ZymoGenetics Inc. (ZGEN) announced recently that it has signed a deal with Novo Nordisk A/S (NVO) whereby the latter gets global rights to an antibody drug developed by ZymoGenetics to block Interleukin-21 (IL-21), a protein that’s found in excess in patients with autoimmune and inflammatory diseases. 

Novo Nordisk in-licensed intellectual property rights to IL-21 antibodies outside North America in 2001 and now possesses global rights. The terms of the deal require Novo Nordisk to make an initial upfront cash payment of $24 million to ZymoGenetics. 

Furthermore, with the progress of the development program of the IL-21 monoclonal antibody, ZymoGenetics stands to receive milestones from Novo Nordisk up to $157.5 million over the period of the agreement. 

The amount includes a $1.5 million milestone payment to be made once an investigational new drug application (IND) is filed and an $8.5 million milestone payment to be made at the commencement of phase I studies with the monoclonal antibody, expected in 2010, coupled with royalties on product sales. 

Furthermore, ZymoGenetics possesses the right to co-promote the IL-21 monoclonal antibody product in the United States in the event of it contributing to phase III development costs. ZGEN Reduces Workforce ZymoGenetics announced last week that it will show the door to 52 of its employees (approximately 15% of its workforce). 

The company also decided to stop discovering new immunology drugs so that it can focus on its marketed product Recothrom (indicated as an aid to hemostasis whenever oozing blood and minor bleeding from capillaries and small venules is accessible and bleeding cannot be controlled by standard surgical techniques) and develop and commercialize existing product candidates. 

This reduction in workforce is in addition to the 161 employees laid off in April 2009. The company expects to record severance related costs to the tune of approximately $3.5 million in the quarter ending Dec 31, 2009.
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