By Mary Welch

Isis Pharmaceuticals received a $15 million loan from an institutional investor as a follow-on to the private debt financing completed last October, and with the same terms.

The non-convertible debt, which brings to $40 million the amount raised by Isis in the past seven months, will mature in 2007, with interest payments accruing during the first five years and payable quarterly in cash at 14 percent each year.

Jane Green, senior director of investor relations for Carlsbad, Calif.-based Isis, said the company chose debt financing as a "creative and prudent" way of raising money for several reasons.

"First off, we receive the funds immediately," Green said. "The terms are very favorable. There is no interest for five years. And, finally, it doesn't dilute our stock."

The investor also received warrants, expiring in 2004, to purchase 300,000 shares of Isis common stock, exercisable at $25 per share. When exercised, the warrants will add another $7.5 million to Isis' coffers.

The money will be used to fund general operations and underwrite the costs of the company's compounds in clinical trials. Fomivirsen, an antisense drug that treats cytomegalovirus-induced retinitis in AIDS patients, just finished Phase III trials and the company applied for FDA approval in April. The drug's development is part of collaboration with CIBA Vision Corp., of Atlanta. The FDA filing triggered a $5 million milestone payment to Isis from CIBA. (See BioWorld Today, April 10, 1998. p. 1.)

Fomivirsen is the company's first new drug application filing, but Isis has five other compounds in clinical trials, including ISIS 2302, an inhibitor of ICAM-1, which is in quality trials for Crohn's disease and in Phase II trials for renal transplant rejection, rheumatoid arthritis and ulcerative colitis. It is also being explored as a topical therapy for psoriasis and asthma. In addition, Isis has three cancer treatments, two in Phase II and the other in Phase I.

"We have quite a lot in our pipeline and several additional compounds in development," Green said. "This funding will give us the flexibility to work on several more projects."

At the end of last year, Isis had $86.7 million in cash, with a net loss of $31 million for 1997.

The company's stock (NASDAQ:ISIP) closed Monday at $14.312, up $0.125. *