Case - Idiopathic Pulmonary Fibrosis

The Executive VP of Scientific and Medical Affairs looked up at the clock on the wall; it read 5:38 p.m. Another glance, down this time, revealed a stack of empty coffee cups and a pile of peppermint candy wrappers decorating the coffee table. He and InterMune’s CFO had been locked up in the VP’s office since the morning discussing the next strategic move for the company to expand its pulmonary drug portfolio. InterMune was founded in 1998 by W. Scott Harkonen, M.D., as InterMune Pharmaceuticals, Inc. Originally a wholly-owned subsidiary of Connetics Corporation in Burlingame, California, the company was reincorporated at the time it went public in 2000 as InterMune, Inc.1 InterMune’s initial intent was to develop pharmaceutical products to treat a wide range of pulmonary and infectious diseases such as cystic fibrosis, pulmonary fibrosis, tuberculosis and hepatitis C, as well as certain cancers, such as ovarian cancer. InterMune’s business model was to license existing drugs and proteins from large, established pharmaceutical suppliers and to expand the use of those compounds into new therapeutic areas through traditional clinical development activities. After the first few years, InterMune’s management found that reorganization was needed—the company had to narrow its focus if it was to achieve profitability. Approved products were divested and clinical trials abandoned in order to focus the company’s development activities specifically on pulmonology