Isis to Receive $14 Million for Its Excaliard Acquisition

Isis Pharmaceuticals, Inc. recently announced it will receive up to $14 million from Pfizer Inc. for its equity ownership of Excaliard Pharmaceuticals, Inc. from Pfizer’s acquisition of Excaliard. Upon closing of the acquisition, Isis will receive an initial $4.4 million. Contingent payments of up to an additional $9.6 million could be paid to Isis upon achievement of various milestones associated with the clinical and commercial progress of EXC 001. In addition, Isis will continue to be eligible for milestone and royalty payments under its licensing agreement with Excaliard for EXC 001. The acquisition of Excaliard by Pfizer exemplifies the potential of Isis’ strategy to partner antisense drugs in diseases that are outside of Isis‘ main therapeutic areas of focus and benefit financially from these partnerships.

“Our business strategy allows us to exploit our antisense drug discovery platform to create many opportunities outside of our core areas of therapeutic focus. We have been extremely successful in implementing this unique strategy. To date, we have generated more than $450 million from our satellite company partners. Our partnership with Excaliard and their development of EXC 001 is the most recent example of the success of this strategy,” said B. Lynne Parshall, JD, COO, CFO, and Secretary at Isis. “The local treatment of fibrosis for scarring is an area outside our key focus and, as such, is not one we would have pursued internally. We chose instead to partner with Excaliard, a company with focused therapeutic expertise in this area. Using its own resources and expertise, Excaliard has rapidly advanced EXC 001 to Phase II, creating a strong clinical data package for this potentially breakthrough therapy. Pfizer will provide additional drug development expertise and experience to support the continued advancement of EXC 001. The market opportunity to treat disfiguring scars is very large, and we are pleased to have created an opportunity to participate in it through EXC 001 and Excaliard.”

“CTGF has been an interesting target for fibrosis for years, and now we have the clinical data that Excaliard generated with EXC 001, which shows the importance of CTGF for the treatment of fibrotic disorders,” added Brett Monia, PhD, Vice President, Drug Discovery and Corporate Development at Isis. “We have been successfully pursuing systemic applications for CTGF, which differs from the local applications pursued by Excaliard, to treat a range of fibrotic diseases and look forward to advancing our program toward clinical development.”

Isis and Excaliard entered into a collaboration in 2007 to discover and develop antisense drugs for the local treatment of fibrotic diseases, including scarring. Excaliard is a private company funded by Rivervest Venture Partners, Alta Partners, Proquest Investments, and Isis. EXC 001 was co-discovered by Isis and Excaliard and developed by Excaliard for the treatment of skin scarring. EXC 001 targets connective tissue growth factor, or CTGF, 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 studies demonstrating that EXC 001 significantly reduced scar severity in both hypertrophic and fine line scarring. EXC 001 was safe and well tolerated in all subjects and is currently being evaluated in a Phase IIb study in patients following breast scar revision surgery.