InterMune Doubles After European Panel Backs Esbriet
InterMune Inc. (ITMN) had a record gain in Nasdaq Stock Market composite trading after a European regulatory committee recommended approval of its medicine Esbriet to treat a fatal lung disease.
InterMune rose $20.62 to $34.89 at 4 p.m. New York time, more than doubling in the stock’s biggest increase since the Brisbane, California-based company first sold shares to the public in March 2000. The European Commission is expected to ratify the committee’s decision in two to three months, the drugmaker said today in a statement.
The drug isn’t approved for sale in the U.S., where regulators rejected the company’s application in May. The denial had sent shares down 75 percent. Peak sales in Europe may reach $1.2 billion, with the drug priced at $21,000 a year per patient, said Adam Cutler, an analyst with Canaccord Genuity.
“This will drive significant sales and will enable the company to be profitable as soon as the end of 2011,” Cutler wrote today in a research note. Based in New York, Cutler raised his recommendation on InterMune shares to “buy.”
The lung disease, idiopathic pulmonary fibrosis, “is among the most urgent of unmet medical needs in respiratory medicine,” said Roland du Bois, a professor of respiratory medicine at the National Heart & Lung Institute at Imperial College in London and co-chair of the program that tested InterMune’s medicine, in an InterMune statement today.
More than 100,000 Europeans suffer from the disease, for which there are no approved therapies in the European Union, du Bois said.
InterMune also said today that it appointed a team to prepare to sell the medicine in Europe, led by Giacomo Di Nepi, who joined the company in November 2009 after roles as chief executive officer of Osaka, Japan-based Takeda Pharmaceutical Co.’s European business and global head for the Transplantation and Infectious Disease unit of Novartis Pharma AG.
The company’s European headquarters will be in Basel, Switzerland, and it has established subsidiaries in Germany, Italy and the U.K. InterMune is in the final stages of establishing subsidiaries in France and Spain, and plans to have a European workforce of about 125 people by the end of 2012.
In May, the U.S. Food and Drug Administration asked for a new clinical trial to prove the medicine delays progression of the disease, snubbing an advisory panel’s recommendation that the drug be approved.
The company plans to provide an update on the medicine’s status with the FDA in the first quarter of 2011, spokesman Jim Goff said in a telephone interview today.
“We continue to evaluate various alternatives,” he said.
Idiopathic pulmonary fibrosis causes an unexplained scarring and inflammation in the lungs and is usually fatal within five years. The condition mostly affects people ages 50 to 75, causing air sacs in the lung to be gradually replaced with scar tissue, according to the National Heart, Lung, and Blood Institute’s website. Most patients die of respiratory failure when the lungs can’t expand to get oxygen into the bloodstream.
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