InterMune Inc. said that U. S. Health Regulators declined to give approval to its drug to treat lung scarring and asked for a new medical experiment to show that is effective. This led to a drop in its shares by 80%.

A new medical examination could keep the drug off the market for years.

InterMune was seeking approval from the Food and Drug Administration for its tentative medicine pirfenidone to cure idiopathic pulmonary fibrosis, an unusual, terminal condition, wherein the lungs experience scarring because of unidentified causes.

ThinkEquity Analyst Brian Skorney, said that it is quite negative for the organization. They will require more information from the FDA, but it appears that it will be a considerable several years setback.

Investors had been anticipating approval after a U. S. team of specialist advisors to the FDA in March voted to support the drug in spite of some stipulations regarding side effects, sending InterMune shares going up some 60% at the time.

But Tuesday's delay sent the shares going down to $9.45 in after hours trading from their Nasdaq close at $45.44.

Chief Executive, Dan Welch said in a statement, "After the positive FDA advisory committee meeting of March 9 at which the committee recommended the approval of the pirfenidone by a 9-3 margin, we are disappointed by this outcome".