The business stories that matter, by Fortune's Colin Barr
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January 7, 2008, 4:37 pm

Isis finds cholesterol magic

Isis Pharmaceuticals (ISIS) is looking at a nice gain after setting up a $325 million licensing partnership with Genzyme (GENZ) to develop Isis’ cholesterol-lowering drug mipomersen. Genzyme will buy $150 million worth of Isis stock at $30 a share and pay the company $175 million in upfront cash. Genzyme will also make milestone payments as the drug moves through development that could be worth as much as $1.6 billion. “Mipomersen is an innovative approach to addressing a real unmet medical need, and we believe it could prove to be the most effective lipid-lowering agent for high risk patients for whom conventional therapies are not sufficient,” said Genzyme chief Henri Termeer. The news comes as big pharmaceutical companies are struggling to find replacement for blockbusters like Lipitor as they prepare to move off-patent. The arrangement also comes just two months after Isis chief Stanley Crooke estimated the value of a mipomersen license at around Isis’ market capitalization - then around $1.4 billion. Isis’ market value stands to be sharply higher when the stock reopens for postclose  trading later Monday.

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Colin Barr covers business and finance for Fortune.com. Previously he was an editor at TheStreet.com and author of the weekly Five Dumbest Things on Wall Street column, and an editor at Dow Jones Newswires.
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