Isis: Vote of confidence from Pfizer

Isis Pharmacauticals (ISIS) had good news when Pfizer announced that it was acquiring Carlsbad, CA-based Excaliard Pharmaceuticals, an ISIS spinoff.

Excaliard was founded in 2006 with technology from ISIS. This is an excellent example of an ISIS satellite partnership program in which they out-license drug development candidates that they do not have all the internal resources to develop.�

In other words, the company�s drug discovery team has discovered more legitimate drug development candidates than they can handle.

Terms of the deal aren't being disclosed, but ISIS said today it is getting $4.4 million upfront, and as much as $14 million over time for its equity stake, plus further milestones and royalties.

EXC-001, is the lead drug development candidate at Excaliard, and is being developed for the treatment of skin fibrosis or skin scarring, in other words, excess scarring after surgery or injury. EXC-001 has been developed by Excaliard in collaboration with ISIS. �
The drug development candidate works by targeting connective tissue growth factor, a growth factor that is over-expressed in damaged skin or tissue following a traumatic event. �

In early 2011, Excaliard reported positive data from three Phase II trials demonstrating that EXC-001 significantly reduced scar severity in both hypertrophic and fine line scarring.

The company measured three separate assessments of scar severity, a physician assessment, a subject assessment and an expert panel visual analog scale (VAS) at 12 and 24 weeks post-surgery.

On all three scales, EXC-001 showed a rapid onset to scar improvement and a sustained reduction in scar severity.

At 24 weeks, the EXC-001 treated scars showed highly significant improvement compared to placebo on all 3 scales with a high degree of statistical significance (p=0.003).

In addition to being safe and well-tolerated, the drug development candidate significantly reduced scar severity in both hypertrophic and fine line scarring. EXC-001 is currently in a Phase IIb study in patients following breast scar revision surgery.

With no FDA-approved products for the reduction of scar severity, the drug development candidate could address a significant market opportunity. �

Pfizer�s vote of confidence certainly increases the odds of success for EXC-001. We continue to believe that ISIS is undervalued and that experts such as the decision-makers at Pfizer are better judges of the value being created by the company than Wall Street. ISIS is a buy.