Isis Pharmaceuticals Inc. and Boehringer Ingelheim InternationalGmbH are pooling their cell adhesion programs in a collaborationthat could be worth more than $100 million to Isis.

Boehringer Ingelheim will make a $28.5 million equity investment inIsis upon the deal's closing, which is expected in the second quarter.The equity purchase would be made at $15 per share, a heftypremium to Wednesday's $5.63 closing price of Isis. It would givethe privately held Germany-based pharmaceutical company a stake ofabout 8 percent in Isis.

Isis' stock (NASDAQ:ISIP) jumped nearly 16 percent on the newsWednesday, increasing 88 cents to close at $6.50 per share.

Isis, of Carlsbad, Calif., also will get access to a $40 million line ofcredit, and Boehringer Ingelheim will make additional equityinvestments, at a premium, upon achievement of certain undisclosedmilestones. Isis also benefits in that it will get royalties on worldwidesales of BIRR1, a murine monoclonal antibody-based product thatBoehringer Ingelheim (BI) has in Phase II and III trial.

The letter of intent stipulates that both parties will share equally inthe profits of any product coming out of the effort.

"Isis has been working in the areas of antisense and combinatorials,and BI has been working in the areas of small molecules andmonoclonal antibodies," said Jane Green, Isis' director, investorrelations. "The combined program will have a very broadtechnological platform. Another strength of the collaboration is thenumber of molecular targets we'll be able to pursue. The combinedpipeline is extremely broad."

Isis' chief contribution to the collaboration, initially, is ISIS 2302, anantisense oligonucleotide designed to inhibit intercellular adhesionmolecule 1 (ICAM-1), which is expected to finish a Phase I trial inthe U.K. in several weeks, Green said.

Isis expects to take 2302 into Phase II trials later this year, likely infour therapeutic areas: renal transplant rejection, rheumatoid arthritis,ulcerative colitis and psoriasis. "We'll continue to lead thedevelopment of 2302," Green said, "but there will be a 50-50 splitupon commercialization."

Both companies have programs targeting cell adhesion molecules(CAM) implicated in inflammatory diseases. CAMs make up a largefamily of related proteins involved in a variety of cell-to-cellinteractions, including the movement of white blood cells through thewall of the blood vessel as they make their way toward sights ofinflammation. Over-expression of ICAM-1 specifically is implicatedin a variety of inflammatory disorders.

BIRR1, a monoclonal antibody directed against ICAM-1, is inpivotal Phase III studies for prevention of renal transplant rejectionand stroke, and in Phase II for the treatment of burns.

ISIS 2302 is designed to selectively inhibit the production of theICAM-1 protein by binding to its mRNA to block protein expression.By decreasing ICAM-1 gene expression, the drug may affect themigration of inflammatory cells into tissues.

Rolf Krebs, vice chairman of the Boehringer Ingelheim Board ofManaging Directors, said his company is focused on securing the besttechnologies for selected in-house development, with cell adhesionbeing an important target.

"We have extensively evaluated potential partners for our effort andare very pleased to be consummating this relationship with Isis,"Krebs said. "By allying ourselves with the creative and aggressiveteam at Isis, we expect to combine the best elements of large andsmall company capabilities. By structuring the collaboration as anequal partnership we believe its value and productivity will bemaximized for the benefit of both companies."

For Isis, the deal fits right into its strategy regarding partnerships,which includes aligning with companies that have complementarytechnologies, and with ones that will let Isis retain as much rights toits products as possible, Green said.

Isis reported about $43 million in cash and equivalents at the end of1994. Green said one of the critical factors in the deal, to Isis, was thefinancial flexibility it offered.

The $28.5 million equity investment, $40 million line of credit andlater equity investments give Isis a stronger cash position, and muchmore latitude in deciding when to seek additional funding. Green saidIsis could not detail specific terms of the line of credit at this time,but noted that it adds even more flexibility to the financing picture.

Last month, Isis and Ciba-Geigy Ltd., of Basel, Switzerland,extended their research collaboration three years, to September 1998.While specific molecular targets have not been disclosed, the effortappears to be in the cancer area, given Isis' pipeline.

Isis' lead product in the clinic, ISIS 2922, is being developed withTokyo-based Eisai Co. Ltd. It's in Phase III trials forcytomegalovirus-induced retinitis in AIDS patients.

Another collaboration, announced in January, is with HumanGenome Sciences Inc., of Rockville, Md. They are seeking thirdparties that would be interested in Human Genome Science's abilityto sequence genes and Isis' ability to develop an antisense compoundagainst that gene. "The universe is pretty wide open for thatcollaboration," Green said. n

-- Jim Shrine

(c) 1997 American Health Consultants. All rights reserved.