I wrote earlier about InterMune's Infergen (consensus interferon -- see InterMune's Infergen website, prescribing information [PDF file]), an alternate form of interferon alpha. Infergen is different than the two relatively identical versions of interferon marketed by Roche and Schering-Plough. Infergen's never gotten much traction in clinical care, though there's interest in using it to treat people who didn't respond to prior therapy with Pegasys (Roche) or Peg-Intron (Schering-Plough).
The problem with Infergen is that InterMune doesn't have a pegylated version of its interferon. Pegylation is a chemical process that adds polyethylene glycol to the interferon; this keeps interferon in the body for longer and has made interferon treatment more effective. Pegylated interferons transformed hepatitis C treatment by reducing interferon injections from 3 times a week (the way Infergen is taken) to once a week (as with Pegasys and Peg-Intron) and increasing response rates to treatment significantly.
InterMune knows this is a problem, and took steps to start developing their own pegylated form of Infergen, called PEG-Alfacon-1. They completed a preliminary (phase I) study of PEG-Alfacon-1 last year, but haven't said much about it since -- until recently. In their current quarterly report filed with the U.S. Securities and Exchange Commission (SEC), they note:
We completed our Phase I trial of a pegylated form of Infergen, PEG-Alfacon-1, for the treatment of chronic HCV infections in 2003. The PEG-Alfacon-1 development program will be lengthy and very expensive, and the duration and expense carry significant risk. Accordingly, we are considering alternative development plans and business collaborations that could increase the speed and decrease our risk and expense for this program. Once we have completed our analysis of alternative development plans and assessed the value that a partnership could bring to PEG-Alfacon-1, we will announce our plans, which, if we are unable to enter into a collaboration on favorable terms, may include a discontinuation of the program.
In other words, PEG-Alfacon-1 is going nowhere fast.
What are the chances that they'll find a partner (read: another pharmaceutical company with deep pockets) to help finance PEG-Alfacon-1 development? If I were a company considering investing, this is how I'd look at it:
Let's say it takes 3-5 years of further development before PEG-Alfacon-1 reaches the market (somewhat optimistic but not impossible, if everything goes well). InterMune still has to fight Roche & Schering's lead and marketing muscle -- an uphill battle, even if PEG-Alfacon-1 shows signs of having some advantage over Pegasys and Peg-Intron. Even worse for InterMune, in 5 years we may well have new hepatitis C drugs in the form of protease and/or polymerase inhibitors -- and if they work well, it may not matter much what kind of interferon you're using with them. And ideally, in 7-10 years, we could end up with combination therapies of protease and polymerase inhibitors (or other novel classes of drugs) that dispense with the need for interferon altogether.
So at this point there's little market incentive for anyone to develop an alternate pegylated interferon -- unless you have a crystal ball telling you that all the current generation of protease and polymerase inhibitors will fail. But unless we get new classes of drugs, there's every reason to think that the overall hepatitis C market will remain relatively flat -- the things that keep people away from treatment today (subpar efficacy, high toxicity, etc.) will still hold true 5 years from now. So InterMune would have a small slice of a pie that hasn't grown beyond an estimated 100,000 people treated for hepatitis C each year in the United States since the introduction of pegylated interferons. That makes it hard to get a decent return on investment for PEG-Alfacon-1 development costs -- and if a partner invests, that takes a large bite out of InterMune's potential profits.
That's why InterMune has decided to focus in the short-term on non-responders to Pegasys/Peg-Intron-based therapy. They estimate that in the U.S. there are 150,000 people who fall into the "non-responder" category. The good news is that they're advancing combination therapy studies of Infergen and ribavirin -- now in phase III -- and Infergen and Actimmune (a form of interferon gamma that's been used off-label to treat idiopathic pulmonary fibrosis, a fatal lung disease) -- now in phase II (see press release).
The bad news is that they're using daily dosing of Infergen in their studies. It's not clear whether side effects (which overall resemble those of Pegasys and Peg-Intron -- e.g., flu-like symptoms, depression; see Infergen safety information, patient medication guide [PDF file]) will occur more frequently or severely with daily Infergen. One small study published last year looked at using Infergen at 9 μg daily, with or without ribavirin, as first-line treatment for hepatitis C (Pockros et al., The safety and tolerability of daily infergen plus ribavirin in the treatment of naïve chronic hepatitis C patients, Journal of Viral Hepatitis, January 2003). The authors noted that 20-25% of study participants dropped out due to side effects and drug-related adverse events, concluding that "daily dosing of CIFN may be difficult to tolerate resulting in discontinuation of therapy in a significant proportion of patients" (abstract here).
InterMune currently has about $310 million in "available cash, cash equivalents and available-for-sale securities." But they have a lot of expenses, and they've been losing money. Add to that declining sales of their main product, Actimmune, and falling prices of their stock (see recent Reuters story). InterMune issued the following guidance in their SEC filing:
We believe that we will continue to require substantial additional funding in order to complete the research and development activities currently contemplated and to commercialize our product candidates. We believe our existing cash, cash equivalents and available-for-sale securities, together with anticipated cash flows from our operations, will be sufficient to fund our operating expenses, debt obligations and capital requirements under our current business plan through at least the end of 2005. However, this forward-looking statement is based upon the risks identified in this report; our current plans and assumptions, which may change; and our capital requirements, which may increase in future periods.
So time is running out for InterMune -- leaving the future of Infergen in doubt.
More on non-responders in the next couple of days, and more on hepatitis C protease inhibitor research this week.