By Randall Osborne

West Coast Editor

SAN FRANCISCO - In the anteroom to the Grand Ballroom of the Westin St. Francis hotel, investors, analysts and others at the J.P. Morgan H&Q Healthcare Conference here took turns Tuesday tapping keyboards on a row of Internet-linked computers to check biotechnology stocks, laid low by a slump of the high-tech sector.

Share prices held steady, or at least declined less severely. Trading was brisker, as buyers took advantage of deals. Hopes rose. A revival seemed in the works.

In a similar spirit, InterMune Pharmaceuticals Inc. - which saw its shares (NASDAQ:ITMN) drop $1.50 to $32.75 - said it has big plans for the liposomal amphotericin B drug, Amphotec, that it's buying for $9 million plus undisclosed milestone payments from Alza Corp., although two other drugs like it already are on the market.

"Sales have dropped, and [Alza] thought, rather than let it languish on the vine, they would get a partner," said Scott Harkonen, president and CEO of Palo Alto, Calif.-based InterMune, which is testing amphotericin B with its approved drug, Actimmune (interferon gamma-1b), in a Phase II study for cryptococcal meningitis, a fungal infection.

"That study is almost completely enrolled, and we'll have results by the end of the third quarter," said Harkonen, who is expected to discuss the worldwide rights deal with Alza, also of Palo Alto, during a presentation today.

"We believe with our sales force we can at least get it back up to the $10 million mark and maybe more," Harkonen told BioWorld Today.

"We're going to have 60 sales specialists in the field by June," he added, twice as many as now. The deal with Alza was "principally driven by our marketing and sales effort," he added. "It's right in our strike zone."

The upshot could be especially pleasing if Amphotec is paired with Actimmune, which Harkonen described as InterMune's "potential blockbuster," licensed from South San Francisco-based Genentech Inc., and approved for chronic granulomatous disease and osteopetrosis.

Amphotericin B, considered the "gold standard" for serious fungal infections, is toxic to the kidneys, and "companies have packaged it in a liposomal formulation so you can give more and get higher rates of cure," Harkonen said.

Alza brought Amphotec aboard when it acquired Sequus Pharmaceuticals Inc., of Menlo Park, Calif., in October 1998. (See BioWorld Today, Oct. 5, 1998.)

Gilead Sciences Inc., of Foster City, Calif., acquired its amphotericin B drug, Ambisome, when the company bought NeXstar Pharmaceuticals Inc., of Boulder, Colo., in a $550 million stock deal in 1999.

Elan Corp., of Dublin, Ireland, markets Evacet, which it got from The Liposome Co., of Princeton, N.J., as part of a $575 million stock-swap buyout last March. In the U.S., Elan's drug is the leader, and Gilead's drug sells more in Europe, Harkonen said.

InterMune, which went public last March, raising $125 million, garnered another $76 million in a private placement this summer. (See BioWorld Today, March 27, 2000, and Aug. 18, 2000.)