Roche ready to roll on InterMune's lung drug with $8.6B buyout deal

Roche CEO Severin Schwan

InterMune ($ITMN) has already bet a big chunk of money on its idiopathic pulmonary fibrosis drug Esbriet (pirfenidone). Now, Roche is laying $8.3 billion on the table, too. The Swiss drugmaker ($RHHBY) agreed to pay $74 per share, in cash, for the biotech company, to add the lung treatment to its own respiratory stable.

Esbriet, already approved in Europe, is waiting on an FDA nod. And it's Esbriet's second run at FDA approval, after the agency turned the drug back for another Phase III trial in 2010. But with that new data now in the bank--and a breakthrough designation from the agency--Roche says it's preparing for a launch later this year. The company "plans a smooth transition of InterMune employees and operations" into its own business to be ready for that debut, Roche said in a statement.

CEO Severin Schwan said the InterMune deal will "complement Roche's strengths in pulmonary therapy," which include Xolair, an asthma treatment, and Pulmozyme, for cystic fibrosis. It's also developing an asthma drug, lebrikizumab.

"For us at Roche, this transaction is a good example of a value-creating bolt-on acquisition; we focus on targeted acquisitions that really compliment our portfolio (...) rather than trying to diversify or going into mega mergers," Schwan told reporters on a conference call (as quoted by Reuters).

Roche's "global resources and scale" will make it easier--and faster-- to roll out Esbriet in the U.S. and beyond, InterMune CEO Dan Welch said in a statement. "Roche shares our passion and commitment to the IPF community and to ensuring that pirfenidone is available as quickly as possible to patients in the U.S., pending FDA approval," Welch said. The agency is scheduled to decide by Nov. 23.

Analysts figure Esbriet can hit $1 billion or more, out of a global IPF market expected to grow to $2 billion. The disease causes progressive scarring in lung tissue, and can be fatal within 5 years of diagnosis.

Roche won't be without competition in IPF, however. Boehringer Ingelheim has its own IPF remedy in development, nintedanib, and it scored the same breakthrough designation from the FDA. Boehringer has already backed a Discovery Channel documentary on IPF as the drug moves toward approval.

Roche nabbed InterMune after a flurry of rumors about a potential deal, with Sanofi ($SNY) and GlaxoSmithKline ($GSK) among the other companies in the mix. InterMune hired Goldman Sachs to entertain potential buyers earlier this year. Now, Goldman and Centerview Partners are advising InterMune on the deal, with Citi acting as Roche's financial adviser.

- read the Roche statement
- get more from Reuters

Special Reports: Top 10 pharma companies by 2013 revenue - Roche | Pharma's top M&A deals of 2013

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