Intercept Pharmaceuticals Posts Earnings, Pipeline in Focus

Intercept Pharmaceuticals, Inc.’s (ICPT) shares gained 16.6% following the company’s impressive second-quarter 2014 earnings results.  Moreover, positive data from a phase II study on obeticholic acid (OCA) for the treatment of nonalcoholic steatohepatitis (NASH) also contributed to the upside.

Intercept Pharma reported earnings of $1.51 per share in the quarter comparing favorably with the Zacks Consensus estimate of a loss of $1.10 and the year-ago loss of 79 cents per share.

Revenues increased 9.9% year over year to $0.4 million.

The Quarter in Detail

Research and development (R&D) expenses came in at $14.9 million compared to $5.1 million in the year-ago quarter. General and administrative (G&A) expenses were $7.9 million, compared to $2.9 million in the year-ago quarter.

Intercept Pharma is working toward the development of its pipeline. The company reported positive results from a 72-week long double blind placebo-controlled phase IIb study (FLINT) on OCA for the treatment of patients suffering from NASH. In the study, OCA led to the reduction in the NAFLD Activity Score by at least 2 points with no worsening of fibrosis in 46% of the patients treated with OCA compared to only 21% of the patients who received placebo. Detailed results from this study will be announced in the American Association for the Study of Liver Disease conference on Nov 10, 2014.

Intercept Pharma intends to initiate a phase III program on OCA for this indication in the first half of 2015. The company might launch a phase II pediatric study on OCA in NASH patients in the first half of 2015 based on data from the FLINT study. Additionally, OCA is in a placebo-controlled phase II study in NASH patients with data expected by the end of 2015.

Moreover, OCA, the company’s lead candidate, is being developed as a second line treatment for patients suffering from primary biliary cirrhosis (PBC) who have an inadequate response to or who are unable to tolerate standard of care therapy, and therefore need additional treatment. The company intends to complete its filing for marketing approval of OCA for PBC in the U.S. and Europe during the first half of 2015. Given Fast Track status to OCA in the U.S. for this indication, the company might request the FDA for the submission of new drug application (NDA) for the candidate on a rolling basis. The company is currently finalizing the protocol for a clinical outcomes confirmatory study on OCA for PBC and intends to initiate the study by the end of 2014.

We note that Intercept Pharma is making efforts to study OCA for other indications as well − cirrhosis, primary sclerosing cholangitis (PSC), portal hypertension, alcoholic hepatitis and bile acid diarrhea. The company plans to initiate a phase II study on OCA for PSC by year-end.

Intercept Pharma currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the health care sector are Endo International (ENDP), Gilead Sciences (GILD) and Mallinckrodt (MNK). All these stocks hold a Zacks Rank #1 (Strong Buy).
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