InterMune (ITMN) — This biotech company specializes in therapies for pulmonology and orphan fibrotic diseases. It produces the drug pirfenidone, under the trade name Esbriet, for the treatment of idiopathic pulmonary fibrosis (IPF). Esbriet has been approved in Europe and Canada, and the U.S. Food and Drug Administration (FDA) recently granted it Breakthrough Therapy Designation, which is reserved for drugs intended to treat serious or life-threatening diseases. IPF results in progressive loss of lung function due to scarring and eventually leads to death.
On Wednesday, Bloomberg reported InterMune received takeover bids from Sanofi, Roche Holding, GlaxoSmithKline (GSK) and Actelion, and is being advised by Goldman Sachs (GS) and Centerview Partners. Since the company has negative earnings, this is strictly a speculative trade based on the Bloomberg story and technical analysis.
The stock broke out following the story, hitting a 14-year high, but there has been no confirmation from the company. A MACD buy signal was triggered Wednesday, and that was preceded by three buy signals from my proprietary indicator, the Collins-Bollinger Reversal (CBR).
Shares pulled back slightly on Thursday and Friday. Buy ITMN on a further pullback under $50, as a speculation that there are legs to this story. But enter a stop-loss at $44 in case it is denied.