ZymoGenetics Settles Patent Spat with Bristol-Myers

This week in Seattle Biotech news, it was the best of times and the worst of times for ZymoGenetics (ZGEN). On Thursday last week, filings from the SEC reported that it had reached a settlement with Bristol-Myers Squibb Co. over a patent infringement suit concerning the rheumatoid arthritis drug, Orencia. That suit was set to begin trial later this week. Under the terms of the settlement, Bristol-Myers will receive a nonexclusive, worldwide license to patents owned by Zymo for fusion proteins in exchange for a lump sum of $21 million. The lawsuit will be terminated. The patents-in-suit are 5,843,725, issued in 1998 and titled “Methods for producing secreted receptor analogs and biologically active dimerized polypeptide fusions,” and 6,018,026, issued in 2000 and titled “Biologically active dimerized and multimerized polypeptide fusions.”

The afterglow from last week's settlement dimmed quickly for the Seattle biotech on news that one of its drugs targeted at kidney disease had been discontinued. Zymo said in a statement that “the observation of an increased risk for severe infection led to the discontinuation.” Shares tumbled more than 28 percent Monday, and fell further today, to $2.69 per share.