Shionogi Files Complaint Against InterMune -8K

On July 5, 2012, Shionogi & Co., Ltd filed a complaint against InterMune

in the United States District Court for the Northern District of California. Shionogi's complaint alleges principally that InterMune breached an agreement between InterMune and Shionogi governing the exchange and use of certain documents and information relating to the parties' respective clinical trials of pirfenidone. The complaint alleges that InterMune breached the agreement by utilizing certain of Shionogi's information in its Marketing Authorization Application for pirfenidone with the European Medicines Agency and then failing to pay royalties to Shionogi for all sales of pirfenidone (Esbriet) in the European Union. In the alternative, the complaint alleges that, if InterMune did not use Shionogi's information in a way that would trigger a royalty obligation under the agreement, InterMune had an obligation to do so as an exclusive licensee. The collaboration agreement establishes a royalty structure on net sales of pirfenidone by InterMune payable to Shionogi on a territory-by-territory basis, in certain circumstances, equal to 6% of net sales for the first and second calendar year following commercialization, 8% of net sales for the third and fourth calendar year following commercialization and 10% of net sales for each subsequent calendar year thereafter. As previously reported, Esbriet sales in the European Union were $2.778 million for the year ended December 31, 2011 and $4.880 million for the three months ended March 31, 2012. The term of the royalty obligation is on a territory-by-territory basis and expires upon the expiration of the market exclusivity period that may be granted by the relevant governmental authority that has the jurisdiction to grant marketing approval for Esbriet in that certain geographical territory. In the European Union, the term of the royalty obligation, if any, would expire ten years from approval of the Marketing Authorization Application by the EMA. Shionogi is seeking, among other things, unspecified monetary damages and a declaration that InterMune is obligated to pay royalties to Shionogi for all sales of pirfenidone in the European Union. InterMune strongly disagrees with Shionogi's claims and intends to defend its position vigorously.