Isis Pharmaceuticals Inc. said it would manufacture Affinitac for the product launch period of the antisense drug, using a $21 million loan from its development partner, Eli Lilly and Co., to build a manufacturing suite.

Affinitac is in Phase III trials for the treatment of patients with non-small-cell lung cancer. The product selectively inhibits the production of protein kinase C-alpha.

Lilly, of Indianapolis, will provide Isis, of Carlsbad, Calif., $21 million to fund the manufacturing space in an existing building on Isis' Carlsbad campus. The agreement stipulates that Isis would continue to manufacture Affinitac for clinical use, but also would produce enough to meet commercial needs for a three-year period. After the three-year period, Lilly expects to assume manufacturing responsibility. The loan is expected to be repaid with Affinitac milestone payments and other product-related cash inflows, Isis said.

The companies began their collaboration on Affinitac - still called ISIS 3521 at the time - in August 2001 through a deal with a potential value of more than $400 million to Isis. Basically, that deal gave Isis about $200 million in committed cash and another $200 million in milestones for the company to shoot for. (See BioWorld Today, Aug. 23, 2001.)

In June, the companies expanded the deal, based on early clinical results from Affinitac studies, to include ISIS 23722, as well as other preclinical antisense compounds. Financial details of the expansion were not disclosed. (See BioWorld Today, June 19, 2002.)

Industry observers have anticipated the new drug application for Affinitac could be submitted to the FDA in 2003. Isis' stock (NASDAQ:ISIS) rose 34 cents Tuesday to close at $10.20.