ZymoGenetics Takes Back Full Rights to Cancer Drug Candidate

1/28/09Follow @xconomy

ZymoGenetics has gotten back full commercial rights to its lead cancer drug in development. The Seattle-based biotech company (NASDAQ: ZGEN) is announcing today it is buying back the commercial rights from Denmark-based Novo Nordisk to the IL-21 cancer drug candidate in territories outside North America, which could free up ZymoGenetics to sign a global partnership if clinical trials pan out.

Zymo is doing the deal, without having to fork over any upfront cash. Instead, it agreed to pay an undisclosed future milestone payment, plus some royalties on sales outside North America. Novo, the world’s largest maker of insulin treatment for diabetes, has decided to get out of the cancer drug development business to pursue what it considers are greener pastures in treating autoimmune and inflammatory diseases. ZymoGenetics will now seek to find a new partner interested in a broader, global partnership to develop the treatment, the company said.

The IL-21 drug candidate has shown an ability to stimulate the immune system’s killer T cells and natural killer cells that shrink tumors in animals. It is currently being tested in mid-stage clinical trials of people with kidney cancer and metastatic melanoma. Any positive finding would help ZymoGenetics, which is coming off a brutal 2008: its recombinant thrombin drug for surgical bleeding fell short of sales goals, its lead drug in development failed in a clinical trial, and it ran thin on cash. This month, the company has bounced back a bit after it signed a partnership with Bristol-Myers Squibb potentially worth as much as $1.1 billion to co-develop a hepatitis C drug.

Evidence to support that IL-21 is effective in cancer patients is still thin at best. In October, ZymoGenetics reported a glimpse of data from 18 patients whose disease had relapsed after prior therapy. The study looked at patients who took IL-21 in combination with Bayer and Onyx Pharmaceuticals’ sorafenib (Nexavar), and found that three of the people (17 percent) had their tumors shrink by at least one-fourth. Data from the mid stage kidney cancer trial is expected in the first half of 2009, and the melanoma trial should generate results mid-year, said company spokesman Michael Fitzpatrick, in an email.

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