This invention relates to a novel herbal composition comprising an extract of flowering and fruiting heads of the plant, Sphaeranthus indicus. The said extract of Sphaeranthus indicus contains a compound, 3a-hydroxy-5a,9-dimethyl-3-methylene-3a,4,5,5a,6,7,8,9b-octahydro-3H-naphtho[1,2-b]furan-2-one (7-Hydroxy-4,11(13)-eudesmadien-12,6-olide) (compound 1), as a bioactive marker. The invention also relates to a composition comprising 3a-hydroxy-5a,9-dimethyl-3-methylene-3a,4,5,5a,6,7,8,9b-octahydro-3H-naphtho[1,2-b]furan-2-one (compound 1) as an active ingredient. The invention also relates to methods of manufacture of the said compositions. The invention also relates to methods of administration of the said compositions to a subject in need of treatment for an inflammatory disorder. The invention also relates to tumor necrosis factor- (TNF-α) and interleukin (IL-1, IL-6, IL-8) inhibitory activity of the said compositions. The invention relates to inhibition of the expression of intercellular adhesion molecule 1 (ICAM-1), vascular-cell adhesion molecule 1 (VCAM-1), and E-Selectin by the said compositions. The said compositions may optionally contain at least one anti-inflammatory agent or can be used in combination with at least one anti-inflammatory agent.