Intercept Pharmaceuticals, Inc.
) shares tumbled 14.1% after a report from The Street disclosed
that the company had information about the occurrence of abnormal
cholesterol levels in its phase IIb study on its lead pipeline
candidate, obeticholic acid (OCA) when it came out with a press
release on Jan 9.
The trial was sponsored and conducted by the National Institute of
Diabetes & Digestive & Kidney Diseases (NIDDK).
Based on emails made public through the Freedom of Information Act,
it appears that not only did the company fail to disclose these
concerns to investors, it also lobbied government scientists
conducting the trial to downplay the safety issue associated with
the use of OCA.
We remind investors that on Jan 9, 2014, Intercept Pharma had
announced that the FLINT (Farnesoid X Receptor Ligand Obeticholic
Acid in Nonalcoholic Steatohepatitis Treatment) trial on OCA was
stopped early after the study met its primary endpoint. The study
was evaluating the efficacy and safety of OCA for the treatment of
nonalcoholic steatohepatitis (NASH). Shares of Intercept Pharma
skyrocketed 281% following the news.
However, the company chose not to disclose the fact that the NIDDK
terminated the FLINT study early partially due to the serious
safety issues. According to The Street article, the NIDDK had
informed the company about the disproportionate finding on lipid
abnormalities (increased total cholesterol with increased
low-density lipoprotein/LDL and decreased high-density
lipoprotein/HDL cholesterol), which Intercept Pharma withheld in
its press release.
Later in Mar 2014, the company had issued a statement about the
occurrence of cardiovascular side effects in the FLINT study. The
company stated that 10 serious cardiovascular adverse events were
observed in 7 patients (2.5% of the total population) across both
The Data Safety Monitoring Board (DSMB) of the FLINT study was
of the opinion that hyperlipidemia and the occurrence of serious
cardiovascular events were numerically more in the OCA arm of the
study compared to that of the placebo arm. Full results from the
FLINT study are expected in Jul 2014.
We believe that investor focus will remain on updates regarding
OCA's development for the NASH indication.
Intercept Pharma currently carries a Zacks Rank #3 (Hold). Stocks
) are better ranked in the health care space. While Allergan and
Gilead are Zacks Rank #1 (Strong Buy) stocks, Alexion holds a Zacks
Rank #2 (Buy).
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