Is There More to Isis Pharmaceuticals Than Kynamro?

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Isis Pharmaceuticals (NASDAQ: IONS  ) is an antisense drug development company that is best known for Kynamro, only the second antisense treatment to be approved by the FDA since Vitravene in 1998.

What about Kynamro?
Unfortunately, in Isis' recent third-quarter earnings call, there was very little mention of Kynamro. Kynamro is used to treat a rare genetic disorder, homozygous familial hypercholesterolemia. Familial hypercholesterolemia causes high cholesterol levels in carriers, independent of diet, leading to early onset of heart attacks and sometimes death. There are two forms of the disease. The more prevalent is the heterozygous form, where individuals have one copy of the gene, with 600,000 cases in the U.S. The homozygous form is rarer, as these are patients who have two copies of the gene (one copy from each parent). There are about 300 cases of the latter disease in the U.S., and life expectancy is short, with few victims surviving into their 20s.

Kynamro had a rocky approval process due to the side effects of the drug; in one clinical trial, 18% of patients discontinued treatment due to adverse reactions. This reaction led to a great deal of volatility in Isis's stock price, dropping below $8 late last year. However, the FDA weighed the facts and approved Kynamro in January of this year. Since then, the stock's price hasn't looked back. Unfortunately, little has been said on its progress: CEO Stanley Crooke stated that he was "encouraged by the progress Genzyme is making in the launch" during the second-quarter earnings call.

Genzyme, owned by Sanofi (NYSE: SNY  ) , made a $25 million milestone payment to Isis Pharmaceuticals following the FDA approval. However, in March, the Committee for Medicinal Products for Human Use of the European Medicines Agency reiterated its negative opinion on the marketing authorization application for the therapy. A phase 3 trial is under way for use of Kynamro to treat the more prevalent, heterozygous form of the disease. It's possible that both Sanofi and Isis Pharmaceuticals are awaiting results from the heterozygous study before saying more about Kynamro's progress.

In the absence of Kynamro news, Isis was instead bullish on a new therapy to reduce Lipoprotein(a), or Lp(a). Lp(a) levels are largely determined by genetic factors, but an association also exists between Lp(a) and LDL ("bad") cholesterol. As CEO Stan Crooke explained, "There is a very wide variation in levels of Lp(a). And the levels of Lp(a) vary primarily genetically so there is very little environmental influence on LPA levels", furthermore "...we understand that there are patients who have LPA levels better as high as in the 100s (mg / dL). And these people have an LPA driven cardiovascular risk which is very, very substantial."

Phase 1 trial data was positive, with reductions of up to 95% in Lp(a) in healthy volunteers, depending on the dosage level. There were associated benefits outside of Lp(a) reduction, although these weren't the focus of the study. Plans for a phase 2 trial are expected next year in patients with existing cardiovascular disease and high Lp(a) levels.

New antisense treatments
Isis has 10 therapies in phase 2 or 3 studies, generating milestone payments sufficient to reduce the expected net loss for the year by 30%, to about $40 million. However, the company is not lacking cash, with $670 million in reserves.

It has three treatments in collaboration with GlaxoSmithKline  (NYSE: GSK  )  and two therapies with Biogen Idec (NASDAQ: BIIB  ) . ISIS-TTRRx is the leading GlaxoSmithKline treatment and is in phase 3 trials. The Biogen collaboration, ISIS-SMNRx, is in phase 2 development. However both therapies have orphan drug designation and fast-track status in the U.S.

ISIS-TTRRx treats a rare genetic disease that leads to progressive dysfunction of heart and/or peripheral nerve tissue, such as in the hands and feet. The two common types of the disease afflict about 50,000 people globally. Phase 1 studies demonstrated an 80% reduction in TTR protein. And enrollment started in February for a phase 2/3 study, including 200 patients with the disease.

ISIS-SMNRx treats spinal muscular atrophy, which is a leading cause of infant mortality. The carrier rate of the gene is quite high, at 1-in-50, so when both parents are carriers, there is a 1-in-4 chance that their offspring will have the disease. Isis estimates that there are up to 50,000 people in America, Europe and Japan with the disease. Results from the phase 1 study were positive, with improvement in muscle function in a number of children, although the sample size was relatively small at just 28 children, with no placebo or control treatment to compare against. Additional studies are under way and are expected to report next year.

While Isis was not forthcoming on Kynamro revenues, it does have the benefit of Genzyme's marketing arm in the promotion and utilzation of drugs to treat rare diseases, and sits on a healthy reserve of cash. Despite the relative radio silence around Kynamro, Isis is at the forefront of developing successful antisense treatments. While the company was keen to emphasize progress with ISIS-APOARx, it's likely to get an ISIS-TTRRx therapy out the door first. This will bring a supporting revenue to compensate against lack of traction with Kynamro, and offer a greater market than the 300 estimated cases for homozygous familial hypercholesterolemia.

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