Bristol-Myers and ZymoGenetics partner in hepatitis drug development

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 US 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 US 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 US, in which case ZymoGenetics will receive double-digit royalties on PEG-Interferon lambda sales worldwide. Outside the US, Bristol-Myers Squibb will be responsible for commercialization and ZymoGenetics will receive double-digit royalties on product sales.

Douglas Williams, CEO of ZymoGenetics, said: 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. We look forward to a productive partnership focused on bringing PEG-Interferon lambda to hepatitis C patients as rapidly as possible.