InterMune to potentially receive up to $470 million in milestones through HCV collaboration with Roche

By Jennifer Lanning Drey

Portland, Ore., Oct. 17 - InterMune, Inc. announced that it has entered into an exclusive worldwide agreement with Roche to develop products from InterMune's hepatitis C virus protease inhibitor program, including its lead product candidate ITMN-191.

If commercialized, InterMune could potentially receive up to $470 million in milestones from the ITMN-191 collaboration, including $35 million in the next 12 months, the company said Tuesday.

Under the agreement, Roche will exclusively license ITMN-191 and will also have the right to license further HCV protease inhibitor development candidates that result from the research collaboration.

Upon closing, which is expected in mid-November, InterMune will receive an upfront payment of $60 million from Roche, John Hodgman, InterMune's chief executive officer, said during a company conference call held Tuesday.

Also under the agreement, Roche will fund 67% of the global development costs of ITNM-191, and the companies will co-commercialize the product in the United States and share profits on a 50-50 basis. InterMune will receive royalties outside the United States.

"This agreement maximizes the value of our protease inhibitor program, not only by improving our chances of success, but by doing so with substantially less expense to InterMune while allowing us to strongly participate on the economic value of this opportunity, said Dan Welch, chief executive officer of InterMune, during Tuesday's call.

The upfront payments that InterMune receives during the development phase of ITMN-191 will provide the funding the company needs to pay for its share of the global development costs of the drug, Hodgman said during the call.

"From InterMune's perspective, the collaboration is self funding through the development phase of 191," he said.

InterMune will conduct phase 1 clinical studies of ITMN-191, and Roche will lead its clinical development in phase 2 and phase 3 clinical trials.

InterMune believes the value of the collaboration could be roughly doubled if the same economic terms are applied to second-generation protease inhibitors, Hodgman said.

In addition, InterMune believes the collaboration will accelerate development of ITMN-191, according to Welch.

"Speed in development and registration is crucial because ITMN-191 is one of several HCV protease inhibitor programs in development and we recognize that speed to market is one of the most powerful value drivers in our industry," Welch said.

InterMune is a Brisbane, Calif., biotechnology company developing therapies in pulmonology and hepatology.

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