ITMN article -
thestreet.com
Biotech firm InterMune (ITMN:Nasdaq - news - commentary - research - analysis) might have a hot drug on its hands. Actimmune, already approved for the treatment of two very rare diseases affecting about 1,000 people total in the U.S., shows evidence of also being effective for the treatment of a fatal lung disease -- this one with a larger, and more profitable, U.S. patient base of 50,000.
The Brisbane, Calif.-based biotech firm is undertaking a late-stage clinical trial to treat the lung ailment known as idiopathic pulmonary fibrosis, with results due at the end of the year. But InterMune doesn't have to wait for Food and Drug Administration approval. Because Actimmune already is an approved drug, doctors can prescribe it to their IPF patients, a practice known as off-label use.
Related Stories
ImClone Soars On Revised Bristol-Myers Erbitux Deal
Plans for New Cancer Drug Help Raise Idec's Estimates
Lilly Says Sepsis Drug Sales Slower Than Expected
The TSC Streetside Chat: FDA Needs to Hurry Up, Already!
The FDA doesn't allow the marketing of a drug for off-label use. Companies can only provide educational material to physicians and patients. In the case of IPF, InterMune is doing that -- in a way that's raising the hackles of some in the IPF community. The company is the behind-the-scenes backer of a nonpartisan foundation -- the Coalition for Pulmonary Fibrosis -- that purports to educate the public and doctors about IPF, but which critics say is tied to the company's attempts to sell Actimmune.
If true, it wouldn't be the first use of a supposedly outside group pushing a drug. In the mid-1990s, the nonprofit American Obesity Association led the charge for approval of a slew of diet drugs before the FDA. Only later, after safety problems forced some of these drugs off the market, was it discovered that the drug companies developing and selling the diet drugs were the largest financial backers of the American Obesity Association.
There's nothing illegal about InterMune's relationship with the Coalition for Pulmonary Fibrosis, although critics say the ethics of the arrangement are questionable because it misleads IPF patients.
It also could be helping the company skirt FDA off-label drug sale laws. InterMune has been successful in selling Actimmune off-label, which has sent Actimmune's revenue soaring. But if the FDA finds the company has crossed a legal boundary, then Actimmune sales -- and the company's stock price -- could take a hit.
And make no mistake, InterMune needs strong Actimmune sales now to satisfy Wall Street expectations. It can't wait until 2003, which is the earliest planned approval for Actimmune as an IPF treatment.
The company estimates that more than 1,200 IPF patients are using Actimmune. As a result, the company's total revenue in 2001 grew 257% to $40 million -- 90% of that derived from Actimmune sales. Looking ahead, InterMune is forecasting 2002 revenue of $100 million, again with a vast majority of sales coming from off-label Actimmune use by IPF patients.
An InterMune spokeswoman denies any wrongdoing, insisting the company is not selling Actimmune as an IPF treatment, nor does it exert any undue influence over the Coalition for Pulmonary Fibrosis.
Holding the Coalition Close
But what to make of InterMune's relationship with the Coalition for Pulmonary Fibrosis -- founded last May and registered in California as a public benefit corporation, according to state records? The CPF describes itself as independent. It is led by a full-time executive director and is governed by patients and a medical advisory board that includes some of the country's top IPF specialists.
And then there's InterMune's role.
InterMune put up the money to start the coalition and helped set its agenda. The group's headquarters is housed inside the San Francisco offices of Edelman Public Relations, which counted InterMune as a client until December. And the coalition's executive director, Mark Shreve, is a former Edelman employee who worked for InterMune. The coalition lists InterMune as co-founder on its Web site, but none of the other information is publicly disclosed.
"The Coalition for Pulmonary Fibrosis is a phony operation," says Michael Rosensweig, executive director of the Pulmonary Fibrosis Foundation, a separate advocacy and research nonprofit supporting IPF patients. "It's a front for InterMune that was set up to sell Actimmune, not to support IPF research."
Shreve acknowledges that he was working for both InterMune and the Coalition for Pulmonary Fibrosis at the same time last year, but that he resigned from Edelman in December when it became clear the nonprofit required a full-time executive director. He also defends the San Francisco office-sharing arrangement between the coalition and Edelman, stating that Edelman provides a host of paid logistical services.
"InterMune is just one of several founders and donors of the Coalition for Pulmonary Fibrosis, and does not have any undue influence," he says, adding that this information is disclosed on the group's Web site.
Shreve declined to provide any information about the number of donors or the amount of money each contributed to the coalition, nor will he explain whose idea it was to start the coalition in the first place. A 2001 federal tax return, which will detail this information, is still being prepared and is not available, he added.
The Web site of the Coalition for Pulmonary Fibrosis includes a lot of information -- both for patients and doctors -- about IPF and existing and experimental treatments. This includes drugs being developed or sold by companies other than InterMune. But Rosensweig believes the group is biased in favor of Actimmune -- something the public is not made aware of because InterMune's influence is subtle, if not obscured.
For instance, in a section explaining to patients how they can get insurance reimbursement, drugs from three other pharmaceutical companies and their phone numbers are listed.
But the reimbursement information for Actimmune is much more detailed, including description of an "Actimmune Access Hotline," which provides "support services, including 24-hour access to nurses and pharmacists, and prescription services that include overnight shipping of medication to physicians and patients."
"I think the FDA should be looking at this very carefully," says Rick Blum of the Center for Science in the Public Interest, a Washington, D.C.-based advocacy group that informs the public about conflicts of interest in the medical and scientific fields.
"If the [Coalition for Pulmonary Fibrosis] is independent, then its mission should be to promote good science," he adds. "But if InterMune's public relations firm runs it, their interest will be in seeing that its client is served."
Roger Stevens is a former IPF patient who is also troubled by the close ties between the coalition and InterMune. Stevens underwent a double lung transplant in 1997 to "cure" his disease. Today he runs a Web site for IPF patients based out of his home near Philadelphia.
"After I did some probing of the coalition, I discovered the linkage to InterMune and it really raised the hair on the back of my neck," Stevens says. "The coalition seems to evangelize more for InterMune than it does for IPF patients."
An FDA spokeswoman wouldn't comment on InterMune's marketing of Actimmune, but she said the agency takes the regulation of off-label drug sales seriously.
An InterMune spokeswoman reiterated Shreve's comments that the company is just one of several co-founders, all of whom have equal say in the group's agenda. But she wouldn't disclose the size of the monetary investment made by InterMune in the coalition, nor could she explain why the coalition and the company shared the same public relations agency.
Dr. Talmadge King, an IPF specialist at San Francisco General Hospital and chairman of the coalition's scientific advisory board, says InterMune was the driving force behind the group's formation. The company's involvement is a positive because it has increased awareness for what is a widely under-diagnosed disease, he adds, but he also understands the criticisms because InterMune benefits by getting more people to take Actimmune.
"When the coalition wins, InterMune wins," he says. "I understand the questions being asked about the relationship, but at this point I haven't seen any evidence that InterMune is manipulating us." King is a paid consultant to InterMune.
Educating Doctors
InterMune has been successful in growing Actimmune sales over the past year, but this effort has not come without questions about the company's methods.
Over the last year, the company has hired 108 "field specialists" whose primary job is to visit doctor's offices and provide them with educational materials about Actimmune, the company says.
During its fourth-quarter conference call, InterMune executives were asked by a sell-side analyst about the appropriateness of its off-label marketing strategies.
"Our message is educational, and it's not a promotional platform. Our reps go in and educate on the disease state and disease awareness and physicians make the choice for the therapeutic regimen they would like to use," said David Cory, InterMune's vice president of sales and marketing, during the conference call.
But on the same conference call, InterMune executives acknowledged that to meet the Actimmune sales goal for 2002, the company's field reps would be making 50,000 personal "detail" visits to the offices of approximately 6,800 U.S. pulmonologists this year. That works out to about seven visits per doctor just to educate them about Actimmune.
But there's a sizable gray area between providing doctor education and outright selling. Like InterMune, a majority of biotech firm Celgene's (CELG:Nasdaq - news - commentary - research - analysis) revenue is derived from off-label use of one of its drugs, thalidomide. Yet in April 2000, the FDA issued Celgene a warning letter after it found that the company was selling thalidomide illegally as a cancer treatment.
For InterMune, proving the efficacy and safety of Actimmune as an IPF treatment is a long-term goal, but a potential problem looms much nearer. If the FDA finds the company violating off-label drug sales rules, the agency could cut into the sales effort of Actimmune, making it difficult for the company to meet its aggressive goal of 150% revenue growth in 2002. |
