Shares of Isis Pharmaceuticals (ISIS) soared as much as 10% in today's trading session after the company had announced the collaboration deal with Janssen Biotech, a unit of Johnson & Johnson (JNJ). According to the deal, both companies will co-develop RNA drugs targeting autoimmune diseases of the GI tract. Autoimmune diseases occurs when the patient's immune system starts to target healthy tissue in the body causing a lot of damage. The GI – Gastrointestinal tract – is the entire digestive system, therefore both companies will co-develop RNA drugs targeting this area. 

According to the terms of the deal Isis is expected to receive an upfront payment of $35 million dollars. In addition to this money Isis will also receive money for the first lead optimization trial to begin testing RNA-targeted drugs in the GI tract. A lead optimization trial is performed to select the first target that establishes proper efficacy using the RNA-targeted technology. Isis Pharmaceuticals will also have the potential to receive $800 million dollars over a period of time due to other milestones. These milestones include: regulatory, development, sales, and licenses. If a successful product is developed and sold on the market Isis will also retain double-digit royalty sales for those products. 

Shares of Isis Pharmaceuticals have been on a huge up swing lately, going up about 77% in share price in the last 3 months. A lot of it has to do with the fact that Isis has a great RNA technology platform that can be licensed out to many big pharmaceutical companies in other types of collaboration deals. This deal between Isis Pharmaceuticals and J&J will allow the companies to develop RNA drugs that are both given to the patients in terms of oral pills or local delivery options. This avoids the need to send the RNA drug systemically, which reduces efficacy and increases side effects. We believe that Isis Pharmaceuticals will continue to establish new partnership deals using it's RNA-targeted delivery technology.