* European panel recommends drug for marketing approval
* To launch drug in top 5 European countries by mid-2012 *
Analysts see peak sales of $1 bln in EU
* Shares up 104 pct
(Rewrites; adds details, analyst comments, updates stock
By Krishnakali Sengupta and Shravya Jain
BANGALORE, Dec 17 InterMune Inc's ITMN.O lung
treatment received backing from the European health regulator,
putting the drug on the road to potential blockbuster status
and reviving takeover chatter about the company.
InterMune shares, which had tanked 80 percent after the
drug was denied U.S. regulatory approval in May, more than
doubled to $30.57 Friday morning on Nasdaq. About 12 million
shares had traded hands, 21 times the stock's average volume.
Analysts said the European panel's decision on the drug
Esbriet came much earlier than expected and removed a
long-pending overhang on the stock.
"This is a huge positive for the stock because expectations
were fairly low and there is minimal visibility into regulatory
review in Europe," Robert Baird & Co analyst Thomas Russo said.
Esbriet is being developed for the treatment of mild to
moderate idiopathic pulmonary fibrosis (IPF) -- a rare, fatal
condition where lungs suffer scarring due to unknown causes.
Esbriet, which is already marketed in Japan under the brand
name Pirespa by Shionogi & Co Ltd (4507.T), has orphan drug
designation in Europe, giving it 10 years of marketing
exclusivity in all 27 member countries of the European Union.
Most analysts expect the drug to be worth $30,000-$50,000
per patient per year and hit peak sales of $1 billion in Europe
InterMune expects to get European approval for Esbriet by
February or March and said it would first launch the drug in
Germany in the third quarter of 2011, and follow with launches
in France, Spain, Italy and the UK by the middle of 2012.
Canaccord Genuity analyst Adam Cutler expects the company,
which has been viewed as an attractive takeover target, to be
profitable as soon as the end of 2011.
Think Equity LLC analyst Brian Skorney said, "A number of
big pharmas like Bristol-Myers Squibb (BMY.N), Novartis AG
NOVN.VX, Pfizer Inc (PFE.N), which are in look out for orphan
designated drugs in inflammatory and pulmonary indications,
will find InterMune attractive."
Skorney said today's announcement was unlikely to effect
the U.S. Food and Drug Administration's decision regarding the
drug, but said the agency was likely to come under political
pressure given the larger need and the EU recommendation.
In May, the FDA had asked InterMune to conduct a new
clinical trial to prove the drug's efficacy. [ID:nSGE6440KB]
"The FDA will ultimately require another clinical trial,
but the company won't probably start another trial before the
end of 2011," Skorney said.
(Reporting by Krishnakali Sengupta in Bangalore; Editing by S.
John Tilak, Anne Pallivathuckal)