Stock Market Champs..........10-17-06

InterMune Inc. (ITMN)

Last Trade:	21.05
Trade Time:	10:36AM ET
Change:	4.22 (25.07%)

Shares of biotechnology company Intermune Inc. rose in Tuesday premarket trading after the company inked a deal valued at up to $530 million to develop its hepatitis C treatment candidates with Roche Group Ltd.

Shares of Intermune rallied $4.82, or 29 percent, to $21.65 after closing at $16.83 in regular trading on the Nasdaq a day earlier.

Late Monday, Brisbane, Calif.-based Intermune said it will receive a $60 million upfront payment and potentially $470 million in additional milestone payments as the compound is developed.

One of the treatment candidates, ITMN-191, developed with partner Array BioPharma Inc., is a protease inhibitor for the hepatitis C virus, an inflammation of the liver caused by a viral infection.

Deutsche Bank analyst Jennifer Chao, maintaining a "Buy" rating, said ITMN-191 has been found to selectively target the liver, while not hurting the heart or liver.

"ITMN-191 addresses a multibillion dollar market opportunity and ITMN deserves a premium multiple for its pipeline scarcity value," Chao wrote in a client note.

Jefferies analyst Eun K. Yang, also maintaining a "Buy" rating, said the deal happened earlier than anticipated, and is "quite favorable, given that Intermune's hepatitis C virus drug candidate, ITMN-191, is yet to enter human testing."

The compound is expected to enter clinical trials by year-end and after an antitrust regulatory waiting period.