Isis (ISIS): Profiting from the human genome

by John McCamant, The Medical Technology Stock Letter

Isis Pharmaceuticals (ISIS) has been a leader in genomics-based drug research since the late 1990s and has amassed an impressive intellectual property portfolio.  

ISIS has successfully applied their technology to take advantage of the emergence of new genetic information. More specifically, and most important for investors, has been the ability to prolifically patent their discoveries.

Their proprietary technologies include methods of screening drug candidates, chemical modification of the drugs to improve their efficacy, safety and biostability and methods for the manufacture of DNA and RNA-based therapeutics.  

They have successfully licensed these technologies to other companies to maintain a steady revenue stream while continuing to develop their own pipeline of drug candidates.  

Different types of RNA carry out important signaling tasks inside of cells and ISIS aims to control the signaling, usually to prevent the formation of certain proteins.  

They have developed chemistry to make the genetic material (at first just DNA, but now RNA as well) stable in the blood and to enhance the function of certain cellular machinery – and thereby enhance the action of the drug.

The main variation between drugs for different indications is only in the sequence of genetic letters – the overall chemical nature of ISIS’ various drugs are very similar.  This means the drugs have a well understood and predictable safety profile.   

ISIS is developing antisense therapies which are designed to stop mRNA in the cell before proteins are synthesized. A piece of complimentary RNA or DNA binds to the mRNA, and once the double-helix structure is formed it is recognized and degraded by the cell.

They are also developing RNA interference (RNAi) technologies, which have the potential to be much more potent than antisense.  Rather than stopping mRNA on their way to make proteins, in RNAi the cellular machinery is taken over and prevented from making the mRNA in the first place.

By taking this route, multiple mRNA molecules – and therefore multiple proteins – are knocked out by a single molecule of the drug.  This means much lower doses are possible.

ISIS drug candidate are generally focused on targets that have for the most part been difficult/impossible to drug with traditional small molecules.

A very good example is their PCSK9 drug development candidate which regulates the clearance of LDL receptors in the blood.  The target was originally found by Human Genome Sciences, but they are no where to be found in the competition to develop drugs against this target.

In addition ISIS, Amgen, Regeneron, and Analylm are also developing drug development candidates that are not small molecules.  PCSK9 is currently in Phase 1 testing and has also been validated through the partnership Bristol Myers Squibb.

This drug development candidate was discussed during the company’s recent R&D call that focused on their cardio pipeline. ISIS believes that PCSK9 will work very well with mipopmersen.

The theory is that after a patients cholesterol has been reduced with treatment from mipomersen, it would be beneficial to then clear the remaining LDL receptors.  We are intrigued by the potential to sequence treatment for this very sick patient population.

PCKS9 and mipomersen are both going after drug targets that are in the liver-based.  Going forward, the company said they will also be developing drugs that have targets in either arterial plaque or endothelial cells.   

ISIS continues to successfully execute their business model of creating value from their impressive intellectual property portfolio through the execution of numerous partnerships.

The excellent combination of a very deep and exciting pipeline with a large cash position leads us to believe that ISIS remains undervalued and should be purchased at current prices by long-term growth investors.

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