SAN FRANCISCO — Genzyme has agreed to pay at least $325 million to win the hotly contested rights to a potentially powerful cholesterol-lowering drug being developed by Isis Pharmaceuticals.
The deal, announced here Monday, represents a vindication of sorts for Isis. The small company has struggled for 18 years to develop drugs using a gene technology called antisense, so far without notable success.
But its cholesterol drug has started to turn some heads. In midstage clinical trials, the drug, called mipomersen, lowered levels of cholesterol and other blood lipids more than 40 percent beyond reductions achieved by statins and other existing drugs alone, Isis said.
Under terms of the deal, Genzyme will pay $150 million to purchase 5 million shares of Isis, a stake of a few percent. It will pay $30 a share, about twice the $14.58 closing price of Isis on Monday. In after-hours trading, Isis shares shot up 47 percent, to $21.40.
Genzyme will also pay a $175 million license fee and could end up paying as much as an additional $1.6 billion if the drug reaches the market and achieves certain sales goals.
Isis, based in Carlsbad, Calif., will also get 30 to 50 percent of the profits from the drug, depending on the sales level.
The deal was announced during the first day of the JPMorgan Healthcare Conference.
Mipomersen is in the last stage of clinical trials as a treatment for a rare genetic disease that causes people to have astronomical cholesterol levels, raising their risk of premature cardiovascular disease and death. There are only about 10,000 people in the world with the most severe form of the disease, which can cause heart attacks even in young children.
Isis and Genzyme envision that eventually the drug might also be used for 1.5 million people in the United States and Europe with less severe forms of the genetic disorder and also for millions of people who have high cholesterol that is not controlled sufficiently by statins like Lipitor.
Genzyme, a biotechnology company based in Cambridge, Mass., specializes in selling drugs for rare diseases at prices as high as $300,000 a year.
That might make it a logical partner for the first use of mipomersen, as a treatment for the rare disease. But Genzyme might seem an odd choice to market a drug for the broader cardiovascular market, because it does not have a large sales force to call on general doctors.
Stanley T. Crooke, the chief executive of Isis, said that because mipomersen is injected once a week, it would be aimed at supplementing statins, not competing with them. “It’s not going to replace statins, and we would never dream of replacing statins,” he said. “While experience selling statins wasn’t contra-indicated, it wasn’t necessary.”
The companies hope to apply in 2009 for approval of the drug.
Mr. Crooke said that 10 companies expressed interest in the drug and that Genzyme made the best overall offer.
