As part of an out-licensing deal, ZymoGenetics Inc. gained a new shareholder: Amgen Inc.
Seattle-based ZymoGenetics granted exclusive worldwide rights to a non-core metabolic disease target to Amgen. In exchange, it received a $10 million equity investment from Amgen, which acquired the common stock at market price and also agreed to pay an up-front license fee. Thousand Oaks, Calif.-based Amgen will fund all further development activities, and ZymoGenetics is eligible for potential downstream payments. Other financial terms were not disclosed.
James Johnson, ZymoGenetics' chief financial officer, told BioWorld Today there are "two things we tend to focus on" when considering the deal. He said that in the long term, the company hopes to realize gains through milestone payments and royalties, while in the short term, any initial payments provide extra flexibility in developing its pipeline of treatments for bleeding disorders, autoimmune diseases and cancer. ZymoGenetics had $285 million in cash and investments for the quarter ended March 31, as well as 52.7 million shares outstanding. It posted a $13.5 million net loss over that three-month period.
Along similar lines to the Amgen deal, the company in March granted exclusive North American rights to Novo Nordisk A/S for patents covering interleukin-20 in exchange for a $4 million initial license fee and potential milestone and royalty payments. Bagsvaerd, Denmark-based Novo, ZymoGenetics' former parent company, already held rights in the rest of the world.
"It was a protein that we determined we would not develop on our own, so we did that licensing transaction," Johnson said. "I think it's something that you can expect to see from us on a regular basis in the future, because we have a pretty extensive patent portfolio and we are actively talking to companies to try and find good homes for these proteins that will ultimately become products one day."
Details related to the target licensed to Amgen were not disclosed, but ZymoGenetics discovered it using its genomics-based discovery platform. Johnson said the company built its protein portfolio through use of a genomics database from Incyte Corp., of Wilmington, Del., that ZymoGenetics employed in combination with its internal algorithms. Its resulting discoveries stemmed from mining families that were known to include biologically active proteins, while Johnson said other companies have been less selective in using genomics for their searches, as they sought everything that looked like a secreted protein.
Now such efforts are paying off for ZymoGenetics, even if all its discoveries don't fit its therapeutic direction.
Meanwhile, its core programs include recombinant human Thrombin (rhThrombin), a product that recently entered a Phase II program in controlling bleeding during surgery. An initial study in patients undergoing liver resection began last month, and three others are under way, as well, in patients scheduled for lumbar spine surgery, lower extremity peripheral artery bypass surgery and formation of vascular access grafts for dialysis. (See BioWorld Today, April 20, 2004.)
Another blood-clotting product, Factor XIII, is being developed to reduce post-surgery bleeding in cardiopulmonary bypass patients. Johnson said the company soon would begin a Phase Ib trial of the product in cardiac surgery patients, followed later this year by a pivotal study in congenitally deficient Factor XIII patients.
Beyond bleeding, ZymoGenetics is developing a product labeled TACI-Ig with Serono SA, of Geneva. The partners have completed a Phase I study and expect to begin a trial in lupus patients by the end of the quarter, followed later this year by a study in rheumatoid arthritis patients. Another product, IL-21, has clearance to enter Phase I studies by the end of the quarter, as well.
The company also is wrapping up construction on a preclinical manufacturing plant in Seattle for greater production.
On Thursday, ZymoGenetics' stock (NASDAQ:ZGEN) gained 31 cents to close at $16.79, while Amgen's shares (NASDAQ:AMGN) traded down 95 cents to close at $53.55.