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Why Isis Shares Surged

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Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of drug developer Isis Pharmaceuticals (NASDAQ: IONS  ) climbed as high as 10% this morning after BMO Capital applauded data from a phase 2 trial of the company's antisense drug in familial chylomicronemia syndrome, or FCS. 

So what: BMO maintained its outperform rating on Isis, but a new price target of $43 per share -- up significantly from $31 -- represents 20% worth of upside to Friday's closing price. Isis' ISIS-APOCIIIRx data showed substantial reductions of triglycerides and Apoc-III in patients with FCS, giving BMO plenty of confidence in the drug's revenue potential going forward.

Now what: Management will now discuss its phase 3 plans with regulators and expects to move into a phase 3 program next year in both patients with FCS and patients with severely high triglycerides.

"We believe that the significant unmet medical need for an effective triglyceride-lowering drug for patients with FCS and the robust, consistent effects we observe with ISIS-APOCIIIRx should enable us to rapidly move forward," said Richard Geary, Ph.D., senior vice president of development at Isis.

Of course, with the stock now up a staggering 415% from its 52-week lows and trading at a price-to-sales of 36, Fools will need plenty of biotech smarts to know just how much of that potential is already baked into price.

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  • Report this Comment On September 23, 2013, at 10:56 AM, biz2befree wrote:

    Been an ISIS bull for a long time but I'm having a hard time believing that the current run up is justified at this time. I believe that the APOCIII drug can be a big winner along with some of their other drugs under development, but with Phase 3 testing starting next year, we may be looking at 1 to 2 years before the APOCIII drug gets partnered and longer before it gets approved and goes on sale and starts bringing in dollars. Just my 2 cents for what it's worth.

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