By Matthew Willett

InterMune Pharmaceuticals Inc. entered a strategic alliance with Boehringer Ingelheim GmbH for certain development and commercialization rights to interferon gamma-1b, InterMune's product for chronic granulomatous disease marketed in the U.S. as Actimmune.

Boehringer Ingelheim (BI), of Ingelheim, Germany, will market the drug in all territories other than the U.S., Canada and Japan, where InterMune retains exclusive rights.

The alliance calls for a royalty rate for InterMune on sales of Imukin - the name used by BI - equivalent to about 20 percent under particular sales conditions. It also allows InterMune to develop the therapy for idiopathic pulmonary fibrosis (IPF), an indication InterMune officials predict could be a blockbuster, with sales upward of $1 billion.

InterMune CEO and President Scott Harkonen said the deal is "win-win," citing profits on both sides of the Atlantic from sales of Actimmune in current indications and expanded usage.

"The main benefit is that it truly does strategically leverage the efforts we have ongoing in the U.S. in developing gamma interferon-1b for use in these new indications," Harkonen told BioWorld Today. "By us leveraging our development experience we get two things: an additional market that adds a significant commercial potential, and through the strategic alliance, access to one of the most formidable marketing coverages in the area of pulmonary disease in Boehringer Ingelheim. I couldn't think of a more ideal partner in these territories. We get access to their marketing capabilities and economic access to these territories."

And the deal for development outside the U.S., Canada and Japan builds on an existing relationship between the companies - BI already has a manufacturing agreement to supply Actimmune to InterMune for clinical trial use.

Burlingame, Calif.-based InterMune has expanded indications for Actimmune since licensing all rights from Genentech Inc., of South San Francisco, last year.

Actimmune is currently approved for treatment of osetopetrosis and severe malignant osteoporosis in addition to chronic granulomatous disease. In 2000, Actimmune's sales were $13 million, compared to $5.4 million in 1999, up 142 percent.

And with expanded indications on tap, the revenue from Actimmune is expected to rise.

"The big thing is that we would participate in approximately 40 percent of the net profit from sales in these international territories, depending on which company actively promotes and markets the product," Harkonen said. "We could get a royalty in excess of 20 percent of net sales."

InterMune currently has a Phase III trial of interferon gamma-1b under way in patients with IPF. Harkonen said that trial has enrolled 100 of the planned 160 patients.

The company also has a Phase II study of the therapy in conjunction with standard therapy for patients with acute cryptococcal meningitis and a Phase III study of the therapy as an inhaled aerosolized recombinant molecule in patients with pulmonary multidrug-resistant tuberculosis.

Harkonen said in a teleconference call Monday that InterMune anticipates 2004 will be the "breakout year" for sales of interferon gamma-1b in the IPF indication.

"The main reason [for the deal is that] we've had a common economic interest with Boehringer Ingelheim. They saw the same opportunity in IPF we did, and this sprung out of a meeting we had with BI," he said. "We're working together to develop this indication because it's not effective for us both to pursue clinical trials of this indication. It's better to work together than to work independently toward a common goal."

InterMune's stock (NASDAQ:ITMN) gained $3.062 Monday, or 18 percent, to close at $20.062. n

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