Biogen pays $1B cash to enlist Ionis on a new drug discovery campaign — but can it deliver fast enough for analysts?

Looking to build up its pipeline, Biogen $BIIB is going back to the partner that provided it with its last big hit, Spinraza.

In a new discovery alliance announced early Friday, Biogen has agreed to pay $1 billion cash for equity and an upfront fee to get Ionis $IONS back in the lab looking for a slate of new programs.

Billed as “one of the most significant discovery stage collaborations in the industry,” the unusually rich front-loaded deal includes $625 million to pay for a chunk of Ionis shares at $54.34 a share — which closed Thursday at $45.85. The rest covers a rich down payment on up to seven programs aiming for the clinic in the next two years.

Ionis will in turn use its antisense knowhow to hunt for new drugs covering dementia, neuromuscular diseases, movement disorders, ophthalmology, diseases of the inner ear, and neuropsychiatry. And that’s the limit of its responsibility. Once they find a candidate Biogen likes, the Cambridge, MA-based biotech is responsible for all the development work, handing out unspecified milestones and royalties based on their progress.

It’s an ambitious task, but it’s questionable if this will satisfy analysts who want to see Biogen double down on new deals to add late-stage programs to its neurosciences pipeline, widely considered too thin and far too dependent on a select group of high-risk drugs like the Alzheimer’s therapy aducanumab.

Ionis’ work on Spinraza — a breakthrough therapy for spinal muscular atrophy that sells for a chart-topping $750,000 — gave Biogen one of its biggest wins in recent times. But as Novartis’ $8.7 billion buyout of AveXis underscores, a better gene therapy approach to the disease could sideline the therapy permanently. And that has triggered a series of fresh alarms among company observers who want to see some dramatic leap forward.

Biogen, though, appears unhurried today.

“With the large number of diseases that could benefit from Ionis’ antisense platform, we believe that the time is now to build upon our highly productive collaboration with Ionis as we aim to transform the treatment of neurological diseases around the world,” noted Biogen CEO Michel Vounatsos.

Biogen CEO Michel Vounatsos. BOSTON GLOBE via GETTY IMAGES

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Research Scientist - Immunology
Recursion Pharmaceuticals Salt Lake City, UT
Director of Operations
Atlas Venture Cambridge, MA

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