By Brady Huggett
Staff Writer
InterMune Inc. filed a registration statement for a proposed public offering of 3 million shares, looking for an approximate $120 million take, based on Mondays closing price (NASDAQ:ITMN) of $40.10.
Lehman Brothers Inc., of New York, will act as lead managing underwriter for the offering, with Banc of America Securities LLC, of New York; Robertson Stephens Inc., of San Francisco; and UBS Warburg LLC, of Stamford, Conn., acting as co-managers. The underwriters have an option to purchase 450,000 shares to cover overallotments.
Well use the funds to, first, expand our clinical programs for Actimmune [interferon gamma 1-b] in the areas of cancer, pulmonary disease and infectious diseases, said Tim Lynch, chief financial officer at InterMune. Secondly, to take advantage of in-licensing and acquisition opportunities for additional products, both development products, and, potentially, marketed products.
InterMune, of Burlingame, Calif., had cash, cash equivalents and available-for-sale securities of about $175 million as of March 31. It has approximately 24 million shares outstanding and posted a net loss for the first quarter of about $10.6 million. Actimmune is its flagship product.
The company was formed as a wholly owned subsidiary of Connetics Corp., of Palo Alto, Calif., in 1998. Connetics acquired Actimmune from Genentech Inc., of South San Francisco, in 1998 and in turn licensed it to InterMune. Genentech received approval to market the drug to treat chronic granulomatous disease in 1990, but Actimmune also is now marketed for severe, malignant osteopetrosis.
Lynch said the product is in Phase III trials for the treatment of idiopathic pulmonary fibrosis and also tuberculosis. InterMune plans start a Phase III trial for ovarian cancer by the end of the year, Lynch said, and InterMune will have four Phase II trials ongoing for Actimmune by then as well.
Actimmunes active ingredient, interferon gamma-1b, is a form of a naturally occurring human protein called interferon gamma, which stimulates the immune system and also helps prevent excessive fibrotic tissue from forming. Actimmune provided InterMune with nearly $5 million in revenue through the first quarter of this year.
In March, InterMune entered an alliance with Boehringer Ingelheim GmbH, of Ingelheim, Germany, giving Boehringer the right to market Actimmune worldwide excepting the United States, Canada and Japan, areas InterMune retains today. The alliance allows for a royalty rate to InterMune of about 20 percent under particular sales conditions, and InterMune may continue development for idiopathic pulmonary fibrosis. (See BioWorld Today, March 27, 2001.)
InterMunes second product, Amphotec, is marketed worldwide for the treatment of invasive aspergillosis. InterMune bought Amphotec from ALZA Corp., of Mountain View, Calif., in January for a $9 million up-front license fee, milestone payments and royalties. Amphotec has thus far brought in $613,000 for InterMune in 2001. (See BioWorld Today, Jan. 10, 2001.)
InterMune, still called InterMune Pharmaceuticals Inc. at the time, sold 6.25 million shares at $20 each to raise $125 million in its initial public offering in March 2000. Its stock dropped $1.70 Tuesday to close at $38.40. (See BioWorld Today, March 27, 2000.)
With so many trials ongoing or planned, further development of Actimmune wont be inexpensive, but Lynch said the offering, together with InterMunes cash on hand, puts InterMune closer to where it wants to be.
We see the additional proceeds as being key to helping us build the business and grow toward being a leading biopharmaceutical company, he said. The cash on our balance sheet allows us to make broader decisions regarding our portfolio for Actimmune and attracts licensing partners.