Why Intermune Shares Surged
Jul 25th 2013 2:29PM
Updated Jul 25th 2013 2:30PM
Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What: Shares of biotechnology company Intermune surged 13% today after its quarterly results and outlook topped Wall Street expectations.
So what: The stock has soared over the past year on strong global penetration by its franchise lung disease drug Esbriet, and today's second-quarter revenue -- $14.4 million versus the consensus of about $12 million -- coupled with upbeat full-year guidance only reinforces that trend. Of course, there is also a belief among some analysts that Esbriet's long-term acceptance still depends on its approval in the U.S. -- it was initially rejected by the FDA in 2010 -- so Fools shouldn't get too worked up over today's news.
Now what: Management now sees full-year Esbriet revenue in the range of $55 million-$70 million, up nicely from its prior view of $40 million-$55 million. "Having recently secured attractive pricing and reimbursement in Italy, England and Ireland, Esbriet is now priced and reimbursed in 13 of our original 15 top-priority European countries," Chairman and CEO Dan Welch said, "a solid achievement when considering the challenging economic conditions in the EU." Of course, with the U.S. Phase 3 ASCEND study of Esbriet scheduled for the second quarter of 2014, I wouldn't rush to get involved just yet.
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The article Why Intermune Shares Surged originally appeared on Fool.com.Fool contributor Brian Pacampara has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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