Zacks Analyst Interview Highlights: Isis Pharmaceuticals, Genzyme and Abbott Labs

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What would you consider your top biopharma pick right now?

The first I'd mention is Isis Pharmaceuticals (Nasdaq: ISIS). This is probably one of the best positioned biotech companies in world. It's also our top-pick overall right now in healthcare. They are a leader in antisense technology.

Explain antisense for us, Jason...in the simplest terms, please!

Sure. Antisense drugs are short, chemically-modified complementary nucleotide chains that bind to a specific area of mRNA in order to inhibit translation (protein production). Basically, it's a way to target disease at the genomic level. Instead of waiting for an errant gene to over-produce or under-produce a protein, enzyme or hormone, antisense drugs go directly after the genetic code. And so the possibilities are enormous because you are knocking out the cause of the disease instead of just treating the symptoms.

Isis' technology is at the forefront of this revolutionary development platform. Isis has collaborations with the "who's who" of healthcare. Because you are going after the gene, Isis can develop drugs over a wide scale of diseases.

The pipeline at Isis is enormous, and holds both proprietary and partnered compounds for cardiovascular disease, metabolic disorders, cancer, inflammatory diseases and infectious diseases. Take a look at the pipeline chart we have in our research report, it's pretty impressive.

The leading candidate is in phase III trials for high cholesterol with partner Genzyme (Nasdaq: GENZ). This drug, mipomersen, has multi-billion dollar potential in our view. Other agents for diabetes, cancer and multiple sclerosis are also potential blockbusters. The pipeline fundamentals are particularly solid.

But the main thing we like about Isis is that the company is extremely well capitalized. Isis should exit 2008 with over $450 million in cash. Management should be able to raise another $190 million in 2009 by selling its Ibis biosensor business to Abbott Labs (NYSE: ABT). That puts the company in an exceptionally solid financial situation to go along with the solid drug discovery / development fundamentals. Add the two together and you can see why it's our top-pick right now.

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