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Isis Q4 Losses Drop on Higher Revenues; Nastech Losses Rise After Failed Alliance

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Isis Pharmaceuticals last week reported a sharp drop in its net loss for 2007 despite higher operating expenses as the company experienced a strong increase in collaboration-related revenues.
 
Given the revenue jump, the antisense drug developer projected that it would finish 2008 with more than $450 million in cash, giving it resources enough to last at least five years.
 
“We can confidently state that, for the foreseeable future, we will not need to return to Wall Street to raise additional cash,” Isis Chairman and CEO Stanley Crooke said during a conference call to discuss the financial results.
 
Nastech Pharmaceuticals, on the other hand, this week posted a jump in its net loss for 2007 after it lost Procter & Gamble as a key collaborator for a non-RNAi drug-development program — a development that has battered the company’s stock and forced it to reconsider the possibility of spinning out its RNAi operations into a separate public company.
 
Earlier this month, Nastech Chairman, President, and CEO Steven Quay told investors that although the company still believes “it’s very important to receive independent investor validation” for its RNAi drug assets, “we are looking at some alternative structures” beyond the spinout (see RNAi News, 3/6/2008).
 
“The analysis is quite different if you’re looking at a spinout from a $300-to-$400 million market-cap company versus doing it where we are now,” he added. Currently, Nastech’s market cap is roughly $65 million.
 
At the time, Quay also hinted that although Nastech has achieved positive in vivo results with its RNAi technology, the company is looking for a big pharma or biotech partner before moving any of these forward into a formal drug-development program.
 
Isis, meanwhile, has recently initiated “other components” of the phase III development program for its flagship antisense drug candidate mipomersen, which is being developed for high cholesterol, Crooke said during last week’s conference call.
 
“Earlier this year, we announced the initiation of phase III trials in patients with homozygous familial hypercholesterolemia,” Crooke said. “Today, we are pleased to be announcing that we are initiating the rest of the phase III program for mipomersen, including studies in patients with heterozygous” familial hypercholesterolemia. Heterozygous and homozygous FH are versions of a genetic condition characterized by high cholesterol.
 

“We can confidently state that, for the foreseeable future, we will not need to return to Wall Street to raise additional cash.”

Mipomersen, formerly known as Isis 301012, targets apolipoprotein B 100, a protein associated with LDL cholesterol synthesis and transport. The drug is being developed to treat high cholesterol in FH patients, as well as those who are unable to achieve target cholesterol levels with traditional statins.
 
In January, Genzyme acquired from Isis the exclusive, worldwide rights to develop and commercialize the drug in exchange for $175 million in cash and $150 million in Isis common stock. Isis also stands to receive milestones under the arrangement and 30 percent of all profits on the drug until sales reach $2 billion, at which point the companies will split the profits evenly.
 
Crooke said during the conference call that Isis plans to release new safety data on mipomersen this year, including data from an ongoing open-label extension study in which “we’re acquiring important data in patients treated with mipomersen” for prolonged periods and an imaging study examining the effects of the drug on fat levels in the liver.
 
“We hope [these new data] will support our belief that mipomersen is well-tolerated by the liver,” he said.
 
Cash is King
 
For the fourth quarter, Isis’ net loss fell to $7 million, or $0.08 per share. For 2007, the company’s net loss dropped to $11 million, or $1.63 per share, from $45.9 million, or $0.62 per share, the year before.
 
Revenues in the three months ended Dec. 31, 2007, surged to $24.7 million from $11.9 million. The increase was partly due to new revenue-generating collaborations formed during the year including one with Bristol-Myers Squibb, which was forged in mid-2007 to develop an antisense inhibitor of proprotein convertase subtilisin/kexin type 9 for cardiovascular disease (see RNAi News, 5/17/2007).
 
For the full year, Isis’ revenues climbed to $69.6 million from $24.5 million in 2006.
 
Isis’ operating expenses in the quarter rose $5 million to $33.2 million, while costs for the year increased to $108.6 million from $92.7 million in the previous 12-month period.
 
As of Dec. 31, 2007, Isis had cash, cash equivalents, and short-term investments worth $193.7 million, which included $10.1 million of cash and cash equivalents held by Regulus Therapeutics, Isis’ microRNA-targeting drugs joint venture with Alnylam Pharmaceuticals (see RNAi News, 9/13/2007).
 
Lost Gamble
 
Nastech’s fourth-quarter net loss, meanwhile, rose to $12 million, or $0.47 per share, from $10.7 million, or $0.50 per share, in the year-ago quarter. The company’s net loss for 2007 surged to $52.4 million, or $2.10 per share, from $26.9 million, or $1.27 per share, the year before.
 
In the quarter, Nastech said revenues increased to $6.4 million from $4.8 million in the same period a year earlier. However, fourth-quarter 2007 revenues included $5.5 million in previously deferred revenues associated with the company’s now-terminated deal with Procter & Gamble.
Revenue for 2007 dropped to $18.1 million from $28.5 million in 2006.
 
Nastech’s operating expenses in the fourth quarter rose to $18.7 million from $15.9 million, while R&D spending fell slightly, to $12.2 million from $12.8 million. For the full year, the company’s operating costs jumped to $72.7 million from $57.8 million.
 
At the end of 2007, Nastech had cash, cash equivalents, and investments totaling $41.6 million.
As reported by RNAi News, the company recently began a restructuring effort (see RNAi News, 11/15/2007), which includes layoffs and is expected to cut the company’s monthly burn to less than $2.5 million.

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