Lilly Licenses Oritavancin Antibiotic to InterMune

Business Wire, Sept 20, 2001

Business Editors, Health & Medical Writers

INDIANAPOLIS, Ind. & BRISBANE, Calif.--(BW HealthWire)--Sept. 20, 2001

InterMune To Acquire Worldwide Rights To Develop, Manufacture and

Commercialize Product With Broad Market Potential

Eli Lilly and Company (NYSE:LLY) and InterMune, Inc. (Nasdaq:ITMN) announced today that InterMune has acquired worldwide rights to oritavancin from Lilly. Oritavancin is a semi-synthetic glycopeptide antibiotic in development for the treatment of a broad range of resistant gram-positive bacterial infections.

The agreement provides InterMune with exclusive worldwide rights to develop, manufacture and commercialize oritavancin. Upon closing, Lilly will receive a $50 million payment related to completion of certain near-term activities by the companies. Lilly will also receive significant milestone and royalty payments upon successful development and commercialization by InterMune. The transaction is expected to close next month upon approval by the U.S. Federal Trade Commission under the Hart-Scott-Rodino Act.

"Licensing oritavancin to InterMune will allow Lilly to maximize the full potential of this innovative compound while the company redirects its internal resources to other late-stage pipeline opportunities," said John C. Lechleiter, Ph.D., executive vice president, pharmaceutical products and corporate development for Lilly. "InterMune is an ideal partner as it has a strong focus in the development and commercialization of infectious disease products."

"Oritavancin adds another major Phase III product to InterMune's growing pipeline," said W. Scott Harkonen, M.D., president and chief executive officer of InterMune. "The market opportunity for oritavancin is significant due to the increasing problem of drug resistance in difficult-to-treat diseases. We are pleased to have the opportunity to complete the clinical development of oritavancin and bring this potential breakthrough treatment to market."

Oritavancin is in Phase III clinical trials for the treatment of complicated skin and skin-structure infections, in Phase II for bacteremia and may be effective against other serious gram-positive bacterial infections, including those resistant to conventional antibiotics. Oritavancin's novel mechanism of action kills harmful and resistant strains of bacteria unlike other agents that merely suppress them. These gram-positive bacterial infections in the aggregate affect more than seven million patients worldwide in the hospital setting alone.

InterMune is a commercial-stage biotechnology company dedicated to developing innovative products for the treatment of serious pulmonary and infectious diseases and cancer. InterMune has three marketed products, growing product revenues and advanced-stage clinical programs addressing a range of diseases with attractive commercial markets. For additional information about InterMune, please visit www.intermune.com.

Lilly, a leading innovation-driven corporation, is developing a growing portfolio of best-in-class pharmaceutical products by applying the latest research from its own worldwide laboratories and from collaborations with eminent scientific organizations. Headquartered in Indianapolis, Ind., Lilly provides answers - through medicines and information - for some of the world's most urgent medical needs. Additional information about Lilly is available at www.lilly.com.

Except for the historical information contained herein, this press release contains certain forward-looking statements by Lilly and InterMune concerning the possible development and commercial benefits of novel products for use against human disease that involves risks and uncertainties. All forward-looking statements and other information included in this press release are based on information available to Lilly and InterMune as of the date hereof, and the two companies assume no obligation to update any such forward-looking statements or information. Actual results could differ materially from those described in the forward-looking statements. With respect to InterMune, factors that could cause or contribute to such differences include, but are not limited to, those discussed under the heading "Risk Factors" and the risks and factors discussed in InterMune's most recent periodic reports (i.e., 10-K, 10K/A, 10-Q, and 8-K) filed with the SEC. In sum, these significant risks include, but are not limited to: the uncertainty of success of InterMune's efforts in research, development, commercialization, product acceptance, third-party manufacturing and capital raising; the uncertain, lengthy and expensive regulatory process; uncertainties associated with obtaining and enforcing patents important to its business; being an early-stage company and relying on third-party payors' reimbursement policies; competition from other products; and product liability lawsuits. With respect to Lilly, factors that could cause or contribute to such differences include, but are not limited to, the uncertainties noted above with respect to the development of oritavancin as well as those factors listed in Exhibit 99 to Lilly's most recent Form 10-Q report dated August 2001.