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Tickers in this Article: SNY, ISIS, BIIB
Isis Pharmaceuticals, Inc. (ISIS) and Biogen Idec (BIIB) have teamed up again. This time round the companies are working on the development and commercialization of an antisense drug for the treatment of myotonic dystrophy type 1 (DM1) or Steinert disease Terms of the Deal

As per the terms of the exclusive, worldwide option and collaboration agreement, Biogen will make a $12 million upfront payment to Isis Pharma. Isis Pharma will work on the discovery of a lead antisense candidate for the treatment of DM1.

Besides this, Isis could receive up to $59 million on the achievement of development-based milestones. Biogen has the option to in-license the candidate from Isis Pharma any time up to the completion of phase II development. If Biogen decides to exercise its option, it will be responsible for the worldwide development, approval and commercialization of the candidate.

Biogen could end up paying an additional $200 million as license fee and on the achievement of regulatory based milestones. Besides this, Biogen will pay double-digit royalties on sales of the drug.

Our Take

This is the second collaboration between Biogen and Isis Pharma. These deals not only validate Isis Pharma's antisense technology but also provide the company with funds in the form of upfront, milestone and other payments.

While this deal is a positive for Isis Pharma, we expect investor focus to remain on the regulatory progress of lead candidate, Kynamro. Kynamro is currently under US Food and Drug Administration (FDA) review. Isis Pharma and partner, Genzyme, a Sanofi (SNY) company, are looking to get Kynamro approved for the treatment of patients with homozygous familial hypercholesterolemia (HoFH). A response from the FDA should be out by January 29, 2013.

We currently have a Neutral recommendation on Isis Pharma, which carries a Zacks #3 Rank (short-term 'Hold' rating).

 
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