Could Isis Threaten Regeneron and Novartis?

Investors will get data from a mid stage trial for iCo-007 as a treatment for DME in April. If results are solid, a move into phase 3 could eventually position Isis (ISIS) against Regeneron (REGN) and Novartis (NVS).

Mar 22, 2014 at 11:00AM

Regeneron (NASDAQ:REGN) and Novartis (NYSE:NVS)enjoy little competition for their vision-improving drugs Eylea and Lucentis. As a result, sales of Eylea grew to more than $1.8 billion last year, just two years after winning FDA approval in 2011, and sales of Novartis and Roche's (NASDAQOTH:RHHBY) Lucentis, which was first approved in 2006, have climbed to more than $4 billion a year.

Those successes have sparked the attention of drug developers hoping to cash in on the lucrative and growing market. One of those developers, Isis Pharmaceuticals (NASDAQ:IONS), developed iCo-007, a drug currently being studied in mid-stage trials as a treatment for a form of vision loss caused by diabetes.

Improving the lives of diabetics
The drug has just completed phase 2 trials as a treatment for diabetic macular edema, or DME, the most common cause of vision loss in people with diabetes, and results from the trial are expected to be announced in April.

The market for DME is big and, unfortunately, growing every year. There are about 1 million cases of DME in the U.S., and more than 300,000 new cases are diagnosed annually.

DME is the most common form of vision loss in patients with eye disease caused by diabetes. Over the course of their lives, more than 80% of all diabetics will suffer from some form of eye disease, with about 30% of all diabetics eventually being diagnosed with DME. 

Currently, the majority of these patients are either treated with Novartis' Lucentis' or with Roche's Avastin, a drug that's most commonly associated with treating cancer, and that racks up more than $6 billion in annual sales globally.

That makes Lucentis, which won FDA approval as a DME therapy in 2012, the top-selling drug specifically approved to treat DME. That may change, however, given the FDA is expected to approve Eylea for the condition in August.

Isis' potential solution
While it is years away from posing a threat to Lucentis or Eylea in the DME indication, iCo-007 may offer patients a new treatment option. The drug targets an enzyme, c-Raf kinase, associated with the formation of blood cells that can leak into the retina and cause vision loss in DME patients.

By inhibiting c-Raf kinase, iCo-007 hopes to thwart the disease downstream of growth factor VEGF, which is the target of both Lucentis and Eylea.  

Isis licensed iCo-007 to iCo Therapeutics in 2005, and results from a small phase 1 trial released in 2010 show iCo-007 was well tolerated at 24 weeks, producing stable or improved vision in 13 of the 15 patients. 

That prompted iCo to move the drug into phase 2, where it is studying iCo-007 as both a solo treatment dosed monthly, and a combination treatment delivered alongside Lucentis.

If iCo-007 results in this trial are compelling enough, iCo will pay Isis a small $4 milestone payment if it advances the therapy into phase 3. Much further down the road, a successful phase 3 trial and possible commercialization could benefit Isis in a couple of ways. Isis not only owns 6% of iCo Therapeutics, but it may receive up to $40 million in regulatory milestones, as well as eventual royalties on any sales. 

Fool-worthy final thoughts
Thanks to partnerships with big and small drug developers, Isis has about 20 different compounds in phase 2 and phase 3 trials, may of which industry watchers have higher hopes for than for iCo-007.

However, if iCo-007 succeeds in phase 2, investors are likely to start paying more attention to how the compound could eventually benefit Isis. Especially since the number of diabetics globally is expected to grow from 365 million in 2011 to 552 million in 2013. Currently, roughly three new cases of diabetes are being diagnosed every 10 seconds. 

Regardless of the size of the market opportunity, investors should view iCo-007 only as a highly speculative and distant threat to Regeneron and Novartis. After all, even if the drug moves into phase 3, which it might not, it would still be years away from reaching the market. That suggests Eylea and Lucentis still have plenty of running room ahead of them. 

Even if all goes well for Isis, it may have real trouble keeping up with this top stock
There’s a huge difference between a good stock and a stock that can make you rich. The Motley Fool's chief investment officer has selected his No. 1 stock for 2014, and it’s one of those stocks that could make you rich. You can find out which stock it is in the special free report "The Motley Fool's Top Stock for 2014." Just click here to access the report and find out the name of this under-the-radar company.

Todd Campbell has no position in any stocks mentioned. Todd owns E.B. Capital Markets, LLC. E.B. Capital's clients may or may not have positions in the companies mentioned. Todd owns Gundalow Advisors, LLC. Gundalow's clients do not have positions in the companies mentioned. The Motley Fool recommends Isis Pharmaceuticals. Try any of our Foolish newsletter services free for 30 days.

We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Money to your ears - A great FREE investing resource for you

The best way to get your regular dose of market and money insights is our suite of free podcasts ... what we like to think of as “binge-worthy finance.”

Feb 1, 2016 at 5:03PM

Whether we're in the midst of earnings season or riding out the market's lulls, you want to know the best strategies for your money.

And you'll want to go beyond the hype of screaming TV personalities, fear-mongering ads, and "analysis" from people who might have your email address ... but no track record of success.

In short, you want a voice of reason you can count on.

A 2015 Business Insider article titled, "11 websites to bookmark if you want to get rich," rated The Motley Fool as the #1 place online to get smarter about investing.

And one of the easiest, most enjoyable, most valuable ways to get your regular dose of market and money insights is our suite of free podcasts ... what we like to think of as "binge-worthy finance."

Whether you make it part of your daily commute or you save up and listen to a handful of episodes for your 50-mile bike rides or long soaks in a bubble bath (or both!), the podcasts make sense of your money.

And unlike so many who want to make the subjects of personal finance and investing complicated and scary, our podcasts are clear, insightful, and (yes, it's true) fun.

Our free suite of podcasts

Motley Fool Money features a team of our analysts discussing the week's top business and investing stories, interviews, and an inside look at the stocks on our radar. The show is also heard weekly on dozens of radio stations across the country.

The hosts of Motley Fool Answers challenge the conventional wisdom on life's biggest financial issues to reveal what you really need to know to make smart money moves.

David Gardner, co-founder of The Motley Fool, is among the most respected and trusted sources on investing. And he's the host of Rule Breaker Investing, in which he shares his insights into today's most innovative and disruptive companies ... and how to profit from them.

Market Foolery is our daily look at stocks in the news, as well as the top business and investing stories.

And Industry Focus offers a deeper dive into a specific industry and the stories making headlines. Healthcare, technology, energy, consumer goods, and other industries take turns in the spotlight.

They're all informative, entertaining, and eminently listenable. Rule Breaker Investing and Answers are timeless, so it's worth going back to and listening from the very start; the other three are focused more on today's events, so listen to the most recent first.

All are available for free at

If you're looking for a friendly voice ... with great advice on how to make the most of your money ... from a business with a lengthy track record of success ... in clear, compelling language ... I encourage you to give a listen to our free podcasts.

Head to, give them a spin, and you can subscribe there (at iTunes, Stitcher, or our other partners) if you want to receive them regularly.

It's money to your ears.


Compare Brokers