Roche and InterMune Inc. have entered into an exclusive worldwide collaboration agreement to develop and commercialise products from InterMune's hepatitis C (HCV) protease inhibitor programme.

The agreement includes InterMune's lead candidate compound ITMN-191, expected to enter clinical trials before the end of the year. The companies will also collaborate on a research programme to identify, develop and commercialise novel second-generation HCV protease inhibitors.

"This agreement with InterMune is part of our ongoing commitment to advancing therapies for hepatitis C patients," said Peter Hug, global head of pharma partnering for Roche. "We believe that protease inhibitors may become an important new component of HCV treatments and we look forward to working with InterMune in the development of ITMN-191 and other potential compounds that may emerge from our collaboration."

Dan Welch, president and CEO of InterMune commented: "We are very pleased to be partnering with Roche. We believe this partnership will help accelerate the development of ITMN-191 and future second-generation protease inhibitors, while allowing InterMune to share in the substantial value creation opportunity of this important programme."

As per the agreement, Roche will exclusively license ITMN-191 and will have the right to exclusively license further HCV protease inhibitor development candidates resulting from the research collaboration. For ITMN-191, InterMune will conduct phase I studies, and thereafter Roche will lead clinical development and commercialisation. Upon closing, InterMune will receive from Roche an upfront payment of $60 million. In addition, assuming the successful development and commercialisation of ITMN-191 in the US and other countries, InterMune could potentially receive up to $470 million in milestones, including $35 million within the next 12 months.

For ITMN-191, Roche will fund 67 per cent of the global development costs and the companies will co-commercialise the product in the US and share profits on a 50-50 basis. InterMune will receive royalties outside the US InterMune may opt-out of either co-development or co-commercialisation for ITMN-191 in which case InterMune would receive higher royalties on ex-US sales, and royalties instead of profit sharing in the US.

The economic terms for ITMN-191 could also apply to additional compounds that InterMune and Roche develop and commercialise. The transaction will close following the expiration or early termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvement Act of 1976, as amended.

InterMune has successfully completed preclinical toxicology and pharmacokinetic studies in multiple species in support of initiating phase I clinical studies of ITMN-191 for the treatment of chronic HCV. The European Clinical Trial Authorization (CTA), which was submitted on September 26th, 2006, includes results of 28-day preclinical toxicology studies utilizing doses many-fold higher than those expected to be given to humans. These studies demonstrate that ITMN-191 has a favourable safety and toxicology profile, allowing the compound to be studied in clinical trials over a range of doses predicted to have antiviral efficacy. ITMN-191 has also demonstrated high in vitro potency and specificity in biochemical assays and in assays utilizing the HCV replicon system. Moreover, ITMN-191 displays a favourable cross-resistance profile, including significant potency against variants of the NS3/4A protease that are resistant to other HCV protease inhibitors currently in development. The preclinical pharmacokinetic results support the exploration of twice-daily oral dosing in HCV patients.