ZymoGenetics Inc. jumped 35 percent in extended trading after Bristol-Myers Squibb Co. said it would pay as much as $1.1 billion for PEG-interferon lambda, an experimental treatment for the hepatitis C liver virus, Bloomberg reported.
ZymoGenetics, of Seattle, rose to $4.20 in trading at 6:28 p.m. New York time, after it announced the deal to develop the drug. Bristol-Myers agreed to pay $105 million in upfront cash and licensing fees, and almost $1 billion more if the product hits sales and regulatory goals or is approved for other uses, the companies said in a joint statement.
Early clinical trials found PEG-interferon lambda equally effective to, and potentially safer than, leading hepatitis C treatments, such as Roche Holding AG's Pegasys and Schering- Plough Corp.'s PEG-Intron, said Gregory Wade, an analyst with Pacific Growth Equities LLC in San Francisco. Pegasys had $1.36 billion in sales in 2007 and PEG-Intron had $911 million, according to data compiled by Bloomberg.
"If the efficacy bears out and the safety bears out, I think what Bristol and others see is a chance to become the market leader," Wade said in a telephone interview. "What they're paying does suggest it has blockbuster potential."
Hepatitis C, a chronic disease of the liver, affects about 3 million people in the U.S. and 170 million worldwide, according to the U.S. Centers for Disease Control and Prevention and the World Health Organization. Every year, about 80,000 people in the U.S. start treatment.
