ZymoGenetics enters licensing deal with former parent Novo Nordisk

Denmark's Novo Nordisk has entered an agreement where it in-licenses a fully-human anti-IL21 monoclonal antibody (IL-21 MAb) developed by Seattle, USA-based ZymoGenetics, a company it spun out in 2000, as well as broad intellectual property rights covering IL-21 MAb and the development of other IL-21 antibodies.

Novo Nordisk in-licensed intellectual property rights to IL-21 antibodies outside North America in 2001 and now possesses global rights. The terms of the deal require the Danish firm to make an initial upfront cash payment of $24 million to ZymoGenetics.

Commenting on the deal, analysts at Zacks Equity Research note that, with the progress of the development program of the IL-21 monoclonal antibody, ZymoGenetics stands to receive milestones from Novo Nordisk up to $157.5 million over the period of the agreement. The amount includes a $1.5 million milestone payment to be made once an Investigational New drug Application is filed and an $8.5 million milestone payment to be made at the commencement of phase I studies with the monoclonal antibody, expected in 2010, coupled with royalties on product sales.

Furthermore, ZymoGenetics owns the right to co-promote the IL-21 monoclonal antibody product in the USA in the event of it contributing to Phase III development costs.

Cutting back staff, reducing discovery projects

ZymoGenetics announced last week that it will lay off 52 of its employees (around 15% of its workforce). The company also decided to stop discovering new immunology drugs so that it can focus on its marketed product Recothrom (thrombin, recombinant), indicated as an aid to hemostasis whenever oozing blood and minor bleeding from capillaries and small venules is accessible and bleeding cannot be controlled by standard surgical techniques, and develop and commercialize existing product candidates, the Zacks analysts noted.

This reduction in workforce is in addition to the 161 employees laid off in April 2009. The company expects to record severance related costs to the tune of approximately $3.5 million in the quarter ending December 31, 2009, they said.