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Updated from 7:41 am ET with new information and analysis.

InterMune (ITMN)  announced Tuesday very strong and positive results from the phase III "Ascend" study of pirfenidone in idiopathic pulmonary fibrosis (IPF). Pirfenidone improved lung function and slowed the progression of IPF -- meeting the study's primary and key secondary endpoints.

Based on these positive data, InterMune intends to file for FDA approval of pirfenidone in the third quarter, the company said Tuesday.

InterMune shares rose 121% to $30.80 in Tuesday trading. 

Here's how InterMune described the primary endpoint analysis of the pirfenidone study:

The magnitude of the treatment effect of pirfenidone was measured by comparing the proportion of patients in the pirfenidone and placebo groups experiencing either a clinically meaningful change in FVC, or death.  A 10% decline in FVC in an individual IPF patient is considered clinically meaningful and strongly predicts mortality.  At Week 52, 16.5% of patients in the pirfenidone group experienced an FVC decline of 10% or more or death, compared with 31.8% in the placebo group, representing a 47.9% reduction in the proportion of patients who experienced a meaningful change in FVC or death.  Additionally, at Week 52 the data demonstrated that 22.7% of patients in the pirfenidone group experienced no decline in FVC, compared with 9.7% in the placebo group, representing a 132.5% increase in the proportion of patients whose FVC did not decrease between Baseline and Week 52.

It's easier to understand the strength of these pirfenidone data by looking at the results graphically:

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InterMune did not disclose the mean absolute or relative change in forced vital capacity (FVC) for all patients in the study but the company did say this analysis was also statistically significant.

The Ascend study also achieved key secondary primary efficacy endpoints. Again, here's how InterMune described the results:

The ASCEND protocol pre-specified 6MWD and PFS as the two key secondary endpoints.  Change from Baseline to Week 52 in 6MWD is a measure of exercise tolerance.  A 50-meter decrement in walk distance is considered an independent predictor of mortality in an individual patient with IPF.  In ASCEND, pirfenidone reduced by 27.5% the proportion of patients who experienced a decline in 6MWD of 50 meters or greater (p=0.0360).  PFS is a measure of time before death or a disease-progression event.  A PFS event was defined in the protocol as any of the following: death, percent predicted FVC decrement of 10% or greater or 6MWD decrement of 50 meters or greater.  In ASCEND, pirfenidone reduced the risk of death or disease progression by 43% compared to placebo (Hazard Ratio [HR]=0.57; 95% confidence interval, 0.43-0.77; p=0.0001). [Emphasis added.]

That latter efficacy data point (emphasized) is important. So, too, are the data which show pirfenidone treatment prolonging the survival of IPF patients. The survival data from Ascend alone trends in pirfenidone's favor but is not statistically significant. When Ascend is pooled with the older "Capacity" studies, however, the survival benefit is statistically significant.

Let's talk some about the commercial opportunity for pirfenidone in the U.S. Remember, InterMune already sells pirfenidone in Europe under the brand name Esbriet, where the drug is priced in the range of $33,000 to $47,000 per year, depending on the country. 

InterMune has not announced U.S. pricing yet but you can be very confident Esbriet will carry a higher price tag here. If InterMune chooses to price Esbriet 30% higher in the U.S, the drug will cost around $60,000 per year. (Based off the highest European price.) That's not an unreasonably assumption, and could be conservative. 

There are 30,000 to 50,000 patients with mild to moderate IPF in the U.S, according to InterMune, so peg the commercial opportunity for the drug at $1.8 billion on the low end, or $3 billion on the top end.

If InterMune captures 35% of those U.S. IPF patients, peak Esbriet sales in the U.S. could be $630 million to $1 billion. Not bad, especially when you add in European sales. 

A big unknown right now is how Esbriet compares to Boehringer Ingelheim's nintedanib. Remember, all we know right now about nintedanib is an unconfirmed report of positive phase III study data. Data on both drugs will be presented in May at the American Thoracic Society annual meeting. 

Adam Feuerstein writes regularly for TheStreet. In keeping with company editorial policy, he doesn't own or short individual stocks, although he owns stock in TheStreet. He also doesn't invest in hedge funds or other private investment partnerships. Feuerstein appreciates your feedback;

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