UPDATE 2-InterMune scraps Actimmune trial for lung disease

(Adds details, analyst's comment)

BANGALORE, March 5 (Reuters) - InterMune Inc. (ITMN.O) said it discontinued the late-stage trial of its immune system booster Actimmune in patients with idiopathic pulmonary fibrosis (IPF) as it did not improve survival.

Shares of the biotechnology company fell more than 18 percent in late electronic trade.

IPF is a disabling and ultimately fatal disease that causes inflammation and scarring in the lungs.

Susquehanna Financial Group analyst Jason Kolbert said the news was "a negative surprise," but added that the fundamental story in InterMune has not changed.

"Investors had very low expectations for a positive outcome for Actimmune," Kolbert said by phone.

In an interim analysis of the trial, that included 115 deaths, the company found no statistically significant difference in overall mortality between the patients given Actimmune and those given a dummy drug, InterMune said.

The study was conducted to evaluate the safety and efficacy of Actimmune in patients with mild to moderate impairment in lung function and the main goal of the study was survival time, the Brisbane, California-based company said.

The data monitoring committee found the overall survival result crossed a "predefined stopping boundary" for lack of benefit of Actimmune relative to placebo, or the dummy drug, InterMune said in a statement.

The boundary was developed to allow for early study termination if interim data were statistically inconsistent with a meaningful effect of Actimmune, it said.

Kolbert said "The story in InterMune will be driven by the outlook for pirfenidone in IPF as well as InterMune 191 for Hepatitis C."

InterMune is studying the use of pirfenidone for the treatment of patients with IPF in Phase III clinical trials, known as Capacity.

Shares of the company fell to $22.88 in late electronic trade, after closing at $28.05 on the Nasdaq. (Reporting by Rakesh Sharma in Bangalore)