ZymoGenetics Inc., spun out of Novo Nordisk A/S in October 2000, signed a collaborative agreement for preclinical development of interleukin-21 with Novo that could bring ZymoGenetics up to $11 million.

"We entered an option and license agreement at the time of the spinout," Susan Specht, public relations associate at ZymoGenetics, told BioWorld Today. (See BioWorld Today, Oct. 24, 2000.)

The four-year option signed upon the spinout requires Novo to pay ZymoGenetics $7.5 million annually but gives Novo the right to "license products coming out of our pipeline," said Charles Hart, senior director of corporate communications and investor relations at ZymoGenetics.

However, since Novo Nordisk focuses heavily on diabetes, the option stipulates that proteins that directly affect the beta cells in the pancreas can be licensed worldwide. Since IL-21 - a protein that activates classes of immune cells, including cytotoxic T cells and natural killer cells - does not apply to that contractual wrinkle, it was available only for licensing outside North America.

Specht said that is the third product licensed by Novo. The companies were working independently on IL-21, but the deal brings their efforts together. Although ZymoGenetics retains full rights in North America, Novo has the right to use all data, materials and intellectual property elsewhere. The companies will collaborate on the research and development activities leading up to an investigational new drug application that ZymoGenetics would file. Novo, of Bagsvaerd, Denmark, is to reimburse ZymoGenetics for a portion of costs incurred prior to the agreement, but the companies will share costs going forward. Of the $11 million sum attached to the deal, ZymoGenetics has already received one-third of that for work accomplished, Hart said, and the rest will come from the 50-50 split of expenses going forward.

The companies will form a joint steering committee to guide the development of IL-21, and although work has yet to be delegated, Specht said it is "anticipated that the bulk of the work will be carried out by ZymoGenetics."

The companies will tackle metastatic melanoma and renal cell carcinoma as the first two indications. The hope is the research will provide an alternative form of therapy for those cancers, Specht said, although they also will investigate IL-21 as an antiviral therapy. The companies agreed to work toward a second agreement that could cover other nonclinical and clinical activities, up to commercialization.

In 1988, ZymoGenetics was bought by Novo Nordisk and operated as its research arm until the spinning out. It went on to have one of 2002's most notable initial public offerings in the biotech sector, raising $120 million through the sale of 10 million shares. Also in 2002, it signed a deal with Wyeth (centered on the interleukin-13 receptor subunit), and its platelet-derived growth factor entered pivotal studies conducted by partner BioMimetic Pharmaceuticals Inc., of Nashville, Tenn. (See BioWorld Today, Feb. 4, 2002; May 30, 2002; and July 30, 2002.)

The company is investigating recombinant Factor XIII, for which it filed an investigational new drug application in 2002, and intends to initiate studies shortly, Specht said. The product is designed to treat congenital Factor XIII deficiency. And Specht said ZymoGenetics plans to file INDs for recombinant human thrombin (as a critical-care hemostat) and TACI-Ig (for lupus, rheumatoid arthritis and other autoimmune diseases) in the second half of 2003. If all goes well, it will file an IND for IL-21 in the first half of 2004.

ZymoGenetics' stock (NASDAQ:ZGEN) rose 19 cents Thursday to close at $8.44.