While investors wait for Isis Pharmaceuticals Inc. to select a partner for its Phase II low-density lipoprotein cholesterol-lowering drug, ISIS 301012, the company signed a surprise deal for an early stage LDL-lowering program.

Kate Corcoran, vice president of corporate development at Carlsbad, Calif.-based Isis, said the deal arose as potential partners for apoB-targeted ISIS 301012 learned about other programs in Isis' pipeline. The early stage LDL-lowering program, which uses antisense to target proprotein convertase subtilisin kexin 9 (PCSK9), caught the eye of multiple bidders.

Princeton, N.J.-based Bristol-Myers Squibb Co. eventually triumphed, gaining an exclusive license to the PCSK9 program. In exchange, Isis gets $15 million up front, at least $9 million in research funding over the next three years, up to $168 million in development and regulatory milestones, and unspecified royalties.

BMS will fund collaborative preclinical work and then assume responsibility for further development and commercialization. Meanwhile, Isis will pursue follow-on PCSK9 antisense drugs, which could bring in additional milestone and royalty payments.

Corcoran noted that the terms for the deal are "in the competitive range" for major preclinical antibody and small-molecule deals, yet Isis' PCSK9 program is still "pre-preclinical" since the human drug has not yet been finalized. She added that antisense traditionally has faced more resistance than other approaches due to some high-profile setbacks, but that Isis' second-generation antisense drugs are "working great."

Analyst Jim Birchenough of Lehman Brothers Inc. agreed that the deal "validates the second-generation antisense platform." But given the high cost of cardiovascular drug development, the "real benefit is the support you get from a large pharma partner in trying to bring something to fruition," he noted.

Isis shares (NASDAQ:ISIS) traded up 33 cents, or 3.3 percent, to close at $10.24 on Wednesday, a response Corcoran described as "mystifying." "We have a long history and a lot of people who like to bet against us, which is frustrating because we are doing top-notch science," she said.

Mark Monane, analyst with Needham and Co. LLC, pointed out that Wednesday was a "bad day" for biotech stocks as a whole, given big losses from Dendreon Corp. and IDM Pharma Inc. (See stories in this issue.)

Birchenough attributed the lukewarm stock reaction to the fact that investors are waiting for the ISIS 301012 deal, which will be the "real value-enhancing event for the company." Discussions on that program are under way, said Corcoran, who added that Isis may sign a deal later this year or early next year.

The excitement around both the PCSK9 program and apoB-targeted ISIS 301012 has to do with the fact that each represents a new approach to lowering cholesterol and may find a place in the $30 billion worldwide market for lipid-lowering drugs. Alnylam Pharmaceuticals Inc. also is working on both targets, but it's one of the few aside from Isis to make much progress.

Eric Miller, spokesman for BMS, called PCSK9 an "attractive, validated target in the field of cardiovascular disease."

In mouse studies, Isis' antisense compounds reduced PCSK9, resulting in higher levels of LDL receptor and consequently lower LDL cholesterol levels in the bloodstream. In Phase II studies, ISIS 301012 reduced apoB levels and related levels of LDL cholesterol and triglycerides both as a monotherapy and in combination with statins. Additionally, the drug was well tolerated with no evidence of drug-induced liver injury, as can be seen with other cholesterol-lowering approaches.

While the monotherapy data may be important for patients who can't tolerate statins, Birchenough noted that the combination approach may be able to help the "large group of patients not reaching their LDL goals on statins alone" without adding toxicity.

Monane agreed there is room for a new class of drugs to be added to statins, as most chronic diseases other than high cholesterol use a combination of drugs to achieve treatment goals. He added that the guidelines for target LDL levels keep getting lower and lower, and that it seems "you can never be too thin, too rich or have too low cholesterol."

Beyond ISIS 301012 and the PCSK9 program, Isis has five other unpartnered programs in its pipeline and many more in discovery stages. As to whether any of those have become the subject of unexpected partnering talks during the ISIS 301012 diligence process, Corcoran pleaded no comment but advised investors to "keep an eye out" for additional business development activity as well as more ISIS 301012 data and the initiation of a pivotal study in familial hypercholesterolemia with the apoB-targeted drug.

Additional details regarding Isis' deal with BMS will be discussed in today's previously scheduled first-quarter earnings conference call.