Egyptians Revere Isis, Investors Not So Much (ISIS)

Shares of Isis Pharmaceuticals (NASDAQ: ISIS) fell off the proverbial cliff today as shares plummeted to $10.27, a loss of $2.88 per share or 21.9% percent.

The reason for the loss was one-fold as the United States Food and Drug Administration expressed a number of concerns regarding the company’s key drug, Kynamro. The FDA expressed a number of serious cancer concerns for patients with homozygous familial hypercholesterolemia, a genetic disorder that causes patients to experience abnormally high levels of “bad” LDL cholesterol.

The endocrinology drug committee of the FDA seems to have some real concerns for both Isis Pharmaceuticals and its partner in Kynamro, Genzyme. Genzyme is a division of French pharmaceutical company Sanofi (NYSE: SNY). The committee said that Kynamro was linked to both benign and cancerous tumors: 3.1% of patients, or 23 people treated with the drug, developed tumors in clinical trials compared to two patients treated with a placebo during those studies, or 0.9%.

Fears of cancer from the use of Kynamro, or mipomersen, should not be viewed as entirely shocking to investors, employees of Isis Pharmaceuticals or the Food and Drug Administration. The panel’s report also included documents that showed that cancers were seen in preclinical studies on mice, including liver cancers and hemangiosarcomas, or cancers of blood vessel cells.

While perhaps not an “out-of-the-blue” surprise, today’s announcement was enough to pound the stock over the course of today’s trading.

The Carlsbad, California-based company relies almost exclusively on development partnerships in Kynamro to enjoy a healthy revenue stream. Today’s report suggests that this may turn out to no longer be a healthy revenue stream, but a carcinogenic one.

Following the committee’s announcement, Isis and Genzyme both posted their prepared questions for the FDA on the agency’s website in a hope to avoid a scare, and also to prepare for Thursday’s conversation with the FDA regarding the concerns it raised.

The panel also pointed out that three people died during the clinical trials: Two died from heart attacks and the third from liver failure. While Isis will certainly point out that the patient who died of liver failure also had a number of other health concerns, the FDA parried this potential argument with “the potential for a contributing effect of mipomersen cannot be ruled out.”

Jefferies & Co. analyst Eun Yang said the disclosure about tumors was “quite surprising.” Yang continued with the suggestion that, in all likelihood, the drug will not be approved in the United States. Even if Kynamro is approved, it will likely be heavily limited in its approved uses given the side effects and the large number of patients who dropped out of the clinical trials.

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Published by Brendan Byrne

While studying economics, Brendan found himself comfortably falling down the rabbit hole of restaurant work, ultimately opening a consulting business and working as a private wine buyer. On a whim, he moved to China, and in his first week following a triumphant pub quiz victory, he found himself bleeding on the floor based on his arrogance. The same man who put him there offered him a job lecturing for the University of Wales in various sister universities throughout the Middle Kingdom. While primarily lecturing in descriptive and comparative statistics, Brendan simultaneously earned an Msc in Banking and International Finance from the University of Wales-Bangor. He's presently doing something he hates, respecting French people. Well, two, his wife and her mother in the lovely town of Antigua, Guatemala. You may contact Brendan via his email (brendanbyrne@wallstreetpr.com) or his Google+ page (https://plus.google.com/u/0/116608759701551457422).

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