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Biogen May Pay as Much as $299 Million for Isis Drug

Biogen Idec Inc. will gain Isis Pharmaceuticals Inc.’s drug for an inherited muscle-weakening disease that afflicts children, in a development deal that may cost as much as $299 million.

Biogen, the world’s biggest maker of multiple sclerosis drugs, will pay Isis $29 million now, plus $45 million in possible milestone payments, and gain an option to license the experimental medicine for spinal muscular atrophy after completion of a successful efficacy trial, the companies said today in a statement. If Biogen exercises the option, Carlsbad, California-based Isis may get $225 million more, plus royalties on sales if the drug is approved.

The deal vaults Weston, Massachusetts-based Biogen to the forefront of a race to develop the first medicine for the inherited disease that afflicts 9,000 people in the U.S., according to the Spinal Muscular Atrophy Foundation. Severe versions of the disease kill children a few years after they are born. Novartis AG and Roche Holding AG, both based in Basel, Switzerland, are also testing drugs for the disease.

“I am very, very excited about this compound,” said Alfred Sandrock, a senior vice president at Biogen, in a telephone interview. If successful, “it would be a breakthrough, the first of its kind; it is exactly the kind of thing we are looking for.”

Missing Gene

Isis declined less than 1 percent to $7.19 at 4:00 p.m. New York time. Its shares had fallen 30 percent in the 12 months before today. Biogen increased less than 1 percent to $113.72 today after jumping 69 percent in the last 12 months.

Children with spinal muscular atrophy lack a gene for a protein called SMN that is necessary for proper nerve cell development. The Isis drug, which began human trials in December, is injected into the spinal fluid and seeks to boost levels of the SMN protein, Sandrock said.

“This has the potential of being truly transformative, if the preclinical data are in any way reflected in the outcome of clinical studies,” said Darryl De Vivo, a pediatric neurologist at Columbia University Medical Center, in a telephone interview. Injections may only have to be given once every few months, he said. De Vivo said he is a consultant to Isis.

Roche in November said it would pay as much as $490 million for experimental treatments from PTC Therapeutics Inc. to treat spinal muscular atrophy. Novartis also has been testing drugs for the disease. Neither of these efforts have yet advanced to human tests.

Roche and Novartis are working with the Spinal Muscular Atrophy Foundation. The foundation, along with other SMA groups, has also funded a researcher at Cold Spring Harbor Laboratory, Adrian Krainer, whose work helped lead to the Isis drug.

The charity was created in 2003 by Dinakar Singh, who runs the hedge fund TPG-Axon Capital Management LP, to find a treatment for his sixth-grade daughter Arya and others with the disease. He has spent almost $100 million on the effort since then.

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