By Jim Shrine

Isis Pharmaceuticals Inc. and Zeneca Pharmaceuticals Inc. entered a potential $40 million collaboration to develop antisense-based compounds for cancer.

The three-year deal includes an up-front access fee, annual research funding and milestone payments for any drugs taken into clinical development. Isis, of Carlsbad, Calif., also will get royalties on any marketed drugs. Zeneca has exclusive worldwide rights to candidates coming from the collaboration.

"I think this reflects a renewal of confidence in antisense from the pharmaceutical industry," Stanley Crooke, chairman and CEO of Isis, told BioWorld Today. "It comes at a moment when we demonstrated that antisense works."

Isis' Vitravene (fomivirsen) became the first antisense drug to be approved by the FDA when it was cleared for marketing in August, for treating cytomegalovirus in AIDS patients. That product is partnered with CIBA Vision, a division of Basel, Switzerland-based Novartis AG.

Initially, Crooke said, the Zeneca collaboration focuses on two molecular targets, but the alliance can be expanded substantially.

"This is basically a research deal," Crooke said. "We had interest in these targets, and had done preliminary work on one of them. They are targets of high interest to Zeneca."

Isis will create and, with Zeneca, will screen potential product candidates. Zeneca, of Wilmington, Del., a unit of London-based Zeneca Group plc, will develop any resulting leads.

Neither Isis nor Zeneca would disclose specific targets or terms of the deal, but Crooke said Isis expects to have two development candidates ready within the three years.

"The time frame for antisense is compressed, compared to other drug-discovery approaches," he said. "We fully expect any target we pick to have an active lead compound going into animal models in six months."

The Zeneca deal is one of many collaborations ongoing at Isis and this one, Crooke said, is non-dilutive in that those were targets Isis wasn't going to be able to work on itself anyway.

"From our perspective, partnerships are important, in terms of financing the company," Crooke said. "The dilution shareholders take with partners is less than if we chose an equity financing. At $11 to $12 per share, it makes more sense to do partnerships and attempt to defray the need to raise money in the equity markets, until we see the stock appreciate."

The company's three cancer drug candidates, already in clinical trials, are not part of the deal with Zeneca. Two of them — ISIS 3521 and ISIS 5132 — are licensed to Novartis and in Phase II trials. The third, ISIS 2503, a ras inhibitor, is in Phase I and not partnered.

ISIS 2302, an inhibitor of intercellular adhesion molecule, or ICAM-1, is in a pivotal study for Crohn's disease and in Phase II trials for renal transplant rejection, rheumatoid arthritis and ulcerative colitis. It is partnered with Boehringer Ingelheim GmbH, of Ingelheim, Germany.

"Zeneca is one of the leading companies in cancer, and a partner we've courted a long time," Crooke said. "The collaboration brings to Isis a very knowledgeable partner in cancer, and it's an area we know something about as well."

Isis also disclosed that it has purchased from Gilead Sciences Inc., of Foster City, Calif., all holdings of Gilead's antisense patent estate for $6 million, payable in four installments over the next three years.

Isis' shares (NASDAQ:ISIP) closed Monday at $11.25, up $0.25. *

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