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Nice Results for InterMune's Orphan Drug

On Tuesday, InterMune (Nasdaq: ITMN  ) hosted a conference call to discuss data about its lead drug. The drug in question is its idiopathic pulmonary fibrosis (IPF) compound, pirfenidone, and the conference call concerned data that InterMune's collaborative partner, Shionogi, presented at a medical conference.

The Shionogi pirfenidone data was from a phase 3 study of the drug. While Shionogi owns the Japanese rights to pirfenidone, InterMune owns the rights to the drug throughout most of the rest of the world.

The study results presented at the American Thoracic Society conference this week showed that pirfenidone succeeded in a statistically significant manner on both its primary endpoint, improving patients' vital capacity (a measure of lung capacity), and its main secondary endpoint, improving progression-free survival.

What makes this Shionogi study data so important to InterMune is that it could serve as a window into InterMune's own phase 3 trials with the drug, which are expected to produce data in January of next year.

InterMune mentioned on the conference call that it is "confident that the results of the Shionogi trial are directly relevant (to its own studies).” The company was using a bit of biotech speak there, which all drugmakers have to do to prevent lawsuits (or, in some cases, to unjustly pump up expectations for upcoming study results). There are in fact some key differences between Shionogi's pirfenidone studies and InterMune's ongoing studies with the drug, and these differences do ramp up the risk a bit for InterMune, but there’s nothing that stands out as a particular cause of concern.

Drugs to treat orphan indications with small patient populations can still go on to produce hundreds of millions of dollars in sales. Just look at what Genzyme (Nasdaq: GENZ  ) and fellow Rule Breakers pick BioMarin (Nasdaq: BMRN  ) have done with the multiple orphan drugs that they sell, and what developing a compound for an undertreated disease can do for a drugmaker's market capitalization.

Like all biotech analysts, I've made my fair share of bad calls over the years about the prospects of some drug candidates. Nothing is ever certain in drug development, and the unexpected can always sink even the best drug candidates. That being said, considering the multiple positive study results produced with pirfenidone in IPF and in other diseases affecting the lungs, the odds look reasonably strong that InterMune will announce positive phase 3 data in January next year.

More Foolishness on drugs without parents:

InterMune and BioMarin are active picks of our Rule Breakers newsletter. You can check out all our other recommendations, as well as get access to our message boards and exclusive content, with a 30-day free trial.

Fool contributor Brian Lawler does not own shares of any company mentioned in this article. You can breathe easier after reading the Fool's disclosure policy.

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