Document:

exv10w110

 

[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS,
HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE
24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

Exhibit 10.110

December 21, 2006

Dr. Kurt Konopitzky

Head Division Biopharmaceutical Operations

Boehringer Ingelheim Austria GmbH

Dr. Boehringer-Gasse 5 — 11

A-1121 Vienna, Austria

			
	Re:	 	Amendment No. 4 to the Data Transfer, Clinical Trial and Market Supply Agreement, dated as of
January 27, 2000

Dear Mr. Konopitzky;

As you know, InterMune, Inc. (“InterMune”) and Boehringer Ingelheim Austria GmbH (“BI Austria”) are
parties to that certain Data Transfer, Clinical Trial and Market Supply Agreement effective January
27, 2000, as amended effective June 19, 2002, September 18, 2003 and July 26, 2005 (the
“Agreement”). This letter (this “Amendment”) will confirm our agreement to amend the Agreement as
follows, effective as of the date first set forth above:

	 	1.	 	The parties hereby agree to replace Section 2 of Amendment No. 3 to the
Agreement dated July 26, 2005 in its entirety as follows:
	 
	 	 	 	“The parties hereby agree that InterMune’s obligation to purchase [ * ] of [ * ] of the
PRODUCT for [ * ] pursuant to Section 3.2.1 of the Agreement shall be [ * ] for such [ *
] without liability or penalty to InterMune with regard to the aforementioned [ * ];
provided, however that InterMune shall also pay to BI Austria a sum of Three Million
Three Hundred Ninety-Four Thousand Fifty Euros (3,394,050€) for such [ * ] before the
end of 2006 as consideration for a price reduction per vial for purchases of PRODUCT by
InterMune in 2007 and 2008 (as set forth in detail in Section 4.1 of the Agreement).
The parties further hereby agree that with respect to such [ * ] that InterMune is
required[ * ] to purchase in [ * ] pursuant to Section 3.2.1 of the Agreement after
giving effect to the modification thereto as set forth in this Section 3 of this
Amendment, [ * ] will be produced by BI Austria in the [ * ] for delivery to InterMune
in the [ * ] and [ * ] will have [ * ] of in the [ * ] of [ * ].”
	 
	 	2.	 	The Agreement is hereby amended by adding at the end of Section 4.1 the following:

 

 

	 	 	 	“Notwithstanding the foregoing, the per unit price (i.e., [ * ] price) to be paid by
InterMune for purchases of PRODUCT for each of the [ * ] shall be [ * ] the amount
derived by [ * ] Euros ([ * ]€) by the total number of units (i.e., number [ * ]) of
PRODUCT purchased and received by InterMune for each [ * ] (“Per Unit [ * ]
Calculation”).
	 
	 	 	 	The Parties understand and agree that since purchases of PRODUCT and payment therefor
will occur periodically throughout the course of each [ * ], the Parties will cooperate
with one another in good faith to first estimate the total number of units of PRODUCT
InterMune will purchase and receive for [ * ] at the [ * ] (“Projected Units”). The
Parties will use the Projected Units in the Per Unit [ * ] Calculation for purposes of
BI Austria’s charges and invoices to InterMune and InterMune’s payments for PRODUCTS
purchased during the course of the [ * ]. At the [ * ], a reconciliation will be
conducted by the Parties by comparing the Per Unit [ * ] Calculation using the Projected
Units with the Per Unit [ * ] Calculation using the total number of units of PRODUCTS
actually purchased and received by InterMune for the [ * ]. If InterMune has underpaid
because the total number of units of PRODUCTS actually purchased and received by
InterMune for the [ * ] is more than the Projected Units, then InterMune will pay to BI
Austria the amount of the difference. If InterMune has overpaid because the total
number of units of Products actually purchased and received by InterMune for the [ * ]
is less than the Projected Units, then BI Austria shall reimburse InterMune for the
amount of such overpayment.
	 
	 	 	 	By way of example, assume that the Parties estimate [ * ]. [ * ], BI Austria would be
charging InterMune a per unit price for PRODUCTS purchased by InterMune that will take
into account a per unit [ * ] of [ * ]€ (derived by [ * ]). Assume further that at [ *
], InterMune has actually purchased [ * ] of PRODUCT in total such that the [ * ] price
InterMune owes BI Austria for [ * ] should have been [ * ] (i.e., derived by [ * ])
rather than [ * ]. Consequently, InterMune would have been overpaying BI Austria for
the purchases of PRODUCT [ * ] and BI Austria would be obligated to reimburse InterMune
the amount for which InterMune overpaid.
	 
	 	 	 	[ * ], in the event InterMune does not purchase [ * ] as defined in the second
(2nd) paragraph of Section 3.2.1 of this Agreement and the total number of
units of PRODUCT actually purchased and received by InterMune [ * ] does not result in [
* ] equal to [ * ] Euros ([ * ]€), then InterMune shall be entitled to apply the
difference between [ * ] Euros ([ * ]€) and the [ * ] for the total number of units of
PRODUCTS purchased and received by InterMune [ * ] to offset that amount InterMune is
required to pay to BI Austria under the second (2nd) paragraph of Section
3.2.1 as a result of [ * ] (i.e., that amount equal to [ * ] and that amount of PRODUCT
actually purchased and received by InterMune [ * ]).”

[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND
FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

 

 

Except as set forth above, all terms and conditions of the Agreement will remain in full force and
effect. Any capitalized term used herein and not otherwise defined will have the same meaning as
set forth in the Agreement. In the event of any conflict between this Amendment and the Agreement,
the terms of this Amendment shall govern to the extent of such conflict.

Please acknowledge your agreement to the above by countersigning both enclosed copies of this
letter where indicated below, and returning one original to the attention of Lucinda Y. Quan,
Director, Legal Affairs at InterMune, Tel: (415) 466-2223, Fax: (415) 466-2323. We would be happy
to proceed based on receipt of a facsimile copy while awaiting the original.

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Sincerely,	 	 	 	 	 	 	 	 	 	 	 	 
	InterMune, Inc.	 	 	 	Accepted and Agreed:
	 	 	 	 	 	 	Boehringer Ingelheim Austria GmbH
	By:

	 	/s/ Daniel G. Welch	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	Daniel G. Welch,	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	President and Chief Executive Officer
	 	 	 	By:
	 	/s/ Kurt Konopitzky
 

Dr. Kurt Konopitzky
	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	Head Division Biopharmaceuticals	 	 	 	 	 	 
	Date:

	 	December 21, 2006
	 	 	 	 	 	Division	 	 	 	 	 	 
	 

	 	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	Date:
	 	December 22, 2006
 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Boehringer Ingelheim Austria GmbH
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	By:
	 	/s/ Monika Henninger
 

Dr. Monika Henninger
	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	Head, Customer Relations & Projects	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	Date:
	 	December 22, 2006
 

	 	 	 	 	 	 

[ * ] = Certain confidential information contained in this document, marked by brackets, has been omitted and
filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.exv10w111

 

Exhibit 10.111

KEVIN V. RYAN (CA Bar No. 118321)

United States Attorney

MARK KROTOSKI (CA Bar No. 138549)

Chief, Criminal Division

IOANA PETROU (CA Bar No. 170834)

Assistant United States Attorney

450 Golden Gate Avenue, Box 36055

San Francisco, California 94102

Telephone: (415) 436-7189

Facsimile: (415) 436-6748

Ioana.Petrou@usdoj.gov

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

SAN FRANCISCO DIVISION

	 	 	 	 	 
	UNITED STATES OF AMERICA,	 	No. CR 06-0707 JSW
	 
	 	 	 	 
	 

	 	Plaintiff,
	 	VIOLATION: 21 U.S.C. §§ 331(k),
	 

	 	
v.
	 	333(a)(2) — Misbranding
	 
	 	 	 	 
	INTERMUNE, INC.	 	SAN FRANCISCO VENUE
	 
	 	 	 	 
	 

	 	Defendant.
	 	DEFERRED PROSECUTION AGREEMENT

DEFERRED PROSECUTION AGREEMENT

     InterMune, Inc. (“InterMune”), by its undersigned officer, and the Department of Justice, by
the United States Attorney’s Office for the Northern District of California (the “Department”),
enter into this Agreement in resolution of the Department’s ongoing criminal investigation into
matters relating to the promotion of the pharmaceutical product Actimmune® (interferon gamma-1b) by
InterMune from a time period spanning 2000 to 2003.

     For purposes of this Agreement, the relevant time period is from August 2002 through January
2003 (the “Investigative Period”). The effective date of this Agreement will be the date that it is
accepted by the Court for the Northern District of California.

1

 

     This Agreement is binding upon InterMune, Inc. and the Attorney General for the United States,
the United States Department of Justice, and all United States Attorneys. This Agreement does
not bind the Tax Division of the U.S. Department of Justice or the Internal Revenue Service
of the U.S. Department of the Treasury. InterMune, Inc. understands that this Agreement does not
bind any state or local prosecutive authorities.

INFORMATION

     1. The United States will file an Information in the United States District Court for the
Northern District of California charging InterMune with One Count of doing an act, with intent to
defraud or mislead, with respect to a drug while the drug was held for sale after shipment in
interstate commerce that resulted in the drug being misbranded, in violation of Title 21, United
States Code, Sections 331(k) and 333(a)(2) (the “Information”).

THE DEPARTMENT’S INVESTIGATION

     2. During the course of the investigation, the Department notified InterMune that certain
former InterMune personnel violated federal criminal law, specifically that certain former
InterMune employees promoted Actimmune® for unapproved indications and made misleading statements
regarding Actimmune in violation of: (a) the Federal Food, Drug and Cosmetic Act, 21 U.S.C. § 331;
and (b) Health Care Fraud, 18 U.S.C. § 1347. As described more fully below, InterMune has provided
extensive cooperation to the Department in this investigation.

     3. InterMune does not contest that the Department has developed evidence during its
investigation that one or more former InterMune employees violated federal criminal law during the
Investigative Period. One or more former InterMune employees instructed certain members of the
Actimmune sales force and a specialty pharmacy to promote Actimmune for idiopathic pulmonary
fibrosis, an indication other than those for which the drug had received FDA approval. InterMune
acknowledges that part of the Department’s investigation is set forth in Attachment A and does not
contest the facts set forth in Attachment A. InterMune accepts responsibility for the conduct of
its former employees and conduct its former employees directed. InterMune does not endorse, ratify
or condone criminal conduct, and, as set forth below, has taken steps to prevent such conduct from
occurring in the future.

2

 

COOPERATION AND REMEDIAL MEASURES

     4. InterMune provided substantial cooperation and assistance to the Department’s
investigation.

	 	A.	 	First, InterMune disclosed the results of internal investigations that had
occurred prior to the Department’s investigation and related to the conduct set forth
in Attachment A.
	 
	 	B.	 	Second, InterMune fully complied with the subpoena served by the Department and
provided significant information regarding the conduct of certain former employees and
officers.
	 
	 	C.	 	Third, InterMune made numerous presentations that were helpful to the
Department’s investigation.
	 
	 	D.	 	Fourth, InterMune made certain current employees and officers who were employed
by the Company during the period of investigation available to the Department in
connection with its investigation.

InterMune has agreed to, and will, continue to fully cooperate with the Department as may be
reasonably required during the term of this agreement, which is two (2) years from the effective
date of this Agreement.

     5. InterMune’s management team — the great majority of whom were hired after the
Investigative Period — also instituted numerous and comprehensive compliance changes, including
new compliance policies, audits and internal reviews, and revised sales representative compensation
programs. These compliance changes were instituted by the Company prior to the commencement of the
Department’s investigation.

AGREEMENT

     6. Based upon InterMune’s significant cooperation and the corrective measures it has
implemented, and InterMune’s commitment to implement and audit such measures and its willingness to
continue to cooperate with the Department in its investigation of these matters, the Department, on
the understandings specified below, agrees that the Department shall recommend to the Court that
prosecution of InterMune on the Information be deferred for a period of two (2) years from the
effective date of this Agreement (the “Effective Period”). InterMune shall expressly waive all
rights to a speedy trial pursuant to the Sixth Amendment of the United States Constitution, Title
18, United States Code, Section 3161, Federal Rule of

3

 

Criminal Procedure 48(b), and any applicable Local Rules of the United States District Court
for the Northern District of California for the period during which this Agreement is in effect.

     7. The Department agrees that if InterMune is in compliance with all of its obligations under
this Agreement, the Department will, within 30 days of the expiration of two (2) years from the
effective date of this Agreement, seek dismissal with prejudice of the Information filed against
InterMune pursuant to paragraph 1 of this Agreement, and this Agreement shall expire. Except in the
event of a breach of this Agreement, the Department will bring no additional criminal charges
against InterMune relating to or arising out of matters set forth in the Information or in
Attachment A or the promotion of Actimmune during the period 2000 through 2003; the Department
acknowledges that this Agreement protects InterMune from indictment and/or trial as to such
matters. InterMune and the Department understand that the Agreement to defer prosecution of
InterMune must be approved by the Court, in accordance with 18 U.S.C. § 3161(h)(2). Should the
Court decline to approve the Agreement to defer prosecution for any reason, both the Department and
InterMune are released from any obligation imposed upon them by this Agreement, and this Agreement
shall be null and void.

     8. This Agreement does not provide any protection to any former employee of InterMune or any
other entity, except successor entities as described in Paragraph 19, below. InterMune understands
and agrees that if it violates this Agreement, the Department can prosecute InterMune for any
crimes committed by its employees, officers or directors relating to the promotion of Actimmune®.

The understandings on which this Agreement are premised are:

     9. For the Effective Period, InterMune shall continue to fully cooperate with the Department
regarding any matter relating to the Department’s investigation of the promotion of Actimmune about
which InterMune has information or knowledge, including, but not limited to, the following: (a)
InterMune shall truthfully disclose all information of which it may be aware with respect to the
activities of InterMune, its directors, officers and employees, about which the Department shall
inquire; (b) InterMune shall provide to the Department, on written request, any document, record or
other tangible evidence, including but not limited to information and documents concerning
presentations, publications, and patient registries, about which the Department shall inquire; (c)
InterMune shall provide to the Department reasonable access to InterMune’s facilities, documents
and employees. In addition,

4

 

	 	A.	 	InterMune will use its best efforts to continue to make records and witnesses
available during the Effective Period regarding activities of the Company during the
Investigative Period, provided, however, this agreement to cooperate does not apply to
any information provided by InterMune to legal counsel after May 2, 2004 in connection
with the provision of legal advice and the legal advice itself, and nothing in this
Agreement shall be construed to require InterMune to provide any such information or
advice to the Department.
	 
	 	B.	 	This agreement by InterMune to cooperate shall not be construed as a waiver
with respect to third parties of the attorney-client privilege, work-product
protection, or any other privilege applicable to information or documents provided to
the Department pursuant to this Agreement; InterMune neither expressly nor implicitly
waives its right to assert any privilege that may be available against entities other
than the Department of Justice.
	 
	 	C.	 	This agreement to cooperate shall not apply in the event that the Department
pursues a criminal prosecution against InterMune.

     10. Upon request of the Department, with respect to any issue relevant to its investigation of
the promotion of Actimmune at any time (not limited to the Investigative Period), InterMune shall
designate knowledgeable employees, agents or attorneys to provide non-privileged information and/or
materials on InterMune’s behalf to the Department. It is further understood that InterMune must at
all times give complete, truthful and accurate information to the Department.

     11. With respect to any information, testimony, document, record or other tangible evidence
relating to the promotion of Actimmune provided by InterMune to the Department or a grand jury,
InterMune consents to any and all disclosures to governmental law enforcement entities of such
materials as the Department, in its reasonable discretion and in good faith, deems appropriate.
With respect to any such materials that constitute “matters occurring before the grand jury” within
the meaning of Rule 6(e) of the Federal Rules of Criminal Procedure, InterMune further consents to
a) any order sought by the Department permitting such disclosure and b) the Department’s ex parte
or in camera application for such orders. The Department agrees that any material which comprises
trade secrets or other proprietary information shall, prior to disclosure to any governmental
entity, be redacted of such information, or be accompanied by a prominent warning notifying the
agency of the protected status of the

5

 

material. Nothing in this paragraph shall be construed as a waiver of InterMune’s rights in
the materials it provides to the Department, and such materials shall not be provided to
non-governmental entities without InterMune’s prior written consent.

     12. InterMune agrees that it will use its best efforts to not make any public statements, in
litigation or otherwise, materially contradicting the facts set forth in Attachment A, or its
representations in this Agreement. Any such statements shall constitute a breach of this Agreement,
and InterMune thereafter would be subject to prosecution unless it cures its breach as set forth
below. Upon the Department’s providing written notice to InterMune of such a contradictory
statement, InterMune may avoid a breach of this Agreement by publicly repudiating such statement
within 72 hours after receipt of written notification by the Department.

     13. InterMune is simultaneously entering into an agreement with the Department’s Civil
Division (the “Civil Settlement Agreement”) regarding the payment of money to settle certain civil
claims. InterMune is also simultaneously entering into a Corporate Integrity Agreement (“CIA”) with
the Office of Inspector General of the Department of Health and Human Services (“OIG-HHS”) to
implement certain specified compliance measures. Failure by InterMune to comply fully with those
material terms of the Civil Settlement Agreement called to occur during the Effective Period of
this Agreement may constitute a breach of this Agreement, provided, however, that a breach of the
CIA referenced in the Civil Settlement Agreement does not constitute a breach of this Agreement.
Any disputes arising under the CIA shall be resolved exclusively through the dispute resolution
provisions of the CIA. The parties understand that nothing in this paragraph shall be construed to
enlarge the Effective Period of this Agreement, or to delay the dismissal of the Information as
described in paragraph 7 if at the time specified therein, InterMune is in full compliance with its
obligations under the Civil Settlement Agreement. The parties further understand and agree that
this paragraph does not deprive InterMune of its rights under the Civil Settlement Agreement or the
common law to contest the existence of a breach of the Civil Settlement Agreement in the Northern
District of California. The Department further agrees that nothing in this paragraph shall be
construed by the United States as affecting the underlying nature of InterMune’s obligations under
the Civil Settlement Agreement.

     14. It is further understood that should it be determined that InterMune has deliberately
given materially false, incomplete, or misleading information under this Agreement,

6

 

or has committed any criminal health care fraud offense during the Effective Period, or that
InterMune has otherwise knowingly, intentionally and materially violated any provision of this
Agreement, InterMune shall, in the Department’s reasonable discretion and in good faith, thereafter
be subject to prosecution for any federal criminal violation of which the Department has knowledge.
Any such prosecutions may be premised on information provided by InterMune to the Department.
Moreover, InterMune agrees that any criminal prosecutions relating to the unlawful promotion of
Actimmune from 2000 through 2003 that are not time-barred by the applicable statute of limitations
on the effective date of this Agreement may be commenced against InterMune in accordance with this
Agreement, notwithstanding the expiration of the statute of limitations between the effective date
of this Agreement and its expiration date two years after the date this Agreement is accepted by
the Court. By this Agreement, InterMune expressly intends to and does waive any rights with respect
to the statute of limitations as described in the preceding sentence.

     15. It is further agreed that should it be determined that InterMune has knowingly,
intentionally and materially violated any provision of this Agreement:

	 	A.	 	all statements made by InterMune to the Department, FDA, HHS-OIG, the FBI or
any other federal agency, or any testimony given by InterMune before a grand jury, the
United States Congress, the SEC, or elsewhere, whether prior or subsequent to this
Agreement, including this Agreement and the statement of facts in Attachment A, shall
be admissible in evidence in any and all criminal proceedings brought by the
Department against InterMune;
	 
	 	B.	 	nothing in this agreement shall prohibit the admission in such proceedings of
any evidence derived from such statements or testimony; and
	 
	 	C.	 	InterMune shall not assert any claim under the United States Constitution, Rule
11(f) of the Federal Rules of Criminal Procedure, Rule 410 of the Federal Rules of
Evidence, or any other federal rule, that statements made by InterMune prior to or
subsequent to this Agreement, or any leads therefrom, should be suppressed.

     16. In the event the Department asserts that InterMune has breached any provision of this
Agreement, the Department shall provide written notice to InterMune and will provide InterMune with
a two-week period from receipt of such notice, except as otherwise specified herein, in which to
make a presentation to the Department, or its designee, to demonstrate that

7

 

no breach has occurred, or, to the extent applicable, that the breach was not knowing,
intentional or material, or has been cured. The Department shall have four weeks from providing
written notice to InterMune asserting a breach to file a motion with the Court asserting the breach
and seeking a finding of a breach; however, this motion shall not be filed less than 15 days from
the day the Department provides InterMune written notice asserting the breach. In the event a
motion is filed by the Department, the Court shall determine whether a breach occurred by a
preponderance of the evidence.

     17. InterMune agrees to not enter into any joint defense agreements relating to the
Department’s investigation during the Effective Period of this Agreement without Department
approval, and InterMune further agrees to withdraw from current joint defense agreements, if any
exist, for which the Department does not approve of InterMune’s continuing participation. The
Department agrees that its approval pursuant to this paragraph will not be unreasonably withheld.

     18. The Company agrees that if it sells or merges all or substantially all of its business
operations as they exist as of the date of this Agreement to or into a single purchaser or group of
affiliated purchasers during the term of this Agreement, it shall provide the Government with
reasonable prior notice and it shall include in any contract for sale or merger a provision binding
the purchaser-successor to the obligations described in this Agreement.

     19. With respect to the matters described in this Agreement, and with the exception of the
agreements described in paragraph 13, and the letter from Ethan M. Posner to the Department dated
October 9th, 2006, this Agreement supersedes all prior, if any, understandings, promises, and/or
conditions between the Department and InterMune. This Agreement may not be modified except in
writing signed by all the parties.

     20. InterMune hereby warrants and represents that the Board of Directors of InterMune has duly
authorized, in a specific resolution, the execution and delivery of this Agreement by InterMune,
and that the person signing the Agreement has authority to bind InterMune. InterMune agrees that
either a duly authorized corporate officer or a duly authorized attorney for InterMune, at the
discretion of the Court, shall appear on behalf of InterMune to enter into this Agreement.

8

 

On Behalf of the United States Department of Justice:

	 	 	 
	 	 	/s/ KEVIN V. RYAN
	 

	 	 
	DATE

	 	Kevin V. Ryan
	 

	 	United States Attorney
	 

	 	Northern District of California
	 
	 	 
	 	 	/s/ IOANA PETROU
	 

	 	 
	 

	 	Ioana Petrou
	 

	 	Assistant United States Attorney
	 
	 	 
	On Behalf of InterMune, Inc.
	 	 
	 
	 	 
	 	 	/s/ ROBIN STEELE
	 

	 	 
	DATE

	 	Robin Steele
	 

	 	Senior Vice President
	 

	 	InterMune, Inc.
	 

	 	3280 Bayshore Boulevard
	 

	 	Brisbane, CA 94005
	 
	 	 
	 	 	/s/ ETHAN POSNER
	 

	 	 
	DATE

	 	Ethan Posner
	 

	 	Covington & Burling
	 

	 	Counsel to InterMune, Inc.

9

 

Attachment A

Introduction

     InterMune, Inc., first incorporated in 1998, is a biopharmaceutical company focused on
developing and commercializing innovative therapies in pulmonology and hepatology.

     During the Investigative Period (August 2002 through January 2003), InterMune derived the
majority of its revenue from Actimmune® (interferon gamma- 1b). Actimmune was approved by the
United States Food and Drug Administration (“FDA”) for the treatment of chronic granulomatous
disease and severe, malignant osteopetrosis. These diseases affect very small patient populations.
The vast majority of Actimmune sales during the Investigative Period were attributable to
prescriptions for the treatment of idiopathic pulmonary fibrosis (“IPF”), a debilitating, fatal
lung disease for which there is no FDA-approved treatment and which afflicts approximately 83,000
Americans.

Dissemination of Misleading Information Regarding Phase III Trial of Actimmune

     1. Commencing in October 2000 and through 2002 InterMune conducted a global Phase III clinical
trial of Actimmune for the treatment of IPF that was designed to study whether Actimmune extended
the time to disease progression or death. The primary endpoint was progression-free survival ,
measured from randomization of the test subjects either to disease progression or death, and, in
addition, there were a number of secondary endpoints, including overall patient survival. In this
clinical study, 330 IPF patients were studied in a double-blind, placebo-controlled trial conducted
at 58 centers in the United States and Europe. Study participants received either a placebo or 200
micrograms of Actimmune injected subcutaneously three times per week. All patients were to remain
in the trial until the last patient received 48 weeks of therapy. Median treatment duration was 60
weeks.

     2. On August 16, 2002, a select number of InterMune personnel received data from the clinical
trial. On August 19, 2002, the data was also provided to the Data Monitoring Committee (“DMC”),
which had been established in accordance with the protocol of the trial as an independent committee
that monitored safety and efficacy data throughout the trial in order to determine if it was
scientifically and ethically appropriate to continue the trial, and to review data from the
completed trial. The data showed that the trial failed to achieve statistical significance on the
primary endpoint agreed between InterMune and the FDA, or any agreed upon secondary endpoint,
including overall survival. After receiving the data, InterMune

10

 

conducted some additional analysis of the mortality data that involved breaking the patient
population into subgroups.

     3. Certain senior InterMune personnel discussed these preliminary trial results, including the
exploratory subgroup analysis, with representatives of the FDA in an informal telephone conference
on August 27, 2002. The purpose of the call was to provide InterMune with the FDA reviewers’
preliminary impressions of the data. The FDA representatives told InterMune that any substantive
comments represented their own opinions and did not reflect the official opinion of the FDA. During
the telephone conference, one FDA representative noted that the study failed to demonstrate
efficacy on its primary endpoint. The FDA representative suggested that while the data appeared to
show an optimistic trend on overall survival, because the data had failed to achieve statistical
significance in the primary endpoint previously agreed with the FDA at the outset of the trial, it
as the representative’s opinion that FDA was unlikely to approve the use of Actimmune for the
treatment of IPF without further rigorous clinical testing.

     4. On August 28, 2002, InterMune publicly announced the results of the Phase III clinical
trial of Actimmune for the treatment of IPF in the form of a press release. Former employees of
InterMune approved the press release, which was headlined “InterMune Announces Phase III Data
Demonstrating Survival Benefit of Actimmune in IPF, with the subheading “Reduces Mortality by 70%
in Patients With Mild to Moderate Disease.” In the release, InterMune’s then-President and CEO
characterized the clinical trial results as indicating that “Actimmune may extend the lives of
patients suffering from this debilitating disease” and further stated that “Actimmune is the only
available treatment demonstrated to have clinical benefit in IPF, with improved survival data in
two controlled clinical trials.”

     5. By letter dated September 5, 2002 to InterMune, the Chair of the DMC expressed his “serious
concerns” with the August 28, 2002 press release. The letter reminded InterMune of, “the DMC’s
assessment that the trial had failed to establish benefit on the primary endpoint” and that there
was no statistically significant evidence of benefit for any of the secondary endpoints. The letter
also stated that the press release provided a “serious misrepresentation of results obtained from
exploratory data subgroup analyses,” referring specifically to the subheading and other statements
concerning a survival benefit in the mild to moderate subgroup.

     6. In approximately mid-October 2002, a specialty pharmacy that distributed Actimmune
disseminated a fax concerning Actimmune for IPF to more than 2,000

11

 

pulmonologists. Distribution of the fax had been approved by a former InterMune employee. The
fax, like the August 28, 2002 press release, began with the headline, “InterMune Announces Phase
III Data Demonstrating Survival Benefit of Actimmune in IPF,” and continued with the subheading,
“Reduces Mortality by 70% in Patients with Mild to Moderate Disease.” The fax also included a copy
of the InterMune press release.

     7. During approximately September to October 2002, the same speciality pharmacy, again with
the approval of a former InterMune employee, distributed a patient letter by mail to Actimmune
patients, which was sent along with their Actimmune prescriptions. The patient letter was prepared
by the specialty pharmacy’s clinical staff from information, including the press release, provided
by former InterMune personnel and provided the same misleading information about the results of the
Phase III Actimmune trial results.’ The letter stated that “On August 28, 2002, InterMune, Inc.
announced that preliminary data from its Phase III clinical trial of Actimmune (Interferon
gamma-lb) injection for the treatment of [IPF) showed a statistically significant reduction in
mortality by 70% in patients with mild to moderate IPF. Interferon gamma- lb is the first treatment
ever to show any meaningful impact in this disease in clinical trials. These results indicate that
Actimmune should be used early in the course of treatment of this disease in order to realize the
most favorable long-term survival benefit.” A former InterMune employee approved the final version
of the patient letter.

     8. Notwithstanding the fact that the Phase III trial failed to establish statistically
significant benefits on its primary endpoint or any of its secondary endpoints, including overall
survival, and notwithstanding the evaluation of the results by the FDA and DMC, certain former
InterMune employees encouraged InterMune sales force personnel to inform physicians that Actimmune
demonstrated a survival benefit in mild to moderate IPF patient populations, and certain former
sales force personnel did so. Certain former sales personnel also distributed or showed the
specialty pharmacy documents to physicians during sales visits.

ASAP Registry

     9. In 2001, InterMune established the “Actimmune Safe and Appropriate Use Program” (the “ASAP
Registry” or the “Registry”), a registry that collected information about IPF patients taking
Actimmune. As described in the Registry Services Agreement between InterMune and the third-party
administrator of the Registry, the ASAP Registry was an observational database designed to obtain
data on “variation in current diagnostic and therapeutic management of patients receiving
Actimmune.” Information from the Registry was

12

 

to be available to InterMune and to participating physicians for research and analysis and “as
a basis for scientific presentations and publications.”

     10. During the Investigative Period, the ASAP Registry was operated substantially by InterMune
sales and marketing personnel. During the Investigative Period, InterMune sales representatives
were the principal source of Registry enrollment, and were also the principal points of contact for
physicians and their offices with respect to the Registry. Sales representatives received incentive
payments for patients they enrolled.

     11. Although one purpose the ASAP Registry was to gather data on Actimmune patients and make
that data available to physicians who had patients enrolled in the Registry, InterMune did not
share the data directly with physicians. InterMune provided a brief summary presentation at a
scientific meeting in late 2002 in San Diego.

     12. During the Investigative Period, there were a number of regulatory and operational issues
raised by the third-party administrator concerning the ASAP Registry, including various issues
relating to good clinical practices and the extent of InterMune sales representatives’
participation in the operation of the Registry.

     13. In the spring of 2002, an outside consultant was retained by InterMune to assess the ASAP
Registry. In June 2002, the consultant issued a final audit report, which identified a number of
problems with the Registry and concluded that absent significant changes, data from the Registry
would most likely not be accepted by the regulatory authorities.

Sales Force

     14. InterMune employed approximately sixty sales representatives focusing on pulmonology and,
in particular, Actimmune, during the Investigative Period. The FDA had not approved Actimmune for
the treatment of pulmonary disorders at that time.

     15. In January 2001, InterMune acquired rights to Amphotec®, an anti-fungal drug approved by
the FDA for the treatment of aspergillosis, including pulmonary aspergillosis. Amphotec was
primarily administered in a hospital setting. Prior to the fall of 2002, InterMune’s sales
representatives had not marketed Amphotec for pulmonary aspergillosis outside the hospital setting.
However, in the fall of 2002, sales force personnel relied on Amphotec for access to
pulmonologists’ offices, where the primary purpose for access to the offices was to discuss
Actimmune for IPF.

     16. InterMune’s Sales Incentive Compensation Plan for 2002 provided that sales representatives
would receive a quarterly bonus based on 7% of incremental Actimmune sales

13

 

and 3.5% of incremental Amphotec sales. The Plan also provided that the bonuses paid to
Regional Sales Directors were derived in part from the total earnings of the sales representatives
in their regions.

     17. During the Investigative Period several sales force personnel sometimes created and used
their own marketing aids in discussions with physicians concerning Actimmune for IPF. For example,
one former sales representative wrote and distributed an invitation letter to an educational
program, which one physician recipient characterized as “against the spirit of FDA regulations.”

14

 

Attachment C — Acknowledgment of Agreement

     This Agreement supersedes all prior, if any, written or oral understandings, promises, and/or
conditions between the Department and Intermune, Inc., with the exception of the Civil Settlement
Agreement incorporated herein, the Corporate Integrity Agreement referred to herein, and the letter
from Ethan Posner to the Department dated October 9, 2006. No additional promises, agreements, and
conditions have been entered into and none will be entered into unless in writing and signed by all
parties.

On Behalf of the United States Department of Justice:

	 	 	 	 	 
	10-24-06

	 	     /s/ KEVIN V. RYAN	 	 
	 

DATE

	 	 

Kevin V. Ryan
	 	 
	 

	 	United States Attorney	 	 
	 

	 	Northern District of California	 	 
	 
	 	 	 	 
	 

	 	     /s/ IOANA PETROU
 

Ioana Petrou
	 	 
	 

	 	Assistant United States Attorney	 	 
	 
	 	 	 	 
	On Behalf of Intermune, Inc.
	 	 	 	 
	 
	 	 	 	 
	October 24, 2006

	 	     /s/ ROBIN STEELE	 	 
	 

DATE

	 	 

Robin Steele
	 	 
	 

	 	Senior Vice President and General Counsel	 	 
	 

	 	Intermune, Inc.	 	 
	 

	 	3280 Bayshore Boulevard	 	 
	 

	 	Brisbane, CA 94005	 	 
	 
	 	 	 	 
	10-24-06

	 	     /s/ ETHAN M. POSNER	 	 
	 

DATE

	 	 

Ethan M. Posner
	 	 
	 

	 	Covington & Burling	 	 
	 

	 	Counsel to Intermune, Inc.

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