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 InterMune Pharmaceuticals, Inc. develops and
 commercializes innovative products for the treatment of
 serious pulmonary and infectious diseases and congenital
 disorders.  The Company currently markets ACTIMMUNE©
 (Interferon gamma-1b) Injection in the U.S. for the treatment
 of Chronic Granulomatous Disease (CGD) and osteopetrosis.
 
 Our Business
 
 InterMune Pharmaceuticals develops and
 commercializes innovative products for the
 treatment of serious pulmonary and infectious
 diseases and congenital disorders. We have the
 exclusive license rights in the United States to
 ACTIMMUNE© (interferon gamma-1b injection)
 for a range of indications, including chronic
 granulomatous disease, osteopetrosis, idiopathic
 pulmonary fibrosis, mycobacterial infections,
 systemic fungal infections and cystic fibrosis.
 
 We currently market ACTIMMUNE for chronic
 granulomatous disease. We have active
 development programs underway for the other
 indications, several of which are in mid- or
 advanced-stage human testing, known as clinical
 trials. Idiopathic pulmonary fibrosis,
 mycobacterial infections and systemic fungal
 infections are serious and difficult to treat
 diseases that we believe represent a combined
 potential market opportunity for ACTIMMUNE
 of approximately $3.5 billion annually in the
 United States.
 
 Interferon gamma-1b, the active ingredient in
 ACTIMMUNE, is a human protein which plays a
 key role in preventing the formation of excessive
 scar, or fibrotic, tissue and is a potent stimulator
 of the immune system. Interferon gamma is
 biologically distinct from interferon alpha and
 interferon beta, two related proteins that are
 currently marketed for the treatment of diseases
 such as hepatitis B infection and multiple
 sclerosis. Interferon gamma has a superior safety
 profile as compared to interferon alpha and
 interferon beta because it results in fewer and less
 severe adverse side effects.
 
 ACTIMMUNE
 
 Marketed Indication
 
 Chronic Granulomatous Disease.  The U.S.
 Food and Drug Administration has approved
 ACTIMMUNE for the treatment of chronic
 granulomatous disease, and we currently market
 and sell ACTIMMUNE in the United States for
 this disease. Chronic granulomatous disease is a
 life-threatening congenital disorder of the immune
 system that causes patients to be vulnerable to
 severe recurrent infections. This disease affects
 children, and no other FDA-approved treatment
 currently exists. ACTIMMUNE was approved by
 the FDA based on its ability to reduce the
 frequency and severity of infections in these
 patients.
 
 Indications in Development
 
 Osteopetrosis.  In August 1999, upon the
 completion of a Phase III clinical trial, we
 submitted a supplement to our biologics license
 application, or BLA, to the FDA for this
 indication. The FDA has designated
 osteopetrosis as eligible for both an accelerated
 review, known as fast track review, and orphan
 drug status. Osteopetrosis is a life-threatening,
 congenital disorder in which an overgrowth of
 bony structures leads to blindness, deafness and
 increased susceptibility to infection. This disorder
 primarily affects children, and no effective
 treatment is currently available.
 
 Idiopathic Pulmonary Fibrosis.  We believe the
 most significant near-term use of ACTIMMUNE
 is for the treatment of idiopathic pulmonary
 fibrosis, a life-threatening lung condition that
 afflicts approximately 50,000 persons in the
 United States. Idiopathic pulmonary fibrosis is
 characterized by progressive scarring of the
 lungs, which leads to their deterioration and
 destruction. The prognosis of patients with
 idiopathic pulmonary fibrosis is poor and most
 patients die from progressive loss of lung
 function, which leads to suffocation. Therapeutic
 options for idiopathic pulmonary fibrosis are
 limited and only minimally effective.
 
 The results of a Phase II clinical trial published in
 October 1999 in The New England Journal of
 Medicine showed statistically significant
 evidence that interferon gamma-1b halts and
 reverses the progression of idiopathic pulmonary
 fibrosis. We are continuing the clinical
 development of ACTIMMUNE for idiopathic
 pulmonary fibrosis by initiating a Phase II/III
 pivotal clinical trial during the first half of 2000.
 
 Other indications.  We are also developing
 ACTIMMUNE to treat a variety of other diseases,
 including infectious diseases and cystic fibrosis.
 Preclinical studies and clinical trials have
 demonstrated the therapeutic potential of
 ACTIMMUNE against a broad range of infectious
 diseases, notably mycobacterial and systemic
 fungal infections. A study published in May 1997
 in The Lancet showed that ACTIMMUNE was
 effective in the treatment of multidrug-resistant
 tuberculosis, a type of mycobacterial infection. As
 a result of these studies, we are initiating a Phase
 III pivotal clinical trial for ACTIMMUNE in the
 treatment of multidrug-resistant tuberculosis and
 have commenced a Phase II clinical trial in
 cryptococcal meningitis, a type of systemic fungal
 infection. We intend to initiate Phase II clinical
 trials in cystic fibrosis and in atypical
 mycobacterial infections in the second half of
 2000.
 
 We believe that the risks and time required to
 obtain FDA approval for new indications of
 ACTIMMUNE may be reduced because
 ACTIMMUNE has proven to be safe for patients
 since its approval in 1990 for the treatment of
 chronic granulomatous disease.
 
 Other Products In Development
 
 We also have two preclinical development
 programs that address infections caused by two
 types of bacteria, pseudomonas aeruginosa and
 staphylococcus aureus. We believe that these
 indications present combined market
 opportunities of approximately $2 billion annually
 in the United States.
 
 Strategy
 
 We plan to pursue a growth strategy through:
 
 growing product revenue;
 expanding the number of FDA-approved
 indications for ACTIMMUNE;
 enhancing physician awareness and
 education;
 developing a sales and marketing
 organization to serve pulmonologists and
 infectious disease specialists; and
 continuing to in-license preclinical and
 development-stage programs.
 
 Background
 
 InterMune was formed in 1998 and began
 operations as a wholly-owned subsidiary of
 Connetics Corporation. In 1998, Connetics
 acquired from Genentech Inc., and subsequently
 sublicensed to us, rights to develop and
 commercialize ACTIMMUNE for a broad range
 of indications. We initially focused on marketing
 ACTIMMUNE for chronic granulomatous disease
 and developing it for serious infectious diseases
 and congenital disorders.
 
 In October 1999, a study published in the The
 New England Journal of Medicine showed
 significant evidence that interferon gamma-1b
 halts and reverses the progression of idiopathic
 pulmonary fibrosis. As a result, we expanded our
 development and commercialization plans to
 include idiopathic pulmonary fibrosis as well as
 other life-threatening pulmonary diseases.
 
 intermune.com
 
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