Four months after licensing a preclinical, second-generation antisense drug for high cholesterol to Bristol-Myers Squibb Co. in a deal worth up to $192 million, Isis Pharmaceuticals Inc. is at it again.

This time, the Carlsbad, Calif.-based company licensed two early stage, second-generation antisense drugs for diabetes to Johnson & Johnson subsidiary Ortho-McNeil Inc.

Shares of Isis (NASDAQ:ISIS) rose 54 cents Thursday to close at $13.30, but investors are still waiting for Isis to partner its lead drug candidate, the Phase II apoB-targeted cholesterol drug ISIS 301012.

In a conference call, Isis Chairman and CEO Stanley Crooke assured analysts that the interest in licensing ISIS 301012 is "intense" and that the process is "going very well."

Joseph Schwartz, an analyst at Leerink Swann & Co., predicted the ISIS 301012 deal will get done around the end of the year, or possibly early next year, and that it could bring in as much as $100 million up front and $1 billion in potential milestones.

ISIS 301012 has been shown in Phase II trials to reduce apoB levels and related levels of low-density lipoprotein (LDL) cholesterol and triglycerides, both as a monotherapy and in combination with statins.

Early data from an ongoing Phase II trial showed LDL reductions beyond those achieved with maximally tolerated lipid-lowering therapy. Additionally, the drug has been well tolerated with no evidence of drug-induced liver injury, unlike other cholesterol-lowering approaches.

But while all eyes are on ISIS 301012, Schwartz noted that the early stage deals signed with BMS and Ortho-McNeil both had "very favorable terms." He attributed that to the fact that the second-generation antisense drugs all have the same backbone, which allows the partners to extrapolate the safety and pharmacokinetic data seen with ISIS 301012 to the earlier compounds.

The BMS deal, signed in May, involved a preclinical, second-generation, cholesterol-lowering antisense drug targeting proprotein convertase subtilisin kexin 9 (PCSK9). In exchange for an exclusive license to the program, BMS agreed to pay Isis $15 million up front, at least $9 million in research funding, up to $168 million in milestones and unspecified royalties.

BMS also agreed to fund collaborative preclinical work and then assume responsibility for further development and commercialization, while Isis pursues follow-on PCSK9 antisense drugs, which could bring in additional undisclosed milestone and royalty payments. (See BioWorld Today, May 10, 2007.)

The deal with Ortho-McNeil followed a similar structure. In exchange for worldwide development and commercialization rights to ISIS 325568 and ISIS 377131, Ortho-McNeil agreed to pay Isis $45 million up front, $15 million in research funding over two years, up to $230 million in development and regulatory milestone payments, and undisclosed royalties. Additionally, the two companies will work together to discover two more drugs for two metabolic disease targets. Johnson & Johnson's successful development and commercialization of those two drugs could bring Isis another $150 million in milestone payments.

ISIS 325568 is designed to inhibit the glucagon receptor (GCGR) in the liver, lowering blood glucose levels in Type II diabetes patients. Preclinical data have demonstrated the drug improves glucose control, reduces levels of blood triglycerides without producing hypoglycemia and increases circulating glucagon-like peptide (GLP-1), which Crooke said may "have a disease-modifying effect." Isis began a randomized, double-blind, placebo-controlled, dose-escalation Phase I trial of the drug earlier this month in healthy volunteers, and Crooke noted the trial is designed to show early efficacy in addition to safety and pharmacokinetics.

ISIS 377131 inhibits the glucocorticoid receptor (GCCR) primarily in liver and fat cells. Preclinical data have shown the drug reduces blood glucose levels, cholesterol, triglycerides and body fat, making it potentially applicable in the treatment of diabetic dyslipidemia and obesity. Yet unlike systemic GCCR inhibitors, ISIS 377131 has not been associated with activity in the central nervous system or adrenal glands, which can lead to systemic side effects.

One diabetes drug not included in the Ortho-McNeil deal is ISIS 113715, a protein tyrosine phosphatase 1b (PTP 1b) inhibitor in Phase II. Crooke said Isis is waiting to partner that drug because "we think it will be worth a great deal more" after completion of an ongoing Phase II trial in combination with sulfonylurea.

The Ortho-McNeil deal is expected to close in the third or fourth quarter. Prior to closing, Isis plans to buy back full rights to ISIS 325568 and ISIS 377131, as well as ISIS 301012, from Symphony GenIsis Inc. Isis licensed the intellectual property around the three compounds to Symphony last year in exchange for $75 million in financing from Symphony Capital Partners LP.

However, Isis retains an exclusive option to acquire Symphony and regain full rights to its programs for a predetermined price of $120 million. Isis said it will complete the purchase this quarter, paying $80 million in cash and $40 million in stock. (See BioWorld Today, April 11, 2006.)

"In the 16 months that we've used the Symphony GenIsis funding, the value of these two drugs has increased certainly fivefold and the value of ISIS 301012 has increased even more significantly," Crooke said. He noted that regaining full rights to ISIS 301012 also prepares that program for partnering.