Isis Pharmaceuticals is celebrating after linking up with Johnson & Johnson to develop antisense drugs to treat metabolic diseases, including type 2 diabetes.

Under the terms of the deal, J&J’s Ortho-McNeil unit has been granted worldwide rights to develop and commercialise two of its new partner’s diabetes compounds, ISIS 325568 and ISIS 377131, which selectively inhibit the production of glucagon receptor (GCGR) and glucocorticoid receptor (GCCR), respectively.

On the financial side, J&J will make an upfront payment of $45 million and provide R&D funding and Isis could receive more than $230 million in milestone payments related to the two investigational drugs, plus royalties. Isis could also receive milestones and royalties for additional treatments developed as part of the collaboration, the companies noted.

Isis added that before the transaction is closed, it plans to purchase the equity in Symphony GenIsis, and reacquire the intellectual property related to the GCGR and GCCR programs as well as regain full ownership of ISIS 301012, a lipid-lowering drug targeting apolipoprotein B-100.

Jeffrey Jonas, Isis' executive vice president, said that the firm’s metabolic drug discovery programme, “which has evaluated more than 120 targets in animal models using antisense drugs" is producing interesting compounds. He added that ISIS 325568 and ISIS 377131 have demonstrated robust effects in “extremely diabetic and hyperlipidaemic animals” and have demonstrated “a unique and preferential distribution to tissues such as liver and fat, thereby potentially minimising the systemic side effects that would be expected with traditional approaches against the same gene targets”.

The agreement suggests that J&J is looking to become a bigger player in the diabetes market, having also signed a deal with Metabolex in June 2006 which could be worth up to $548 million.