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InterMune's CEO Discusses Q2 2012 Earnings - Earnings Call Transcript

Stocks in this article: ITMN

Importantly in the press release today, in addition to announcing the Esbriet pricing, the German authorities officially exempted Esbriet from the prescription budgets of all office-based doctors and outpatient clinics reimbursed by the Sick Funds. This means that after many months of uncertainty in the minds of many physicians concerning the future reimbursement of Esbriet, it will soon be clear to all German doctors that they can prescribe Esbriet without concern for their individual healthcare budgets.

The press release also noted that Esbriet is the first drug that the Sick Funds have approved for IPF and off-label use of other drugs for this indication is now generally not allowed. While we view this as a positive statement in respect to the market conditions for Esbriet, it’s important to recognize that the Sick Funds generally reimburse Tier 1 hospitals for so-called off-label prescriptions, especially in the case where they are relatively low price, as is the case for N-ac, Prednisone, and/or steroids used to treat IPF patients. The Esbriet price that we negotiated is very comparable to what we view as analogous products in Germany, among those oral drugs used for the treatment of pulmonary arterial hypertension. Specifically, the Esbriet net price is about 6% below the Tracleer price. Given that Tracleer was priced a decade ago in a significantly less challenging economic period, we believe the Esbriet price fairly reflects the value of Esbriet to patients and to the healthcare system.

The strength of the €27,000 price negotiated for Esbriet is even more significant when we put it into local German context. Our new price of Esbriet is at the high end of the prices of other oral specialty medicines marketed in Germany such as Tarceva, Iressa, Ticurb and Gilenya, which range between 20,000 – which is Gilenya, and €28,500 – Iressa – net per year. Of note, none of these drugs went through the AMNOG negotiation process.

Read the rest of this transcript for free on seekingalpha.com

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