InterMune, Inc. said it has entered into agreements with Marnac, Inc. and co-licensor KDL GmbH to purchase the pirfenidone patents rights that it had already licensed from Marnac and KDL, as well as certain other pirfenidone- related assets. This move will enable the company to eliminate all of future royalty and milestone payment obligations for pirfenidone.

In addition, InterMune will also acquire exclusive worldwide rights to certain additional intellectual property for pirfenidone, including patents relating to the TNF-alpha activities of the compound, that was not licensed under the previous licensing agreement signed in March 2002.

Dan Welch, president and chief executive officer, InterMune, said, "Today's announcement underscores our commitment to and enthusiasm for pirfenidone. If our phase III Capacity programme of pirfenidone in idiopathic pulmonary fibrosis is successful and we register the compound for commercialisation, we will enjoy the economic benefit of avoiding $14.5 million in milestone payments and the 9 per cent royalty on net sales, otherwise due under the license agreement. The acquisition of this intellectual property is an important step in strengthening our IP portfolio for pirfenidone and supplements our recent patent applications to claim discoveries from our pirfenidone research and development program."

Under terms of the acquisition agreements, InterMune has made total upfront payments of $13.5 million. Contingent acquisition payments of up to an additional $53.5 million would be made by InterMune only if positive phase III data and registration in the United States and European Union are achieved. The upfront payments will be partially offset by a $7.5 million milestone recorded in the third quarter of 2007, which has now been applied towards the acquisition. The agreements announced today do not affect the rights to pirfenidone in Japan, Korea and Taiwan, which rights are licensed by Marnac and its co-licensor to Shionogi & Co. Ltd of Japan.

Prior in vitro and animal evidence have shown that pirfenidone inhibits collagen synthesis, down-regulates profibrotic cytokines, inhibits TNF-alpha synthesis and decreases fibroblast proliferation. Data presented from one phase III study and four phase II clinical trials in more than 400 patients suggest that pirfenidone may positively affect lung function and disease progression in patients with IPF. In these clinical studies, pirfenidone was generally well tolerated with the most frequent side effects reported being photosensitivity rash and gastrointestinal symptoms. Both the US Food and Drug Administration (FDA) and European Medicines Evaluation Agency (EMEA) have granted pirfenidone orphan drug designation for the treatment of IPF.

IPF is characterized by inflammation and scarring (fibrosis) in the lungs, hindering the ability to process oxygen and causing shortness of breath (dyspnea) and cough. IPF is a progressive disease, meaning that over time, lung scarring and symptoms increase in severity.