Still smarting from a U.S. development setback and more exposed than ever after divesting its clinical candidate for hepatitis C, InterMune got good news Dec. 17 as the European Medicines Agency's drug review arm issued a positive opinion recommending marketing authorization for pirfenidone, the company's candidate for idiopathic pulmonary fibrosis.

The positive opinion from the Committee for Medicinal Products for Human Use (CHMP), several weeks earlier than expected, all but guarantees that pirfenidone will be approved early in 2011. InterMune, based in Brisbane, Calif., plans to market the drug on its own under the brand name Esbriet and concurrently announced several management team additions to start the EU commercialization effort.

A dual inhibitor of TGF-beta synthesis and TNG-alpha synthesis, pirfenidone does not cure IPF, a scarring and inflammation of the lungs, but slows the progress of the disease in some patients. There is no currently approved drug therapy for the disease - the current standard of care is lung transplant - but companies with approved drugs for pulmonary arterial hypertension - Actelion and Gilead Sciences - are testing those drugs in IPF.

Investors were rewarded from the good news, as InterMune's stock price more than doubled during trading Dec. 17, finishing the day up 144.5% to $34.89. The stock price had stumbled in May, after FDA issued a "complete response" suggesting an additional Phase III trial for pirfenidone (Also see "Despite Positive Advisory Committee Vote, InterMune Gets Complete Response For Pirfenidone" - Pink Sheet, 4 May, 2010.).

Already marketed by commercial partner Shionogi in Japan as Pirespa, pirfenidone would be the first drug approved in the U.S. and EU for IPF, categorized as an orphan disease in both markets. InterMune estimates 110,000 IPF patients live in Europe, with roughly 70,000 of them in line with the drug's label for treatment of mild to moderate disease.

During a same-day conference call, InterMune CEO Dan Welch explained that his company is up to the task of marketing pirfenidone in Europe with a 75-member sales force. InterMune plans to launch the drug in Germany during the third quarter, to be followed by France, Spain and Italy during the first half of 2012 and the U.K. in mid-2012.

"We respect the challenge," Welch said in an interview. "We are a company based [near] San Francisco and the EU market is thousands of miles and eight or nine time zones away."

Welch pointed to his background as a former general manager and vice president of international marketing with Sanofi (before the merger that created Sanofi-Aventis), where he was responsible for the launch of several blockbuster products, including Plavix, Eloxatin and Avapro.

InterMune also announced four senior leadership appointments to spearhead the EU marketing effort, including Giacomo Di Nepi, former CEO of Takeda Pharmaceuticals Europe, as senior VP and managing director, Europe, and Frank Weber, former chief medical officer at Merck Serono, as senior VP, EU Medical and Global Medical Advisor.

"Through that experience and also through the experience that we have hired and will hire, we feel we understand and can very effectively launch in Europe," Welch said. "Importantly, this is a specialist product, an orphan drug, and the care is highly focused and centralized in centers of excellence in the major countries.

"Additionally, the populations and the market value are highly concentrated in Europe," he continued. The top 10 countries account for 80% to 85% of the pharma market value, while the top five countries have a combined population of 300 million and represent 70% to 75% of the value. "So when we think of Europe, 27 countries, 500 million patients, we can really focus on the top five and maybe the next five and capture 80%-85% of that whole market with a small concentration," he said.

Analysts Mostly Remain Cautious Due To Uphill Climb In U.S.

Market analysts called the news an unexpected surprise for InterMune but largely remained cautious because the biotech still faces the significant and expensive challenge of getting pirfenidone approved in the U.S. While J.P. Morgan and Robert W. Baird & Co. both maintained a "neutral" rating for the company's stock, an outlier was Cannacord Genuity, which upgraded InterMune from "hold" to "buy."

"We expect the positive CHMP opinion for Esbriet to lead to approval and launch of the product in Q1/11," wrote Cannacord analyst Adam Cutler in a same-day note. "We expect that this will drive significant sales and will enable the company to be profitable as soon as the end of 2011."

Cutler said his modeling, which assumes pricing of $21,000 a year for the drug, indicates that with peak penetration of half of all diagnosed IPF patients in Europe, the drug could reach EU sales of $1.2 billion.

Baird's Thomas Russo and JPM's Geoffrey Meacham both perceive a strong market opportunity for pirfenidone in Europe but maintain caution on InterMune because the company will need to conduct another Phase III trial to obtain FDA approval. Welch said InterMune will update its U.S. regulatory strategy during the first quarter of 2011.

Baird called IPF "easily a $500 million market opportunity with no currently approved treatment" in Europe, while Meacham projected peak sales of about $600 million in 2015 for pirfenidone.

Despite the cautious words, in a Dec. 17 note, Baird's Russo laid out a very positive long-term outlook for InterMune if U.S. approval could be attained.

"The market for IPF has billion-plus dollar potential, and with no currently approved therapies, is completely up for grabs," Russo wrote. "Its orphan drug nature offers seven and 10 years of exclusivity in the U.S. and Europe, respectively, and can likely support price points in the range of $30,000-$50,000. The likelihood that future drugs entering the space would be added on, rather than competing for share is also favorable to the first mover. Our feedback from the medical community suggests very high intent to prescribe any approved therapy to these patients with no other effective options."

InterMune obtained cash that could fund an additional Phase III trial in October when it sold off Phase II hepatitis C candidate danoprevir to Roche for $175 million (Also see "InterMune Wagers On Pirfenidone With Sale Of Full Danoprevir Rights To Roche" - Pink Sheet, 7 October, 2010.). The company has estimated it will end 2010 with about $290 million in cash.

-Joseph Haas (j.haas@elsevier.com)

Pleasant Surprise For InterMune With Early Positive Opinion On Pirfenidone From CHMP

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