Bellissima Magazine
March Issue
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Bringing a New Idea in Drug Development to Reality

Developing a new drug is risky. Developing a new class of drugs is even riskier. And developing a new technology to make drugs is riskiest of all.

Isis Pharmaceuticals is trying to do all three.

Founded in 1989, the Carlsbad-based company appears close to winning its struggle to prove itself to shareholders and patients. Isis is the acknowledged leader in a field of drugs called antisense, which block diseases at the genetic level. To date, Isis has just one antisense drug approved for sale, for a niche market in treating an AIDS-related viral infection of the eyes.

But Isis is closing in on getting a second antisense drug to market, and this promises to be a blockbuster. It's called mipomersen, a cholesterol-lowering medicine. Repeated clinical studies have found it to work remarkably well by itself and in combination with other cholesterol-lowering drugs now on the market called statins. In Phase
II trials, mipomersen reduced cholesterol and other blood lipids by more than 40 percent beyond that with standard drugs.

The world's top-selling drug, Pfizer's Lipitor, is a statin. Annual sales are about $13 billion. On January 7, Isis reaped the fruits of years of struggle, setbacks and hundreds of millions of dollars in research and development, announcing a major alliance with Genzyme. The Cambridge, MA-based biotech giant will take mipomersen to the market "Mipomersen is our most important asset today," said Stanley T. Crooke, Isis' chief executive, in a conference call announcing the deal. "It is a potential blockbuster product."

In exchange for the right to sell mipomersen, Genzyme agreed to pay Isis $325 million, plus milestone payments as the drug advances to market, and royalties once it does reach the market. Isis gets $175 million up-front, and Genzyme will buy 5 million shares of Isis stock at $30 a share from Isis.

Isis is eligible for up to $825 million in development milestone payments, and up to $750 in commercial milestone payments.
Isis will get 30 percent of mipomersen profits to start, with the percentage increasing on a sliding scale to an even split once annual sales reach $2 billion.

FOUNDED ON AN IDEA
Isis was founded in 1989 by Crooke and two colleagues, Dave Ecker and
Chris Mirabelli. At the time, Crooke was in Philadelphia, a rather frustrated president of research and development for SmithKline
Beckman Corp.

In a late January interview, Crooke said he foresaw the decline of the pharmaceutical industry unless it invested in new technologies that would more specifically target drugs. That message is getting much attention today, as drug patents expire and new drugs from big pharmaceutical companies fail clinical trials. So Crooke and his colleagues packed up and moved to Carlsbad. They liked being near San
Diego's growing biotech community, but less expensive than the pricey La Jolla area where biotech was congregating.

Antisense was their baby. The idea is simple: block the genetic activity of a protein involved in a disease. It could be an enzyme needed by a cancer, or a protein used by a virus, or nearly anything else made by a gene. Antisense short-circuits the process of transcription. In transcription, DNA, the carrier of heredity in the cell's nucleus, is used as a template to form RNA, the workhorse molecule that takes the instructions. RNA then migrates from the nucleus to the rest of the cell, building proteins that carry out metabolism.

Crooke and his peers figured out that RNA is a good drug target because it forms a specific sequence for each protein. If a bit of complementary RNA is brought into contact with a single strand of RN (unlike DNA, which is double-stranded), it sticks to the RNA, inactivating it.

But turning the theory into practice had huge obstacles. How do you identify which complementary sequence works best? How do you get it into the cell? How do you prevent it from being attacked and destroyed by the body's immune system?

Even the question of how long to make the RNA molecules was troublesome.

Theory didn't help here, but hard trial-and-error determined that RNA of about 17 to 20 bases, or units, worked ideally. Too large a molecule and getting it into the cell would be difficult. Too small a molecule and it might have matched up with other RNA than the specific target, potentially causing side effects.

SETBACKS
Crooke says Isis has made steady progress scientifically throughout its 19-year history. However, the business path has been much more uneven.

Isis made what for most biotech companies is the defining breakthrough
- marketing approval for its first drug - in 1997. But a decade-long drought followed in which no new drug was approved, and several exciting projects for other drugs rose and fell from favor.
Isis' first drug, Vitravene, was intended more as a proof of concept that antisense works than anything else, Crooke said in a late January, 2008 interview. Vitravene is used in AIDS patients who have a viral infection that attacks the retina, causing blindness. The drug is injected into the eye. As an example of "first generation" antisense technology, Vitravene can't be given orally, because the drug doesn't pass through the digestive system into the eye.

Getting a drug through the eye is not appealing, of course, but patients facing blindness didn't object. The trouble - from a financial perspective - was that there were not enough AIDS patients facing blindness to make a big market for Novartis, which licensed the drug from Isis through its Ciba Vision subsidiary. Drugs such as protease inhibitors dramatically improved the health of AIDS patients, so the need for Vitravene vanished. In 1998, Isis reported just $560,000 in revenue from Vitravene. By 1999, Isis reported it had made
no shipments and earned no money from Vitravene.

Meanwhile, Isis was developing dozens of additional drugs, which it hoped would be commercial successes. These included drugs for cancer,
Crohn's disease, rheumatoid arthritis and AIDS. Isis developed these drugs with a succession of big pharmaceutical companies such as Merck and Eli Lilly.

In 1999, Isis shares plunged 63 percent after its drug for Crohn's disease failed a clinical trial and Isis discontinued development.
This pattern repeated over the next several years - Isis would make progress, a drug would run into late-stage problems, and Isis would scale back the efforts. Isis also cut staff to keep money from running out. Crooke kept the focus on improving antisense. Isis scientists, including his wife, Rosanne, labored on that task.

STRIKING IT BIG
The answer to making antisense work better, Crooke believed, was in reworking the technology from the ground up. First-generation
antisense was designed with oligonucleotides -- RNA fragments – that were then available. As RNA chemistry advanced, more choices became available to make better "oligos" that would get into cells more readily and find their targets. The result was "second-generation" antisense drugs.

Investors didn't want to wait, and Isis stock slid from nearly $30 per share to about $5 a share. (Isis stock traded at more than $15 per share in late January). Isis' market capitalization, or total stock value, is now more than $1.3 billion.

Crooke said it was his wife who discovered mipomersen, a second-generation compound. Isis decided to turn its focus away from cancer and toward the cardiovascular market. Statins such as Lipitor were becoming blockbusters, showing that there was a market. Antisense, working by a different mechanism than conventional drugs, might deliver even better effect, or work in combination with statins to reduce cholesterol and lipids even more.

That proved to be true in Phase II clinical trials. As mipomersen moved toward Phase III trials, Isis took its data on the road, presenting at scientific and investor conferences. The goal was to get a capable partner to help finish the trials and take the drug to market. Isis had no intention of marketing mipomersen by itself, Crooke said, because that would take Isis out of its core strength of antisense research and development. Isis today has about 300 employees, and Crooke said it's good business sense to keep the company small and focused.

Drugs today are based on just a few "platform technologies," capable of generating drugs for the gamut of illnesses, Crooke said. There are small molecule drugs, chemicals that are good at getting into cells and affecting their metabolism; a technology more than 100 years old.
Then there are proteins such as monoclonal antibodies, developed at the dawn of biotech in the 1970s. Antisense is a platform technology.
So while Isis appears on the surface to be just one small company developing drugs, it's really developing much more.

Isis can't possibly handle all the possibilities for antisense itself,
Crooke said, so the drugs it doesn't develop itself or with parters will be licensed out to other companies.

"If you look at monoclonals, it was about 20 years and $20 billion before monoclonals became understood, performed and were accepted,"
Crooke said. "A third attempt to create a platform for drug discovery was gene therapy. That was about 20 years and $13 billion, and it has not succeeded. And with antisense, it's less than 20 years and roughly
$2 billion has been spent, mostly by Isis. So in the grand scheme of things, creation of this platform has been faster and cheaper than the creation of any other platform that I'm aware of."

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