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Heres Why Intercept (ICPT) Stock is Up 28.7% in 3 Months

Shares of Intercept Pharmaceuticals, Inc. ICPT surged 28.7% in the past 3 months compared with the industry’s decline of 10.3%.

The main catalyst for this surge was the FDA’s acceptance of Intercept’s new drug application (NDA) for obeticholic acid (OCA), which sought accelerated approval for the treatment of patients with pre-cirrhotic liver fibrosis due to nonalcoholic steatohepatitis (NASH) in January 2023.

The regulatory body indicated that it considers this a complete Class 2 resubmission and has assigned a target action date of Jun 22, 2023, for the NDA.

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The NDA is supported by a broad OCA NASH clinical development program, including two positive interim 18-month analyses from the phase III REGENERATE study in patients with pre-cirrhotic liver fibrosis due to NASH. Data showed OCA 25 mg consistently demonstrated double the response rate of placebo in reduction in liver fibrosis stage without worsening of any of the three histologic components of NASH, an endpoint consistent with FDA’s draft guidance.

Further, management stated that a detailed assessment of 2,477 patients in REGENERATE, including nearly 1,000 patients on the study drug for at least four years, provided a well-characterized safety profile that is monitorable and manageable and supports the chronic administration of OCA.

NASH is a serious progressive liver disease caused by excessive fat accumulation in the liver that induces chronic inflammation, resulting in progressive fibrosis (scarring) that can lead to cirrhosis, eventual liver failure, cancer and death.

A potential approval of OCA for NASH will give a significant boost to Intercept. With no treatments currently approved to address this disease, the market opportunity is substantially large.

In June 2020, Intercept received a complete response letter (“CRL”) from the FDA stating that its NDA for OCA for the treatment of liver fibrosis due to NASH could not be approved in its present form. The CRL indicated that the FDA has determined that the predicted benefit of OCA, based on a surrogate histopathologic endpoint, remains uncertain and does not sufficiently outweigh the potential risks to support accelerated approval for the treatment of patients with liver fibrosis due to NASH.

This analysis was based on the data reviewed by the agency. The FDA then recommended that Intercept submit additional post-interim analysis efficacy and safety data from the ongoing REGENERATE study in support of potential accelerated approval and that the long-term outcomes phase of the trial should continue.

Investors are also upbeat on the performance of the lead drug, Ocaliva. OCA is approved under the brand name Ocaliva for treating primary biliary cholangitis (PBC) in combination with ursodeoxycholic acid (UDCA) in adults with an inadequate response to UDCA alone or as a monotherapy for adults intolerant to UDCA.

While the NASH market promises potential with no approved therapies yet, it is challenging.

Quite a few players are trying their hand at successfully developing a treatment for the same condition.

Another company, Viking Therapeutics VKTX, is developing a candidate, VK2809, for biopsy-confirmed NASH and fibrosis. Viking initiated the VOYAGE study, a phase IIb study designed to evaluate VK2809 in patients with NASH and fibrosis.

A clinical-stage biopharmaceutical company, Madrigal Pharmaceuticals, Inc. MDGL, reported positive top line results in December 2022 from the phase III MAESTRO-NASH biopsy clinical trial of resmetirom, a liver-directed selective thyroid hormone receptor agonist. Madigral remains on track to file its NDA for resmetirom in the first half of 2023.

Intercept currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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