Genzyme Places Big Bet on Antisense RNA With Isis Deal

Xconomy Boston — 

Back in the fall, Malorye raised the question of whether antisense RNA technology—the older, dowdier cousin of the very trendy RNAi—could possibly be hot again. Well, hang on to your pleated pants and oversized glasses because it looks like the answer is yes, as evidenced by yesterday afternoon’s announcement of a potentially ginormous strategic alliance between Cambridge, MA-based Genzyme (NASDAQ: GENZ) and Carlsbad, CA’s Isis Pharmaceuticals (NASDAQ: ISIS)

Under the terms of the agreement, Genzyme will develop and commercialize Isis’s mipomersen, a lipid-lowering drug that, like other antisense-based treatments, works by sticking to certain RNA molecules. The drug, which is injected once a week, is already in Phase 3 clinical trials in patients with an inherited form of high cholesterol that affects some 1.5 million people in the U.S. and Europe. Genzyme will also get special access to certain future drugs from Isis that target central nervous system disorders and rare diseases.

The deal is a sweet one for Isis, which will get an up-front licensing fee of $175 million and, pending regulatory clearance, a payment of $150 million for 5 million shares of its stock (that’s $30 per share for a stock that was trading around $14.50 when the deal was announced). More than $1.5 billion in development, regulatory, and commercial milestone payments is on the table as well, and Genzyme and Isis will share any profits on mipomersen.

In a statement, Genzyme CEO Henri A. Termeer lauded mipomersen: “This potential blockbuster is a very Genzyme-like product. It provides significant benefit over the standard of care, targets a well-defined and severely ill patient population, and offers meaningful revenue and earnings potential.” Genzyme investors evidently weren’t as impressed; the firm’s stock opened today at $74.97, down from yesterday’s close of $77.10 (though it is now trading back up around $77). Isis, on the other hand opened at $19.81—up almost 36 percent from yesterday’s $14.58 close—and seems to be holding on to the gain.