12:00 AM
 | 
Jan 07, 2002
 |  BioCentury  |  Finance

Ebb & Flow

InterMune (ITMN) lost $207 million of its value last week as investors dumped shares on rumors that the company was seeing a larger-than-expected dropout rate for its Phase III trial of Actimmune interferon gamma-1b in idiopathic pulmonary fibrosis (IPF). The Street chatter was that the company was seeing a dropout rate as high as 30%, in sharp contrast to the less than 5% dropout rate ITMN had seen as of Nov. 26, when it provided an update to analysts in New York.

However, the sellers will find out today the price of speculating on a rumor, as the company plans to announce that less than 5% of patients have withdrawn from the study prior to meeting the primary endpoint, which is time to disease progression, as measured by either a 10% decline in lung function or a 10% decline in oxygen in the blood, or death.

Patients can elect to drop out of the trial if they hit either of the disease progression measures, but that would not affect the power of the study.

The rumor mill was fueled by a Dec. 18 research report from Sturza's Institutional Research, which began coverage with a "sell" rating. The report raised questions about ITMN's ability to expand the indication for Actimmune to include the IPF indication, which accounts for the majority of sales thanks to off-label use. The product is approved for both chronic granulomatous disease (CGD) and severe, malignant osteopetrosis; but of the $35-$36 million of Actimmune sales ITMN expects to post for 2001, about $30 million is from the IPF setting.

Sturza's main concern is that ITMN will announce a delay in the IPF program after the sizing analysis, which will occur between mid-January and mid-February. Sizing analysis is a standard approach to ensuring that a trial is powered to achieve statistical significance.

On Friday, however, ITMN told Ebb & Flow that the retention rate is firmly in line with the assumptions underlying the statistical power and sample size of the trial. Sixty percent of the study is complete in terms of patient treatment days. The company noted that a 5% dropout rate over the first 60% of the trial implies an 8.3% dropout rate over the full course of the trial. That would be well within the 12% rate ITMN built into the original trial plan, which had the company enrolling 260 patients.

The study actually has enrolled 330 patients. Even at a 12% drop out rate, ITMN said, the trial is still 94% powered to show statistical significance. Most efficacy trials are powered within the 80-90% range.

ITMN expects to complete the trial by early August, report the data by November, and file for U.S. approval by year end. The company also was to announce today that the compound has received Fast Track designation from the FDA for IPF, further supporting ITMN's prior guidance for an '03 launch.

ITMN's $7.25 (14%) slide last week to $43.25 values the company at $1.2 billion.

January effect?

The 24% updraft in the BioCentury 100 in the fourth quarter may leave some market watchers wondering whether there's any room left for a "January Effect" coming out of this week's 20th Annual J.P. Morgan H&Q Healthcare Conference in San Francisco, where 160 presenting companies hope to give...

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