On the heels of better-than-expected third quarter sales for idiopathic pulmonary fibrosis (IPF) drug Esbriet (pirfenidone) in Europe, Intermune Inc. priced a public offering to raise $84.5 million to help fund additional studies of Esbriet, including the pivotal trial needed for U.S. approval of the drug and studies to expand its use in IPF and other indications.

The Brisbane, Calif.-based firm priced 6.5 million shares at $13 per share, marking a small – 5.3 percent – discount from Tuesday’s closing price. Another $12.7 million in gross proceeds could come if underwriters Goldman, Sachs & Co., J. P. Morgan Securities LLC, JMP Securities LLC, Leerink Swann LLC, UBS Securities LLC and Wells Fargo Securities LLC exercise their overallotment option in full.

Shares of Intermune (NASDAQ:ITMN) fell $1.55, or 11.3 percent, to close Wednesday at $12.18.

Net proceeds are expected to total $79.6 million – or $91.5 million with overallotments – and will be directed primarily to the Esbriet program. The drug gained approval in Europe in 2011, and late that year, Intermune began rolling it out to European Union (EU) member companies starting with Germany. In its SEC filing, the company said it currently markets Esbriet in 13 of the 15 top-priority EU companies, with Spain and the Netherlands awaiting pricing negotiations.

Sales growth has been steady since launch. The company reported third quarter Esbriet revenue totaling $19.7 million, topping consensus estimates of $16.6 million, with growth driven both by new country rollouts and by growth in existing markets.

Along with ongoing commercialization activities in Europe, Intermune will use proceeds from the offering to support clinical development, including the confirmatory ASCEND (Assessment of Pirfenidone to Confirm Efficacy and Safety in IPF) study, which, if positive, would pave the way for approval of Esbriet in the U.S.

The FDA requested a confirmatory trial in its 2011 rejection of Esbriet’s new drug application, which was based on pooled data from two Phase III studies, CAPACITY 1 and CAPACITY 2, only one of which hit its primary endpoint. To give ASCEND a better chance of success, Intermune modified the patient population criteria, looking for a more homogenous group compared to the CAPACITY studies, and testing Esbriet for a shorter treatment duration. (See BioWorld Today, May 27, 2011.)

“Given the more homogenous IPF patient population compared to the CAPACITY studies, we expect Esbriet to show a statistically significant improvement in its primary endpoint of change in percent predicted forced vital capacity,” Leerink Swann analyst Howard Liang wrote in a research report on the company’s earnings.

Top-line data are expected in the second quarter of 2014.

However, even if data are positive, Esbriet isn’t the only late-stage player in the IPF space. Wells Fargo analyst Brian Abrahams pointed to two “likely” data readouts in the first half of next year that could have a “significant impact” on Intermune.

One of those is the INPULSIS Phase III program testing Boehringer Ingelheim GmbH’s nintedanib (formerly BIBF1120), a small-molecule tyrosine kinase inhibitor. The German big pharma completed enrollment in the two pivotal trials last year.

Also on tap are data from the National Institutes of Health-funded PANTHER Phase III study, which is designed to test n-acetylcysteine (NAC), an antioxidant treatment that has been widely used with IPF despite a lack of clear data showing efficacy as a monotherapy. PANTHER is designed to test NAC alone vs. placebo.

Combinations involving NAC also have been hailed as possible regimens in IPF and are included in Intermune’s strategy. In fact, the biotech recently launched a Phase II study dubbed PANORAMA to test the safety and tolerability of NAC in patients with IPF who are being treated with Esbriet.

Beyond IPF, Intermune is evaluating Esbriet, a small molecule that inhibits the synthesis of TGF-beta, in systemic sclerosis-related interstitial lung disease. A Phase II study (LOTUSS) is ongoing in that indication. And, as Wells Fargo’s Abrahams noted, Intermune is working on a life-cycle management strategy for Esbriet, “pursuing optimized formulations to improve tolerability and second-generation pirfenidone analogues with greater potency, enhanced PK and a better safety profile.”

The firm has plans to look at other antifibrotic targets as well, possibly in-licensing or acquiring additional assets as well as advancing internal programs.

As of Sept. 30, Intermune had a cash position of $337.2 million. Following the offering, set to close on or about Nov. 12, the firm will have about 88.5 million shares outstanding – 89.4 million with overallotments.

Karyopharm Raises $109M in IPO

Becoming the 34th biopharma firm to price an initial public offering (IPO) in the U.S. this year, according to BioWorld Snapshots, cancer drug developer Karyopharm Therapeutics Inc. is hauling in $108.8 million in an upsized offering.

The Natick, Mass.-based firm increased the number of shares from 5.7 million to 6.8 million, pricing them at $16 apeice, at the high end of its proposed range. The newly traded stock (NASDAQ:KPTI) jumped to $19 on debut, though it fell throughout the day, gaining only 5 cents, to close at $16.05.

Like most other biotechs to go public this year, Karyopharm filed an S-1 under the Jumpstart Our Business Startups Act, originally seeking to raise $80 million. The IPO filing came just two months after Karyopharm padded its coffers with a $19 million Series B extension. (See BioWorld Today, Aug. 2, 2013, and Oct. 8, 2013.)

Proceeds from the IPO will go toward the firm’s pipeline of Selective Inhibitors of Nuclear Transport (SINE) compounds, which are designed to inhibit the nuclear export protein XPO1. Lead SINE compound selinexor (formerly KPT-300) is in Phase I testing in pre-treated relapsed and/or refractory hematological and solid tumor cancers, with plans to move into Phase II by early 2014.

Karyopharm’s pipeline also includes an inflammatory disease candidate, KPT-350, which is in preclinical development. A SINE compound related to selinexor is in pivotal studies to treat lymphomas in dogs.

As of June 30, the company had about $17.7 million in cash and equivalents. Following the IPO, it will have about 28.7 million shares outstanding.

BofA Merrill Lynch and Leerink Swann acted as joint bookrunners on the deal.

In other financings news:

• Aerpio Therapeutics Inc., of Cincinnati, Ohio, closed a new $9 million extension to a $27 million series A financing raised in 2012. The round was led by Satter Investment and Management LLC and joined by Novartis Venture Funds, Kearny Venture Partners, Venture Investors LLC, Triathlon Medical Ventures and Athenian Venture Partners. Proceeds will support advancement of AKB-9778, including a Phase II program to study efficacy of the drug as monotherapy and in combination with a VEGF inhibitor in DME patients.

• Discovery Laboratories Inc., of Warrington, Pa., said it completed its public offering to sell an aggregate of 25 million shares priced at $2 each. Net proceeds totaled about $47 million and will be used primarily to support the commercial introduction of Surfaxin (lucinactant) for the prevention of respiratory distress syndrome in premature infants at high risk, as well as to advance the Aerosurf program, including a Phase II trial, and for general corporate purposes. Stifel and Piper Jaffray & Co. acted as joint bookrunning managers, while Lazard Capital Markets LLC served as co-lead manager and Roth Capital Partners LLC acted as co-manager.

• Lion Biotechnologies Inc., of Los Angeles, said it completed its private financing for gross proceeds of $23.3 million. Net proceeds totaled about $21 .6 million and will be used to move its lead T-cell program into a Phase III trial in metastatic melanoma. Funds also should support additional combination studies of check point inhibitors and T cells. Roth Capital Partners LLC served as lead placement agent, with Highline Research Advisors LLC acted as co-placement agent. Quogue Capital LLC was the lead investor, with several additional institutions participating, including Perceptive Advisors LLC, Venbio Select Advisor, Three Arch Opportunity Fund and Broadfin Capital LLC.

• Ocera Therapeutics Inc., of San Diego, said it obtained commitments to purchase common stock and warrants in a private placement, with gross proceeds expected to total about $28 million. The financing was led by new investors Vivo Capital and Venrock, with additional participation from institutional investors Deerfield, Great Point Partners LLC, funds managed by QVT Financial LP, RA Capital Management, Interwest Partners and Three Arch Opportunity Fund. Under the securities purchase agreement, Ocera will sell units consisting of 3.9 million shares of common stock and warrants to purchase up to 788,177 additional shares, with each unit priced at $7.11. Proceeds will be used to advance clinical and nonclinical development of OCR-002, ornithine phenylacetate, for the treatment of hepatic encephalopathy. Ocera is planning to enroll patients in a Phase IIb study of the intravenous form of OCR-002 later this year and will work on the oral version of the drug next year.

• Trevena Inc., of King of Prussia, Pa., set a price range for its proposed initial public offering (IPO). The firm plans to offer 5.8 million shares priced between $12 and $14, which would result in gross proceeds of $75.4 million at the midpoint range. Funds would support the firm’s work in cardiovascular disease, including lead drug TRV027, which is set to start Phase IIb testing in acute decompensated heart failure. The company, which filed for an IPO earlier this year, aims to list on Nasdaq under the ticker “TRVN.” Barclays Capital Inc. and Jefferies LLC are acting as joint book-running managers, while Canaccord Genuity Inc., JMP Securities LLC and Needham & Co. LLC are acting as co-managers. (See BioWorld Today, Oct. 11, 2013.)

• Vital Therapies Inc., of San Diego, set terms for its proposed initial public offering (IPO), aiming to offer 4.4 million shares at a price range of $16 to $18. At the midpoint range, the company would bring in gross proceeds of $74.8 million. Vital Therapies filed for an IPO earlier this year, originally hoping to raise $86.25 million to help pay for a Phase III program with Elad, an external, artificial liver system based on human liver-derived cells. Upon pricing, the firm would list on Nasdaq under “VTL.” Credit Suisse and William Blair are acting as joint bookrunners. (See BioWorld Today, Oct. 15, 2013.)