Pharmaceuticals Shares Jump

Shares of Isis Pharmaceuticals Inc. jumped Thursday after Jefferies & Co. initiated coverage on the company with a "Buy" rating and $17 price target saying the company's drug pipeline holds promise and appears under-appreciated based on the current stock price.

The stock rose 56 cents, or 5.1 percent, to $11.50 in midday trading. Shares have traded between $5.81 and $14 during the last 52 weeks.

The company is developing a high cholesterol treatment, labeled ISIS 301012, and a diabetes drug called ISIS 113715. Jefferies analyst Salveen Kochnover said the cholesterol drug has the potential to be blockbuster, that is, become a billion-dollar drug. The drugs are based on RNAi technology, which aims to silence genes at the root of a condition, therefore shutting down the disease.

She expects Isis to start a late-stage study on the cholesterol drug in the second half of the year, with approval in 2010.

"Isis, an industry leader in antisense technology and drug development, holds a huge patent estate comprised of more than 1,500 patents that have generated over $77M in technology access revenue to date," she said. "The company's long-standing singular focus on antisense technology has yielded improved second-generation compounds with enhanced chemistry, higher potency, less frequent dosing, better tolerability, and possible oral bioavailability."

She also expects the company to find a large pharmaceutical partner for the cholesterol drug candidate by the end of the year or early next year. Isis has already partnered with Bristol-Myers Squibb to develop drugs targeting cardiovascular disease.

The company already has one marketed drug, Vitravene, with partner Novartis AG. The drug treats cytomegalovirus retinitis, an infection of the retina. In all, it has 18 drugs in various stages of development.

Source:www.forbes.com