.
Higher operating expenses led to the year-over-year increase in
Quarter in Detail
Revenues include license fees, milestone-related payments and
other payments. First quarter 2012 revenues included the
amortization of the $29 million upfront fee received from
) earlier this year.
Operating expenses increased 11.9% during the quarter to $41.7
million mainly due to the advancement of Isis Pharma's pipeline.
While research and development expenses increased 13.1% to $38.7
million, general and administrative expenses declined 1.1% to $2.9
With Isis Pharma completing its $125 million funding obligation
for Kynamro, Kynamro development expenses will be shared equally
with Genzyme from 2012 until the product becomes profitable. As a
result, Isis Pharma's share of Kynamro related expenses are
Update on Kynamro
Isis Pharma and partner Genzyme - a
) subsidiary - filed for European approval of Isis Pharma's lead
pipeline candidate, Kynamro (mipomersen), in July 2011. The
companies are seeking approval for patients with homozygous
familial hypercholesterolemia (FH) and severe heterozygous FH.
The US application was submitted in March 2012. The companies
are seeking FDA approval for the use of Kynamro for the treatment
of patients with homozygous familial hypercholesterolemia (HoFH).
Isis Pharma said that Genzyme is preparing for the EU launch of
Kynamro later this year.
Meanwhile, Isis Pharma and Genzyme are conducting a 12-month
study (FOCUS FH - saFety and atherOgeniC lipoprotein redUction of
mipomerSen in FH) with Kynamro. The study is being conducted to
support the expansion of the initial label and support an
alternative dosing regimen (three times a week). The study is being
conducted under the FDA's Special Protocol Assessment (SPA)
The acceptance of the Kynamro new drug application (NDA) filing
and approval in the US will trigger milestone payments of $25
million each from Genzyme. While the $25 million milestone payment
for the acceptance of the NDA filing will most likely be earned in
the second quarter of 2012, the $25 million milestone payment for
the approval of Kynamro will be due in 2013 given the January 2013
FDA action date. Expenses are expected to go up about 10% from 2011
levels mainly due to the expansion and maturation of the
Neutral on Isis Pharma
We currently have a Neutral recommendation on Isis Pharma, which
carries a Zacks #3 Rank (short-term 'Hold' rating). We are positive
on Isis' agreements with
) and Biogen which not only validate its antisense technology but
also provide Isis with funds in the form of upfront, milestone and
other payments. With the EU filing of lead candidate, Kynamro,
taking place in July 2011 and the US filing in March 2012, Isis
could be in a position to launch the product in 2012. We expect
investor focus to remain on the regulatory progress of Kynamro.
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