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Biogen Idec Inc (BIIB): Why ISIS Pharmaceuticals, Inc. (ISIS) Shares Leapt Higher

Although we don’t believe in timing the market or panicking over market movements, we do like to keep an eye on big changes — just in case they’re material to our investing thesis.

What: Shares of ISIS Pharmaceuticals, Inc. (NASDAQ:ISIS), a biopharmaceutical company engaged in the development and marketing of antisense drugs, jumped as much as 13% after announcing an expanded drug development partnership with Biogen Idec Inc (NASDAQ:BIIB).

ISIS Pharmaceuticals, Inc.

So what: Under the terms of their new six-year long collaboration, ISIS Pharmaceuticals, Inc. (NASDAQ:ISIS) will receive $100 million upfront with the potential to earn more through milestones, and will use its antisense technology, along with Biogen’s expertise, to develop therapies designed to treat neurological disorders. Biogen Idec Inc (NASDAQ:BIIB) will gain access to ISIS Pharmaceuticals, Inc. (NASDAQ:ISIS)’ antisense technology platform and, in return, should any therapies be developed that make it to market, Isis has the potential to earn $220 million in milestone payments plus the potential to recoup some of their clinical study costs. This marks the fourth time in the past two years that Biogen Idec Inc (NASDAQ:BIIB) and ISIS Pharmaceuticals, Inc. (NASDAQ:ISIS) have forged an alliance to treat a particular disease category or to work on a group of experimental therapies together.

Now what: Ka-ching, Isis! This is why ISIS Pharmaceuticals, Inc. (NASDAQ:ISIS) remains among one of the very, very few biopharmaceutical companies that’s still losing money that I feel is a potentially strong buy. At last check, Isis’ pipeline was 30-plus clinical and preclinical studies deep, and it has a handful of big pharmaceutical development partners, including Biogen Idec. The upfront cash gives ISIS Pharmaceuticals, Inc. (NASDAQ:ISIS) even more leverage to continue to develop antisense drugs among an array of disease fields ranging from cancer to autoimmune disorders and should serve as a reminder to investors that deep pipelines are the cornerstone to big gains in the biotech sector.

The article Why Isis Pharmaceuticals Shares Leapt Higher originally appeared on and is written by Sean Williams.

Fool contributor Sean Williams has no material interest in any companies mentioned in this article. You can follow him on CAPS under the screen name TMFUltraLong, track every pick he makes under the screen name TrackUltraLong, and check him out on Twitter, where he goes by the handle @TMFUltraLong.

Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

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