As it focuses on its research and clinical candidates, ZymoGenetics Inc. decided to out-license the development and marketing rights of an early stage psoriasis compound to Novo Nordisk A/S.
The compound, IL-20, and all of ZymoGenetics' related patents now will fall under the watch of Novo. In turn, the Bagsvaerd, Denmark-based company is paying ZymoGenetics a $4 million initial license fee, as well as undisclosed milestone payments and potential royalties.
Further financial details were not disclosed.
ZymoGenetics now can focus on developing its internal pipeline of protein therapeutics for autoimmune diseases, as well as bleeding and cancer indications. Although the company has a strategy to out-license selected proteins, the idea for the latest agreement came from Novo, said Susan Specht, public relations manager of Seattle-based ZymoGenetics.
"Overall, the motivation was that they wanted the North American rights," she told BioWorld Today, meaning Novo wanted "additional geographic licensing" to its current holdings outside the continent.
ZymoGenetics was founded in 1981 and acquired by Novo in 1988. The company operated as Novo's research arm until Novo spun the company out in 2000. It raised $120 million in its initial public offering conducted in 2002.
When Novo spun out ZymoGenetics, the companies entered an option agreement under which Novo gained the right to exclusively license proteins outside of North America. That right expires in November. Novo optioned to license the IL-20 rights outside North America in September 2001. With the new agreement, Novo now holds worldwide rights to the product.
ZymoGenetics retains North American rights to all other members of the IL-10 family, which includes several preclinical compounds being studied for cancer, psoriasis and antiviral indications.
The company anticipates filing its first investigational new drug application for IL-21 in the first half of this year, Specht said. While ZymoGenetics holds North American rights to that cancer product, Novo holds the rights outside of North America. (See BioWorld Today, Jan. 21, 2003.)
Next up to enter the clinic is IL-20, but Specht could not say when it might move to that stage.
"Novo Nordisk make that decision about when it enters clinical trials," she said.
ZymoGenetics identified IL-20 as a new member of the IL-10 cytokine family using its genomics-based discovery platform. Researchers found in preclinical studies that overexpressing IL-20 caused skin abnormalities similar to psoriasis. In vitro, IL-20 activates human keratinocytes and induces the expression of other pro-inflammatory cytokines. Those findings suggest that IL-20 might play a role in the regulation of cutaneous inflammation and pathology of psoriasis.
ZymoGenetics has three products in the clinic: rFactor XIII, which is in Phase I trials in the U.S. and the UK to treat patients undergoing major cardiac surgery and with congenital Factor XIII deficiency; rhThrombin, which is in a Phase I/II trial as a critical-care topical hemostat; and TACI-Ig, which is in a Phase I trial in the UK for systemic lupus erythematosus and rheumatoid arthritis. TACI-Ig is in co-development with Geneva-based Serono SA, but ZymoGenetics holds all rights to the other products.
Two other out-licensed products also are in the clinic. PDGF is in pivotal trials for periodontal disease, and alpha 1-antitrypsin is in a Phase II trial for emphysema. The products are out-licensed to BioMimetic Pharmaceuticals Inc., of Franklin, Tenn., and Arriva Pharmaceuticals Inc., of Alameda, Calif., respectively. (See BioWorld Today, May 30, 2002, and Feb. 7, 2003.)
In preclinical development, ZymoGenetics is studying FGF18 for cartilage repair and stroke, CTRP1 for anti-thrombotic indications and Zven1 for gastric motility.
ZymoGenetics has contributed to the discovery or development of five marketed recombinant protein products. The marketed products are Novolin (insulin) for diabetes; NovoSeven (Factor VIIa) for hemophilia; Regranex (platelet-derived growth factor) for non-healing diabetic ulcers; GlucaGen (glucagons) for gastrointestinal motility inhibition and severe hypoglycemia in diabetic patients on insulin; and CleactorTM (tPA analogue) for myocardial infarction. All five products are marketed by third parties. Novo has worldwide marketing rights to Novolin and NovoSeven, and partial rights to GlucaGen.
ZymoGenetics raised $75 million in a public offering last fall, hoping to use some of it to advance rhThrombin and rFactor XIII through the clinic to market. ZymoGenetics had $300 million of cash, cash equivalents and short-term investments at the end of 2003. (See BioWorld Today, Oct. 17, 2003.)
The company's stock (NASDAQ:ZGEN) rose 78 cents Tuesday, closing at $15.78.