InterMune Inc. (ITMN)

[ghmm]

Some More thoughts on InterMune's news today #msg-25786271
[Forward looking statements may follow and may be reading too much into things]
On Dose Tested
1. We know the InterMune was going to test BID and TID and the statement says 300mg DAILY. We also know that Vertex doses at 800mg TID. So we are probably looking at efficacy with 1/8th the dose that Vertex used.
2. As the PI's developed and it became clearer that no way mono-therapy was going to work, InterMune calls became more focused on finding an efficacious dose that is well tolerated. There is a subtle distinction from what Vertex did. From my perspective it appeared that Vertex was looking to get maximal viral knock-down in the hopes of monotherapy then they got stuck at 800mg TID and exacerbation of the rash. InterMune’s mention of preparing for triple combination study reaffirms their stated goal to get efficacious well tolerated dose for combination use and not necessarily the maximum viral knock-down that can be achieved monotherapy.
3. The fact that InterMune stated the principal goals of the study were reached my guess is BID dose was found. While certainly they could have discovered that TID is necessary to maintain levels of the drug one would think they may have tried to push the dose more before moving on to looking into combination therapy.
4. So why keep pushing the dose in monotherapy? Here I have a disagreement with JPMorgan analyst Richard Smith who called the news “mixed”. Well he was surprised I can think of a few reasons to keep pushing the dose. First in patients who are not naïve to therapy and in other genotypes perhaps a high dose will be required so we need to make sure the drug can be safely titrated upward. Second, the PI may be used with other regimen’s (such as perhaps altering the PEG/ Ribavirin regimen and/or a Polymerase or other Proteases). Third (and perhaps not so significant) if people start comparing 191 head-to-head with telaprevir a more favorable comparison may be possible if the drug is studied as VX-950 was in early stage trials when the goal was maximum (monotherapy) efficacy.
On Price Movement
The stock was up significantly today but one needs to keep in mind the stock was in the mid 30’s less then a year ago. Lets recap what has happened since:
1) Actimmune INSPIRE study terminated. I had about a $10 value pegged to this portion of the company (others had less and the immediate drop was less)
2) People had fears that 191 had some sort of side-effect issue in 1A
3) The company did a financing for a little more then 4 million shares.
4) Other HCV compounds presented some interesting findings. People soured on Vertex and others (like us).
Now the positives
1) We not only went into 1B but found a safe and efficacious dose for combination use.
2) Vertex stumbled
3) Not only has 191 provided interesting findings in 1B but a Polymerase under Roche’s control (Pharmasset) is proving to be quite interesting as well. Roche is in better position then any other company to advance many other permutations of combination therapy (it doesn’t hurt that they have the financial resources to do so as well).
4) In addition to the company increasing duration and size of CAPACITY study (for Pirfenidone) the trial over enrolled (increased power) and the clock is advancing towards data and Shionogi hearing from the Japanese Health Minister (though we have no financial interest it would give some added validity to the results found).
5) The company made a heck of deal buying out the Pirfenidone royalty.
6) People forget that the we have a very active second generation Protease development program and we not only would get milestones but a to be negotiated up-front payment. In addition to the second array collaboration that produced a second hepatology target.
7) There are more hints on the other preclinical compounds that perhaps later this year they will be identified (beyond what has been).