ISIS Gains from TEVA-OGXI Deal - Analyst Blog

Isis Pharmaceuticals, Inc. (ISIS) stands to benefit from the recently signed agreement between OncoGenex Pharmaceuticals (OGXI) and Teva Pharmaceutical Industries Ltd. (TEVA) for the development and commercialization of OGX-011.

As Isis had co-discovered OGX-011 with OncoGenex, Isis is entitled to receive $10 million of the upfront payment made by Teva to OncoGenex. Isis will also receive 30% of the up to $370 million in milestone payments OncoGenex is eligible to receive, in addition to 5.5 – 7% royalties on all sales of OGX-011.

OGX-011 is a second-generation antisense drug to inhibit cancer treatment resistance. The candidate is being developed for use as adjunct therapy to increase the effectiveness of chemotherapy. OGX-011 has completed phase II studies in prostate and lung cancer, and is scheduled to enter into two phase III studies in 2010. A third phase III study for the first-line treatment of advanced, unresectable non-small cell lung cancer (NSCLC) will commence by early 2011.

The advancement of OGX-011 into phase III studies should help validate Isis’ antisense technology. Isis is pioneering the effort into antisense research and has already commercialized an antisense drug in 1998 with Vitravene.

Isis has several proprietary compounds in clinical development as well as partnered programs with large pharmaceutical companies such as Bristol-Myers (BMY), Eli Lilly (LLY), Merck (MRK), Johnson & Johnson (JNJ), Genzyme (GENZ) and GlaxoSmithKline (GSK). Thanks to its collaborations with several companies, Isis has put itself in a constant position to receive developmental milestones. We think that by 2012, two to three additional antisense drugs developed by Isis could be on the market.