Intermune to Start European Sales of Lung Drug in September

Intermune Inc. (ITMN), which won European approval Feb. 28 for Esbriet, will start selling the lung-disease drug in September in Germany and in other parts of Europe next year, Chief Executive Officer Dan Welch said.

While Intermune isn’t currently in discussions about selling itself, Welch said he would be surprised if other companies didn’t see Esbriet’s “tremendous” value.

“Esbriet is an asset that we at Intermune place high value on,” Welch said today in an interview. “I would be surprised if other companies didn’t see it similarly.”

The drug may reach $1 billion in sales in Europe by about 2015 and similar revenue in the U.S. by about 2018, Howard Liang, a Boston-based analyst for Leerink Swann & Co., said today in a telephone interview. Bloomberg News reported April 27 that the Brisbane, California-based company was working with Goldman Sachs Group Inc. to find a buyer, according to three people with knowledge of the matter who declined to be identified because the discussions were private.

Welch declined to offer a sales estimate or to predict when the company, which has lost $793 million since its founding in 1998, will become profitable. Liang, who rates the stock “outperform,” said Intermune may be able to turn a profit about 2014.

Intermune declined $1.24, or 3.3 percent, to $36.31 at 4 p.m. New York time in Nasdaq Stock Exchange composite trading. The company’s shares have lost less than 1 percent so far this year.

Lung Disease

Esbriet was approved in Europe to treat mild to moderate idiopathic pulmonary fibrosis, a lung disease that robs patients of their ability to breathe and leads to death. The company aims to complete a 500-patient clinical trial of the drug in time to win U.S. approval by the end of June 2014, Welch said.

Food and Drug Administration officials told the company the trial must show improvement in patients’ breathing capacity and “supportive evidence” that the drug may extend patients’ lives in order to gain clearance, Welch said.

In a 52-week study and a separate 72-week clinical trial of patients at mild to moderate stages of the disease, 5 percent of those taking Esbriet died, compared with 8 percent taking placebos, Welch said.

The studies didn’t have enough patients or last long enough to reveal major differences in mortality rates, Welch said.

Esbriet has a number of key advantages that will help it get to “a very exciting blockbuster-type level,” Welch said.

‘Robustly Priced’

“It’s the first drug of its kind approved for a uniform deadly disease,” he said. It has few side effects, won’t face competition from other drugs for at least four years in Europe and will be “robustly priced,” he said.

The price in Europe may be similar to that of Tracleer from Actelion Ltd. (ATLN) of Allschwil, Switzerland, which treats a lung condition known as pulmonary arterial hypertension, said Jim Goff, an Intermune spokesman. Tracleer sells for $40,000 to $45,000 per year in Europe, Goff said.

Intermune will roll out the drug country by country in Europe because each nation must approve pricing levels, Welch said. The company will hire 125 employees and build a marketing organization in Europe, he said.

Intermune’s only approved drug in the U.S. is Actimmune, used for the treatment of severe, malignant osteoporosis and chronic granulomatous disease, a rare inherited immune system disease. It had 2010 sales of $20 million.

To contact the reporter on this story: Rob Waters in San Francisco at rwaters5@bloomberg.net.

To contact the editor responsible for this story: Reg Gale at rgale5@bloomberg.net.

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