Pirfenidone deal eliminates all future payments related to prior agreement.

InterMune entered into agreements with Marnac and with colicensor KDL that will eliminate all of InterMune’s future royalty and milestone payment obligations for pirfenidone related to the prior license agreement the parties had entered into in March 2002.

InterMune will purchase the pirfenidone patents rights that it had already licensed from Marnac and KDL, as well as certain other pirfenidone-related assets. InterMune will also acquire exclusive, worldwide rights to certain additional intellectual property for pirfenidone that were not licensed under the previous agreement including patents relating to the TNF-alpha activities of the compound.

Under the terms of the 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 U.S. 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 toward the acquisition. These agreements do not affect the rights to pirfenidone in Japan, Korea, and Taiwan, where they are licensed by Marnac and its colicensor to Shionogi & Co.

“This announcement underscores our commitment to and enthusiasm for pirfenidone,” Dan Welch, president and CEO of InterMune, says. “If our Phase III CAPACITY program of pirfenidone in idiopathic pulmonary fibrosis is successful and we register the compound for commercialization, we will enjoy the economic benefit of avoiding $14.5 million in milestone payments and the nine percent 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.”

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