Hybridon and Isis Pharmaceuticals Inc, the two pioneers of antisense technology, announced patent licensing activities that would eliminate any potential patent conflict between them, fortify Isis' dominant position in antisense technology and enhance Hybridon's ability to exploit the advances it has made in antisense technology. These transactions support the application of each company's technologies.

Isis has taken an exclusive license to all of Hybridon's antisense chemistry and delivery patents and technology. Hybridon retains the right to practice its licensed antisense patent technologies and to sublicense it to collaborators. Hybridon has taken a license to Isis' suite of RNase H patents that covers the mechanism of action of many antisense drugs to support Hybridon's activities in antisense therapeutics.

In exchange for the license to Hybridon's antisense intellectual property, Isis will pay Hybridon $15 million in cash and will pay $19.5 million in Isis stock over two years. Under the agreement Isis has also acquired the exclusive right to sub-license the licensed Hybridon technology to third parties. In return for access to Isis' RNase H suite of patents, Hybridon will pay Isis $6 million in Hybridon stock over three years. The license of Isis' RNase H patents to Hybridon is not sublicenseable, except in connection with Hybridon antisense drugs. Under the terms of the non-exclusive license from Isis, Hybridon cannot use those licenses to practice commercial functional genomics and target validation as a service for third parties.

"We are extremely pleased to complete this transaction with Isis,'' stated Sudhir Agrawal, Hybridon's President and Chief Scientific Officer. "We believe antisense is maturing into a broad technology platform. The licensing arrangements we established today allow each company to move forward to exploit the opportunity without encumbering the other, and the success of either party will benefit the other. This transaction also solidifies Hybridon's financial position, and allows us to create value through the commercialization of our three DNA chemistry technology platforms which include immunomodulatory Oligos, Cyclicon DNA and antisense therapeutics.''

"The license of Hybridon's intellectual property is part of our continuing strategy to dominate antisense for drug discovery and functional genomics,'' said B. Lynne Parshall, Isis' Executive Vice President. "Hybridon has performed high-quality science, and these patents round out our antisense patent portfolio. Control of these patents also boosts our strategic position as the licensor of antisense technology to partners for antisense functional genomics and target validation activities, as well as antisense therapeutics. Additionally, it will decrease Isis' potential for conflict and associated expenses.''

Isis' intellectual property position in RNA-based drug discovery is the product of 12 years of focused research and is comprised of over 700 issued and allowed patents. Isis began consolidation of non-Isis antisense intellectual property two years ago with the acquisition of Gilead's antisense patent estate. The licensing of Hybridon's patent portfolio augments Isis' estate and further solidifies Isis' control of patented technology in the field of antisense.