When looking at biopharmaceutical companies as potential investments, there is a broad spectrum of companies to choose from. For the brave, there are higher-risk but higher-reward biotechs with earlier-stage pipelines; more conservative investors can choose biotechs with drugs in later stages or already on the market. Biotech company InterMune (NASDAQ:ITMN) is one of the former, but it is taking steps to become one of the latter.

InterMune announced yesterday that it had submitted a regulatory filing in France to begin a phase 1 trial on the company's lead drug, ITMN-191, to treat hepatitis C (HCV). Phase 1 studies are small, short trials that are run to test a drug candidate's safety and to determine appropriate drug dosage for later studies.

Some might argue that InterMune is not a risky development-stage biotech, since the company does already have two drugs in phase 3 trials, as well as one marketed product, named Actimmune, to treat various diseases. But the product is only expected to generate $75 million to $100 million in sales this year, down from the $107 million in sales achieved in 2005. Anyway, investors haven't bestowed upon InterMune a $560 million market cap for this one product with declining sales, but rather because of the promise of ITMN-191.

What excites investors and Rule Breaker biotech analyst extraordinaire Charly Travers so much about ITMN-191 is that the compound is in the same class of drugs, protease inhibitors, as VertexPharmaceuticals' (NASDAQ:VRTX) hepatitis C drug, VX-950. In early trials, VX-950 has provided blowout results and garnered Vertex a sweet collaboration deal with Johnson & Johnson (NYSE:JNJ).

It will be years before ITMN-191 could make it to the multibillion-dollar HCV market, if it can even get that far. For example, VX-950 is already in phase 2 trials but is expected to be on the market no earlier than 2009.

Not only is InterMune facing years of clinical trials, but these trials will be quite expensive, as well. With the start of the ITMN-191 trials, the company's burn rate will increase, but thanks to the revenues from Actimmune, cash burn has so far been kept to a minimum. In the first two quarters of 2006, the company has only burned through $36 million and has a cash pile of $180 million left in the bank.

Until InterMune starts generating clinical trial results from ITMN-191, its fortunes will largely be tied to Vertex and VX-950. Fortunately for InterMune investors, the first steps toward getting ITMN-191 results have finally been taken.

InterMune is a Motley Fool Rule Breakers pick. Love nanotech, biotech and all things tech?Rule Breakersis your risk-free source for forward-looking investing ideas. Take a30-day free trial today.

Fool contributor Brian Lawler does not own shares of any company mentioned in this article. The Fool's disclosure policy has passed all tests.