The company's only approved drug, Recothrom, used to stop bleeding during surgery, hasn't been able to stop the company's cash flow from hemhorraging. Recothrom brought in just $1.8 million in revenue last quarter, as it competed with other thrombins from entrenched leader King Pharmaceuticals
But ZymoGenetics' pipeline was able to give the balance sheet a transfusion. Bristol-Myers Squibb
Compare that to Alnylam's deal last week with Cubist Pharmaceuticals, which netted Alnylam $20 million up front and $82.5 million in potential milestone payments for its phase 2 compound, and you can see that ZymoGenetics got one heck of a deal.
Of course, PEG-interferon lambda has some serious sales potential, considering what's already on the market. Schering-Plough's
Perhaps the best part of the licensing deal for ZymoGenetics is that it takes some of the marketing risk off of the company's shoulders. The hepatitis C treatment market will change a lot between now and when PEG-interferon lambda potentially gets approved. Human Genome Sciences
But that's a long time off. For now, ZymoGenetics and its investors should relish the opportunity to live to see a few more years of drug development.
Fool contributor Brian Orelli, Ph.D., doesn't own shares of any company mentioned in this article. Vertex is a Rule Breakers choice, and Johnson & Johnson was picked by Income Investor. The Fool has a disclosure policy.