This story has been updated from a previous version.
NEW YORK, May 25 - Isis Pharmaceuticals and Hybridon said Friday they had penned several cross-licensing agreements for antisense technologies, in a deal valued at more than $40 million in cash and stock.
Under the terms of the deal, Isis will pay Hybridon $15 million in cash to license second-generation antisense technology for inhibiting gene function. In addition to the cash payment, Isis will also pay Hybridon $19.5 million in stock, to be paid out every six months for the next two years.
Hybridon will pay Isis $6 million in stock to license Isis' RNase H suite of patents, which describe the mechanism for using certain antisense chemistry as a therapeutic. Hybridon is currently developing oligonucleotides that modulate the immune system and other compounds for use as potential drugs.
The deal provides a measure of financial relief for Cambridge, Mass.-based Hybridon after their first generation antisense chemistry proved problematic, said Robert Andersen, Hybridon's chief financial officer. The company's second generation antisense chemistry is designed to eliminate some of the side effects found in the earlier version of the therapeutics, Andersen said.
"We've obviously got very significant intellectual property in our second generation chemistry, which Isis deems incredibly valuable," said Andersen. "It's a wonderful incentive to keep developing in the antisense field."
For their money, Isis, based in Carlsbad, Calif., will obtain an exclusive license to all of Hybridon's antisense chemistry and delivery patents and technology, as well as the option to sub-license this technology to others.
Isis is not a newcomer to antisense research, with 12 years experience in RNA-based drug discovery. Two years ago, the company acquired antisense technology from pharmaceutical company Gilead. Exclusively licensing Hybridon’s technology, said Karen Lundstedt, vice president for investor relations and corporate communications at Isis, “filled in the holes and augmented our overall strength” in antisense technology, and also denies Isis’ competitors access to the intellectual property.
"It wasn't like they had a certain patent suite that was brand new to us," added Lundstedt, "but this will strengthen our interest in controlling antisense technology." Isis licensed the technology rather than acquiring the company as a whole, said Lundstedt, because Isis was not interested in investing in Hybridon's immunomodulator drug program, and because it was cheaper to exclusively license the technology.Isis is currently developing treatments for HIV, Crohn's disease, and lung cancer, among other diseases. The company has a current market capitalization of $498 million.