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When a cell transcribes information from aDNAgene intomessenger RNA, ormRNA, the two complementary strands of
theDNApartlyuncoil. One strand acts as a template and information stored in theDNA strand is copied into a complementary
mRNA.mRNA then carries the information to cellular structures called ribosomes, the cell’s factories formanufacturingproteins. The
ribosome reads the encoded information, themRNA’s nucleotide sequence, and indoing so, strings together amino acids to form a
specific protein. This process is called translation. Antisense technology interrupts the cell’s proteinproductionprocess bypreventing
theRNA instructions from reaching the ribosome, thus inhibiting the synthesis of the protein. ThemRNA sequence of nucleotides that
carries the information for protein production is called the ‘sense’ strand. The complementary nucleotide chain that binds specifically
to the sense strand is called the “antisense” strand.We use the information contained inmRNA todesign chemical structures, called
antisense oligonucleotides or antisense drugs, which resembleDNA andRNA and are the complement ofmRNA. These potent
antisense drugs inhibit the productionof disease-causingproteins. Specifically, almost all of our antisense drugs indevelopment cause
a cellular enzyme called ribonucleaseH1, or RNaseH1, to degrade the targetmRNA. The drug itself remains intact during this
process, so it can remain active against additional targetmRNAmolecules and repeatedly trigger their degradation. Our antisense
drugs can selectivelybind to anmRNA that codes for a specific protein andwill not bind to closely relatedRNAs, providing a level of
specificity that is better than traditional drugs. As a result,we candesign antisense drugs that selectively inhibit the disease-causing
member of the groupwithout interferingwith thosemembers of the groupnecessary for normal bodily functions. This unique
specificitymeans that antisense drugsmaybe less toxic than traditional drugs becausewe candesign them tominimize the impact on
unintended targets.
Further, the designof antisense compounds is less complex,more rapid andmore efficient than traditional drugdiscovery
approaches directed at protein targets. Traditional drugdesign requires companies to identify a smallmolecule thatwill interact with
protein structures to affect the disease-causingprocess. Since predictingwhich smallmoleculeswill do this has proven to be difficult,
traditional drugdiscovery involves testinghundreds of thousands of smallmolecules for their ability to interferewithprotein function.
As a result, traditional drugdiscovery is a labor intensive, lowprobability endeavor. In contrast, we designour antisense compounds
to bind tomRNA throughwell understoodprocesses.We candesignprototype antisense drugs as soon aswe identify the sequence for
the targetmRNA.
Usingproprietary antisense oligonucleotides to identifywhat a gene does, called gene functionalization, and then
determiningwhether a specific gene is a good target for drugdiscovery, called target validation, are the first steps inour drug
discoveryprocess.We use our proprietary antisense technology togenerate information about the functionof genes and todetermine
the value of genes as drugdiscovery targets. This efficiency represents a unique advantage of our antisense drugdiscoveryprocess.
Antisense core technology is the functionwithin Isis that is responsible for advancing antisense technology. Through the efforts of our
scientists in the antisense core technologygroup, we have produced secondgeneration antisense drugs that have increasedpotency
and stability. In recent years, our scientists have improved the screening assays for our drugs, which led to the discovery of second
generation antisense drugs that have generally demonstrated enhanced tolerability profiles in numerous clinical studies. For example,
our drugs ISIS-TTR
Rx
and ISIS-FXI
Rx
are drugswe discovered throughour improved screening assays. InPhase 1 studies evaluating
these drugs inhealthy volunteers, subjects reported approximately65percent fewer injection site reactions andno flu-like symptoms
compared to subjects treatedwithKYNAMRO, an earlier secondgenerationdrug.
We combine our core technologyprograms inmedicinal chemistry, RNAbiochemistry, andmolecular and cellular biology
withmolecular target-focuseddrugdiscovery efforts todesigndrugs. The goal of our target-based research programs is to identify
antisense drugs to treat diseases forwhich there are large commercialmarkets or forwhich there is a need for better drugs. In
addition, our research programs focus on the planned advancement of our technology for future antisense drugs. We selected our next
generation chemistry, generation2.5, an advancement that we believewill increase the potencyof our drugs andmake oral
administration commercially feasible. In2013, we publisheddata demonstrating that our generation2.5drugs generallyhave
enhancedpotencyover our generation2.0drugs and are broadlydistributed throughout the body tomultiple tissues including liver,
kidney, lung,muscle, adipose, adrenal gland andperipheral nerves. We expect that these generation2.5drugswill constitute some of
our future drugs and serve as follow-on compounds to some of our current drugs indevelopment. Currentlyour ISIS-STAT3
Rx
, ISIS-
FVII
Rx
, and ISIS-AR
Rx
drugs incorporate our generation2.5 chemistry.
OtherAntisenseTargets andMechanisms
There aremore than a dozen antisensemechanisms that canbe exploitedwith our antisense technology. While themajority
of the drugs inour pipeline bind tomRNAs and inhibit the productionof disease-causingproteins through theRNaseHmechanism,
we believe that our antisense technology is broadly applicable tomanydifferent antisensemechanisms, includingRNA interference,
orRNAi, and splicing, andmanydifferent RNA targets, includingnon-codingRNAs and toxicRNAs. For example, RNAi is an
antisensemechanism that uses small interferingRNA, or siRNA, that exploits a cellular protein complex called theRNA-induced
silencing complex, orRISC, tobind to themRNA and toprevent the productionof a disease-causingprotein.Most companies
approach siRNAusingdouble-strandedoligonucleotides, which, due to their properties, require complex formulations or drugdelivery
vehicles to achieve delivery to the cell. We have created single-strandedRNAi compounds that, whenwe administer systemically,
