West Coast Editor

Another kernel popped in the sizzling pan of protease inhibitors for hepatitis C virus, as F. Hoffmann-La Roche Ltd. signed a potential $530 million deal with InterMune Inc. for a program led by preclinical ITMN-191.

InterMune's stock (NASDAQ:ITMN) jumped 25.5 percent on the news, closing Tuesday at $21.12, up $4.29. The payout from Roche includes $60 million up front and another $35 million that InterMune could pocket in the next 12 months.

Larry Blatt, the Brisbane, Calif.-based firm's chief scientific officer, partly credited the potency of ITMN-191 for the handsome terms. In early work, the drug's strength proved "at least two orders of magnitude [greater]" than other protease inhibitors in clinical testing by other firms, he told BioWorld Today, referring to VX-950, from Vertex Pharmaceuticals Inc., and Schering-Plough Corp.'s SCH 503034, both in Phase II.

What's more, ITMN-191, which InterMune and Roche plan to put in Phase I trials before the end of this year, can be dosed every 12 hours, or about twice per day, whereas others must be given at least three times per day, Blatt said.

In the deal with InterMune, Basel, Switzerland-based Roche is paying 67 percent of worldwide expenses. The firms will work on commercialization together and split costs as well as profits on sales in the U.S.; outside, InterMune will get royalties in the mid-teens to high-teens, depending on sales levels.

Manufacture of ITMN-191 (originally developed by InterMune with Array BioPharma Inc.), and any other drugs that might emerge from the collaboration, is up to Roche, and InterMune may opt out of either co-development or co-commercialization for the drug, which would mean higher royalties on ex-U.S. sales and royalties instead of profits in the States.

Roche already stands tall in HCV with Pegasys (pegylated interferon alfa-2) - the drug with which Vertex combined its VX-950 for a comparison Phase II trial with Schering-Plough's SCH 503034. Vertex came out the winner in data disclosed earlier this year at the 41st annual meeting of the European Association for the Study of the Liver in Vienna, Austria.

Vertex's advanced position in the protease race "doesn't mean they will ultimately be the most important product out there," Blatt noted.

For chronic HCV, first-line therapy is Pegasys plus ribavirin, but about half of all patients treated fail to respond. Protease inhibitors, which proved strong against HIV, could hold major hopes for HCV, as well, since HCV needs them to copy itself. Also, HCV proteases interfere with the host's defenses by interacting with proteins that otherwise would fight off the virus.

The HCV market could be worth as much as $9 billion, and has drawn plenty of players. Gilead Sciences Inc. and Achillion Pharmaceuticals Inc. have inhibitor GS 9132 in Phase I trials. Others doing early research include Medivir AB, Bristol-Myers Squibb Co., GlaxoSmithKline plc and Novartis AG.

InterMune has a program for idiopathic pulmonary fibrosis (IPF), as well. The company is trying Actimmune, approved for chronic granulomatous disease and severe, malignant osteopetrosis, in a Phase III trial called INSPIRE. Although the first Phase III study with Actimmune (interferon gamma-1b) against IPF failed to hit statistical significance, and the drug didn't work against ovarian cancer, hopes are higher for INSPIRE. InterMune completed patient enrollment in April, and Wall Street expects to see data in the first quarter of 2008. (See BioWorld Today, Feb. 6, 2006.)

"There's nothing approved for this disease, which affects four or five times the number of patients than pulmonary arterial hypertension, subject of the Myogen-Gilead deal, for example," said InterMune's president and CEO, Dan Welch. Earlier this month, Gilead Sciences Inc. disclosed a plan to buy Myogen Inc. for about $2.5 billion, a takeover that would give Gilead the Phase III compound ambrisentan PAH. (See BioWorld Today, Oct. 3. 2006.)

For IPF, the five-year survival rate is "around 20 percent, which is worse than every cancer you know about, with the exception of lung cancer," Welch told BioWorld Today. "If INSPIRE works, it's going to be a huge upside to our company's future." Already, doctors are prescribing about $75 million to $100 million per year of Actimmune off label for the condition.

CIBC World Markets, which Tuesday initiated coverage of InterMune with a "sector outperform" rating, estimated that peak sales of Actimmune for IPF could exceed $700 million. Sales of ITMN-191 could go beyond $1 billion, according to CIBC's report.

InterMune also has the oral small molecule pirfenidone in Phase III trials to improve lung function in IPF patients. The trial "has only just begun enrolling," Welch said.

CIBC does not expect data until early 2009, but Shionogi & Co. Ltd., which owns Japanese rights, is running a Phase III trial in Japan at the same time, with results likely at the end of this year or the beginning of next.

"Based on data from the Shionogi trial, which may not be made public, InterMune could adjust the powering of its Phase III study, or discontinue the pirfenidone program altogether," wrote CIBC analyst Brian Abrahams in a report. He noted that earlier studies have shown mixed results, and "believe[s] it is very possible InterMune may make changes to the pirfenidone program," on which CIBC places no significant value.