Updated with new information and stock price.
BRISBANE, Calif. (
) --European regulators breathed new life into
Friday, recommended the approval of the company's drug Esbriet as a treatment for the fatal lung disease idiopathic pulmonary fibrosis.
InterMune shares are surging, up $15.84, or 111%, to $30.10 in mid-morning Friday trading.
InterMune's Esbriet, also known by its scientific name pirfenidone, was rejected the U.S. Food and Drug Administration in May despite a positive recommendation from a panel of outside experts. The FDA rejection sank InterMune shares but the company moved to Europe hoping to convince regulators there to approve the drug.
And it looks as if InterMune succeeded. The positive recommendation from the Europe's Committee for Medicinal Products for Human Use (CHMP) came about a month earlier than expected.
"The benefits with Esbriet are its ability to reduce the rate of deterioration of lung function measured as reduced decline of percent predicted Forced Vital Capacity (FVC) in patients with idiopathic pulmonary fibrosis," the CHMP opinion states. "It is noted that demonstration of this effect in the clinical studies was modest but measureable. In addition, a trend in improvement of the 'six minute walk test' was observed. The most common side effects are nausea, rash, fatigue, diarrhoea, dyspepsia and photosensitivity reaction."
The CHMP recommendation still needs to be ratified by the full European Commission, which can take two or three months, InterMune said Friday.
"We are very pleased by the positive opinion adopted by the CHMP, particularly because it was achieved earlier in the regulatory process than is typical," said InterMune CEO Dan Welch, in a statement. "We are now focusing our efforts on completing our commercial launch preparations to bring Esbriet to European patients as soon as possible."
JMP Securities analyst Liisa Bayko raised her InterMune rating to market outperform from market perform and upped her price target on the stock to $35. The market opportunity for Esbriet in Europe is approximately $800 million, she said.
Esbriet would be approved as a treatment for patients with mild to moderate idiopathic pulmonary fibrosis (IPF), a disease marked by scarring of the lungs caused by the gradual buildup of fibrous tissue. As the fibrotic scar tissue accumulates, air sacs in the lungs lose their ability to transfer oxygen into the bloodstream. There are no effective treatments for IPF, and unless patients can undergo a successful lung transplant, they eventually die of the disease.
--Written by Adam Feuerstein in Boston.
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