Ionis Pharmaceuticals Inc. announced Jan. 4 that it has grabbed another big-name partner in Biogen Inc. for its antisense technology, adding to deals it already has with GlaxoSmithKline Inc. and Genzyme Corp. Biogen and Isis have agreed to collaborate on the development of ISIS-SMN, a Phase I compound meant for the treatment of spinal muscular atrophy (SMA).

Under the terms of the agreement, Biogen will pay Isis $29 million upfront as well as $45 million in potential milestones for the option to license the compound after it has reached the proof of concept phase. The size of the milestones would be more than enough money to fund development to that point, Isis Chief Operating Officer and Chief Financial Officer B. Lynn Parshall said in an interview.

Should Biogen choose to license the drug, it will assume full development and regulatory responsibilities. Isis will be eligible for another $225 million in milestone payments, along with double-digit royalties on sales, and also will retain some commercialization rights. Parshall would not disclose the details of the commercialization agreement, but called the terms "generous."

The structure of the deal will allow Biogen to avoid a bidding war for the compound once it has become more mature and allows Isis the funding to complete near-term development, Parshall said.

Isis began Phase I trials of ISIS-SMN three weeks ago and, once it completes those, it will move the compound into two parallel Phase II/Phase III trials.Currently, approved treatments for SMA do not exist.

The compound will fit with Biogen’s focus on neurology. Biogen is a leader in the treatment of multiple sclerosis and has been expanding its pipeline to include other neurodegenerative diseases like Alzheimer's disease and Amyotrophic Lateral Sclerosis. A Biogen representative said that the company chose to make this deal because it hopes that ISIS-SMN will be a first-to-market treatment for the disease.

"With focus on Isis' balance sheet, we believe that the upfront payment helps mitigate potential concern regarding cash burn, and to the extent that we believe additional orphan disease collaborations could be forthcoming, establishes a template for increased leverage of the antisense pipeline," said BMO Capital Markets analyst Jim Birchenough.

Parshall said that the company has about $375 million in cash on hand.

Roche And Novartis Also Competing In SMA Space

While this may be the case, other companies are not far off on their own treatments for SMA. Both Roche and Novartis AG have made investments in compounds for the treatment of SMA, but none of the assets have reached clinical testing.

In November, Roche paid South Plainfield, N.J.-based PTC Therapeutics Inc. $30 million upfront, plus the potential for $460 million in milestone payments in exchange for an exclusive worldwide license to PTC’s SMA program, including three pre-clinical assets and potential back-up compounds. Roche will handle all development funding, Shafique Virani, Roche head of CNS partnering, said in an interview. The compounds could be in the clinic within 18 months [Also see "Roche Inks A Second Deal With PTC Therapeutics, Pays $30M Upfront" - Pink Sheet, 29 November, 2011.].

SMA is a severe genetic disorder that affects about 30,000 patients in the U.S., Europe, and Japan. The disease can cause a loss of neuromuscular growth and function that can be fatal. Children who have the disease lack a protein that regulates neurological development. ISIS-SMN affects the gene splicing, resulting in the creation of the full protein. Parshall said that Isis hopes ISIS-SMN will stop the progression of the disease in older children and hold off symptoms in infants completely. Patients would be given an injection directly into the spinal fluid once a month throughout their lives.

Option-based deals have been growing in the industry over the last few years, and Isis has chosen to structure most of its deals this way. These structures lower the risk for pharmacos even as they engage in an emerging area of science, in this case, antisense-based drugs. Antisense therapies, a potentially new class of drugs, target the proteins involved in disease processes by affecting the splicing process of RNA that builds the proteins.

Biogen Strikes A Deal With Isis For Antisense Technology

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