ZymoGenetics, Inc. (Nasdaq: ZGEN) today announced preliminary positive results from two Phase 1b clinical trials in patients with systemic lupus erythematosus (SLE) treated with atacicept (formerly referred to as TACI-Ig). The results demonstrated a favorable tolerability profile and indicated biological activity consistent with the mode of action. ZymoGenetics and its partner, Serono S.A., plan to present full results of these clinical studies at a medical meeting later this year.

"These positive results show the potential of atacicept for treating patients with SLE," said Nicole Onetto, M.D., Senior Vice President and Chief Medical Officer of ZymoGenetics. "We are very encouraged by the findings of these studies and the results will be beneficial in designing future studies in this indication."

The primary objective of these two Phase 1b clinical studies was to determine the safety and tolerability of atacicept administered subcutaneously or intravenously to patients with SLE. Secondary objectives included examination of the relationship between the atacicept dose and schedule with markers of biologic activity and disease activity. In both studies, atacicept appeared to be well tolerated across all dose levels and schedules tested in both studies, and clear biologic response corresponding to the mechanism of action of atacicept was observed.

Both clinical studies were multi-center, double-blind, randomized, placebo-controlled, dose-escalating studies. In the subcutaneous administration study, 49 patients were enrolled and patient cohorts received single or repeated doses (4 weekly doses) of atacicept or placebo. In the study with intravenous administration, 24 patients were enrolled and patient cohorts received single or repeated doses (2 doses 21 days apart) of atacicept or placebo. All patients were monitored during and for several weeks after for safety. The predominant adverse event noted was a mild injection site reaction (redness of skin or pain at the injection site).

ZymoGenetics and Serono are planning to start a Phase 2 study of atacicept later this year in rheumatoid arthritis patients with an inadequate response to TNF inhibitors. The companies are also conducting ongoing Phase 1b clinical trials of atacicept in patients with B-cell malignancies in several open label dose escalation safety studies.

About Atacicept

ZymoGenetics and Serono are developing atacicept (formerly referred to as TACI-Ig) for the treatment of autoimmune diseases and B-cell malignancies. Atacicept is a soluble receptor that binds to BLyS and APRIL, TNF family cytokines that promote B-cell survival and the production of autoantibodies that are associated with certain autoimmune diseases such as systemic lupus erythematosus (SLE). Current data indicates that levels of BLyS and APRIL are elevated in patients with rheumatoid arthritis, SLE and B-cell malignancies. Atacicept has been shown to affect several stages of B-cell development and may inhibit the survival of cells responsible for making antibodies.

About ZymoGenetics

ZymoGenetics creates novel protein drugs with the potential to significantly help patients fight their diseases. The Company is developing a diverse pipeline of potential proprietary product candidates that are moving into and through clinical development. These candidates span a wide array of clinical opportunities that include bleeding, autoimmune diseases and cancer. ZymoGenetics intends to commercialize these product candidates through internal development, collaborations with partners, and out-licensing of patents from its extensive patent portfolio. For further information, visit zymogenetics/.

This press release contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on the current intent and expectations of the management of ZymoGenetics. These statements are not guarantees of future performance and involve risks and uncertainties that are difficult to predict. ZymoGenetics' actual results and the timing and outcome of events may differ materially from those expressed in or implied by the forward-looking statements because of risks associated with our unproven discovery strategy, preclinical and clinical development, regulatory oversight, intellectual property claims and litigation and other risks detailed in the company's public filings with the Securities and Exchange Commission, including the company's Annual Report on Form 10-K for the year ended December 31, 2005. Except as required by law, ZymoGenetics undertakes no obligation to update any forward-looking or other statements in this press release, whether as a result of new information, future events or otherwise.

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