Roche plans to acquire InterMune for $8.3 billion cash, in a deal that expands the buyer’s respiratory product portfolio with the seller’s lead product anticipated for launch later this year, pirfenidone for idiopathic pulmonary fibrosis (IPF).
Under the deal––announced yesterday and expected to close by year’s end—Roche will launch a tender offer no later than Friday, August 29, to acquire all outstanding shares of InterMune common stock. In return, InterMune agreed to file a statement containing the unanimous recommendation of its board that the company’s shareholders tender their shares to Roche.
The acquisition is subject to the expiration or termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 and other customary conditions. The boards of both companies have approved the deal.
Headquartered in Brisbane, CA, InterMune focuses on R&D and commercialization of new therapies in pulmonology and fibrotic diseases. The company’s lead product pirfenidone is an oral anti-fibrotic agent designed to inhibit the synthesis of TGF-beta, which controls cell proliferation and differentiation and plays a key role in fibrosis. Pirfenidone also inhibits the synthesis of TNF-alpha, a cytokine known to have an active role in inflammation.
Pirfenidone is under regulatory review in the U.S., with a target or PDUFA date of Nov. 23, after winning approvals for IPF indications in the E.U. in 2011, and in Canada a year later. In both markets, InterMune sells the drug under the trade name Esbriet®.
However, in the U.S., the FDA held off approving pirfenidone in 2010 while recommending that InterMune carry out an additional Phase III clinical trial to support the drug’s efficacy. Results of this study, known as the Assessment of Pirfenidone to Confirm Efficacy and Safety in IPF (ASCEND) trial, were part of InterMune’s NDA resubmission in May.
On July 17, the FDA declared pirfenidone to be a breakthrough therapy. The agency gives that designation to drugs intended to treat a serious or life-threatening disease or condition when preliminary clinical evidence indicates that those drugs may demonstrate substantial improvement over existing therapies on one or more clinically significant endpoints.
Roche said it will prepare for the expected U.S. launch of pirfenidone by planning “a smooth transition” of InterMune employees and operations into the pharma giant. Until now, InterMune has advanced to Phase II its LOTUSS study, which is assessing Pirfenidone in patients with systemic sclerosis-related interstitial lung disease (SSc-ILD).
Pirfenidone would join a Roche pulmonary medicine portfolio that includes two existing products, Pulmozyme (dornase alfa), a daily inhaled drug for cystic fibrosis; and Xolair (Omalizumab), an injected injected anti–Immunoglobulin E (IgE) antibody indicated for moderate to severe persistent asthma in patients with a positive skin test or in vitro reactivity to a perennial aeroallergen and symptoms inadequately controlled with inhaled corticosteroids. In the U.S., Roche’s Genentech subsidiary markets Pulmozyme and co-markets Xolair with Novartis.
Roche’s portfolio also includes two investigational compounds designed to fight asthma—RG7449 (quilizumab), a humanized monoclonal antibody that binds to the M1 prime segment of membrane IgE; and RG3637 (lebrikizumab), a humanized monoclonal antibody designed to reduce airway inflammation, a key feature of asthma, by blocking the action of the interleukin-13 cytokine.
Earlier this month, Roche told ClinicalTrials.gov it was recruiting patients for Phase III trials of RG3637 for asthma, and Phase II trials assessing the compound for asthma and IPF—while a single Phase II trial of RG7449 in adults with Chronic Spontaneous Urticaria and resistance to antihistamine treatment was ongoing but not recruiting patients.
“Roche’s global resources and scale will not only facilitate and accelerate our ability to deliver pirfenidone to more patients around the world, but also to realize our joint vision to bring additional innovative therapies to patients with respiratory diseases,” Dan Welch, InterMune’s chairman, CEO, and president, said in a statement.
According to its website, InterMune is in preclinical phases for aPirfenidone analog, as well as an LPA-I inhibitor and other unspecified drug discovery programs.
The deal is expected to have no effect on Roche’s core earnings per share in 2015, and contribute to core EPS the following year. At $74 per share, Roche’s deal for InterMune represents a 38% premium over InterMune’s closing price on August 22, and a 63% premium to InterMune’s closing price on August 12, before speculation surfaced about Roche acquiring the company.
“We see the acquisition offer as capturing good value for [InterMune] shareholders in assumed long durability of Esbriet as an asset, majority of sales synergy,” Leerink analysts Howard Liang, Ph.D., Richard Goss, and Gena Wang, Ph.D., CFA, concluded in a research note. “We believe the acquisition is a recognition of the potential to develop a fibrosis franchise with pirfenidone (Esbriet) as a starting point, which even as a simple molecule in its unoptimized form appears to provide remarkable therapeutic benefits in IPF.”
Those benefits are at least as robust as the alternative approach of targeting angiogenic enzymes, InterMune showed in a pooled efficacy analysis of data from ASCEND and its two earlier CAPACITY Phase III trials presented at the 2014