Isis Inches Closer Toward Profitability

2/25/09Follow @xconomy

Isis Pharmaceuticals is getting closer to a milestone few biotechs ever reach-profitability. The Carlsbad, CA-based company, through its strategy of forming partnerships with pharmaceutical companies that want a piece of its inventions, was able to build up a war chest of $491 million at year’s end. Isis also trimmed its net loss last year to a relatively skinny $12 million.

The company has been around 20 years, long after many biotech companies wear out their welcome, and it still hasn’t gotten into the black permanently. But the financial picture at Isis looks quite a bit brighter than it did a year ago, based on the fourth-quarter and year-end report it issued this morning. Isis has more than twice as much cash as it did a year ago ($193.7 million) and narrowed its annual loss from the $136 million hit it took in 2007.

The big difference last year came via a huge partnership in January 2008 with Cambridge, MA-based Genzyme to co-develop a cholesterol-lowering drug called mipomersen. That deal brought in $325 million upfront, and it could generate a lot more if the drug has success in the final stage of clinical trials, which should start showing results this year. Another recent coup for Isis, the sale of its diagnostics subsidiary to Abbott Laboratories, brought in $175 million in cash last month, and will help keep the company’s losses down in the low-to-mid $20 million range for 2009. The company didn’t say what its financial models look like for 2010 and beyond, but simple math suggests means that its cash reserves ought to last a long time when its losses have been cut this low.

“We believe that we are now at the beginning phase of sustained financial strength,” said Lynne Parshall, Isis’ chief operating officer and chief financial officer, in a statement.

In the midst of a recession, that kind of growing stability has to be good news for the roughly 300 employees at Isis, as of its last official count in March. It’s certainly looking like a more solid place to be than a lot of other San Diego companies we’ve been writing about lately, who are making big layoffs to hold onto the cash they have as the long winter continues.

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