ZymoGenetics, Merck KGaA deal

ZymoGenetics exercised its option to restructure a 2001 deal with Merck's Merck Serono S.A. division to co-develop and commercialize atacicept, which is in Phase I/II testing to treat systemic lupus erythematosus (SLE) and lupus nephritis; Phase II testing to treat multiple sclerosis (MS) and rheumatoid arthritis (RA); and Phase I testing to treat hematological malignancies (see BioCentury, Sept. 10, 2001). Merck now has exclusive, worldwide rights to develop and commercialize atacicept and will fund all development of the soluble fusion protein containing the extracellular portion of TACI linked to Fc. ZymoGenetics, which previously shared funding responsibilities, is now eligible for royalties on sales of atacicept and remains eligible for up to $40 million in milestones. ZymoGenetics said the option exercise would allow it to reduce costs and conserve cash. The biotech had $116.9 million in cash as of June 30, and posted an operating loss of $77.1 million in the first half. ...