Assistant Managing Editor

InterMune Inc. dipped on news that it would stop testing the highest dose in its ongoing Phase IIb study of protease inhibitor ITMN-191 in hepatitis C virus after reports of liver toxicity in three patients, offering a minor distraction for investors awaiting FDA word on the company's new drug application for fibrosis candidate pirfenidone.

Shares (NASDAQ:ITMN) fell $2.21, or 15.8 percent, to close Tuesday at $11.81.

The trial, funded by partner F. Hoffmann-La Roche Ltd., is expected to enroll about 210 patients total and is testing three doses of ITMN-191 in combination with HCV standard of care (peginterferon alfa-2a and ribavirin) vs. standard of care alone in 12-week and 24-week treatment regimens. To date, about 175 patients have been recruited, and the companies anticipate 12-week rapid virologic response data in the first quarter of 2010.

But three reports of Grade 4 elevations in alanine transaminase levels in the 900-mg twice-daily cohort, including one patient on concomitant allopurinol who had an elevation of total bilirubin, prompted the data monitoring committee to recommend halting that cohort. The cohorts testing 300 mg of pirfenidone three times daily and 600 mg twice daily will continue. Since the ongoing study remains blinded, InterMune could not disclose further details. At this time, the company expects no changes to the upcoming INFORM-2 trial, set to test ITMN-191 in combination with a polymerase inhibitor in HCV, though analysts say it's likely further trials will not include the 900-mg dose.

That's somewhat disappointing, given that data from the much-lauded INFORM-1 trial, which tested ITMN-191 plus a second antiviral - oral nucleoside analogue polymerase inhibitor RG7128 from Roche and Princeton, N.J.-based Pharmasset Inc. - showed an impressive 88 percent of treatment-naïve HCV patients achieving HCV RNA below the lower limit of quantification and 63 percent having with HCV RNA below the lower limit of detection after 13 days of treatment.

A lower 600-mg twice-daily dose of ITMN-191 plus RG7128 resulted in a lower viral load reduction, but that regimen was tested in a different patient population: treatment-experienced patients.

Despite the increased risk profile, analyst Liisa Bayko, of JMP Securities, still sees InterMune's drug as a contender, both in combination with standard of care, as well as in combination with other direct antivirals.

InterMune and Roche also are testing ITMN-191 in an ongoing ritonavir boosting study. In addition to INFORM-2, a longer duration Phase II trial combining direct-acting antiviral is expected to start next year. But, even with its lucrative partnership with Basel, Switzerland-based Roche and the headline-making INFORM-1 trial, InterMune's HCV program continues to get second billing next to pirfenidone, which remains the company's biggest value driver.

At most, ITMN-191 "provides a valuation floor, should pirfenidone not be approved," wrote Oppenheimer & Co. analyst Brian Abrahams.

Two weeks ago, InterMune submitted an NDA in idiopathic pulmonary fibrosis, a market that could range from $500 million to more than $1.5 billion, and has asked for a six-month priority review. (See BioWorld Today, Nov. 5, 2009.)

Though there are no drugs currently available for IPF, pirfenidone's approval isn't a sure thing.

The NDA is based on mixed Phase III data. One of the two Phase III studies conducted by InterMune missed its mark, though the company cited an overall positive treatment effect, in terms of the change in percent predicted forced vital capacity at week 72. A separate Phase III trial from Osaka, Japan-based Shionogi and Co. Ltd., which markets pirfenidone in Japan, was included as supportive data. (See BioWorld Today, Feb. 4, 2009.)

JMP's Bayko gives the drug about a 60 percent chance of approval. While "the NDA for pirfenidone is far from perfect, there appears to be reasonable evidence to support a therapeutic benefit to patients with acceptable safety," she wrote in a research note.

InterMune expects to file a marketing application in Europe in the first quarter of next year.

For now, pirfenidone remains unpartnered. The company already is gearing up to handle a launch on its own in the U.S. and possibly in Europe, though InterMune has said it remains open to an overseas deal. As of Sept. 30, the company had cash totaling about $139.7 million.

Published  November 18, 2009