Bristol-Myers Squibb and ZymoGenetics to collaborate on hepatitis C compound

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Bristol-Myers Squibb and ZymoGenetics, Inc. have announced a global collaboration for PEG-Interferon lambda, a novel type 3 interferon currently in Phase Ib development for the treatment of Hepatitis C, and its related development program.

Under the terms of the collaboration, Bristol-Myers Squibb agreed to pay ZymoGenetics an upfront cash payment of $85 million for the development and commercialization rights to PEG-Interferon lambda, and to pay an additional license fee of $20 million in 2009. ZymoGenetics could receive additional payments of up to $430 million based on pre-defined development and regulatory milestones for PEG-Interferon lambda in Hepatitis C, up to $287 million in development and regulatory milestones for other potential indications, and up to $285 million based on pre-defined sales-based milestones.

The companies have agreed to co-develop PEG-Interferon lambda in the United States and Europe and will share development costs. It is anticipated that ZymoGenetics will conduct a significant portion of continuing Phase I and certain Phase II development activities. ZymoGenetics will have the option to co-promote in the United States and to share profits on product sales with Bristol-Myers Squibb. ZymoGenetics may opt out of the co-development, co-promotion and profit sharing arrangement in the United States, in which case ZymoGenetics will receive royalties on PEG-Interferon lambda sales worldwide.

Outside the United States, Bristol-Myers Squibb will be responsible for commercialization and ZymoGenetics will receive royalties on product sales.

“We welcome the opportunity to combine ZymoGenetics’ strong foundation in discovering and developing therapeutic proteins, with our own internal research and development expertise in working on this innovative Hepatitis C therapy that has the potential to help patients prevail over this serious disease,” said Francis Cuss, MD, Senior Vice President, Discovery and Exploratory Clinical Research, Bristol-Myers Squibb. “The profile of PEG-Interferon lambda offers the possibility of improvements in the safety and effectiveness of combination treatment for Hepatitis C and makes it an ideal fit with our emerging portfolio of small molecule anti-virals.”

“We believe Bristol-Myers Squibb is the ideal partner for ZymoGenetics and that we share the vision that PEG-Interferon lambda could become an important part of treating patients with Hepatitis C,” said Douglas E. Williams, Ph.D., Chief Executive Officer of ZymoGenetics. “We look forward to a productive partnership focused on bringing PEG-Interferon lambda to Hepatitis C patients as rapidly as possible.”

PEG-Interferon lambda (IL-29) is a novel type 3 interferon currently in Phase Ib development for Hepatitis C. The native human protein Interferon lambda is generated by the immune system in response to viral infection. PEG-Interferon lambda has the potential to be uniquely differentiated from available interferon therapy because Interferon lambda mediates anti-viral activity through a receptor that is distinct from that used by Interferon alpha and is present on fewer cell types within the tissues of the body. As a result, the possibility exists for more targeted delivery of interferon therapy and an improved therapeutic index.

The effectiveness of the agreement is subject to antitrust clearance by the United States Federal Trade Commission and Department of Justice, under the provisions of the Hart-Scott-Rodino Antitrust Improvements Act of 1976 and other customary regulatory approvals.

About Hepatitis C 1

Hepatitis C is a virus that infects the liver and is transmitted through direct contact with blood. An estimated 170 million people worldwide are infected with Hepatitis C and, of these, 94.5 million people live in the Asia Pacific region. One to five percent of people with chronic infection will develop liver cancer. Although there is no vaccine to prevent Hepatitis C, it is a curable disease.


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