Isis gains most in 5 years on analyst praise for novel drug
By Ryan Flinn, Bloomberg News
Friday, November 9, 2012
Isis Pharmaceuticals Inc. (Nasdaq: ISIS) rose the most in almost five years after Cowen & Co. analyst Eric Schmidt raised his rating to outperform from neutral based on an experimental therapy's likelihood of becoming a blockbuster.
Isis jumped 14 percent to $8.78 at the close of trading in New York, for its largest single-day gain since January 2008. Shares of the Carlsbad-based company have increased 22 percent this year.
Isis develops therapies with its antisense technology, which works by manipulating chemical compounds so they bind to and disable the action of some disease-linked genes. Drugmakers such as Sanofi, GlaxoSmithKline Plc (NYSE: GSK) and Teva Pharmaceutical Industries Ltd. (NYSE: TEVA) have been partners with Isis to bring therapies to market. The company is developing a treatment with Biogen Idec Inc. (Nasdaq: BIIB) for spinal muscular atrophy, called ISIS-SMNRx, that may reach sales of $1 billion plus, Schmidt wrote today in a note to clients.
"Our confidence in ISIS-SMNRx in particular is growing," Schmidt said. "We forecast approval of ISIS-SMNRx in 2016 and believe the drug has blockbuster potential."
While Isis has declined 50 percent since September because of "diminished expectations" for Kynamro, a drug being developed with Paris-based Sanofi to treat a hyper form of high cholesterol in people with a rare genetic disease, Schmidt said the company's pipeline is undervalued.
"Our enthusiasm for Isis's antisense platform and pipeline (20+ candidates in clinical development) continues to grow," he wrote.
U.S. regulators are scheduled to decide whether to approve Kynamro by January.