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InterMune Takes Off

Shares surge after the company sets a hepatitis C partnership with Roche.
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Updated from Oct. 16

Shares of

InterMune

(ITMN)

vaulted Tuesday after the company scored an exclusive collaboration agreement with Swiss giant Roche for hepatitis C drugs.

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The companies said after the bell Monday that they plan to develop and commercialize products from InterMune's HCV protease inhibitor program. The Brisbane, Calif., biotech said it will get a $60 million upfront payment and up to $470 million in milestones, including $35 million in the next year.

InterMune shares recently were up $4.40, or 26%, to $21.23, on volume of more than 2.5 million shares. Average daily volume is just 313,000 shares.

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

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

"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, InterMune's CEO, said, "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 program."