I warned investors last November not to leave ZymoGenetics (NASDAQ:ZGEN) for dead, but even I couldn't have guessed it would pull itself this far out of the grave.

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 (NYSE:KG) and powerhouse Johnson & Johnson (NYSE:JNJ).

But ZymoGenetics' pipeline was able to give the balance sheet a transfusion. Bristol-Myers Squibb (NYSE:BMY) agreed to license its phase 1 hepatitis C treatment, PEG-interferon lambda, for $105 million this year, with potential milestone payments of $430 million if the drug is successful in the clinic and approved by regulatory authorities. ZymoGenetics could also get $287 million if the drug is successful in treating other diseases, and as much as $285 million if the drug reaches sales goals.

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 (NYSE:SGP) Pegintron had sales of $689 million through the first nine months of the year, and Roche's Pegasys did even better, with around $1 billion in sales. But both those pegylated interferons have nasty side effects that ZymoGenetics and Bristol-Myers hope to avoid with their own offering. Their drug is still in early testing, but so far, the data looks good.

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 (NASDAQ:HGSI) has a pegylated interferon halfway through its phase 3 trials, and Schering and Vertex Pharmaceuticals (NASDAQ:VRTX) both have drugs in late-stage trials designed to work in combination with Pegasys and Pegintron. Even if ZymoGenetics' drug works better than those two, there could be a new standard of care that it needs to beat by the time it gets to the market.

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.