Update 3:32 PM EST The final votes were rather close, but in the end, the FDA's advisory panel recommended approval for InterMune's pirfenidone as a treatment for IPF.

Here's how some of the panelists explained their final votes:

"No effective treatment for this fatal disease. This medication serves an unmet medical need. It's not perfect but it stems the tide."

"I am convinced in the change in lung function and enough evidence to suggest the change in lung function is related to the disease."

"I voted yes because I've been straight down the middle the entire time. I didn't see substantive evidence of efficacy per the FDA regulations but there was clinical meaningful effect on the disease. You need to offer patients hope. If this offers a smidgen of hope, then it is worth approving."

"I voted no because there was no compelling information that this therapy would benefit large portions of the patient population."

"I voted yes, opposite of my vote on the question of substantial efficacy because I don't believe there is substantial evidence of efficacy; but if I got this disease, I'd be on the next Delta flight to Japan." (Pirfenidone is already approved and marketed in Japan.)

Thanks for reading this live blog.

Update 3:21 PM The last panel vote on InterMune's pirfenidone:

Does the committee recommend approval of pirfenidone for the treatment of patients with IPF to reduce the decline in lung function? (Voting Question) If not, what further data should be obtained? Emphasis added.

Yes 9 No 3

Update 3:15 PMMore FDA panel voting on InterMune's perfinidone:

The previous 7-5 vote in favor of pirfenidone's efficacy was tight, and in further comments, some of the panelists who voted "yes" said they still wanted to see more clinical data, particularly on perfinidone's effect on patient mortality.

The next question: Has the safety of pirfenidone been adequately assessed for the treatment of patients with IPF? (Voting Question) If not, what further safety data should be obtained?

Yes 9 No 3

Update 3:02 PM The FDA panel begins to vote on InterMune's perfinidone:

Does the data provide substantial evidence that pirfenidone provides a clinically meaningful beneficial effect in the treatment of patients with IPF to reduce decline in lung function? (Voting Question) If not, what further efficacy data should be obtained?

Yes 7 No 5.

Update 2:10 PM The panel begin to discuss the pros and cons of pirfenidone for the treatment of IPF.

One panelist spoke up immediately in favor of pirfenidone, calling the data from the positive study 004 "strong" and "clinically meaningful."

He also called FDA's skeptical view of Study 006 "too narrow," arguing that FVC is but one of many relevant endpoints.

"FVC was selected as the primary but that doesn't mean secondary outcomes were invalid if primary outcome was not met. FDA's view on Study 006 is too narrow, especially since this is an uncommon disease," the panelist said. (I'm watching a grainy webcast and couldn't identify the panelist by name.)

Another expert on the panel says he's struggling with the decision to choose VFC as the primary endpoint over mortality, and asked FDA for guidance. FDA turned the question back on him and said this was one of the reasons for holding the panel.

A third panelist called the mortality data "intriguing" and added that "all the mortality metrics were in favor of pirfenidone."

InterMune says 20% of pirfenidone-treated patients lost 10% or more of their lung function compared to 35% of placebo-treated patients. Moreover, 24% of pirfenidone-treated patients reported no decline in lung function compared to 14% of placebo patients.

Is that 10% loss of lung function an arbitrary measure or is it clinically meaningful?

A panelist chimed in with an opinion: When you get to 10% of more change, it's more than just an artifact of measure error alone, says the panelist, who's a lung specialist. Would patients feel better, or is it clinically meaningful? I think it's getting to that ballpark where patients would start to benefit.

Another panelist: We don't know what is clinically meaningful. Dypsnea, or shortness of breath, was more common in pirfenidone patients than those treated with placebo, so how can pirfenidone prolong survival?

Back to the previous panelist: The lack of consistency across the studies bothers me. This drug probably works but in a subset of patients. If we can't figure out that subset then I worry about widespread use of the drug when they might not benefit.

The FDA then corrects the panelist about the rate of dypsnea, stating that the correct data shows that there was a higher rate of dypsnea (shortage of breath) in placebo patients not pirfenidone patients.

The discussion and debate continues. Most of the panel members have still not spoken.

Update 12:49 PM The FDA panel is on lunch break until 1 pm EST. The FDA review was tough, as I outlined below, but there is no clear indication yet about the direction of the experts on the panel. Only about half the panelists have spoken or asked questions so far.

One point of clarification: The FDA changed the wording of the fifth question, which now reads:

Does the committee recommend approval of pirfenidone for the treatment of patients with IPF to reduce the decline in lung function? (Voting Question) If not, what further data should be obtained? Emphasis added.

The panel members will be begin to discuss and debate the pirfenidone data after the lunch break, which will offer a better sense of how they feel about the drug's efficacy and safety.

Update 11:40 AM The FDA presented its review of pirfenidone, focusing on the "uncertain" survival benefit for pirfenidone in the two phase III studies.

FDA agreed there is some clinical evidence that pirfenidone reduced the risk of death compared to placebo in IPF patients, but "the benefit of pirfenidone on all-cause mortality is uncertain," said FDA's statistical reviewer.

The discussion was lengthy, but in summary, FDA did not seem entirely convinced that the survival benefit from the pooled data of the two pirfenidone trials met the agency's definition of "substantial evidence" of efficacy needed for a drug's approval.

Since only one of the two phase III studies met its primary endpoint, FDA considers pooled analyses of secondary endpoints to be exploratory only, and not confirmative of benefit.

The FDA says it told InterMune that it was concerned about the use of change in forced vital capacity (FVC) as the primary endpoint of the two phase III studies since FVC has not been prospectively validated and the results can be hard to interpret.

In particular, FDA says a 10% or greater change in FVC as a threshold for clinically meaningful treatment benefit is still an unsettled debate. The FDA is questioning the robustness of pirfenidone's benefit, as measured by FVC.

On the safety side, FDA raised concerns about liver toxicity related to treatment with pirfenidone.

The FDA is asking the panel members to discuss and debate the following questions:

1. Discuss the efficacy data for pirfenidone. Include a discussion as to what constitutes a clinically meaningful effect size for the change in percent predicted FVC.

2. Discuss the safety data for pirfenidone.

3. Does the data provide substantial evidence that pirfenidone provides a clinically meaningful beneficial effect in the treatment of patients with IPF to reduce decline in lung function? (Voting Question) If not, what further efficacy data should be obtained?

4. Has the safety of pirfenidone been adequately assessed for the treatment of patients with IPF? (Voting Question) If not, what further safety data should be obtained?

5. Does the committee recommend approval of pirfenidone for the treatment of patients with IPF? (Voting Question) If not, what further data should be obtained?

Update 10:35 AM" The FDA panel is now on a short break following questions from the panelists to InterMune's presenters. This is where my coverage turns subjective, but I didn't hear any questions or concerns raised to this point that were overly negative or skeptical of the pirfenidone data.

Panelists queried InterMune about pirfenidone's dose response, safety and differences in the outcomes of the placebo-treated patients from both studies. Other panelists asked InterMune to discuss the statistical assumptions in the studies and for added color on how the endpoints of the study were analyzed.

The FDA's presentation is about to begin.

Update 9:35 AM: Dr. Paul Noble of Duke University, a leading expert in IPF, makes his pitch in favor of pirfenidone:
  • "Prognosis for IPF is dismal," adding that "Patients with IPF feel like they have no hope," he said.
  • Safety risks are "manageable and acceptable."
  • "Pirfenidone did not cure IPF and it did not make patients better, but I firmly believe that preventing loss of lung function in an irreversible disease is clinically meaningful."
  • "Pirfenidone is an important first step in IPF treatment. It's the first drug to have a favorable benefit-risk profile."

Update 9:15 AM: Intermune's Dr. William Bradford presented the data from the two phase III studies of pirfenidone in IPF patients.

Recall that the first study (the "004" study) was positive, showing that treatment with pirfenidone resulted in a statistically significant 4.4% change in forced vital capacity (FVC) compared to placebo after 72 weeks. That's a 35% relative change in FVC.

Secondary endpoints from the "004" study also favored pirfenidone, including the percentage of patients with lung function decline greater than 10% and progression-free survival.

These positive results, however, were not duplicated in the second "006" study, where pirfenidone treatment did not result in a statistically significant or clinically meaningful improvement in VFC compared to placebo. The 6.5% relative improvement was not statistically significant.

Bradford called the incongruous results "perplexing" and said the company was not able to explain why the "004" study was a success while the "006" study failed. The company's best guess is that the variability of lung function decline in IPF patients was the likely cause.

InterMune says the best way to assess pirfenidone is to pool the data from the two studies. While this analysis is exploratory only, Bradford said treatment with pirfenidone across both studies resulted in a 2.5% absolute change in FVC compared to placebo (a 23% relative difference) which is clinically meaningful. All the secondary endpoints in this pooled analysis also favored pirfenidone, including survival.

The FDA has raised questions about the appropriateness of the pooled analysis in its posted review, so expect debate and discussion of this issue later today.

Update: 8:35 AM InterMune's presentation kicked off with opening remarks from the company's chief medical officer Steven Porter, who reiterated the company's belief that the clinical data, in total, demonstrates pirfenidone demonstrates a benefit for patients with IPF.

Dr. Ron Dubois of Denver's National Jewish Health gave an overview of IPF. About 30,000 patients are diagnosed with IPF in the U.S. ever year. Currently, about 100,000 people in the U.S. have the disease and more than 175,000 IPF patients died between 1992 and 2003.

"The death rate for IPF is worse than most lung disease and more than some cancers," said Dubois.

Patients with IPF are usually diagnosed after the disease has begun to scar the lungs and irreversibly damage lung tissue. Patients progress at variable rates, but eventually all patients decline, become housebound and oxygen dependent, and then die, said Dubois.

Treatment for IPF, including pirfenidone, is unlikely to improve lung function. The goal is to slow the decline in lung function, sais Dubois.

In its review, FDA raised concerns that the primary endpoint of InterMune's phase III studies -- the change in lung function measured by the change in forced vital capacity (FVC)-- might not be the most ideal way to measure clinical benefit.

In his presentation, Dubois argued that FVC is best way to assess a drug's benefit in patients with IPF because it is a widely used and accepted measure of disease status. Measuring lung function using FVC is repeatable, reliable and valid, and correlates strongly with other measure, including patient mortality, said DuBois.

BRISBANE, Calif. ( TheStreet) -- InterMune ( ITMN) shares are halted Tuesday at $23.30 as a panel of experts convened by the U.S. Food and Drug Administration meets to review the company's experimental drug pirfenidone as a treatment for idiopathic pulmonary fibrosis (IPF), a fatal lung disease.

The FDA advisory panel kicks off at 8 a.m. EST, with voting on approval recommendations likely to begin the middle of the afternoon. I'm watching a paid webcast of the panel and will provide regular updates throughout the day, so check back here often.

InterMune shares surged 64% Friday after the FDA made public a medical review of pirfenidone that investors considered to be a less critical than expected. This helped raise the likelihood that Tuesday's panel would vote to recommend pirfenidone's approval.

A positive vote later today could send shares of InterMune into the $30-plus range; while a negative vote could plunge the stock down into the single digits, according to many analysts who cover the stock.

I'll be back soon with an update once the FDA advisory panel meeting gets underway.

-- Reported by Adam Feuerstein in Boston.

Follow Adam Feuerstein on Twitter.
Adam Feuerstein writes regularly for TheStreet.com. In keeping with TSC's editorial policy, he doesn't own or short individual stocks, although he owns stock in TheStreet.com. He also doesn't invest in hedge funds or other private investment partnerships. Feuerstein appreciates your feedback; click here to send him an email.

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