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Intercept (ICPT) Down 10.7% Since Last Earnings Report: Can It Rebound?

·3-min read

A month has gone by since the last earnings report for Intercept Pharmaceuticals (ICPT). Shares have lost about 10.7% in that time frame, underperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is Intercept due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.

Intercept Beats on Q3 Earnings & Sales, Ups View

Intercept reported a loss of 63 cents (excluding gain on extinguishment of debt) per share in third-quarter 2021, narrower than the Zacks Consensus Estimate of a loss of $1.00 and the year-ago quarter’s loss of $2.01.

Total revenues of $92.8 million in the quarter beat the Zacks Consensus Estimate of $83 million and also increased from $79.5 million in the year-ago quarter.

Quarter in Detail

Total revenues generated in the quarter comprised only Ocaliva (obeticholic acid or OCA) net sales. Net sales came in at $66.6 million in the United States and $26.2 million outside the country.

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.

Research and development expenses decreased to $45 million from $48.9 million in the year-ago quarter, primarily driven by lower personnel and development costs.

Selling, general and administrative expenses decreased to $53.3 million from $70.6 million in the year-ago quarter. The decline was driven by actions taken to decrease expenses relating to the launch preparation activities associated with the potential approval and commercialization of OCA for liver fibrosis due to non-alcoholic steatohepatitis (NASH) following the complete response letter, which was received in 2020.

As of Sep 30, 2021, Intercept had cash, cash equivalents, restricted cash and marketable securities of $428.8 million.

2021 Guidance Upped

Ocaliva net sales are now projected between $355 million and $370 million (earlier guidance: $325 million to $340 million).

Other Updates

The prescribing information for the lead drug, Ocaliva, in the United States has been updated. The update to the prescribing information was prompted by cases submitted to the FDA’s Adverse Event Reporting System and published in the medical literature. These were cases of worsening of liver problems or liver failure in PBC patients with cirrhosis treated with Ocaliva.

Consequently, the Boxed Warning has been updated and Ocaliva is now contraindicated for patients with PBC and decompensated cirrhosis, a prior decompensation event, or with compensated cirrhosis with evidence of portal.
The company is on track to compile a new data package from the phase III REGENERATE study in fibrosis due to NASH to support a potential resubmission meeting with the FDA in the first half of 2022.



 

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed an upward trend in estimates review.

VGM Scores

Currently, Intercept has a great Growth Score of A, though it is lagging a bit on the Momentum Score front with a B. However, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.

Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Intercept has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.


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