Roche Teams Up with Isis - Analyst Blog

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Roche ( RHHBY ) recently announced an alliance with Isis Pharmaceuticals, Inc ( ISIS ) to develop therapies for Huntington's disease (HD).

This alliance will combine Isis' antisense oligonucleotide (ASO) technology with Roche's scientific expertise to develop neurodegenerative therapeutics for treating HD.

Isis develops antisense drug discovery programs targeting cardiovascular, severe and rare neurologic and metabolic diseases and cancer.

In addition, Roche will combine its proprietary brain shuttle technology with Isis ASO technology to enable systemic administration of antisense drugs for treating asymptomatic patients.

As per the agreement, Roche will make an upfront payment of $30 million to Isis. The total payment comprising license fee and pre- and post-licensing milestone payments is expected to touch $362 million including potential commercial milestone payments up to $80 million.

Additionally, Isis is eligible to receive royalties on sales of the drugs whereas Roche has the option to license the drugs from Isis through the completion of the first phase I trial. Before Roche exercises this option, Isis will be responsible for discovering and developing of an antisense drug targeting huntingtin (HTT) protein in collaboration with Roche.

Once Roche exercises its option, it will be responsible for the global development, regulatory and commercialization activities for all drugs resulting from the alliance. As per Roche, currently there is no effective cure for HD.

We are positive on the deal with Isis as the market for HD represents a huge unmet medical need.

The deal comes close on the heels of the Japanese approval of the subcutaneous injectable version of Roche's rheumatoid arthritis (RA) drug Actemra (tocilizumab). The subcutaneous version of the drug has been approved for treating RA patients who have not responded adequately to one or more existing medications for the disease.

Actemra primarily faces competition from AbbVie Inc.'s ( ABBV ) Humira in the RA space.

Roche, a large cap pharma company, carries a Zacks Rank #4 (Sell). Favorably placed large cap pharma stocks include Novartis ( NVS ) with a Zacks Rank #2 (Buy).

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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