Will Isis Right Pfizer's Wrong?

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Isis Pharmaceuticals (NASDAQ: IONS  ) started the year strong with a Food and Drug Administration approval for genetic high cholesterol drug Kynamro. As Kynamro prepares for launch, Isis' active pipeline continues to push forward. Today, the antisense drug developer announced the initiation of phase 2/3 trials for ISIS-TTRRx, which treats a rare neurodegenerative disease called transthyretin amyloidosis.

This GlaxoSmithKline (NYSE: GSK  ) partnered drug looks strong going into mid-stage. But the companies need to avoid making the same mistake that sent Pfizer's (NYSE: PFE  ) similar product back for another clinical trial.

Market potential
ISIS-TTRRx treats transthyretin, or TTR, amyloidosis -- a genetic condition caused by protein buildups that disrupt the function of tissue and organs. TTR amyloidosis has three main types defined by what body system the proteins affect. ISIS-TTRRX targets the types affecting the peripheral nervous system and/or the heart.  

TTR amyloidosis can lead to limb numbness, quick drops in blood pressure, and an enlarged heart. Late stages can cause potentially fatal damage to the heart and kidneys. Kidney transplants are the only currently available treatment in the United States.

The disease is rare, but orphan drugs tend to price high enough to compensate. Research firm Global Data estimates that the general amyloidosis market will reach $2.58 billion by 2019, up from $1.43 billion last year. Isis' drug will belong to a subsection of that market if it receives FDA approval.

Will ISIS-TTRRx make it that far?

Chance of approval?
It's tough to judge a drug's approval chances this early in the pipeline. Isis did report positive phase 1 data early last year, and the FDA granted Fast Track designation in December. But Isis and Glaxo need to make sure that the late-stage trials clearly demonstrate efficacy if they don't want to run into the same problem as Pfizer.

Pfizer's Vyndaqel became the first EU-approved treatment for the peripheral nervous system form. But the drug didn't fare as well in front of the FDA. Pfizer received a complete response letter requesting another trial that better demonstrates Vyndaqel's efficacy.

Deal financials
The phase 2/3 initiation for ISIS-TTRRx triggered a $7.5 million payment from GlaxoSmithKline.

Isis and Glaxo recently amended their agreement due to the drug's sped-up review process. Isis awaits the other half of a $20 million upfront payment plus an additional $2.5 million defined in the new deal. The freshly triggered milestone payment will lead to further pre-licensing milestones up to $50 million. Isis will receive double-digit royalties on sales if the drug makes it to market.

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