Roche To Acquire Intermune

Roche has agreed to pay $8.3 billion in cash to acquire InterMune. The Brisbane, Calif.-based company has one product, pirfenidone, a treatment for idiopathic pulmonary fibrosis (IPF), a progressive and ultimately fatal lung disease. It has sold the drug under the name Esbriet in Canada since 2011 and received European authorization in 2012. The drug is awaiting FDA approval in the U.S.

Roche, known for its cancer therapies, views the acquisition as an opportunity to expand in the respiratory disease area. It already sells the cystic fibrosis drug Pulmozyme and asthma drug Xolair, and has the IL-13 antibody lebrikizumab in Phase III trials for asthma and Phase II for IPF.

Acquiring InterMune is “recognition of the potential to develop a fibrosis franchise with pirfenidone as a starting point,” according to Howard Liang, a stock analyst with Leerink Partners in a recent report. He anticipates that Esbriet sales will reach $1.6 billion in 2020.

InterMune has narrowed its focus over a 15-year history on developing an IPF drug. It faced a major setback in 2010, when FDA refused to approve pirfenidone and required another large Phase III trial to show efficacy. InterMune refiled for approval this spring, and FDA granted breakthrough therapy designation to the drug in July. The drug is an orally active, antifibrotic agent that inhibits the synthesis of TGF-β, a mediator of many cell functions. It also inhibits the synthesis of TNF-α, a cytokine involved in inflammation.

The Roche acquisition “represents a favorable ending of the InterMune story, which has endured an arduous road in pioneering the development of the first approved treatment for idiopathic pulmonary fibrosis,” Liang says. In 2013, InterMune had revenues of $70 million and a net loss of $220 million.

Meanwhile, Roche has spent much of 2014 making smaller acquisitions and setting up collaborative deals. It paid up to $450 million to acquire the RNA-drug company Santaris Pharma in August and $1.73 billion in July for the cancer drug firm Seragon Pharmaceuticals. To prepare for a U.S. launch of pirfenidone later this year, Roche plans “a smooth transition of InterMune employees and operations” into its business.