Deals of the Week's Dead Presidents Edition

As many Americans prepare for their three-day weekend celebrating the birthdays of two great Presidents, Deals of the Week cynically notes that a lot of Americans don’t really love their Presidents until after they’re dead – specifically, the ones whose visages have been enshrined on legal tender. Little Walter sang an amusing blues number about a nation’s love for currency and the commanders-in-chief who adorn it, conveniently glossing over the presence of several non-Presidents, including Alexander Hamilton and Benjamin Franklin, on commonly circulated bills.

It takes far more than even a rarely-seen Salmon P. Chase to get a pharma deal done, but sometimes it also takes more than mere dollars – or euros, pounds, or whatever you like – to keep everyone satisfied. Witness Sanofi-Aventis SA’s bid for Genzyme Corp., a once-hostile overture sweetened with contingent value rights, or CVRs – in this case, options for further payments based on regulatory and manufacturing milestones on Genzyme drugs – that could account for nearly a sixth of the deal’s value. The CVRs primarily relate to pipeline considerations, and a new study shows just how crucial they are to Sanofi and its peers.

According to a report issued Thursday by Bernstein Research’s Tim Anderson, Sanofi’s pipeline was expected to contribute less than 3% of its overall revenues by 2015, the smallest share among nine Big Pharmas studied – at least, prior to the Genzyme deal, which includes a potential blockbuster in multiple sclerosis. Bristol-Myers Squibb, by contrast, can expect nearly 18% to come from its pipeline by 2015, thanks to R&D spending approaching $4 billion annually in the coming years as well as a relatively small revenue base, according to Bernstein’s report. Meanwhile, Eli Lilly & Co. is expected to be among the biggest R&D spenders relative to revenue, though it can expect the fewest returns in total Benjamins from drugs currently in its pipeline, and only a middle-of-the-pack performance as a percentage of overall 2015 sales.

Where do exciting pipeline drugs come from when they're not homegrown? Why of course, it's...


Sanofi/Genzyme: Preliminary conversations between Sanofi and Genzyme last summer gave way to a publicly announced bid to shareholders in August, then a hostile overture in October, protracted negotiations in the following months, and finally a deal in February. The French pharma will pay $74 per share for Cambridge, Mass.-based Genzyme, along with CVRs entitling each shareholder to payouts based on drug development milestones for pipeline drug Lemtrada (alemtuzumab) for multiple sclerosis and production volumes for approved orphan drugs Cerezyme (imiglucerase) and Fabrazyme (agalsidase). While the $74 per share bid exceeded Sanofi’s rejected bid by $5, the CVRs are thought to have been the key to completing the deal, potentially adding $14 per share – $13 from Lemtrada milestones – to its value. Sanofi, whose massive diabetes franchise is balanced by diverse offerings including vaccines and soon-to-be-off-patent anticoagulant Lovenox (enoxaparin), gets Genzyme’s expertise in rare diseases, as well as its manufacturing capabilities. Though some believe it may have overpaid, the aggressive milestone timeline will bear out the deal’s true value – suggesting that the real work, including a potentially tricky integration process, is yet to be done. – P.B.

Astellas/AVEO: In one of the richest oncology deals in the past few years, Japan’s second-largest pharma placed a big bet on AVEO Pharmaceuticals Inc.’s most advanced compound, the Phase III drug tivozanib. Astellas Pharma Inc. paid $125 million up front, while committing to a milestone schedule that could add more than $1.3 billion to the deal, to license tivozanib worldwide, save for Asian territories already licensed to Kyowa Hakko Kirin under an existing agreement. The deal includes $575 million for clinical and regulatory milestones and $780 million in commercial payments, and covers all indications of the drug, currently farthest along in studies for renal cell carcinoma. The two companies will split profits 50/50 in North America and Europe, where they will also share development costs and sales forces, although Astellas is expected to lead commercialization in Europe while AVEO does so domestically. Phase III results are due in mid-2011 for tivozanib, a blocker of vascular endothelial growth factor (VEGF), although an NDA isn’t expected until 2012, pending a favorable clinical outcome. The agreement extends Astellas’ ongoing commitment to oncology beyond its $4 billion acquisition of OSI Pharmaceuticals last year. – P.B.

AdventRx/SynthRx - About two years ago, AdventRx Pharmaceuticals had placed its lead clinical programs on hold and cut staff twice, to a headcount of five. Now, the San Diego-based firm has an FDA action date for its lead program, chemotherapy drug Exelbine (vinorelbine injectable emulsion), and is acquiring privately held SynthRx in an all-stock deal to move into the sickle cell disease (SCD) space. AdventRx, focused on a growth-by-acquisition strategy, will acquire Texas-based SynthRx through an equity deal in which more than 75% of merger consideration is based on NDA acceptance and approval of SynthRx’s lead program and more than 95% is based on milestone achievement. In exchange for an upfront consideration giving SynthRx’s shareholders a 4% interest in AdventRx, SynthRx becomes a wholly owned subsidiary of AdventRx, giving the latter firm ownership of the Phase III poloxamer 188 program. Initially advanced into Phase III in myocardial infarction by CytRx, 188 is a purified form of a rheologic and antithrombotic agent to be studied first in pediatric SCD and thought to have potential in other illnesses involving microvascular flow abnormalities, such as heart attack, stroke and hemorrhagic shock. During an investor call Feb. 14, CEO Brian Culley explained that if every milestone in the deal is paid out fully, SynthRx shareholders would end up with a 40% stake in AdventRx. “If the NDA is accepted and approved, [that is] something I think we would be happy to make these equity payments for,” he added. – Joseph Haas

Bayer/Philogen: The crumbling of one European deal led to the cancellation of a potential bellwether IPO. Swiss-Italian biotech Philogen SpA might be searching for an aspirin after its oncology deal with Bayer AG came apart, prompting Philogen to cancel its anticipated IPO. Bayer abruptly walked away from its licensing arrangement for Philogen’s L19 therapies, vascular-targeting immunocytokine drugs that are being investigated for several different cancers. The two companies’ association dates to 1999, when Schering AG took an option on Philogen’s research into antibodies that inhibit angiogenesis, leading to a formal worldwide license in 2003. Despite the extended relationship, Bayer gave no specific reason for unraveling the deal. Philogen, which says it has six clinical antibodies targeting cancer as well as a rheumatoid arthritis drug and a preclinical ophthalmology program for age-related macular degeneration, was expected to list on the Milan exchange February 18, but instead scuttled what was expected to be Europe’s first IPO of 2011. In the offering, thought to be a signal of a warming climate for biotech listings, Philogen had anticipated raising as much as €65.3 million ($89.3 million) by floating 23% of its shares. The failed listing is Philogen’s second IPO cancellation; it withdrew a planned offering in 2008 as well, citing unfavorable market conditions. – P.B.

Mt. Rushmore image courtesy of Flickr user dclamster, used under Creative Commons license.

Sanofi/Genzyme: The Hard Work Begins

It's official. The months of haggling and well-timed media leaks are finally over. But that doesn't mean there aren't a number of unanswered questions tied to Sanofi's $20.1 billion purchase of Genzyme.

In their conference calls with investors and the press, Messrs. Viehbacher and Termeer played chums, outlining the merits of a Sanofi/Genzyme tie-up in the broadest of terms, while still managing to stay mum on specifics. But even with the complete disclosure on the proposed CVR payments, the question ahead of the deal is still the central question today: why is Genzyme, at $74-a- share, a good deal for Sanofi shareholders?

Put another way: does the scarcity factor associated with Genzyme's big biotech status justify its premium price tag, in the same way that oenophiles will pay $5000 to quaff a rare vintage? (Or is this acquisition destined to be tarred with the same problems AstraZeneca has endured in trying to bolt on MedImmune?)

At the deal's current price, Sanofi claims the Genzyme acquisition will be accretive, and possibly by 2012. As their CFO Jerome Contamine put it to investors on the call announcing the deal, "We can tell, as early as today, that this transaction will be accretive to our business earnings, the earning per share, as early as one year after closing; and that it will be accretive by €0.75 to €1 per share by year 2013." Moreover, Contamine also promised the return on capital will be in excess of Sanofi's average cost of capital by year two.

Problem is, it's very hard to confirm such a statement independently without knowing how Sanofi internally defines its cost of capital. (And surprise, surprise, when analysts pushed Sanofi management on the question, they didn't exactly answer, instead noting that "we adjust our cost of capital to each and every investment.") And the company wasn't exactly forthcoming about the synergies it sees post-close either. In the Q&A with investors, Contamine demurred, eventually saying that based on Sanofi's assumptions it anticipates generating "north of $600 million in synergies." But apparently uncertainties, which include an announced performance program for Genzyme employees mean "the accretion range...is more meaningful because it includes everything."

Why does this matter? For starters, because Viehbacher has been vocal in his criticism of blockbuster M&A and the return it provides shareholders. Add in his own admission at the JP Morgan Healthcare Conference that "with cheap debt, you can make almost any transaction look accretive," and it's hard not to be a wee bit skeptical of how such a fully loaded deal is beneficial to Sanofi shareholders.

That's not to say Viehbacher didn't put on a good show -- or that he failed to sell his logic to some portion of Sanofi's shareholders. Sanofi's shares, which are listed on the Paris exchange, closed up 3.5% on February 16, ending the day at €51.55. But that positive reaction could also be relief that the months long back-and-forth has come to an end, and that Viehbacher did what he said he would do, which was close the deal. There's also the possibility that Sanofi investors were simply glad the deal didn't cost them any more than $74 a share upfront; recall that at times over the past few months industry wags have speculated the final deal price could cross the $75-a-share threshold.

But will said investors be so happy if Cerezyme and Fabrazyme sales fail to rebound to their pre- 2009 -2010 levels? The $1 per share contingent value right tied to the continued resolution of manufacturing issues Sanofi won't have to pay will be cold comfort in that scenario; after all, it leaves considerable room for looming competitors to take advantage of what Viehbacher called Genzyme's "gold-standard" brand.

During his call with investors Viehbacher emphasized the diligence Sanofi has done on this front. "We have been out there in the marketplace all along the year, really making sure that the Genzyme brand was not really suffering too much because of production difficulties," he said.

But it's hard not to see the brand as somewhat tarnished either. Some 6000 Gaucher patients are currently being treated for their disease and Genzyme still commands the lion's share of the market, with 4700 getting its enzyme replacement Cerezyme. But the manufacturing snafus have allowed competitors like Shire's Vpriiv to come on strong, with some 1300 patients now being treated by non-Genzyme alternatives. That proportion could grow, especially since patients haven't really had the full option to jump to Vpriiv because of that medicine's supply constraints.

Keep in mind, too, that as early as next week US patients could have yet another therapeutic option--and one that's significantly cheaper than Cerezyme. Pfizer/Protalix's taliglucerase could get a positive nod from regulators on February 25; given the medicine is manufactured using a plant-cell based technology that is more cost-effective than the process Genzyme uses to make Cerezyme, it's widely expected that Pfizer and Protalix will market the medicine at a significant discount, potentially more than the 15% price cut Shire is already offering on Vpriiv.

Even with ongoing improvements in its manufacturing, Genzyme has missed (admittedly only slightly) its pre-released revenue guidance for the Gaucher drug. As Chris Raymond, an analyst with Baird, outlined in a note to investors, fourth quarter Cerezyme sales fell short by $2 million, with the final tally for the drug coming in at just $222 million. Calling the information "surprising", Raymond asked "how does one miss a pre-released number?"

Admittedly a small discrepancy, this failure shows the crack team at Genzyme still has work to do to get its flagship rare disease franchise back on track. And given the deal's price tag, that means Sanofi has a lot of its own work to do as well.

Genzyme: Time to Sell?

"We have to earn our independence, every day, by doing good things for all our constituents." The words of Genzyme's CEO Henri Termeer, from late 2007, speaking to IN VIVO.

The constituents include shareholders, of course. But the good things certainly don't include major manufacturing snafus, the latest of which those constituents were first made aware of in mid-June when Genzyme declared it was voluntarily closing down its Allston Landing, Mass., production facility, if temporarily, for sanitization following viral contamination.

So does Genzyme no longer deserve its independence? Is it time to sell up? Certainly one or two observers think so. Especially since there's suspicion that the current problems are a lot more severe than Genzyme is letting on.

Genzyme's track record meeting FDA plant inspection requirements hasn't exactly helped preserve shareholders' trust in management. Genzyme apparently received a warning letter in February 2009 as to its plant standards, and a further inspection in May revealed that the company had failed to carry out all of the necessary corrective actions. FDA then informed Genzyme on July 31 that it will re-inspect the Allston plant yet again.

As far as drug supply is concerned, back in June the company said that production of the key rare disease drugs Cerezyme (the only treatment for Gaucher's disease) and Fabrazyme (for Fabry's disease) was scheduled to re-start in late-July. Half the bioreactors at the Allston plant are indeed up and running again, but the company yesterday announced it would have to discard far more--80%--of in-process Cerezyme drug material than initially expected, pushing annual sales estimates down to the lower end of already low guidance--about $750 million. (That may slip even further if the regulators fail to allow two lots of finished drugs, made before the plant was shut down, to be released. Given the company's track record, it's a real possibility.)

As we report in this Pink Sheet DAILY piece, analysts are split on how damaging this whole process has been to Genzyme. Goldman Sachs have the group on their conviction sell list, whereas Leerink Swann reckons concerns are overblown.

No one can argue that Shire is grinning broadly, however, at the golden opportunity it has had to get its own Gaucher's treatment, velaglucerase (Vela), in via the back door. Even though the drug's NDA isn't quite ready yet, FDA has approved a treatment protocol for patients with type 1 of the disease. That means doctors can prescribe the drug, which Shire has agreed to provide free of charge so long as there's no Cerezyme available. Meanwhile the drug has passed its first Phase III trial, the company reports, and is on a fast-tracked NDA submission process.

But let's get back to independence and whether this is the end of Genzyme's. It's hard not to draw a bit of pattern from the fate of a handful of other major biotechs that suffered similarly serious manufacturing problems--think MedImmune, Immunex and Chiron. All of them ended up being sold.

MedImmune went to AstraZeneca in 2007, following FDA warnings that it had failed to address multiple manufacturing problems at a European plant of its nasal influenza vaccine FluMist. Chiron was dogged with similar issues before it eventually became part of Novartis in 2005; its UK production facility for 'flu vaccine Fluvirin was contaminated. For Immunex, which Amgen bought in 2001, the problem was a lack of manufacturing capacity--it couldn't produce enough of RA treatment Enbrel.

If Genzyme is due the same treatment, who will do the honors? Plenty of Big Pharma are now totally converted to the idea of specialist drugs--even the very specialist drugs that Genzyme's into, so there's no philosophical block there. Financially, Novartis might have a problem given its commitment to buy the remainder of Nestle's stake in eye-care firm Alcon (an IN VIVO Blog deal-of-the-year nominee that now looks somewhat less worthy). But what about GlaxoSmithKline or Sanofi Aventis? Both those have admitted that the future isn't about blockbuster oral drugs ; Sanofi knows that growth for the next few years can come only from bolt-on acquisitions and partnerships.

Termeer in his 2007 interview also gave his view of activist shareholders (this was shortly before news emerged of Carl Icahn's stake in Genzyme). "They're a good thing in one sense," he says, "since they force management to understand where their vulnerabilities are, and to unlock maximum value from the business."

Termeer undoubtedly knows where the company's vulnerabilities are right now. (If it's not manufacturing, then he could take a look at how the firm adjusts its earnings, oftentimes rather too heavily in its favor; the sort of tweaking that doesn't do much for confidence at times like this.)

The question is whether or not he can continue to prove that current management is best-placed to unlock maximum value from the business. It was all looking pretty good up until this latest snafu. Genzyme was, after all, diversified and specialist before it was fashionable to be so. But now that it is, and that Genzyme has very definitely tripped up (and seen its share price do the same; it's at a 12-month low), the time for a change may have come.

image by flikrer burienundressedblog used under a creative commons license

Deals of the Year Nominee: Genzyme/Isis

Ah, awards season. Why should film critics have all the fun? And voting! It's not just for presidential elections. This year your IN VIVO Blog team is nominating a handful of alliances, acquisitions, financings, regulatory negotiations and legislative compromises in our First Annual DOTY competition. And then you, dear readers, will vote (early and often, we hope) for the winner. Imaginary federal and international biopharmaceutical statutes prohibit us from awarding a monetary prize. But our winners, when they die, on their deathbeds, they will receive total consciousness. So they've got that going for them, which is nice.

The case for Genzyme's January cholesterol deal with Isis is straightforward: it's Big. In terms of up-front money (not always easy to come by these days), it's the biggest licensing deal of 2008. And of 2007, in fact--the largest one before it was GlaxoSmithKline's Genmab alliance in December 2006.

What’s more, this deal remains top of the money-on-the-table league even after terms were adjusted following one of the year's largest clinical upsets, Schering-Plough and Merck's Enhance data.

To recap: Genzyme, allegedly up against ten other bidders, agreed to pay $325 million up front (including $150 million for shares, at roughly double the price they are today) and over $800 million in development and regulatory milestones for mipomersen, a Phase III, once weekly injectable that targets low-density lipoprotein (LDL), the bad-guy cholesterol—and is perhaps even better at doing so than statins.

Trouble was, days later, data from the notorious ENHANCE study called into question whether lower LDL actually leads to better cardiovascular outcomes—apparently undermining the entire premise on which statins—and mipomersen--is based. Vytorin scrips have been on a nosedive since then.

Small wonder, then, that the deal terms were updated in June, following a delay in April to the drug’s development timeframe thanks to a skittish FDA. Genzyme squeezed another $50 million of development funds out of Isis, bringing its total contribution up to $125 million. Isis gets certain milestones early, in exchange, but—here’s probably the biggest blow—it also shares development costs after the $125 million is used up, until the program turns a profit. (See this story.) In the original deal, Genzyme paid all the development beyond Isis’ $75 million contribution.

That matters, but only later. Mipomersen’s developers may brag that it’s more potent than statins but this isn’t a drug that’s about to displace Lipitor, at least not for a while. For now, mipomersen is being developed for a rare inherited disorder called homozygous familial hypercholesterolemia, which affects only one in a million people. Granted, FDA’s extra data requests post-Enhance will delay the planned filing date by a year (read more about that here), but this shouldn’t break the bank for Isis even under the new terms. Where it might—but where its 30% share of profits could also be significantly higher—is in the subsequent heterozygous hypercholesterolemia program (1 in 500) and the incrementally broader populations beyond that. These ramp up to people with elevated cholesterol at high risk of cardiovascular events, and then to those unable to tolerate statins or for whom statins don’t work.

Which leads us to the second part of the case for this being Deal of the Year: because of the product. Mipomersen’s pyramid-style expansion potential—starting with a tiny, orphan indication, getting the regulators and physicians on side, then broadening out, including with an orally-available follow-on—is the new way to build a blockbuster. In fact it’s probably the only way, mitigating risk and cost for all parties.

And that property of mipomersen—the potential to turn from a small product within specialist comfort zone into something worth $2 billion—explains why Genzyme left its blockbuster upfront cash-wodge on the table. Is it IN VIVO Blog's Deal of the Year?

Genzyme/Isis’ Mipomersen Development Hits A Snag

Talk about bad timing. You could almost feel sorry for Genzyme signing a $1.9 billion development and commercialization deal with Isis for mipomersen just days before ENHANCE data shook up the long-held belief that lower LDL equals better cardiovascular outcomes.

Mipomersen is based on the same lower-is-better lipid theory, after all. In fact, the drug targeting apolipoprotein B-100 has been shown to reduce cholesterol and other atherogenic lipids by more than 40 percent beyond reductions achieved with current standard lipid-lowering drugs.

Given the uncharted regulatory environment post-ENHANCE, we weren’t surprised to hear that Genzyme and Isis are pushing back their development timeline for mipomersen. IN VIVO speculated as much in February, and sure enough FDA is requesting more data to support an NDA filing than the firms had originally banked on.

The revised development plan calls for filing in 2010, not 2009, for an initial indication in homozygous familial hypercholesterolemia – a rare, orphan drug indication. It is the planned filing for a broader indication in patients with high cholesterol at high risk of cardiovascular events, including heterozygous FH, that could face a more significant delay, until 2012 or potentially beyond.

While FDA has guided Genzyme and Isis that reduction of LDL-cholesterol is an acceptable surrogate endpoint for accelerated approval for patients with hoFH, the agency is requesting two carcinogenicity studies to be included in the filing, rather than the one the firms had been planning to have completed in time for the submission.

For the broader indication, FDA is requesting a cardiovascular outcomes trial, three words that would send a tremor through even the most deep-pocketed big pharma. Outcomes data means long, expensive trials. Take for example Merck/Schering’s ongoing outcomes trial for Vytorin, IMPROVE IT, which is enrolling 18,000 patients with data anticipated in 2012.

Genzyme and Isis management are assuring investors that they can run a significantly smaller outcomes trial given the high-risk patients that will be enrolled, but that remains to be seen.

The one outcome that is clear is that the cost of developing mipomersen just went up.

And that leads to yet another snag: the transaction hasn’t officially closed. It’s expected to this quarter, but before the door shuts on the deal, there may still be an opening for Genzyme to re-negotiate. Both chief execs were less than forthcoming when asked about re-negotiating, which makes us think some changes are likely.

One line item Genzyme might look to gain an edge on is the development costs. Under the original agreement, Genzyme is responsible for paying all but $75 million of the development costs, meaning it would bear the brunt of the outcomes trial.

The deal also includes a pretty hefty upfront payment - $325 million – but the bulk of the regulatory and commercial milestones hedge Genzyme’s risks. Only $50 million of the $825 million in development and regulatory milestones are related to the homozygous FH indication, with the rest of the allotted payments falling to a heterozygous FH indication, a non-FH indication and approval of a follow-on product.

Read more about mipomersen and the latest regulatory setback at “The Pink Sheet” DAILY.

by Jessica Merrill
The Pink Sheet Daily

“We’re a Buyer, not a Seller,” Says Genzyme With Isis Deal

Genzyme’s $325 million up-front deal with Isis Pharmaceuticals on Phase III cholesterol-lowering drug mipomersen achieves two goals for the Big Biotech. It plugs a worrying gap in the company’s otherwise healthy growth trajectory and makes a bold statement about Genzyme’s determination to remain independent.

After activist shareholder Carl Icahn took a small stake in the company at the back end of last year, Genzyme needed to do something to minimize takeover speculation. CEO and chairman Henri Termeer--although always clear in his desire to drive an independent ship--took the trouble to go on the road and make his case, as reported in the Wall Street Journal.

Fortunately, as we now know, Termeer was also busy bidding for mipomersen. The product went up for auction last summer, according to Isis' CEO Stanley Crooke, and the timing of Genzyme's victory is opportune. The deal's size and structure--$150 million for about 5% of Isis’ equity, plus $175 million in cash upfront, a headline-grabbing potential $825 million in development and regulatory milestones, plus up to $750 million in commercial milestones—sends a strong message that Genzyme is out to buy and build, not to sell.

The deal also reinforces elements of Genzyme’s diversified-yet-specialist strategy, whose advantages, as we argued in a recent IN VIVO feature, are becoming increasingly clear. Mipomersen, a lipid-lowering compound that targets apolipoprotein B-100, is a weekly injectable being investigated, in the first instance, for familial hypercholesterolemia (FH). That’s a relatively rare, inherited disorder, suitable for a specialist sales force—bang in Genzyme’s bailiwick. Termeer describes the asset in the press release as a “very Genzyme-like product.”

Not that cardiovascular is exactly a Genzyme-like TA; not yet, anyway. For now in this area it sells only Cholestagel, a tablet for high cholesterol patients who can’t tolerate statins or who need additional help lowering LDL. But that’s the diversification bit: CV may now become one of Genzyme's emerging franchises as the company continues to broaden out beyond lysosomal storage disorders, where top-selling Gaucher’s treatment Cerezyme accounts for about 30% of total revenues.

Mipomersen, on paper at least, fits beautifully into Genzyme’s tried-and-tested strategy of broadening out assets beyond an initial niche indication and picking up lucrative corners left un-served by larger, sometimes primary care drugs. Thus mipomersen, due for filing in FH next year, will also be tested in patients with high cholesterol and at high risk of cardiovascular events—those for whom statins don’t work or aren’t suitable. (The drug, a second-generation anti-sense product, likewise confirms Genzyme's willingness to embrace novel, often risky technologies.)

Given the fit, the timing, and the drug's late-stage, it’s no surprise to see the smaller biotech win above-average up front fees, lucrative milestones--although, as Bear Stearns analyst Mark Schoenebaum points out, it’s unclear how these are distributed--and also at least 30% of profits without lifting a finger on the commercialization front.

That detail—commercialization--is perhaps more surprising: until recently, most biotechs have tended to go for a co-promotion option on their drugs at a minimum (although that trend has been waning, as we reported here). If the drug reaches $2 billion or more in sales (unlikely; Bear Stearns is forecasting a conservative $750 million) Isis would be eligible for 50% of profits, with a linear sliding scale in between.

Genzyme also has preferred access to future Isis drugs in CNS and certain rare diseases; that, courtesy of the $150 million equity purchase, at more than double Isis’ pre-announcement share price. Isis’ shares rose almost 50% in after-hours trading on Monday, according to Reuters.