Bristol-Myers Jumps into Hepatitis C Race

| About: Bristol-Myers Squibb (BMY)

Bristol-Myers Squibb (NYSE:BMY) has decided to jump into the hotter by the second race for hepatitis C therapies. BMS and ZymoGenetics have entered a global collaboration for PEG-Interferon lambda, a novel type 3 interferon currently in Phase Ib development for the treatment of Hepatitis C, and its related development program.

Upfront: $85M plus $20M in licensing fees

Regulatory Milestones: $430M in Hep C; $287M in additional indications

Sales Milestones: $285M

Co-development: US shared costs - ZymoGenetics will pay 20 percent of the cost of developing pegylated interferon lambda, and Bristol-Myers will pay for 80 percent of costs with a 60 BMS / 40 ZymoGenetics share of profits. If ZymoGenetics doesn’t not exercise option to co-promote it will receive double digit royalties. Additionally, BMS can terminate ZymoGenetics’ co-promotion rights if Zymo’s cash balance falls below $35 million, and it is unable to regain the cash balance above $35 million within 10 days (ZymoGenetics would then get an additional royalty).


PEG-Interferon lambda (IL-29) is a novel type 3 interferon currently in Phase Ib development for Hepatitis C. The native human protein Interferon lambda is generated by the immune system in response to viral infection. PEG-Interferon lambda has the potential to be uniquely differentiated from available interferon therapy because Interferon lambda mediates anti-viral activity through a receptor that is distinct from that used by Interferon alpha and is present on fewer cell types within the tissues of the body. As a result, the possibility exists for more targeted delivery of interferon therapy and an improved therapeutic index.

Simply put… a phenomenal deal for ZymoGenetics.

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