Companies will collaborate on discovery of new compounds, and Ortho-McNeil will gain two Isis candidates.

Isis Pharmaceuticals stands to earn over $275 million in deal with Ortho-McNeil related to metabolic diseases. The collaboration includes discovery, development, and commercialization of antisense drugs to treat these disorders. Additionally, Isis will grant Ortho-McNeil worldwide development and commercialization rights to two of its diabetes development candidates.

Ortho-McNeil will pay Isis a $45 million upfront licensing fee for Phase I candidate ISIS 325568 and preclinical compound ISIS 377131, which selectively inhibit the production of glucagon receptor and glucocorticoid receptor (GCCR), respectively. Isis could receive over $230 million in milestone payments upon successful development and regulatory approvals of these two drugs as well as royalties on sales.

Isis could also receive milestones and royalties for additional drugs discovered as part of the collaboration. Ortho-McNeil will provide funding to support joint discovery work. After the initial collaboration phase, Ortho-McNeil’s parent company, Johnson & Johnson Pharmaceutical Research & Development, will continue development.

Prior to closing the transaction, Isis says that it plans to purchase the equity in Symphony GenIsis and reacquire the intellectual property related to the GCGR and GCCR programs.

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