InterMune’s Idiopathic Pulmonary Fibrosis Push Continues As Actimmune Sales Slump

Data support gambling on experimental pirfenidone against “incredibly complex” disease, chief scientific officer tells “The Pink Sheet” DAILY.

Despite sliding sales of its immune system booster Actimmune , InterMune beat consensus earnings per share for the fourth quarter and ended the year with cash, as investors kept their eyes on Phase III pirfenidone for idiopathic pulmonary fibrosis.

Brisbane, Calif.-based InterMune reported on Feb. 7 a net loss for fourth-quarter 2007 of $25.8 million, or 66 cents per share, compared with a net loss of $21.5 million, or 64 cents per share, in the fourth quarter of 2006.

Revenue hit $9.6 million, compared with $19.8 million in the fourth quarter of 2006, the numbers consisting mainly of $8.8 million from Actimmune, compared with $19.4 million in the same quarter of 2006, a plunge of about 55 percent.

FDA-approved for chronic granulomatous disease and severe, malignant osteopetrosis, Actimmune (interferon gamma-1b) enjoyed off-label use in idiopathic pulmonary fibrosis, but prescriptions tapered off after the company quit its Phase III program in that indication about a year ago. (¹ (Also see "InterMune Halts Phase III Actimmune Lung Disease Trial" - Pink Sheet, 6 Mar, 2007.))

Fourth-quarter research and development costs dipped by about 2 percent to $25 million, thanks to ending the IPF Actimmune study - called INSPIRE - a move that also helped InterMune cut general and administrative expenses by about 37 percent to $6.6 million.

Enter pirfenidone, for which InterMune expanded its Phase III program shortly after ending INSPIRE.

Whereas InterMune based the Actimmune effort in IPF on results from a small but promising Austrian trial, much more research supports the pirfenidone bid, InterMune Chief Medical Officer Steven Porter, said in an interview with "The Pink Sheet" DAILY.

"[Pirfenidone] has been around for many years, and explored more in academic trials than industry," he told the DAILY, noting that the mostly mysterious origins of IPF have made attacking the disease especially challenging.

The disorder apparently is a wound-healing process in which the body responds to one or more insults. It "sets up a scarring reaction in the lung that is progressive, as opposed to turning itself off as it should," Porter said.

He called IPF "incredibly complex," with many redundancies, mediators, and potentially confusing traits. Pirfenidone seems to work by inhibiting p38 gamma kinase, a master player in fibrosis.

IPF afflicts about 5 million people worldwide, and more than 200,000 in the U.S., including Michael Rosenzweig, president and CEO of the Chicago-based Pulmonary Fibrosis Foundation. Rosenzweig has lost a brother and sister to the disease, which seems linked to a mutation in the SP-C protein in some families.

In the fourth quarter, InterMune spent $6.2 million to buy out pirfenidone royalties and milestones that would have been due under the license deal with Marnac co-licensor KDL GmbH for pirfenidone. (² (Also see "Actimmune Trial INSPIREs InterMune To Enlarge Pirfenidone Studies, Make Cuts" - Pink Sheet, 20 Mar, 2007.))

Rights in Japan, Korea and Taiwan are licensed by Marnac and KDL to Shionogi, which has gained positive Phase III results in IPF with the drug, called S-7701 there. None of the data have yet been published in peer-reviewed journals.

Shionogi submitted pirfenidone for approval in Japan last March, and word is expected sometime in the first half of this year. Porter said one theory holds that Japanese firms dislike revealing trial data while approvals are pending, so details of the study might come later.

InterMune plans to disclose Phase III results in 2009 from its own two-study CAPACITY program, which pushed R&D expenses for the year to $105.8 million in 2007, 2 percent above the previous year.

"I would feel more comfortable making a positive statement if I had seen some [Phase III] data" on pirfenidone, Rosenzweig told the DAILY, adding that he is neutral on its prospects.

"The early-stage stuff really has no significance," he said, with a nod to the academic research mentioned by Porter.

"Right now, the researchers all need money to continue the operation of their centers, and InterMune has spread around quite a few dollars," he said. "I know all these people personally, and nobody has called me and said pirfenidone is a winner. If it was, I would probably be the first to know."

Also in the InterMune hopper: ITMN-191. The protease inhibitor partnered with Roche for hepatitis C has yielded encouraging top-line Phase Ib data, with full results expected this spring. The firms recently added a cohort to the monotherapy trial, bringing the total to four. They also will delay unveiling the data until all the numbers are available. The European Association for the Study of the Liver meeting in April or the Digestive Disease Week event in May are likely targets.

In the second quarter of this year, a 14-day, Phase II trial will test the compound - discovered through a collaboration with Array Biopharma - in combination with Roche's Pegasys (pegylated interferon alfa-2a).

Basel, Switzerland-based Roche also has the nucleoside polymerase inhibitor R1626, which proved strong in a Phase IIa study - an important finding, as the HCV fight turns increasingly to a combination-drug approach. Vertex Pharmaceuticals and Schering-Plough are developing HCV polymerase and protease inhibitors (³ (Also see "Roche Polymerase Inhibitor Shows Promise In Phase II" - Pink Sheet, 1 Nov, 2007.))

InterMune finished 2007 with about $235 million in cash and equivalents, enough to fund operations into 2010, according to estimates by Leerink Swann.

- Randall Osborne ([email protected])