In a restructuring move that cut its staff by 40 percent, Isis Pharmaceuticals Inc. has refocused company resources in hopes of advancing a pipeline of second-generation antisense drug candidates.
"The most important factor was, really, strategic," said Stanley Crooke, president and CEO of the Carlsbad, Calif.-based company. "Obviously, the financial consequences are important, but what drove us is strategic development."
Isis is reducing its work force by about 165 employees. Crooke said about 300 employees remain, adding that that was "still a significant number" to complete drug discovery and other development work.
"We have some significant partnerships and we'll have sufficient staff to reach all milestones" he said. Cuts were "across the board," and employees received severance packages with a graduated scheme for salary continuance.
"I'm very disappointed to have so many people leave, especially the long-term people," he said. "But around San Diego people know Isis employees. They won't have any trouble finding new jobs."
Isis anticipates an estimated 40 percent reduction in net operating loss for 2005 commensurate with the reduction in staff. Crooke said that should provide the company needed money for clinical and preclinical development.
"We've got a group of more than 10 drugs in our pipeline and we wanted enough funds to expand those," he said. "We have the luxury of a platform that we know, based on data, is working and is generating many more drug candidates than we can possibly develop ourselves."
Restructuring also allows Isis to "reduce cash flow and not have to depend on the equity market," he said.
Crooke estimated Isis has about $125 million in cash and cash equivalents, sufficient "to take us through 2007."
While Crooke said he was "satisfied" with the company's burn rate, more specific financial information will be available when Isis releases its 2004 earnings report in March. Statements released last September showed Isis had a net loss of $22.4 million for the quarter.
The restructuring also had to do with Isis' experience with developing antisense products. "We know what we need going forward," he said, adding that big pharmaceutical companies also have shown an interest in antisense.
"I'm very optimistic that lots of good things will be happening this year," he said.
Isis is evaluating possible partnerships for its alicaforsen enema, a product designed to treat ulcerative colitis, Crooke said.
Alicaforsen, an ICAM-1 inhibitor, completed a Phase II program late last year.
"The data were extremely positive," Crooke said. "It outperformed the placebo in every trial and outperformed the standard of care."
No date has been set to begin Phase III, but Crooke said he expects the program to be "modest and relatively rapid."
Last year, Alicaforsen given as an intravenous infusion failed in Phase III trials to show statistical significance in the treatment of Crohn's disease, but the company already was setting its sights on the product's Phase II results for colitis. (See BioWorld Today, Dec. 3, 2004.)
Alicaforsen is the last of the first-generation antisense products, Crooke said. Isis' focus now is on second-generation products.
The first is ISIS 301012, an antisense inhibitor of apoB-100, designed to treat high cholesterol. Isis is preparing Phase II studies. ApoB-100 is the molecular carrier of LDL and VLDL cholesterol often associated with heart disease. He said Isis also will look at creating an oral formulation for the drug, with the first study to begin soon.
ISIS 113715, designed to treat Type II diabetes, is in Phase II trials. Initial studies showed the product was safe and improves patients' glucose tolerance, Crooke said. The drug also worked without side effects such as weight gain and hypoglycemia.
"I'm very optimistic about that also being a candidate for an oral drug," he said.
Development and testing also will continue on six partnered products. Isis works with OncoGenex Technologies Inc., of Vancouver, British Columbia, on OGX-011, in Phase II trials for treating tumors, and OGX-225, in preclinical development, to treat cancer by targeting IGFBP-2 and IGFBP-5.
In agreements with Antisense Therapeutics Ltd., of Melbourne, Australia, Isis has ATL-1102, designed to treat multiple sclerosis by targeting VLA-4, which is in Phase II studies, and ATL-1101, in trials for the treatment of psoriasis.
Isis also has partnered with Indianapolis-based Eli Lilly and Co. to development and test two cancer drugs, LY2181308 and LY2275796.
Isis also expects to receive value from other assets, such as the TIGER Biosensor program, which will not be affected by the restructuring, Crooke said.
The company believes the TIGER (Triangulation Identification Genetic Evaluation of Risks) program provides a method for identifying infectious agents. The U.S. government's Defense Advanced Research Projects Agency (DARPA) awarded Isis' Ibis Therapeutics program last spring a two-year $19.5 million contract to further develop the program to identify infectious agents in biological warfare attacks. (See BioWorld Today, March 4, 2004.)
Monday's news marked the third time in the past five years that Isis has restructured its company and cut personnel.
In January 2000, when the company had about 400 employees, it reduced staff by nearly 40 percent in the wake of a Phase III failure for ISIS 2303. About 160 jobs were cut, nearly half from antisense development. (See BioWorld Today, Jan. 19, 2000.)
Two years ago, another failed Phase III trial, that one testing non-small-cell lung cancer treatment Affinitak, prompted a 9 percent reduction in work force. (See BioWorld Today, April 3, 2003.)
Isis' stock (NASDAQ:ISIS) rose 15 cents on Monday to close at $5.16.