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InterMune Wins Amid More Takeover Rumors

By Dave Williamson - Mar 7, 2014 at 7:54PM

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InterMune pops today on buyout rumors, but is there anything substantiating the buyout talk?

InterMune ( ITMN.DL ) was the big winner in biotech today, up around 10% on rumors of a buyout. However, in this video from Friday's Market Checkup, Motley Fool health-care analyst David Williamson says that these rumors are as of yet completely unsubstantiated, and should not constitute an investing thesis.

He does discuss, however, why the company would make an attractive acquisition. Its first-in-class idiopathic pulmonary fibrosis drug Esbriet recently passed a new phase 3 trial, and is up again for FDA approval; the drug was approved in Europe in 2011. Esbriet makes up the entirety of InterMune's value, which makes it a very pure play, and a nice addition to just about any company's portfolio. David makes a prediction for who may buy the company down the road, discusses how big the upside could be for the drug, and cautions investors regarding how the downside could look, as well.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis – even one of our own – helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.

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