Isis Pharmaceuticals, Inc. (ISIS) entered a collaboration
agreement with Biogen Idec Inc. (BIIB) with a potential value of
$299 million to develop and commercialize the drug developer's
investigational treatment for spinal muscular atrophy.
Isis's experimental treatment is designed to compensate for an
underlying genetic defect that causes the potentially fatal
neuromuscular disease, which is characterized by muscle atrophy and
weakness.
Under the agreement, Isis will receive an upfront payment of $29
million. The company is eligible to receive up to $45 million in
milestone payments prior to any licensing. Biogen has the option to
license the treatment, ISIS-SMN, until the completion of the first
successful Phase 2/3 trial. Isis also could receive up to an
additional $225 million in a license fee and regulatory milestone
payments as well as double digit royalties on any sales.
"SMA is a heartbreaking disease--it can kill children before
their 2nd birthday and there are currently no therapies to treat
the disease," said Biogen Chief Executive George A. Scangos.
Biogen derives the bulk of its sales from drugs to treat the
chronic, inflammatory and potentially disabling disease. Scangos,
who became CEO in mid-2010, has led a restructuring effort at
Biogen that cut costs and refocused the company around developing
neurology treatments as well as its current MS drugs.
Isis began a Phase I clinical study of ISIS-SMN for children
with the disease in December. The U.S. Food and Drug Administration
has granted orphan status and fast-track designation to the
treatment.
Biogen in October reported that its third-quarter earnings rose
38%, topping expectations as the biotechnology company's key drugs
for treating multiple sclerosis fueled rising sales.
Shares of Isis and Biogen closed Tuesday at $7.25 and $113.50,
respectively. Neither stock was active in premarket trading. Isis's
stock is down 30% in the past year, while Biogen has climbed
roughly 71%.
-By Tess Stynes, Dow Jones Newswires; 212-416-2481; Tess.Stynes@dowjones.com