Item 1. Legal Proceedings.
On June 25, 2003, a purported securities class action entitled Johnson v.
Harkonen and InterMune, Inc., No. C 03-2954-MEJ, was filed in the United States
District Court for the Northern District of California. Three additional class
action complaints entitled Lombardi v. InterMune, Inc., Harkonen and
Surrey-Barbari, No. C 03 3068 MJJ (filed on July 1, 2003); Mahoney Jr. v.
InterMune Inc., Harkonen and Surrey-Barbari, No. C 03-3273 SI (filed on July 14,
2003); and Adler v. Harkonen and InterMune Inc., No. C 03-3710 MJJ (filed on
August 3, 2003), were filed in the same court, each making identical or similar
allegations against us, our former chief executive officer and our former chief
financial officer. On November 6, 2003, the various complaints were consolidated
into one case by order of the court, and on November 26, 2003, a lead plaintiff,
Lance A. Johnson, was appointed. A consolidated complaint titled In re InterMune
Securities Litigation, No. C 03-2954 SI, was filed on January 30, 2004. The
consolidated amended complaint named us, and our former chief executive officer
and our former chief financial officer, as defendants and alleges that the
defendants made certain false and misleading statements in violation of the
federal securities laws, specifically Sections 10(b) and 20(a) of the Exchange
Act, and Rule 10b-5. The lead plaintiff sought unspecified damages on behalf of
a purported class of purchasers of our common stock during the period from
January 7, 2003 through June 11, 2003. The parties settled this case in May 2005
and a final settlement was approved by the court in August 2005.
On July 30, 2003, a stockholder, Michael Adler, purporting to act on our
behalf filed a derivative action entitled Adler v. Harkonen, et al., No. CIV
433125, in the California Superior Court for the County of San Mateo against our
directors, our former chief executive officer and our former chief financial
officer. We were also named as a nominal defendant solely in a derivative
capacity. The derivative action was based on the same factual allegations and
circumstances as the securities class actions and alleged state law claims for
breach of fiduciary duty, abuse of control, gross mismanagement, waste of
corporate assets and unjust enrichment. The derivative action sought unspecified
damages, injunctive relief and restitution. The parties settled this case in
August 2005 and the amount was not material to the financial statements.
On March 19, 2004, plaintiff Joan Gallagher filed an action against us and
other defendants in the United States District Court for the Eastern District of
Pennsylvania. Ms. Gallagher alleged that during her employment with InterMune,
we actively marketed, and required our sales force to market, Actimmune for a
purpose for which the drug was not approved by the FDA, specifically for the
treatment of idiopathic pulmonary fibrosis, in violation of "public policy,"
including the purported public policies of the Food Drug and Cosmetic Act, the
Pennsylvania Controlled Substance, Drug, Device and Cosmetic Act and the
Pennsylvania Unfair Trade Practice and Consumer Protection Law. Ms. Gallagher
alleged that she was wrongfully terminated from InterMune in violation of public
policy due to her refusal to engage in the alleged off-label marketing. The
parties settled this case in July 2005.
On November 9, 2004, we received a subpoena from the U.S. Department of
Justice requiring us to provide the Department of Justice with certain
information relating to Actimmune, including information regarding the promotion
and marketing of Actimmune. We are cooperating with the Department of Justice in
this inquiry. Although we cannot predict whether the outcome of this inquiry
will have a material adverse effect on our business, it is possible that we will
be required to pay a substantial civil fine in connection with
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the settlement of this matter. At this time we cannot predict the magnitude of
such a fine or the impact the payment of such a fine may have on our future
business operations.
Item 6. Exhibits.
Exhibit
Number Description of Document
3 .1 Amended and Restated Certificate of Incorporation of
InterMune.(1)
3 .2 Certificate of Ownership and Merger, dated April 26, 2001.(2)
3 .3 Bylaws of InterMune.(1)
3 .4 Certificate of Amendment of Amended and Restated Certificate of
Incorporation of InterMune.(3)
3 .5 Certificate of Amendment of Amended and Restated Certificate of
Incorporation of InterMune.(4)
10 .1* Amendment No. 3 to Data Transfer, Clinical Trial and Market
Supply Agreement, dated January 27, 2000, between InterMune and
Boehringer Ingleheim Austria, GmbH.(5)
31 .1 Certification required by Rule 13a-14(a) or Rule 15d-14(a).(5)
31 .2 Certification required by Rule 13a-14(a) or Rule 15d-14(a).(5)
32 .1** Certification required by Rule 13a-14(b) or Rule 15d-14(b) and
Section 1350 of Chapter 63 of Title 18 of the United States Code
(18 U.S.C. § 1350).(5)
(1) Filed as an exhibit to the InterMune's Registration Statement on Form S-1
filed with the Securities and Exchange Commission on February 2, 2000 (No.
333-96029), as amended by Amendment No. 1 filed with the Commission on
February 18, 2000, as amended by Amendment No. 2 filed with the Commission
on March 6, 2000, as amended by Amendment No. 3 filed with the Commission on
March 22, 2000, as amended by Amendment No. 4 filed with the Commission on
March 23, 2000 and as amended by Amendment No. 5 filed with the Commission
on March 23, 2000.
(2) Filed as an exhibit to the InterMune's Quarterly Report on Form 10-Q for the
quarter ended June 30, 2001.
(3) Filed as an exhibit to the InterMune's Quarterly Report on Form 10-Q for the
quarter ended June 30, 2003.
(4) Filed as an exhibit to the InterMune's Quarterly Report on Form 10-Q for the
quarter ended June 30, 2004.
(5) Filed herewith.
* Confidential treatment has been requested with respect to certain portions
of this exhibit. Omitted portions have been filed separately with the
Securities and Exchange Commission.
** This certification accompanies the Periodic Report pursuant to Section 906
of the Sarbanes-Oxley Act of 2002 and shall not be deemed "filed" by the
Company for purposes of Section 18 of the Securities Exchange Act of 1934,
as amended.
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