InterMune rating upgraded, stock climbs

InterMune rises as analyst raises rating on better chance of Phase III success than rival

Associated Press

NEW YORK (AP) -- InterMune's stock climbed more than 2 percent Wednesday as an analyst boosted the drugmaker's rating and price target, saying its lung-disease drug is more likely to succeed in Phase IIl testing than that of rival Boehringer Ingelheim.

THE SPARK: Matthew Harrison of UBS lifted InterMune Inc. to "Buy" from "Neutral" and increased its price target to $15 from $9. The company's Ascend study is for its Esbriet drug, which is for treating idiopathic pulmonary fibrosis.

Idiopathic pulmonary fibrosis is a terminal lung disease that causes inflammation and scarring of the lung. Esbriet is designed to slow the progress of the disease and reduce declines in lung function.

THE ANALYSIS: Harrison said that Boehringer's BIBF1120 drug is likely to fail in Phase III partly because tolerability of the drug is poor and causing more patient dropouts. Boehringer may also have enrolled too many people, Harrison said, which could lead to variable placebo rates.

The analyst believes InterMune's Ascend study is more likely to succeed in its Phase III testing.

SHARE ACTION: Shares of InterMune rose 28 cents, or 2.8 percent, to $10.32 in afternoon trading. The stock has traded in a 52-week range of $7.21 to $17.09.

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