The agreements will eliminate all of InterMune’s future royalty and milestone payment obligations for pirfenidone related to the March 2002 license agreement.
InterMune will also acquire exclusive worldwide rights to certain additional intellectual property for pirfenidone that was not licensed under the previous licensing 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 US 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 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. of Japan.
Dan Welch, president and CEO of InterMune, said: “This agreement underscores our commitment to and enthusiasm for pirfenidone. 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 9% 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 R&D program.”