InterMune Gains on German Esbriet Decision: San Francisco Mover
InterMune Inc. (ITMN), maker of the lung- disease drug Esbriet, reached its highest value in five weeks after a German committee said the medicine offers an additional benefit, clearing the way for talks with the country’s health insurers.
InterMune rose 4.4 percent to $15.45 at the close in New York, the highest share price since Feb. 8. The Brisbane, California-based company has declined 65 percent in the past 12 months.
Germany’s Federal Joint Committee, also known as the G-BA, decided the drug has an added benefit that can’t be quantified now, and will be defined later based on clinical experience, InterMune said today in a statement. The ruling ignored a recommendation in December from the Institute for Quality and Efficiency in Health Care, an advisory panel. The panel had found the drug, also known as pirfenidone, had no or low additional benefit.
The rating “takes the worst-case scenario off the table, should position InterMune reasonably for upcoming pricing negotiations, and should also increase confidence that France will take a similar view,” Brian Abrahams, an analyst with Wells Fargo Securities, wrote in a research note today.
Esbriet costs 38,474 euros ($50,234) for the first year of therapy in Germany, according to the G-BA. Additional years of therapy cost 39,200 euros. Today’s decision sets into motion negotiations between InterMune and Germany’s public insurers about a discount to that price, Kristine Reis, a Berlin-based spokeswoman for the G-BA, said by telephone today.
Under a law passed in 2010, Germany forces drugmakers to prove their medicine works better than older therapies in order to charge more for a new drug. Esbriet is the first medicine classified as an orphan drug, one for a disease with few medical options, to be reviewed under the new law.
Esbriet may be priced at $30,000 to $34,000 in Germany next year, and $28,000 in other European countries, Michael Yee, an analyst with RBC Capital Markets, wrote today in a note to clients. He said he believes negotiations over price in France, Spain and Italy are “on track” and will be “influenced by Germany’s decision.”
Esbriet was approved in Europe a year ago to treat mild to moderate idiopathic pulmonary fibrosis, a lung disease that robs patients of their ability to breathe and leads to death. The drug may reach $352 million in sales by 2014, the average estimate of six analysts in a Bloomberg survey.
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