Intermune sells antibiotic oritavancin to Targanta for $9 million cash, $25 million in convertible notes

By E. Janene Geiss

Philadelphia, Dec. 27 - InterMune, Inc. announced the sale of its worldwide ownership interest in oritavancin, an antibiotic that has completed two phase 3 clinical trials, to Targanta Therapeutics, a privately held biopharmaceutical company developing antibacterial drugs.

Terms of the agreement include a total of $9 million in upfront and milestone payments and a convertible promissory note with up to $25 million in principal amount to be issued by Targanta, which will be initially secured by the oritavancin assets, according to a company news release.

Upon the achievement by Targanta of certain corporate objectives, the notes will convert into preferred stock of Targanta, officials said.

InterMune said it also will be entitled to a seat on the Targanta board of directors.

"Oritavancin is the second of two anti-infective products we divested this year as part of our corporate strategy to focus our efforts on our two areas of therapeutic interest, pulmonology and hepatology," Dan Welch, president and chief executive officer of InterMune, said in the release.

"Since many members of Targanta's senior leadership team have direct experience with oritavancin from time spent at Eli Lilly and Co., and have a track record of delivering many products to registration, we are confident that Targanta has the resources and capabilities to continue the successful development and registration of oritavancin," Welch added.

Targanta president and chief executive officer Pierre Etienne said he believes oritavancin has the potential to be the best-in-class antibiotic for serious gram-positive infections in the hospital and in outpatient settings.

Oritavancin is a semi-synthetic glycopeptide antibiotic with bactericidal activity against clinically relevant serious gram-positive infections, including multi-resistant strains.

Two large, multicenter phase 3 studies in more than 1,750 patients have suggested oritavancin to be an effective and safe therapy for complicated skin and skin-structure infections, officials said.

In both phase 3 studies, oritavancin reached its primary endpoint, officials said, and appeared to be as effective as a commonly used treatment regimen, vancomycin followed by cephalexin.

InterMune is a Brisbane, Calif., biotechnology company focused on the research, development and commercialization of innovative therapies in pulmonology and hepatology.

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