Roche To Pay $8.3B For Intermune: Who’s Next In Pulmonary Fibrosis?

8/25/14Follow @alexlash

Swiss pharmaceutical giant Roche said Sunday it would buy Intermune (NASDAQ: ITMN) of Brisbane, CA, for $8.3 billion. It’s by far the high water mark of a growing wave in recent years of deals for drugs to treat pulmonary fibrosis, a deadly scarring of the lungs that often has no known cause.

The idiopathic version—meaning its cause remains mysterious—kills 40,000 people a year in the U.S. alone. Of all pulmonary fibrosis cases, including those with a known cause such as infection, autoimmune disease, or environmental toxins like those inhaled by firefighters, two-thirds end in death within five years of diagnosis, according to the Coalition for Pulmonary Fibrosis in Culver City, CA.

Intermune garnered such a high price because it has managed to bring a pulmonary fibrosis drug to market, the first drug maker to do so. Its pirfenidone, which treats the idiopathic version, is sold in Europe under the brand name Esbriet. It’s been approved in Canada, too, but the public health system won’t pay for it. U.S. regulators should make the call on pirfenidone in late November.

Rumors of Intermune’s acquisition have bubbled up for months, most recently in mid-August, and its stock price has nearly tripled since late February. (It closed at $53.80 on Friday, and Roche has agreed to pay $74 a share, a 38 percent bump.)

But pulmonary fibrosis has been on Big Pharma’s radar for some time. Bristol-Myers Squibb bought San Diego’s Amira Pharmaceuticals in 2011 for $325 million, with up to $150 million more in milestones. Then Biogen Idec bought Stromedix in 2012 for $75 million upfront, with nearly $500 million in potential milestone payments. (Stromedix originally got the drug from Biogen Idec, where Stromedix CEO Michael Gilman had been a top research executive; it went full circle back to Biogen—as did Gilman for a limited time—with the deal.)

The scientists who founded Amira went their separate ways. Two of them, Jilly Evans and John Hutchinson, have helped launch PharmAkea Therapeutics, also based in San Diego, which is working on what it says are therapies targeting cancer and fibrotic diseases. The startup came out of stealth last October, already tied to the hip of Celgene, which is putting in $35 million over three years in exchange for equity and an option to buy the company. (We don’t know how much Celgene might have to pay to acquire PharmAkea, but chances are it won’t be $8 billion.)

Other companies to watch now that Roche has upped the ante on pulmonary fibrosis acquisitions:

—Privately-held Promedior of Lexington, MA, which has done Phase 1 tests of its lead candidate PRM-151 in idiopathic pulmonary fibrosis but is actually a bit farther ahead with it in myelofibrosis, a cancer that includes scarring of the bone marrow. Xconomy reported on the myelofibrosis program earlier this year.

—Genoa Pharmaceuticals, which Xconomy profiled in 2012, is working on an aerosol version of pirfenidone that it believes will avoid the side effects that come with Intermune’s oral pill. Genoa received orphan drug designation earlier this month from the FDA.

Alex Lash is Xconomy's National Biotech Editor. He is based in San Francisco. Follow @alexlash

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