Associate

Isis Pharmaceuticals Inc. and its partner, Eli Lilly and Co., reworked their Affinitak manufacturing agreement, following the compound's disappointing Phase III non-small-cell lung cancer trial in March.

Isis in a prepared statement called the move a "mutually beneficial renegotiation." Both sides have given concessions. Lilly, of Indianapolis, agreed to waive a $21 million manufacturing loan repayment from Isis. The loan was used to build the Affinitak manufacturing facility.

Isis, of Carlsbad, Calif., agreed to let Lilly out of its Affinitak supply obligations. Lilly is not obligated to buy additional product from Isis, nor is it required to pay for the cost of maintaining the manufacturing suite.

Using Lilly's loan, announced in the fall of 2002, Isis built a manufacturing facility initially designated for Affinitak; its construction was completed in February. Now, however, Lilly is allowing Isis to use the space to manufacture other drugs, even those that fall outside the companies' collaboration. (See BioWorld Today, Oct. 2, 2002.)

Lilly and Isis formed their partnership in August 2001. The deal was centered on ISIS 3521, now called Affinitak, but included other antisense drugs and had a total potential value of more than $400 million. The companies expanded that deal in June 2002 by adding specific gene targets in cancer, which increased the potential value, although by how much was not disclosed. (See BioWorld Today, Aug. 23, 2001, and June 19, 2002.)

The missed primary endpoint in March in the Affinitak non-small-cell lung cancer trial dropped Isis' stock by nearly 32 percent the day it was made public, as it closed that day at $2.83. The company has a second Affinitak lung cancer Phase III trial, which is sponsored by Lilly, under way. Data from that study are expected early next year. After the failure, Isis reduced its staff by 9 percent and pulled plans for a few clinical trials to conserve funds. (See BioWorld Today, March 18, 2003, and April 3, 2003.)

Isis' stock (NASDAQ:ISIS) rose 34 cents Thursday to close at $6.37.