InterMune (ITMN) shares tumbled on Mar. 6 after the Brisbane (Calif.)-based company halted late stage trials of a treatment for the lung condition idiopathic pulmonary fibrosis. Data from the Phase III clinical trial showed that the drug did not show a statistically significant improvement in mortality rates over a placebo for the disease. The stock dropped 21% to $22.15 in heavy trading of more than 7.3 million shares on the Nasdaq.
The trials were for the drug Actimmune, a human protein designed to trigger an immune system response in patients. InterMune markets the drug to halt the advancement of severe chronic osteopetrosis and treat serious infections associated with chronic granulomatous disease, an immune deficiency disorder.
In 2006, Actimmune sales were $90.3 million, making up all of the company’s revenue. The company reported a net loss of $102.4 million last year.
Pulmonary fibrosis is marked by the scarring of lung tissue with hard, fibrous tissue, leading to inhibited breathing. The condition has no effective treatments, according to the Pulmonary Fibrosis Foundation. InterMune has also initiated a late stage trial for a second drug, Pirfenidone, to treat the disease. The small molecule drug may potentially be able to treat fibrotic conditions in other organs as well.
The halted trial for Actimmune prompted Jefferies to drop its target price on the stock to $16 from $20. Back in January, Jeffries downgraded the stock from hold to underperform. The analyst considers the Pirfenidone trial risky as well.
InterMune is also developing a treatment for Hepatitis C that's currently in early stage trials. To develop that drug, InterMune inked a deal in November with the Swiss pharmaceutical giant Roche that was worth $60 million up front for InterMune. Depending on the drug achieving milestones, it could be worth much more to the smaller outfit.