InterMune shares bludgeoned after FDA demands new trial for pirfenidone

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InterMune took its best case for pirfenidone to the FDA, and lost. The agency ruled Tuesday afternoon that the developer would need to mount a new clinical trial for the drug before it could provide a green light for marketing. Shares of InterMune were halted ahead of the decision at $45.44. But once investors had a chance to act on the news, the developer's share price (ITMN) plunged a stunning 81 percent.

InterMune only hit the primary endpoint in one of two late-stage trials. But with no approved therapies available for idiopathic pulmonary fibrosis -- a lethal disease characterized by inflammation and scarring of the lungs -- and a recommendation from an influential panel of agency experts, the news was a bitter pill to have to swallow.

"After the positive FDA Advisory Committee meeting of March 9 at which the Committee recommended the approval of the pirfenidone NDA by a 9-3 margin, we are disappointed by this outcome," noted InterMune CEO Dan Welch. "We will meet with the FDA as soon as possible to understand their points of view and to determine the most appropriate path forward to expeditiously make Esbriet available to the approximately 100,000 patients with IPF and their families who suffer from this terrible disease and for whom no FDA-approved medicines exist."

Over at TheStreet this morning, Adam Feuerstein notes that InterMune's failure to sell shares in the company after the advisory panel vote left it in bad shape for raising more money for a new clinical trial. And for IPF patients in the U.S., says Andrew Pollack of the New York Times, the only available treatment remains a lung transplant.

InterMune still has near-term hopes for the European market, though, where it filed for an approval in March. Here's more on the mixed late-stage data. But InterMune has faced a rocky road in its quest to treat IPF. Last fall former CEO Scott Harkonen was convicted of wire fraud for his role in writing a press release that made false claims about Actimmune's ability to treat IPF. He faces up to 20 years in prison as a result.

- here's the press release
- here's the story in TheStreet
- and here's the report from the New York Times