By Kim Coghill

Washington Editor

ZymoGenetics Inc. and Serono SA signed a deal potentially worth $52.5 million for development and commercialization of two preclinical product candidates discovered by ZymoGenetics.

The candidates, developed using ZymoGenetics¿ genomics-driven approach, are referred to as TACI and BCM, and are receptors found on the surface of B lymphocytes. Both appear to be involved in regulating B-cell activity by stimulating their growth, as well as by stimulating antibody production through receptors, Charles Hart, ZymoGenetics¿ senior director of corporate communications and investor relations, told BioWorld Today.

Representatives from neither company commented on specific indications slated for research through the collaboration. However, Hart said preclinical studies have identified a number of applicable autoimmune diseases in animal models including systemic lupus, rheumatoid arthritis and myasthenia gravis.

Hart said a steering committee charged with research and development will later determine indications and timelines for development. Serono develops products for reproductive health, neurology, metabolism and growth, while ZymoGenetics develops therapeutic proteins for a variety of conditions.

¿The agreement between Serono and ZymoGenetics is another example of Serono¿s collaborative approach to access novel protein-based therapeutic technologies and emphasizes our commitment to the treatment of autoimmune and serious inflammatory diseases,¿ Silvano Fumero, head of research and pharmaceutical development at Serono, said in a prepared statement.

Hart did say the collaboration is potentially worth up to $52.5 million for ZymoGenetics, of Seattle. And according to a prepared statement released by ZymoGenetics, the companies will share research and development expenses worldwide, with the exception of Japan, where Serono will cover all expenses.

ZymoGenetics also will retain an option to co-promote products with Serono in North America, and if ZymoGenetics exercises the option, the companies will share commercialization expenses and profits equally. Serono will have exclusive rights to market products in the remainder of the world, for which ZymoGenetics would receive undisclosed royalties. Serono will manufacture all products for both clinical trials and commercial sale.

Other than the potential financial rewards, the collaboration has numerous benefits for ZymoGenetics, Hart said.

¿For one, the deal aligns us with one of the leading companies in the development of protein therapeutics and I think that is evidenced by Serono¿s perfect track record of products on the market today,¿ he said. ¿And, Serono has broad experience in developing products for treatment of autoimmune disease.¿

Serono, of Geneva, has several products on the market, including Gonal-F, a recombinant human follicle stimulating hormone-FSH; Ovidrel/Ovitrelle and Luveris, all treatments of human infertility; Rebif, a treatment for relapsing-remitting multiple sclerosis (RRMS); Serostim, a growth hormone that treats AIDS wasting; and Saizen, a growth hormone used to treat children with growth hormone deficiencies. Rebif and Luveris are not available in the U.S. Serono has 13 molecules in development.

¿By collaborating with Serono, we gain the benefit of their expertise and their established infrastructure for developing protein products while we build our own clinical development manufacturing capabilities,¿ Hart said. ¿This allows us the opportunity to participate in sales and marketing of products eventually.¿

ZymoGenetics hopes the collaboration will help it in its plan to become fully integrated, from initial drug discovery to the sale of biopharmaceutical products.

Five products on the market resulting from ZymoGenetics¿ research generate more than a billion dollars in annual sales. ZymoGenetics was founded in 1981 and purchased by Novo Nordisk, of Bagsvaerd, Denmark, in 1988 for about $30 million in cash. Last fall, ZymoGenetics raised $150 million through a private placement and through it regained its independence from Novo, which retained about 51 percent of the company. Novo does not control ZymoGenetics because of the way voting rights are structured. (See BioWorld Today, Oct. 24, 2000.)

ZymoGenetics products being sold by Novo Nordisk are Novolin (human insulin); NovoSeven, a Factor VIIa product used to control bleeding in hemophiliacs; and Glucagon, used for severe hypoglycemia and as a diagnostic aid. The company also developed a platelet-derived growth factor for non-healing diabetic ulcers, which is sold by Johnson & Johnson, and a tissue plasminogen activator sold in Japan by a Japanese partner.

ZymoGenetics¿ scientists believe that TACI (transmembrane activator and CAML-interactor) and BCMA (B-cell maturation antigen), the candidates for the project, bind the growth factor called BlyS (also known as BAFF, TALL-1, THANK and zTNF4). Reports from ZymoGenetics and others have indicated an association between elevated levels of circulating BlyS and autoimmune disease, including SLE (systemic lupus erythematosus) and rheumatoid arthritis.