ZymoGenetics Begins Clinical Trial for PEG-Interferon lambda as Potential

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ZymoGenetics Begins Clinical Trial for PEG-Interferon lambda as Potential

Treatment for Viral Infection

PR Newswire Europe (inc. UK Disclose) - Jan. 30, 2007

SEATTLE, Jan. 30 /PRNewswire-FirstCall/ -- ZymoGenetics, Inc. today

announced that the company has initiated a Phase 1 safety and

pharmacokinetic study of PEG-Interferon lambda (IL-29) in healthy

volunteers. The Phase 1 study is part of a clinical development program

designed to evaluate PEG-Interferon lambda as a potential treatment for

patients with hepatitis C and other viral diseases.

" This clinical trial highlights the breadth of our pipeline and reflects our

intense commitment to finding new treatments for patients. ZymoGenetics'

development programs now encompass hemostasis, cancer, autoimmune and viral

diseases, " said Bruce L.A. , Ph.D., President and CEO of ZymoGenetics.

" We believe PEG-Interferon lambda could serve as an effective alternative in

providing therapy for viral infections such as hepatitis C, with the

potential for fewer side effects than the current standard of care. "

The native human protein Interferon lambda is generated by the immune system

in response to viral infection. It mediates anti-viral activity through a

receptor that is distinct from that used by Interferon alpha and is

generally present on fewer cell types within the tissues of the body.

Receptors for Interferon lambda are present on several important sites of

viral infection, most notably cells of the lung and liver. ZymoGenetics'

product candidate, recombinant PEG-Interferon lambda, has shown in vitro

anti-viral activity against several viruses, including hepatitis C.

About Hepatitis C

Chronic infection with hepatitis C virus (HCV) is a leading cause of

cirrhosis, liver failure, and hepatocellular carcinoma worldwide. In the

United States, it is estimated that HCV is associated with up to 20,000

deaths per year, and is the main indication for liver transplantation. An

estimated 4.1 million people in the United States have been exposed to HCV,

and approximately 3.2 million have chronic HCV infection. Without effective

intervention, the National Institutes of Health project that the number of

deaths from chronic HCV infection may triple in the next 10-20 years.

Current Standard of Care for Hepatitis C

The current standard of care for chronic HCV infection involves treatment

with Interferon alpha and ribavirin. This form of HCV therapy has been

associated with a number of significant side effects including flu-like

symptoms, anorexia, depression, hemolytic anemia and myelosuppression. This

side-effect profile often necessitates additional medications to manage the

side effects, and can lead to early discontinuation of treatment and poor

adherence to prescribed therapy, leading to worsened treatment outcomes.

Currently, the response rates for the most common form of HCV in the United

States to standard treatment are only 50%. Therefore, there remains a need

for better tolerated and more effective therapy for HCV infection. The

development of PEG-Interferon lambda is intended to provide such an

alternative to PEG-Interferon alpha.

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 and viral 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 http://www.zymogenetics.com/ .

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.

Contact

Investor Relations

Calhoun, MD, MBA

Director, Corporate Communications & amp; Investor Relations

(206) 442-6744

Media Relations

W. Specht, MBA

Associate Director, Corporate Communications

(206) 442-6592

ZymoGenetics, Inc.

CONTACT: investors, Calhoun, MD, MBA, Director, Corporate

Communications & Investor Relations, +1-206-442-6744, or media,

W. Specht, MBA, Associate Director, Corporate Communications,

+1-206-442-6592, both of ZymoGenetics

Web site: http://www.zymogenetics.com/

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