InterMune Inc shares jumped as much as 15 percent on Monday, after the biotechnology company said it would resubmit for U.S. approval its drug to treat a fatal lung disease after it was successful in a late-stage study.
Analysts said the results should position InterMune's lead drug, pirfenidone, as the standard of care over Boehringer Ingelheim's experimental drug nintedanib, in patients with idiopathic pulmonary fibrosis (IPF).
Pirfenidone is sold as Esbriet in the European Union and Canada.
""In the end, the mortality differences may be what ultimately influences treatment decisions most, and in that area, we believe InterMune has the edge," Wells Fargo analyst Brian Abrahams said on Monday.
Abrahams said there was a 95 percent chance Pirfenidone would be approved in the United States. He raised his price target on InterMune's stock to $48-$50 from $41-$43.
The stock jumped to $39.45 on the Nasdaq on Monday morning amid heavy volume.
InterMune Chief Executive Dan Welch said it plans to resubmit the marketing application for the drug in the coming weeks.
The U.S. Food and Drug Administration had rejected Pirfenidone in 2010, unconvinced of its efficacy, despite a recommendation for approval by an independent committee.
InterMune said on Sunday Pirfenidone proved more effective than a placebo in the trial.
Stifel Nicolaus analyst Stephen Willey raised his price target on the stock to $51 from $45, and estimated U.S. peak sales of $1.1 billion.
IPF, whose cause is undetermined, is characterized by a progressive decline in lung function due to scarring which causes an irreversible loss of the tissue's ability to transport oxygen.
There exist no FDA-approved treatments for IPF, which affects about 128,100 people in the United States, with about 48,000 new cases diagnosed annually, according to the Coalition for Pulmonary Fibrosis.
More than seven million shares of the Brisbane, California-based company changed hands by noon — thrice their 10-day moving average — making them one of the top movers of the exchange.
(Reporting by Natalie Grover in Bangalore; Editing by Joyjeet Das)