Dear Valued Visitor,

We have noticed that you are using an ad blocker software.

Although advertisements on the web pages may degrade your experience, our business certainly depends on them and we can only keep providing you high-quality research based articles as long as we can display ads on our pages.

To view this article, you can disable your ad blocker and refresh this page or simply login.

We only allow registered users to use ad blockers. You can sign up for free by clicking here or you can login if you are already a member.

Biogen Idec Inc (BIIB), ISIS Pharmaceuticals, Inc. (ISIS), Alnylam Pharmaceuticals, Inc. (ALNY): A Ringing Endorsement of a Technology Years in the Making

Biogen Idec Inc (NASDAQ:BIIB) is going back to the antisense well, teaming up with ISIS Pharmaceuticals, Inc. (NASDAQ:ISIS) for the fourth time in two years.

Endorsements of a technology don’t get bigger than that.

For the latest deal, Biogen Idec Inc (NASDAQ:BIIB) is giving Isis $100 million up front, and ISIS Pharmaceuticals, Inc. (NASDAQ:ISIS) is eligible to receive as much as $220 million per drug developed through the new collaboration. Isis would also collect royalties on the drugs if they make it to the market.

Biogen Idec Inc (NASDAQ:BIIB)

Unlike the earlier collaborations on spinal muscular atrophy, myotonic dystrophy type 1, and a third that covered three novel targets for neurological disorders, this partnership is an earlier development-stage deal.

The companies will start with basic research to identify new targets for different neurological disorders; on the conference call, ISIS Pharmaceuticals, Inc. (NASDAQ:ISIS) and Biogen Idec Inc (NASDAQ:BIIB) cited amyotrophic lateral sclerosis, also known as Lou Gehrig’s disease, as one of the potential diseases.

ISIS Pharmaceuticals, Inc. (NASDAQ:ISIS) and Biogen Idec Inc (NASDAQ:BIIB) think they can identify two or more targets a year. Not all of them are going to work out, but even one drug a year would be a pretty impressive partnership.

Molecular switch
The attraction of ISIS Pharmaceuticals, Inc. (NASDAQ:ISIS)’ antisense technology lies in its simplicity. Antisense works by inhibiting the production of a specific protein. Essentially it can turn a specific gene off by acting on the RNA molecule that is the intermediary between the gene and the protein it encodes for.

All you need to do is find a protein that improves disease symptoms when its expression is knocked down. Designing an antisense molecule to bind to the RNA is typically much easier than creating a drug that can inhibit the protein’s function.

ISIS Pharmaceuticals, Inc. (NASDAQ:ISIS) isn’t the only one using this approach. Alnylam Pharmaceuticals, Inc. (NASDAQ:ALNY) has a related technology called RNAi that acts on the RNA intermediary, degrading it through another mechanism. Biogen Idec Inc (NASDAQ:BIIB) has a partnership with Alnylam Pharmaceuticals, Inc. (NASDAQ:ALNY) as well, so it clearly likes the strategy.

But Isis is the leader in the field, mostly because it’s been doing it for so long; Isis was founded in 1988!

While the idea of antisense is simple, the development of the technology has been challenging, mostly because the drugs weren’t particularly stable. Fortunately, Isis seems to have solved the problem with next-generation technology, highlighted by its recently approved drug Kynamro.

Best drug for the job
Admittedly, there are other ways to treat diseases other than lowering protein expression; small molecules and antibodies can inhibit the protein’s function by binding to it. Interestingly the Biogen-Isis partnership allows for the companies to determine the best way to target the proteins they discover. If an approach other than antisense is most feasible, Biogen Idec Inc (NASDAQ:BIIB) will take over development and Isis will get a smaller royalty for its early discovery effort on that drug.

The article A Ringing Endorsement of a Technology Years in the Making originally appeared on and is written by Brian Orelli.

Fool contributor Brian Orelli has no position in any stocks mentioned. The Motley Fool recommends Alnylam Pharmaceuticals.

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

DOWNLOAD FREE REPORT: Warren Buffett's Best Stock Picks

Let Warren Buffett, George Soros, Steve Cohen, and Daniel Loeb WORK FOR YOU.

If you want to beat the low cost index funds by 19 percentage points per year, look no further than our monthly newsletter.In this free report you can find an in-depth analysis of the performance of Warren Buffett's entire historical stock picks. We uncovered Warren Buffett's Best Stock Picks and a way to for Buffett to improve his returns by more than 4 percentage points per year.

Bonus Biotech Stock Pick: You can also find a detailed bonus biotech stock pick that we expect to return more than 50% within 12 months.
Subscribe me to Insider Monkey's Free Daily Newsletter
This is a FREE report from Insider Monkey. Credit Card is NOT required.