InterMune Inc and Array BioPharma Inc announced a drug discovery collaboration agreement to create small molecule therapeutics targeting hepatitis.

"We are very pleased to enter this collaboration with Array, which has a track record of success in creating promising drug candidates," said Scott Harkonen, President and CEO of InterMune. "This deal represents our strategy to expand our own internal applied research capabilities and efforts, which are focused on exploring new uses for our lead products and identifying promising drug candidates to build our pulmonary disease, infectious disease and anti-cancer franchises."

InterMune will fund drug discovery research conducted by Array based on the number of Array scientists working on the research phase of the agreement and will be responsible for all development and commercialization. Array will be entitled to receive milestone payments based on the selection and progress of clinical drug candidates, as well as royalties on net sales of products derived from the collaborative efforts. Other terms were not disclosed.

"We are delighted to collaborate with InterMune, an emerging leader in the development and commercialization of products for infectious diseases," said Robert E. Conway, Chief Executive Officer, Array BioPharma. "This collaboration leverages Array''''s expanding drug discovery platform with InterMune''''s recognized development and commercialization expertise with the goal of creating products to address one the world''''s largest unmet medical needs and market opportunities."