ZymoGenetics Signs Licensing Agreement With Novo Nordisk For Autoimmune, Inflammatory Drug Candidate IL-21 MAb - Update

Biopharmaceutical company ZymoGenetics, Inc. (ZGEN) said it has signed a licensing agreement with Danish drug maker Novo Nordisk A/S (NVO), for ZymoGenetics' autoimmune and inflammatory drug IL-21 mAb. The deal would also offer the broad intellectual property rights of IL 21 mAb as well as developmental rights of other IL-21 antibodies to Novo.

IL-21 mAb is a pre-Investigational New Drug candidate which is under development for the treatment of autoimmune and inflammatory disorders, a condition wherein the body mistakes its own cells as pathogen and attacks it.

As per the deal, Novo will pay ZymoGenetics an initial upfront cash payment of $24 million. Additionally, ZymoGenetics may get milestone payments of up to $157.5 million. Novo has agreed to pay $1.5 million milestone payment upon filing of an Investigational New Drug Application and $8.5 million milestone payment at the start of phase 1 studies with the mAb. In addition ZymoGenetics shall get royalties on net sales, as the development programme of the IL-21 mAb advances.

ZymoGenetics will have a right to co-promote IL-21 mAb product in the US if the company contributes to phase 3 clinical development costs. As part of the agreement, ZymoGenetics retains the option to fund a portion of phase 3 clinical development costs in exchange for an increased royalty rate on US sales and US co-promotion rights.

If ZymoGenetics exercises the option, it would pay a fixed fee of $10 million together with 15% of the costs of phase 3 clinical trials, and royalties on US sales would increase from single to double digits.

Novo in-licensed intellectual property rights to IL-21 antibodies outside North America in 2001 and now has worldwide rights. Novo said it intends to initiate a phase 1 trial with IL-21 mAb in 2010.

ZGEN closed Monday's regular trading at $7.16 per share on the Nasdaq.

NVO closed Monday's regular trading at $66.86 per share on the New York Stock Exchange.

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