InterMune, Inc. has entered into a new supply agreement with Boehringer Ingelheim Austria GmbH (BI Austria) for Actimmune (interferon gamma-1b). As a result, InterMune eliminates approximately $91.6 million in future purchase commitments for Actimmune that existed under the previous supply agreement.
In consideration for terminating the existing supply agreement and for entry into the new supply agreement, InterMune will pay to BI Austria the net amount of approximately $5.5 million.
Under the terms of the new supply agreement, InterMune is not required to make any minimum annual purchase commitments and BI Austria is not required to commit to reserving any minimum annual capacity for the manufacture of Actimmune.
Actimmune is a synthesized version of interferon gamma, a naturally occurring protein believed to stimulate the immune system. InterMune markets Actimmune for the treatment of two life-threatening congenital diseases: chronic granulomatous disease and severe, malignant osteopetrosis. The most common side effects are flu-like symptoms, including headache, fatigue, fever, chills and rash.
Dan Welch, chief executive officer of InterMune, said, "We are very pleased to have eliminated the significant purchase commitments of the previous supply agreement and established a new supply agreement for Actimmune on terms that are attractive to InterMune. Our new supply agreement provides for a steady supply of Actimmune at the same cost as our previous supply agreement and allows flexibility to adapt supply to future demand for Actimmune."
On June 6, 2007, InterMune and BI Austria entered into a Termination Agreement related to their existing supply agreement of January 27, 2000, as amended, for the clinical and commercial supply of Actimmune. In consideration of the entry by BI Austria into the new supply agreement, the corresponding termination of the existing supply agreement, and the entry into the Termination Agreement, InterMune will pay to BI Austria the net amount of approximately $5.5 million. This net amount is derived in part by crediting against the lump sum amount owed to BI Austria under the Termination Agreement the approximate $4.5 million previously paid by InterMune to BI Austria pursuant to Amendment No. 4 of the existing supply agreement dated December 21, 2006. Pursuant to the Termination Agreement and new supply agreement, InterMune eliminates approximately $91.6 million in future purchase commitments for Actimmune under the existing supply agreement for the years 2007 to 2012.
On June 29, InterMune and BI Austria entered into a new agreement for the clinical and commercial supply of Actimmune. On July 6, InterMune filed an 8-K providing more details of this transaction. Under the terms of the new supply agreement, InterMune is not required to make any minimum annual purchase commitments and BI Austria is not required to commit to reserving any minimum annual capacity for the manufacture of Actimmune. On a going forward basis, InterMune will purchase supplies of Actimmune from BI Austria based upon a rolling forecast. The cost per vial of Actimmune is the same as existed in the previous supply agreement and will be annually adjusted with inflation. The new supply agreement is effective June 29, 2007 and will expire on December 31, 2012 unless both parties agree to extend it.