A month has gone by since the last earnings report for Intercept Pharmaceuticals (ICPT). Shares have lost about 3.9% 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 catalysts.
Q3 Earnings Miss, Sales Beat, View Raised
Intercept incurred a loss of $3.04 per share (from continuing operations) in third-quarter 2022 in contrast to the Zacks Consensus Estimate of earnings of $5.11 per share. In the year-ago quarter, the company had reported a loss of 53 cents per share.
The wider year-over-year net loss was due to the gain recognized on the sale of the ex-U.S. business, partially offset by a loss on the extinguishment of 2026 Convertible Secured Notes.
Total revenues came in at $77.59 million, which surpassed the Zacks Consensus Estimate of $76 million and were up from $66.6 million in the year-ago quarter.
Quarter in Detail
Total revenues generated in the quarter comprised only Ocaliva (obeticholic acid or OCA) net sales in the United States.
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 approval for Ocaliva was granted by the FDA under an accelerated pathway, the drug also received conditional approval from the European Commission.
On Jul 1, 2022, Intercept completed the sale of its international business for $405 million.
Selling, general and administrative expenses increased to $43.2 million from $41.2 million in the prior-year quarter. The increase was primarily due to commercial activities and costs related to litigation.
Research and development expenses decreased to $44 million from $44.7 million in the year-ago quarter.
As of Sep 30, 2022, Intercept had cash, cash equivalents, restricted cash and marketable securities of $497.8 million.
In August and September 2022, Intercept repurchased $388.9 million of 2026 Convertible Secured Notes for $258.2 million in cash and $219.4 million in equity for a total consideration of $477.6 million.
ICPT now expects net sales between $340 million and $350 million compared with the previous guidance of $325 million to $345 million.
Based on the positive new interim analysis from its phase III REGENERATE study, Intercept is on track to resubmit its new drug application (NDA) for OCA in liver fibrosis due to non-alcoholic steatohepatitis (NASH) by the end of 2022.
However, the phase III REVERSE study in patients with compensated cirrhosis, due to NASH, did not meet its regulatory primary endpoint.
Intercept is currently in the process of compiling data from the post-marketing phase IV COBALT study. ICPT plans to submit data from this study to the FDA later this year to support the continued approval of Ocalvia for the PBC indication.
Intercept continues to add clinical sites and screen patients in its U.S.-based phase II OCA/bezafibrate fixed-dose combination trial in PBC.
The phase I study for its next-generation FXR agonist, INT-787, progressed to the final cohorts. Intercept looks forward to sharing data from its phase I studies, as well as a targeted indication and development plans for INT-787 later.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended upward during the past month.
The consensus estimate has shifted 44.4% due to these changes.
At this time, Intercept has a poor Growth Score of F, a grade with the same score on the momentum front. However, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.
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.
Performance of an Industry Player
Intercept is part of the Zacks Medical - Biomedical and Genetics industry. Over the past month, Alnylam Pharmaceuticals (ALNY), a stock from the same industry, has gained 2.9%. The company reported its results for the quarter ended September 2022 more than a month ago.
Alnylam reported revenues of $264.31 million in the last reported quarter, representing a year-over-year change of +40.9%. EPS of -$3.32 for the same period compares with -$1.72 a year ago.
For the current quarter, Alnylam is expected to post a loss of $2.18 per share, indicating a change of -0.9% from the year-ago quarter. The Zacks Consensus Estimate has changed -6% over the last 30 days.
Alnylam has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of F.
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