InterMune Gearing Up For Another Round With The FDA
2012-11-29 13:10:31 -
By Brian Wilson, Lead Contributor
After spending the last few months in a well-defined trading range of $8-10 per
share, the pulmonary fibrosis drug development company InterMune (NASDAQ:ITMN)
has settled right in the middle (at $9/share) as investors wait for more news on
its flagship product, pirfenidone.
Pirfenidone is the only approved treatment in the world right now for idiopathic
pulmonary fibrosis (IPF). It was approved in the European Union in March 2011,
and it at the end of phase III trials in the United States.
Idiopathic pulmonary fibrosis is a disease that has no known cause at this time
(hence the "idiopathic" designation), but the apparent efficacy of pirfenidone
is very impressive given the fact that no other medications have shown any
potential in IPF treatment. Some doctors use corticosteroids to reduce
inflammation in patients' lungs, but this actually increases the risk of death
in most patients without offering any actual potential in the direct treatment
of IPF. Most of the patients with pulmonary fibrosis are between the ages of 50
and 70 according to the U.S. National Library of Medicine, and available
estimates put the total number of pulmonary fibrosis patients above 128,000
within the United States
Since pirfenidone targets a patient population that is considered "small" by the
FDA's guidelines, it was granted orphan drug status by the FDA as well as fast-
track status to expedite the development of the drug in order to meet the
significant unmet demand for an effective IPF drug. An orphan drug designation
gives a drug 7 years of exclusivity according to PDUFA guidelines, which is
longer than the standard 5 years that other drugs receive. In addition to the
expanded time period of exclusivity, orphan drug developing companies receive
other benefits like tax incentives and fee waivers to help sweeten the deal. The
catch is that orphan diseases are often difficult to treat (typically due to
their complex nature, which is certainly the case with IPF). There are also some
incentive problems due to the small patient population that some of these drugs
have, although we usually see drug companies earning very high sales revenue per
patient with these orphan drugs to further compensate for the smaller overall
market.
Pirfenodine, like stated before, is approved in Europe but remains in phase III
trials in the United States. This is because the FDA and the EMA (European
Medicines Agency) had quite different opinions on the NDA (New Drug Application)
and MAA (Marketing Authorization Application) that InterMune submitted that
year. These applications both looked to bring pirfenodine to the market using
data that the company collected in clinical trials throughout the development
process of the drug, but the NDA was met with a CRL (Complete Response Letter)
by the FDA on May 4, 2010 which caused a 74% drop in shares of ITMN. Clearly,
the market was disappointed that InterMune was unable to get their orphan drug -
an IPF treatment at that, approved in one go. Although the stock has very quiet
ever since the extreme display of volatility in 2010, we are getting closer to
another NDA submission based on new clinical trial data that could possibly
bring the stock back to old highs.
The complete response letter from 2010 stated that the FDA wanted to see more
data that could establish the efficacy profile of pirfenodine in the treatment
of pulmonary fibrosis. In January of the next year (2011), InterMune announced
that it would conduct a new phase III study (known as the ASCEND trial) to study
the efficacy of pirfenodine in IPF with a primary endpoint defined by forced
vital capacity (%FVC) of patients undergoing the recommended dose of pirfenodine
versus placebo. The study is estimated to be finished as soon as December of
2013, although we may see interim results presented at investor conferences or
through direct company press releases sooner. There's a good chance that
InterMune was just unlucky in 2010, and will bolster its case with new phase III
trial resulting in an NDA with an extremely high chance of approval in 2014 or
so, which would bring the stock significantly higher due to the peak revenue
potential of pirfenodine. There is also a short interest of 21% of floated
shares, which presents some opportunity of a substantial short squeeze if ITMN
breaks out of its $8-10 trading range. Even though the really big news is still
a year away, it's definitely worth keeping an eye on ITMN to see if the
speculation starts to move the shares early on.
The full report including charts and technical analysis is available at:
www.biomedreports.com/20121129114619/intermune-gearing-up-for-an ..
round-with-the-fda.html
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new complete database of clinical trials and upcoming FDA and world-wide
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