Analysts Thoughts On Isis Pharmaceuticals (ISIS) After 19% Sell-Off

Despite a Phase 3 study of Mipomersen meeting its primary endpoint, shares of Isis Pharmaceuticals (Nasdaq: ISIS) fell 19% yesterday on concerns about elevated liver toxins from the trial. A number of analysts have now weighed in on the matter (from today and yesterday).

Many of the analysts were telling clients to buy on the weakness, one firm however was more cautious.

• Needham & Co: "We believe the efficacy results are clinically meaningful, as every 2 mg/dl reduction in LDL leads to a 1% reduction in CAD events. The dropout rate for trial was modest at 12% and lower than that seen in the previous Phase 3 trial. We note the LFT abnormalities were modest as well, and consistent with a favorable benefit/risk profile in this hard-to-treat heFH population. We note that liver fat is being measured as part of this trial, and the full analysis of the efficacy and safety data will be presented at a scientific meeting. We reiterate our BUY rating at this time, given the current stock weakness, yet we believe that there will be continued questions raised until the other Phase 3 trial data are reported in mid-2010 (which may provide an additional upside to our current valuation) along with follow-up of Genzyme’s plans to submit the mipomersen NDA for patients with homozygous familial hypercholesterolemia and severe hypercholesterolemia in 1H11. We note the ~$550MM net cash position, high-quality collaborations with brand names in big Pharma, and upcoming pipeline events as additional company resources beyond mipomersen." Reiterate Buy rating, $22 price target.
  
  
• Leerink Swann: "Modest efficacy is unable to make up for questionable mipomersen safety and tolerability, in our view. The regulatory pathway remains difficult since we believe the FDA is likely to require more than just LDL lowering data for patient groups beyond the ultra orphan indication of hoFH (300 patients in the US)." Reiterate Market Perform, lowering fair value from $10 to $9.
  
  
  
• Piper Jaffray: "ISIS and Genzyme reported pivotal data for mipomersen in heterozygous familial hypercholesterolemia (HeFH) patients. The 28% decrease in LDL with mipomersen (33% delta over placebo) was below Street expectations pressuring shares again this morning. We continue to believe that mipomersen is approvable in severe cholesterol and high-risk cardiovascular patients. The partners remain on track for submission in the U.S. and EU in 1H:11. Although we are reducing our price target to $13, we recommend investors buy ISIS on weakness today." Overweight rating, price target cut from $15 to $13
  
  
• Collins Stewart: "We believe ISIS/GENZ's mipomersen P3 study in HeFH patients demonstrated solid efficacy (33% placebo-adjusted reduction on an ITT basis). Although the Street is questioning overall safety/tolerability of mipomersen, our physician checks continue to support the risk/benefit profile of the drug in the initial indications of HoFH and severe hypercholesterolemia (apheresis-eligible). We believe today's stock reaction seems exaggerated, given a late-stage potential blockbuster (mipomersen's safety and efficacy profile remain in-line with prior clinical data), robust pipeline and a strong cash position (~$5/share in net cash)." Maintain Buy rating, $17 price target
  
  
• Wells Fargo: "Prior to the market's 2/10/10 open Genzyme and Isis announced positive results for the RADICHOL 2 study of mipomersen in Heterozygous Familial Hypercholesterolemia (HeFH) patients. This is the 2nd positive Phase III study to date with two additional studies to report top-level data by mid-2010. After 26 weeks of dosing mipomersen resulted in a placebo-adjusted reduction in LCL-C of 33% (5% increase for placebo vs. a 28% decrease for mipo). From a safety perspective no patients achieved ALT elevations > 8x ULN (the stopping rule) or Hy's Law (the FDA's primary safety concern) and there were no Serious Adverse Events. While we must await details around the 10 mipo drop outs (12%) the overall safety profile continues to be acceptable for this high risk population. Based on an evolving profile we continue to believe that mipo will initially have a clinical role to play in the treatment of the 50,000-100,000 global patients (i.e., HoFH, "apheresis-eligible" phenotype) who are at a high risk for CV events." Maintains Overweight rating
  
  
• Cantor Fitzgerald: "Today's sell-off, we believe, was an overreaction to the observation of ALT elevation in the HeFH Phase III study also observed in the previously reported Phase III hoFH study (see "Mipomersen Data Validating for Platform & Pipeline -- BUY," November 19, 2009), particularly in light of significantly improved efficacy outcomes (-28% LDL-C reduction) in these severe, inherited high cholesterol, difficult-to-treat patients who had pre-existing coronary artery disease and were on a maximally tolerated statin therapy." Maintains Buy rating $28 price target.

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