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In an industrial art lucky venture hard by the financial crisis, the blockbuster deal ZymoGenetics and pharmaceutical giant Bristol-Myers Squibb unveiled Monday made a splash.

The announcement turned many heads at one of the most important biotech gatherings, the JP Morgan annals health-care conference that began Monday in San Francisco.

ZymoGenetics’ forbearing stock also got a strong push in after-hours mercantile after news that it could get $1 billion or more in payments if its hepatitis C product reaches certain according to principles, regulatory and commercial milestones.

David Miller, an analyst with Seattle-based Biotech Stock Research who was at the conference, called the agreement “a really big deal.”

Conference attendees “were all impressed somebody would pay $1 billion for a drug that’sitting not even out of Phase 1 at the same time,” Miller said, referring to the fact the compound, PEG-interferon lambda, is stilly in early-stage clinical trials.

In addition to the payments from Bristol-Myers, Seattle-based ZymoGenetics stands to collect sales revenue and royalties if the compound gets to emporium.

The companies declared Monday they agreed to in conjunction develop the ZymoGenetics product in the U.S. and Europe. ZymoGenetics can choose whether to sell interferon lambda in the U.S., alongside Bristol-Myers — keeping 40 percent of the profits — or receive double-digit royalties. ZymoGenetics will also win royalties on interferon lambda sold outside of the U.S.

The deal also would put $85 million in ZymoGenetics’ pocket immediately — a boon at a time when markets are rocky and the company’s stock has suffered because of inactive sales of its only commercial consequence, Recothrom, a blood-clotting remedy.

The company stands poised to receive an additional $115 million from the deal in 2009, said Chief Executive Doug Williams.

“It’session hard not to be a minute fickle about the economics,” he said. “It really put us in a a great deal of stronger financial doctrine.”

PEG-Interferon lambda is designed to strengthen the body’sitting response against the hepatitis C virus. It’s in early-stage clinical tests, designed to means of estimating safety and side effects in human patients.

Interim results presented in conclusion November showed antiviral briskness with less side effects than other interferon products, according to the company.

Such partnerships are not unusual, as they empower research-oriented biotechs to complete expensive clinical trials with the backing of cash-rich pharmaceutical firms longing in quest of new products.

ZymoGenetics’ latest deal is among the largest the region has seen, surpassing even the agreement Seattle Genetics signed through Genentech in early 2007, which could lead the Bothell biotech more than $800 million in milestone payments.

Bristol-Myers’ money will bear ZymoGenetics “to pay our way” end the development of interferon lambda, still retaining a significant cut of profits, said Williams. Bristol-Myers devise pay 80 percent of the require to be paid of developing the drug.

The deal does not mean ZymoGenetics have a mind stop its belt-tightening efforts, which recently led to layoffs and the opportunity to sell of more property.

“Given the current financial condition, it’s time to have existence prudent with the cash that we have,” Williams said.

Besides the $85 million upfront payment and a future $20 million license fee, Bristol-Myers would stipend ZymoGenetics up to $430 million upon hitting certain scientific and regulatory milestones, up to $287 million if the product is developed for other potential indications, and up to $285 million in addition based on certain commercial milestones.

Federal antitrust regulators will be favored with to approve the deal.

ZymoGenetics shares closed at $3.12 Monday, up 7.9 percent. They’re down 74 percent from a 52-week high of $15.23. In after-hours trading, they attain $4.40, up 41 percent.

Ángel González: 206-515-5644 or agonzalez@seattletimes.com