In a deal reflecting the recent forward momentum of Isis Pharmaceuticals' second-generation antisense inhibitors, the Carlsbad, Calif., company has licensed two preclinical antisense compounds to Johnson & Johnson subsidiary Ortho-McNeil for treatment of type 2 diabetes.

Under the licensing deal, announced by Isis Sept. 13 and worth upwards of $400 million, Ortho-McNeil will pay an up-front licensing fee of $45 million in exchange for the rights to two candidates. In addition, the company will provide Isis with R&D funding to develop additional novel drugs to treat metabolic diseases, including obesity.

The two lead drug candidates, ISIS 325568 and ISIS 377131, are selective inhibitors of the production of glucagon receptor (GCGR) and glucocorticoid receptor (GCCR), respectively, Isis CEO Stanley Crooke said in a same-day conference call with investors.

In preclinical studies, antisense inhibitors of GCGR led to improved glucose control and reduced levels of blood triglycerides without producing hypoglycemia, according to Isis. In addition, treatment with '5568 led to an increase in circulating GLP-1, a hormone that helps to preserve pancreatic function, thereby enhancing insulin secretion.

GCCR inhibition, meanwhile, has been recognized as a potential path to treating type 2 diabetes, but side effects have been a challenge, Isis said. In preclinical studies, '131 has been shown to have a broad therapeutic profile that includes reduction of blood glucose levels, a dramatic and favorable effect on lipid levels including cholesterol and triglycerides, and a reduction in body fat, the firm said.

In addition to the up-front fee, potential development and commercialization income from those two compounds could exceed $230 million, with an additional $150 million or more stemming from a provision for development of two more drugs to treat metabolic diseases. Royalties for the two as-yet-unnamed drug candidates are "slightly different" from those negotiated for '568 and '131, Crooke noted.

Before closing the transaction, Isis will buy back its equity in Symphony GenIsis and reacquire intellectual property governing the GCGR and GCCR programs as well as regaining full ownership of 301012, its lipid-lowering drug candidate that targets apolipoprotein B-100.

"We've had a significant resurgence of interest in antisense drugs for all indications," Crooke said. "We believe that resurgence and interest have been driven by the data from ISIS 301012, and we expect the interest to continue to increase."

Isis is still courting partners to advance 301012, which showed positive Phase II results lowering lipids in patients with familial hypercholesterolemia (¹ Also see "Isis Expects To Submit Its Lipid-Lowering Treatment By Early 2009" - Pink Sheet, 17 May, 2007.).

Crooke called interest in licensing 301012 "intense." Isis is scheduled to present Phase II data on 301012 at the International Symposium on Drugs Affecting Lipid Metabolism in New York City Oct. 4-7.

Another Phase II candidate, 113715, a second-generation antisense inhibitor of the protein tyrosine phosphatase 1b receptor to treat type 2 diabetes, is not included in the deal, Crooke noted. Isis is awaiting results of an ongoing Phase II trial of '715 in combination with sulfonylurias before making any partnering decisions.

"We think it's going to be worth a great deal more to us once we complete that process," he said.

Isis' core focus is in drug discovery and development of compounds that modify antisense targets. The firm's aim is to license its investigational drugs at various points in development while retaining the IP related to the antisense targets, the company told "The Pink Sheet" DAILY in an exclusive interview in July (² Also see "Isis VP-Corporate Development Kate Winkler Corcoran: An Interview With “The Pink Sheet” DAILY (Part 1 of 2)" - Pink Sheet, 18 July, 2007.).

Isis has had a full dance card in the past year, announcing deals with Bristol-Myers Squibb to develop cardiovascular drugs, forming strategic alliances with Archemix for oligonucleotide-based drug development and Alnylam for microRNA-based therapies, as well as pairing with Lilly and Merck.

Isis and Alnylam announced earlier this month the creation of Regulus Therapeutics, a joint venture to further the development of drug candidates based on microRNA technologies (³ Also see "Starlight Success: Isis, Alnylam Form Regulus To Develop MicroRNA Antagonists" - Pink Sheet, 7 September, 2007.).

-Pamela Taulbee (p.taulbee@elsevier.com)

Antisense Makes Financial Sense: Isis-Ortho-McNeil Pact Worth Potential $400 Mil.

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