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made some hard decisions. In April 2009, the company cut one-third of its workforce, or about 161 jobs. The company, which made its reputation as a scientific hothouse, dropped cancer research. With the stock in the tank, Zymo’s ability to raise money was weaker than ever before. The following month, ZymoGenetics divested a handful of drug candidates that it said it didn’t have the resources to develop anymore.
By August, Williams showed he was willing to play some real hardball against his chief competitor—Bristol, TN-based King Pharmaceuticals. ZymoGenetics asked the FDA to yank King’s surgical bleeding drug off the market for safety reasons after it said two patients died following adverse reactions to the drug. He threw some roundhouse punches in an interview with me at the time, while executives at King Pharma quietly seethed, hissing a “no comment” at me through the phone when I sought their side of the story.
“There are physicians using [King’s drug] without a clear understanding of its risks,” Williams said at the time. “There are at least three better alternatives in the marketplace now, that don’t have the same risk profile.”
The King drug never got withdrawn. One month later, ZymoGenetics suffered a couple of brutal clinical trial failures, when atacicept—the drug it once hoped would have Enbrel-like potential against autoimmune diseases—failed in a string of trials for rheumatoid arthritis and multiple sclerosis.
A home run in those trials could have re-ignited enthusiasm for ZymoGenetics, but as things stood, Williams’ options were limited. ZymoGenetics was still struggling to capture market share fast enough from King, and by December 2009, the company did a second round of layoffs, eliminating 52 jobs. As with cancer, the company decided to get out of the immunology research business, so it could put more resources into Recothrom marketing and development of drug candidates like pegylated interferon lambda.
That series of moves, which brought ZymoGenetics’ headcount down from about 530 to 320 employees—and which tightened its focus on a smaller group of drugs already in clinical trials— restored some degree of confidence among investors. But later in December 2009, Bayer walked away from its partnership with ZymoGenetics to market Recothrom.
This could have been interpreted as the death of the product, but Williams wouldn’t give up. He pitched this to investors as an opportunity for Zymo to control its own destiny with the drug, and keep the proceeds for itself. Driven by the new plan, and with an experienced commercial executive in Zaruby overseeing the Recothrom group, Williams was able to lead a $91 million financing for the company in January 2010.
While that deal provided some extra financial cushion, ZymoGenetics just couldn’t … Next Page »
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