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 biotech InterMune (Nasdaq: ITMN ) have popped today by as much as 15% before giving most of it back after German regulators had positive comments on the company's Esbriet drug.
So what: Germany's Federal Joint Committee has granted the additional benefit of Esbriet for treatment of idiopathic pulmonary fibrosis. The drug's benefit was classified as stage 4, which means its benefit isn't quantifiable yet, but will be defined more specifically in the future.
Now what: InterMune will now proceed to enter price negotiations with the entity that represents Germany's sickness funds, which are health insurance providers that cover the costs of drugs in the country. Baird has followed up the announcement by reiterating its outperform rating, and whopping $38 price target, which is more than double today's high. That price action isn't entirely unreasonable, as shares flirted with the $50 threshold roughly a year ago.
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