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Analyst Blog

InterMune, Inc. (ITMN - Snapshot Report) recently announced that the Comite Economique des Produits de Sante (CEPS), the pricing committee of France, has granted reimbursement for InterMune’s Esbriet (pirfenidone).

Esbriet is marketed for treating adults suffering from mild-to-moderate idiopathic pulmonary fibrosis (IPF), a rare and fatal lung disease. The decision of the CEPS makes Esbriet the first drug to be reimbursed in France for the disease.

Management at InterMune stated on a conference call that following discussions with the CEPS, an ex-factory reimbursed price of €25,000 per patient per year has been authorized by the committee. Management said that the ex-factory reimbursed price comes to approximately $32,000 at the prevalent exchange rates.

On the conference call, it was further stated that the drug will become eligible for reimbursement only after its price is published in the French Journal Officiel. InterMune expects to make Esbriet available to the French population following the publication. This is expected by year end. InterMune is recruiting and training a special team to promote Esbriet in France.

We note that Esbriet, which was approved in the EU in February 2011, is already available in Germany, Austria, Sweden, Norway, Denmark, Iceland and Luxemburg. France will become the eighth EU nation to market the drug by year end.

Management stated on the conference call that it expects to conclude discussion regarding Esbriet’s pricing and reimbursement in Italy, Spain, Belgium and the Netherlands by year end. Similar discussions are expected to be concluded in the UK (first quarter of 2013), Ireland and Finland (first half of 2013). Esbriet will be launched in those countries following pricing and reimbursement approvals by the relevant authorities.

Our Recommendation

We currently have a Neutral recommendation on InterMune. The stock carries a Zacks #3 Rank (short-term Hold rating). We expect investor focus to stay on the pricing and reimbursement process in Europe.

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