InterMune's New Lung-Disease Drug Doesn't Deserve Its Hype
Analysts predict InterMune's drug Esbriet, newly approved for a fatal lung disease called idiopathic pulmonary fibrosis, can exceed $1 billion in peak sales. With marketing limited to the EU and little proof the drug slows disease progression, however, blockbuster status remains uncertain.
European Union approval for Esbriet covers the treatment of patients with mild to moderate idiopathic pulmonary fibrosis in all 27 EU member countries. Given expected EU country reimbursement timelines, InterMune (ITMN) expects to begin selling the drug in September 2011, starting with Germany. It will launch in the key markets of France, Spain, and Italy in the first half of 2012, and anticipates having a sales presence "in all or substantially all of the 10 most important pharmaceutical markets in the EU" by summer 2012.
Idiopathic pulmonary fibrosis (IPF) is a condition in which the lung tissue -- over a period of time -- becomes thickened, stiff, and pathologically scarred. Patients experience a gradual decrease in quality of life due to progressive loss of lung function (difficulty in breathing), and usually die within 3-5 years of diagnosis (mean life expectancy is 2-3 years). IPF affects more than 100,000 patients in the 10 nations comprising the most-populated European countries, according to the Pulmonary Fibrosis Foundation.
To date, save for the combination of corticosteroids (prednisone or equivalent) and an immunosuppressant agent (such as the organ-transplant rejection drug azathioprine or cancer-fighting agent cyclophosphamide) -- or, lung transplantation (last-resort option) -- few treatment therapies have proven effective against IPF, including biological response modulators (such as, Enbrel, co-marketed by Amgen (AMGN) and Pfizer (PFE), and Novartis' (NVS) cancer-fighting agent Gleevec).
Gilead Sciences (GILD) recently announced, too, that it was terminating its phase III trial (ARTEMIS-IPF) studying its pulmonary arterial hypertensive drug Letairis (ambrisentan) for the treatment of IPF due to lack of efficacy.
Current thinking in IPF scientific circles holds that exposure to an inciting agent (such as smoke, environmental pollutants, or viral infections) initially results in alveolar epithelial damage, triggering a cascade of both fibrotic and inflammatory responses. Esbriet (pirfenidone) is an orally active, small molecule drug that attenuates the synthesis of both fibrotic and inflammatory proteins manufactured in response to initial assault of lung tissue.
With progression of the disease leading to inevitable death for 70 percent of patients within five years of diagnosis, Wall Street analysts and investors alike are giddy toward Esbriet's commercial prospects: Esbriet is the first medicine approved specifically for IPF, and the EU labeling provides a broad indication for usage -- starting in patients with mild or moderate IPF, representing about two-thirds of affected patients.
Echoing sentiments from many of his peers, Avik Roy, an equity research analyst at Monness, Crespi, Hardt, opined EU approval could prove a watershed event for InterMune: "Esbriet has billion-dollar potential in Europe alone," Roy wrote in a recent research report to clients.
Treatment costs are expected to run about $21,000 per year, or about €15,000.
Shares of InterMune have gained more than 285 percent, or some $33 in price to just over $44 a share, in the last six months. The Brisbane, California-based company's market capitalization recently stood at $2.62 billion. Not bad for a struggling biotech -- whose one approved product, Actimmune (interferon gamma-1b), marketed for a rare, inherited immunodeficiency disorder called chronic granulomatous disease, generated sales of just $5.79 million in 2010, down almost 80 percent from the prior year.
InterMune's internal forecasts appear even more bullish than Wall Street, with management pegging the market opportunity for Espriet in the top 10 EU countries as high as $3 billion, according to Zacks Equity Research."...sweating in the sun that melted the wings' wax ...unsignificantly off the coast...
there was ... a splash quite unnoticed ... this was Icarus drowning."
~ American poet William Carlos Williams, Landscape with the Fall of Icarus
Both internal and Wall Street projections for Esbriet's sales potential could prove too much of a stretch, considering the global IPF market was valued at $88 million in 2009 (nominal sales don't recognize off-label RX use, but do underscore a market under-served due to a lack of approved products). Nonetheless, even with new growth drivers, such as Esbriet and other novel treatments in development, from LPA1 receptor antagonists to protein inhibitors (like NeoPharm's Interleukin-13 receptor-targeted cytotoxin), the combined U.S. and EU market for IPF is expected to climb no higher than about $462 million by 2017, according to industry analyst BioPortfolio.
As in Greek mythology, where Icarus ignored the warning of his father Daedalus, this unbridled optimism surrounding Esbriet runs significant risk of flying too close to the sun. Closer scrutiny of Esbriet's product characteristics (SmPc), authorized by the European Committee for Medicinal Products for Human Use (CHMP), suggest hype is outdistancing hope:
- Efficacy. The supposed benefits with Esbriet are its ability to reduce the rate of deterioration of lung function, measured as slowed decline of (percent predicted) Forced Vital Capacity (FVC). Although CHMP recommended the granting of a marketing authorization, the committee noted "demonstration of this effect in the clinical studies was modest."
That controversy surrounded the CAPACITY trial results shouldn't be startling news to industry watchers. InterMune received a complete response letter from the FDA back in early May 2010 -- denying regulatory approval and requesting data from an additional clinical trial (before it would reconsider labeled use for Esbriet stateside). Albeit an FDA panel had recommended on March 9 that the drug be approved for use in the treatment of patients with IPF, it wasn't lost on the full regulatory body that a majority of the members of the Pulmonary - Allergy Drugs Advisory Committee had expressed reservations "that a clinically meaningful effect" on delaying disease progression had been evidenced by extended treatment with Esbriet usage.
Committee members also vocalized concerns of "a heterogeneity effect," opining "more data and exploration was needed to examine the subset of patients for which the drug was (truly) beneficial."
- Quality of life. Granted, no satisfactory treatment options exist for patients languishing from IPF. But does that mean health-care providers should blindly prescribe an agent with questionable efficacy -- and, might negatively impact quality of life?
- Frequent physician visits are mandatory during the first six-months of therapy, as liver function tests must be performed at monthly intervals for the first 180 days, and then every three months thereafter;
- A reported one-in-three Esbriet-treated patients will likely suffer from dyspepsia, diarrhea and/or nausea, according to SmPc disclosures;
- Compliance could become even more vexing a concern, too, as the dosing schedule changes on Days 8 and 15;
- Furthermore, more than 28 percent and 12 percent of Esbriet-treated patients, respectively, reported rashes or photosensitivity reactions in prior clinical trials. Patients are being urged to avoid direct exposure to sunlight and are being instructed to lather up with a sunscreen lotion daily (and wear clothing that affords additional protection against sun exposure); and,
- As Esbriet is primarily metabolized in the liver, physicians are being urged to tell patients to avoid consumption of grapefruit juice (could adversely affect drug efficacy) and to avoid use of certain agents metabolized by the same hepatic enzymes, such as the antibiotic ciprofloxacin or the anti-depressants Paxil (paroxetene) and Prozac (fluoxetene).
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