InterMune to focus on three programs, sell Infergen, cut jobs

New York, Nov. 28 - InterMune, Inc. said it will focus on three programs, Actimmune for idiopathic pulmonary fibrosis, pirfenidone for idiopathic pulmonary fibrosis, and the hepatitis C virus protease inhibitor.

As part of the refocusing, the Brisbane, Calif., company has agreed to sell its U.S. and Canadian rights to Infergen (interferon alfacon-1) for up to $135.5 million in cash, including milestaone payments.

In addition, InterMune will continue work on its hepatitis C virus protease inhibitor program, at least through phase 1b, without a development partner.

Annual operating expenses will be cut $50 million through the sale of Infergen, reducing investment in field-based idiopathic pulmonary fibrosis disease awareness activities and cutting 160 jobs.

"Collectively, these actions position InterMune to be able to deliver maximum value to shareholders through our key development programs," said Dan Welch, president and chief executive officer of InterMune, in a news release.

"With the substantial cash infusion from the sale of Infergen, significantly reduced operating expenses, and continued revenues from Actimmune, we intend to fully fund and advance our core development programs without the near-term need to raise additional capital or partner these important programs.

"Our key development programs include the ongoing phase 3 Inspire trial for Actimmune in IPF [idiopathic pulmonary fibrosis], for which final data is expected in early 2008, the phase 3 program for pirfenidone in IPF, for which data is expected in early 2009, and the lead compound from our preclinical HCV [hepatitis C virus] protease inhibitor program, for which we plan to file an IND in 2006.

"In addition, our phase 3 Graces trial evaluating Actimmune plus standard of care in the treatment of ovarian cancer is continuing, with the outcome of an interim analysis expected to be communicated in the first quarter of 2006."

InterMune will continue to support the supply and reimbursement of Actimmune (interferon gamma-1b) for its labeled indications, chronic granulomatous disease and severe, malignant osteopetrosis. It expects that given the lack of approved treatments revenue from physician prescriptions of Actimmune for the treatment of idiopathic pulmonary fibrosis will continue to be significant.

For the sale of Infergen to Valeant Pharmaceuticals International, InterMune will receive an upfront cash payment of $113.5 million, a fixed cash payment of €2 million in 2007, and subsequent development milestone cash payments, expected to be paid in 2007 and 2009, that could total up to $20 million. In addition, Valeant will acquire $6.5 million in inventory.

For the hepatitis C virus protease inhibitor, InterMune said it decided not to take a partner at this point because of "the potential for clinical data to dramatically raise the value of this program and the increased ability of the company to finance the phase I program as a result of the other decisions announced today."

As far as the operating expense reductions are concerned, InterMune said it plans to rebuild its commercial presence in the future when phase 3 data from its research and development pipeline warrants that investment.

InterMune expects to finish 2005 with more than $200 million in cash.

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