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Questcor Pharmaceuticals Inc (QCOR), ISIS Pharmaceuticals, Inc. (ISIS): Despite a Mid-Stage Disappointment, This Biotech Stock Is Still in Great Shape

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As human beings it can sometimes be difficult for us to see the good in a bad situation. In the biotech sector, where developing a drug can cost hundreds of millions of dollars and some biotechs rest their entire nest egg on the success of one of two compounds, it takes on an entirely new meaning.

Usually the phrase “failed to meet its primary endpoint” or “didn’t provide statistical significance from the placebo” with regard to the results of a clinical trial is met with swift and profound selling by investors — at least this is the case with many biotech companies. Luckily for shareholders in ISIS Pharmaceuticals, Inc. (NASDAQ:ISIS), this isn’t just your run-of-the-mill biotech operation.

Yesterday, ISIS Pharmaceuticals, Inc. (NASDAQ:ISIS) delivered some rather sobering mid-stage results for ISIS-CRPrx, a compound being developed to treat rheumatoid arthritis. According to the results of the 51-patient trial, ISIS-CRPrx cut levels of the inflammatory C-reactive protein by 67% but was unable to create a statistical separation from the placebo, which also demonstrated significant inflammation-reducing results. Isis made the decision to stop its investigation of ISIS-CRPrx with regard to RA but continue its ongoing mid-stage study of the drug for patients with atrial fibrillation.

Had ISIS Pharmaceuticals, Inc. (NASDAQ:ISIS) been a small operation with but a handful of ongoing trials, this news could have been devastating. Instead, its shares ended the day lower by a mere 2%.

“Why is that?” you might be asking yourself. The reasoning behind investors’ ability to shrug off ISIS Pharmaceuticals, Inc. (NASDAQ:ISIS)’ failure has to do with the nature of its research, the scope of its studies, its partners, and its ability to deliver results.

It’s about research
The first unique aspect about ISIS Pharmaceuticals, Inc. (NASDAQ:ISIS) is the pathway by which it’s developing its drugs. Isis is utilizing antisense technology, which employs antisense molecules to bind with messenger RNA (as opposed to traditional proteins) to block the synthesis of pathogenic cells. Rather than focusing on the result of the faulty RNA sequencing — the protein — Isis’ solution actually attacks the problem at its point of origin.


Source: Robinson R., Wikimedia Commons.

Specifically, for you science buffs out there, Isis’ antisense technology works through the RNase H mechanism that blocks mRNA translation and disallows the formation of new pathogenic proteins without altering the normal genome of a patient. There really are just a handful of companies in the world with an antisense platform, and none appear as advanced as Isis.

It’s about the scope of Isis’ studies
Including yesterday’s disappointing results for ISIS-CRPrx, Isis currently has a product development pipeline complete with seven preclinical studies, six ongoing phase 1 clinical trials, 14 ongoing phase 2 clinical trials, three ongoing phase 3 clinical trials, and one drug approved by the Food and Drug Administration. Add that up and you have 31… you heard me… 31 different potential sources of revenue.


Source: Isis Pharmaceuticals.

And this isn’t just a one trick pony, either, like Questcor Pharmaceuticals Inc (NASDAQ:QCOR) — which has one medication, Acthar Gel, indicated for 19 different ailments — or Alexion Pharmaceuticals, whose entire pipeline revolves around Soliris. This isn’t to say that a company like Questcor Pharmaceuticals Inc (NASDAQ:QCOR) can’t be successful, but it does place a lot of uncertainty around issues that can arise with regard to that one drug. Let’s not forget that a U.S. probe into Questcor’s marketing practices is still ongoing.

Isis’ pipeline features 27 different compounds (a few with multiple indications) across a myriad of developmental areas including the cardiovascular system, severe and rare diseases, cancer, metabolic disorders, and inflammation. The loss of one drug isn’t a gigantic problem when you have 31 other possible revenue sources and 27 total compounds in some form of preclinical, clinical, or commercial development.

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