ZymoGenetics Licenses Ex-North American Rights to Three Proteins with Antiviral and Anti-Inflammatory Disease Therapeutic Potential to Novo Nordisk.

SEATTLE -- Novo Nordisk Obtains Development Rights Outside North America for Interleukin 28a, 29 and 31

ZymoGenetics, Inc. (Nasdaq:ZGEN) announced today three agreements with Novo Nordisk A/S (NYSE:NVO). ZymoGenetics licensed to Novo Nordisk exclusive development rights outside North America to patents covering Interleukin 28A (IL-28A), Interleukin 29 (IL-29) and Interleukin 31 (IL-31). IL-28A and IL-29 show potential in providing immunity to viral infection, and Interleukin 31 (IL-31) is believed to play a role in stimulating cellular infiltration and inflammation. All three licenses resulted from an existing option and license agreement between Novo Nordisk and ZymoGenetics, which was recently extended to November 2006. Under the terms of the agreements, Novo Nordisk will pay ZymoGenetics initial license fees along with potential milestone and royalty payments. Other financial details of the transactions were not disclosed.

"IL-28A, IL-29 and IL-31 demonstrate our continuing ability to discover novel proteins with the potential to save and transform lives," said Bruce L.A. Carter, Ph.D., President and Chief Executive Officer of ZymoGenetics. "We were at the forefront of discovering cytokines and their receptors, and this has resulted in our sizable therapeutic protein patent portfolio. As our focus has been to develop proteins for North American markets, our strategy is to partner with companies like Novo Nordisk that will commercialize proteins outside North America."

About IL-28A and IL-29

ZymoGenetics identified the novel cytokine family containing Interleukins 28A and 29 from human genomic sequence. These interleukins, distantly related to both type I interferons (IFNs) and the IL-10 family, use a newly identified class II cytokine receptor, IL-28R. ZymoGenetics researchers found that like type I IFNs, IL-28A and IL-29 have antiviral activity and are induced by viral infection. The in vitro and in vivo biological activities of IL-28A and IL-29 suggest that this cytokine family may serve as an alternative to type I IFNs in augmenting the body's defenses against viral infection.

About IL-31

ZymoGenetics researchers discovered Interleukin 31 (IL-31) using the Company's genomics-based discovery platform. Current in vitro and in vivo data suggest that IL-31 may affect cellular infiltration and inflammation. Analysis of IL-31 and IL-31 receptor levels in human and murine disease tissues suggests that expression of IL-31, and/or its receptor, is significantly increased in the settings of inflammatory bowel disease, asthma and psoriasis. Further evidence suggests a potential role of IL-31 in the development of atopic dermatitis.

A paper by ZymoGenetics scientists that was published in the July 2004 issue of the journal Nature Immunology characterizes IL-31, illustrates the hypothesized role of IL-31 in atopic dermatitis and respiratory disease, and suggests directions for future investigation of this cytokine and its role in human diseases.

About ZymoGenetics

ZymoGenetics is a biopharmaceutical company focused on the discovery, development and commercialization of therapeutic proteins for the prevention or treatment of human diseases. The Company is developing a diverse pipeline of potential proprietary product candidates that are moving into and through clinical development. These 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 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 ZymoGenetics' public filings with the Securities and Exchange Commission, including ZymoGenetics' Annual Report on Form 10-K for the year ended December 31, 2003. 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.