Intercept Tumbles On A New Obstacle For Its Experimental NASH Drug

Intercept Pharmaceuticals (ICPT) said Friday its experimental liver disease treatment will face a Food and Drug Administration panel in May, leading ICPT stock to tumble.

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The FDA’s Gastrointestinal Drugs Advisory Committee will meet on May 19 to discuss the benefits and risks of Intercept’s obeticholic acid as a treatment for nonalcoholic steatohepatitis, or NASH. The panel will make a nonbinding recommendation on the drug’s future.

SVB Securities analyst Thomas Smith said the panel’s discussion will provide more clarity into how the FDA views obeticholic acid in NASH.

“We also expect this advisory committee will have important implications for other NASH drug developers, as it represents the first detailed insight into the FDA’s process for reviewing NASH drug applications more broadly,” he said in a report.

On today’s stock market, ICPT stock toppled 13.9% to close at 16.12. Meanwhile, shares of biotech companies gapped down about 3.5%. The broader fall is due to concerns after federal regulators took control of Silicon Valley Bank. The investment bank handled about 44% of U.S. health care and tech initial public offerings in 2022.

ICPT Stock: Expanding Ocaliva’s Uses

Intercept has faced an uphill battle with obeticholic acid in NASH. The drug is approved as a treatment for another liver disease called primary biliary cholangitis. It sells under the brand name Ocaliva.

There are no approved treatments for NASH. To gain approval, a drug must improve fibrosis — a form of scarring on the liver — by at least one stage. Fibrosis is measured in stages 1-4. Or, the drug must improve the symptoms of NASH and prevent fibrosis from worsening.

On Sept. 30, Intercept said obeticholic acid failed to make a difference in patients with the worst level of fibrosis, stage 4. This means their livers had extensive scarring, known as cirrhosis. Generally, these patients only survive with a liver transplant. ICPT stock fell 15% that day.

But, in January, the FDA accepted Intercept’s application for obeticholic acid in NASH patients with less severe fibrosis. Before deciding whether to approve or reject the application in June, the FDA will hold the advisory committee meeting. SVB’s Smith expects the meeting to be a challenge for Intercept.

Intercept is facing Madrigal Pharmaceuticals (MDGL) in this market. Madrigal scored a win with strong Phase 3 results in NASH in December. As Madrigal shares tripled, ICPT stock plummeted 23.5%.

Meeting Will Provide Broad NASH Insight

The FDA meeting will provide some insight across the NASH development space, Smith said.

“We believe the advisory committee will serve as a forum to provide much needed clarity into how the FDA views both the obeticholic acid risk/benefit in NASH, as well as broader insights into the regulatory review process for this indication, with important implications for other NASH players beyond Intercept,” he said.

He kept his market perform rating on ICPT stock. On the news Friday, shares dropped below their 50-day moving average, MarketSmith.com shows. Intercept stock has a strong Relative Strength Rating of 93, however. This puts shares in the top 7% of all stocks when it comes to 12-month performance, according to IBD Digital.

Follow Allison Gatlin on Twitter at @IBD_AGatlin.

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