Until now, all of Isis Pharmaceuticals' (NASDAQ:IONS) late-stage drugs involved partnerships with other companies. Kynamro, its only drug on the market, is sold by Sanofi (NASDAQ:SNY), and phase 3 drug candidates ISIS-TTR, ISIS-SMN, and custirsen are respectively being developed with or completely by GlaxoSmithKline (NYSE:GSK), Biogen Idec (NASDAQ:BIIB), and a tag team of Teva Pharmaceutical (NYSE:TEVA) and OncoGenex Pharmaceuticals (NASDAQ:OGXI).

But in August, the biotech launched its first independent phase 3 trial; it is testing ISIS-APOCIII for patients with familial chylomicronemia syndrome, or FCS, a rare genetic disorder resulting in extremely high triglyceride levels. Isis plans later this year or early next year to start another phase 3 program in patients with extremely high triglyceride levels who don't have FCS.

Striking out on its own comes with added risks but also provides the potential for better rewards. Isis Pharmaceuticals could capture all of the revenue by marketing the drug on its own; since FCS is a rare disease, the company would not need a large sales force. Or it could license the drug down the line, garnering better economics than it could get now, assuming the phase 3 trials are successful.

Isis Pharmaceuticals is keeping its options open, and it doesn't look like it will follow this strategy only with ISIS-APOCIII.

On its third-quarter earnings call today, Isis announced plans to set up a subsidiary to develop its lipid-lowering drugs. In addition to ISIS-APOCIII, it will also move ISIS-APO(a) and ISIS-ANGPTL3 into the subsidiary. ISIS-APO(a) is in phase 2 development, while ISIS-ANGPTL3 hasn't left phase 1 trials.

In the near term, this is nothing more than a reorganization to separate the commercialization of ISIS-APOCIII from the core development of the company's antisense technology. But the separation could have been accomplished by creating a new department. Establishing a subsidiary allows for more flexibility in funding, perhaps spinning the entity off or selling it as a packaged unit.

There are some precedents here. Isis Pharmaceuticals previously separated out its microRNA technology, combining it with Alnylam Pharmaceuticals' (NASDAQ:ALNY) technology to create Regulus Therapeutics (NASDAQ:RGLS).

Isis is still one of the company's major shareholders, although it sold more than $20 million worth of the stock recently. In addition to the equity value, Isis is due royalties on drugs that Regulus develops and a percentage of Regulus' milestone payments. If the lipid-lowering subsidiary were to be spun out, we could see a similar setup, allowing Isis to generate cash to further fund its pipeline.

The decision on whether to fund the subsidiary indefinitely or bring in outside investment likely depends on how much cash Isis Pharmaceuticals can bring in from partnered drugs. So far this year, the biotech has landed more than $160 million from its partners as they have advanced the drugs using Isis technology. And there should be at least another $27 million from Biogen Idec when Isis later this year starts the phase 3 CHERISH study on ISIS-SMN in children with spinal muscular atrophy.

Isis plans to end the year with more than $575 million in the bank. While that's a substantial nest egg, development costs will increase as more of its drugs push further into the clinic.