ZymoGenetics secures $100M funding

Seattle, USA-based biotechnology firm ZymoGenetics says that it has received a $100.0 million funding commitment from Deerfield Management, a health care investment organization and a significant shareholder in the company. The funds can be drawn at any time over the next 18 months at ZymoGenetics' discretion. Funds drawn, together with accrued interest, will be repayable five years from entering into the funding arrangement and can be repaid without penalty at any time at the company's sole discretion.

"This transaction significantly increases our financial strength and provides capital that we'll use to build our Recothrom [Thrombin, topical (recombinant), the company's first commercial product, which was approved by the US Food and Drug Administration at the start of the year; Marketletter January 28] business, including the potential development of Recothrom line extension products," said Bruce Carter, chief executive of ZymoGenetics.

Under the terms of the arrangement, Deerfield's $100.0 million can be drawn down by ZymoGenetics in $25.0 million tranches. Each tranche will entitle Deerfield to a royalty equal to 2% of Recothrom net sales. In addition, ZymoGenetics will issue Deerfield 1.5 million warrants exercisable at $10.34 at the time of the first draw and 1.0 million on each subsequent draw exercisable at a 25% premium to the average sale price for a previous 15-day period. All warrants will have a six-year term and the company has agreed to register with the Securities and Exchange Commission the common stock issuable under the warrants.