ZymoGenetics and Serono Initiate Clinical Trial with TACI-Ig

Business Wire, Sept 29, 2003

Business Editors/Health/Medical Writers

SEATTLE & GENEVA--(BUSINESS WIRE)--Sept. 29, 2003

Inhibitor of B-cell Activation Provides Novel Therapeutic Approach to

Treat Debilitating Autoimmune Diseases

ZymoGenetics, Inc. (Nasdaq:ZGEN) and Serono S.A. (virt-x:SEO) (NYSE:SRA) announced today the initiation of a Phase 1 clinical trial with TACI-Ig. The trial is a single-dose escalation study in healthy volunteers designed to evaluate the safety and pharmacokinetics of the protein. TACI-Ig is a soluble receptor that is being co-developed by ZymoGenetics and Serono. The companies intend to focus their activities on the development of TACI-Ig for the treatment of autoimmune diseases.

"TACI-Ig has the potential to be an important treatment for a variety of immunological diseases, such as lupus and rheumatoid arthritis, as well as other indications such as non-Hodgkin's lymphoma," commented Bruce L. A. Carter, Ph.D., President and Chief Executive Officer of ZymoGenetics. "TACI-Ig demonstrates ZymoGenetics' ability to turn its discoveries into product candidates and move those candidates into the clinic. Our collaboration with Serono has strengthened this development program by adding their proven ability to develop protein therapeutics for the treatment of autoimmune disease."

"The collaboration between Serono and ZymoGenetics for the development of TACI-Ig is another example of Serono's commitment to identify and develop novel therapeutics for the treatment of autoimmune and serious inflammatory diseases," commented Franck Latrille, Head of Global Product Development at Serono. "ZymoGenetics' expertise in protein discovery combined with our experience in product development have allowed us to rapidly advance TACI-Ig from the lab bench to the clinic."

The Phase 1 trial will be conducted in the United Kingdom. The trial will be a double-blind placebo controlled study in healthy volunteers randomized between TACI-Ig and placebo. In addition to monitoring safety and pharmacokinetics of TACI-Ig, the effects on B-lymphocytes will also be measured.

Following completion of the trial in healthy volunteers, the companies intend to extend TACI-Ig clinical testing in 2004 into patients suffering from autoimmune diseases, where there is an over production of autoantibodies (antibodies that attack one's own cells). The first indication will be systemic lupus erythematosus (SLE) or lupus, a chronic and often debilitating disease without a newly approved treatment for many years. The companies also plan to extend clinical testing into patients suffering from other autoimmune disorders.

ZymoGenetics has previously reported data showing the effectiveness of TACI-Ig to inhibit the progression of autoimmune disease in mouse models of lupus and rheumatoid arthritis. By inhibiting BLyS and APRIL, two proteins that are involved in the development and activation of B-cells, TACI-Ig may provide a novel mechanism of action to address lupus, rheumatoid arthritis and other autoimmune diseases.

ZymoGenetics and Serono entered into an exclusive co-development and commercialization agreement in 2001 focused on the development of TACI-Ig. The two companies are sharing research and development expenses worldwide, except for in Japan, where Serono covers all expenses. ZymoGenetics retained the option to co-promote products with Serono in North America. If ZymoGenetics exercises that option, the two companies will share commercialization expenses and profits equally. Serono has exclusive rights to market TACI-Ig in the remainder of the world, for which ZymoGenetics will receive royalty payments. Serono is responsible for manufacturing the product for both clinical trials and commercial sale.

TACI-Ig background

TACI is a cell-surface receptor found on B lymphocytes, the cells in the blood responsible for producing antibodies. TACI has been shown to bind to BLyS and APRIL, two cytokines that stimulate B-cell growth and the production of autoantibodies. The importance of the BLyS pathway for regulating B cell function has been demonstrated by scientists from ZymoGenetics (1) where the gene for BLyS was eliminated in mice, thereby preventing the production of BLyS protein. These mice had almost no mature B cells present and had reduced serum antibody response to immunization. ZymoGenetics scientists further showed that mice genetically engineered to over express the gene for BLyS develop symptoms of the autoimmune disease systemic lupus erythematosus (SLE), including the generation of autoantibodies(2). Reports from ZymoGenetics and others have also demonstrated an association between elevated levels of circulating BLyS and BLyS/APRIL heterotrimers and autoimmune disease, including SLE in mice and humans and rheumatoid arthritis in humans.

By using the receptor portion of TACI responsible for binding the growth factors, ZymoGenetics researchers have produced TACI-Ig, an antagonist protein that can "mop up" increased BLyS and APRIL growth factor present in the blood. TACI-Ig is a soluble fusion protein that links the extracellular part of the TACI receptor to the Fc portion of human immunoglobulin (Ig). TACI-Ig thus prevents binding of the growth factors to the B cells, regulating the development of mature B cells and antibody production. In published studies (1), scientists at ZymoGenetics demonstrated that in TACI transgenic mice, mice that have been genetically engineered to over express a soluble form of the TACI receptor, there are fewer mature B cells and reduced levels of circulating antibody. Similar results were observed in normal mice treated with soluble TACI receptor.