Back in March, Intermune's stock saw a sudden jump on news that an FDA advisory committee treated their drug pirfenidone more positively than expected. But the agency is in no way committed to following these recommendations, and yesterday they turned down the drug, sending Intermune stock right back down into the basement again.

Pirfenidone was, even after the advisory committee, an iffy proposition. It made it through one Phase III trial, but missed its endpoints on another. And even though there's no current treatment for idiopathic pulmonary fibrosis, there's no use in telling people that there is one (and asking their insurance companies to pay for it) if there really isn't. The company isn't saying much, but all indications are the the FDA is concerned about efficacy: they aren't convinced that the drug really works, and will want fresh clinical trial data before reconsidering approval.

Whether Intermune can raise the cash to do that is in doubt. If they can't convince the FDA that they have something worthwhile, they'll likely have trouble persuading investors.