We estimate that our net proceeds from the sale of 5,000,000 shares of common
stock in this offering will be approximately $68.3 million after deducting
underwriting discounts and commissions and estimated offering expenses
payable by us. If the option to purchase additional shares is exercised in
full, we estimate that our net proceeds will be approximately $78.7 million.
The principal purposes of this offering are to obtain additional capital to
support our operations, to create a public market for our common stock and
to facilitate our future access to the public equity markets. We intend to
use the net proceeds from this offering as follows:
• approximately $17.0 million to fund the continued clinical development
and other studies and work needed for the anticipated FDA and EMA filings
for OCA as a treatment for PBC, as detailed below;
• approximately $19.0 million to fund the continuation of the long-term
safety extension portion of our POISE clinical trial and the Phase 3
clinical outcomes trial after the anticipated FDA and EMA filings;
• approximately $10.0 million to fund certain pre-commercialization
activities of OCA for PBC;
• approximately $4.0 million to fund further preclinical development work
on INT-767 and, if warranted, Phase 1 clinical trials of INT-767;
• approximately $5.0 million to fund the initiation of a Phase 2 clinical
trial for an additional indication for OCA, such as portal hypertension,
if warranted; and
• the remainder for general corporate purposes, general and administrative
expenses, capital expenditures, working capital and prosecution and
maintenance of our intellectual property.
We believe that the remaining clinical development and other studies and
work needed for anticipated FDA and EMA filings for the approval of OCA
as a treatment for PBC will require approximately $40.0 million. We believe
that our existing cash and cash equivalents, including $29.8 million of net
proceeds received on August 9, 2012 upon the issuance of our Series
C preferred stock, along with the net proceeds from this offering, together
with interest on cash balances, will be sufficient to fund our operating
expenses and capital expenditure requirements through 2016 and fund the
continued development of OCA through the following events:
• the completion of our Phase 3 POISE trial;
• initiation of the long-term safety extension portion of the POISE trial
and continuation of the ongoing long-term safety extension portion of
the Phase 2 monotherapy clinical trial;
• initiation of a Phase 3 clinical outcomes trial to confirm clinical
benefit of OCA in PBC;
• two-year animal carcinogenicity studies in both rats and mice;
• a Phase 1 clinical trial in healthy volunteers to evaluate the effect
of OCA on the heart’s electrical cycle, known as the QT interval, and
additional Phase 1 clinical trials;
• manufacturing of clinical drug supply and materials necessary for the
anticipated FDA and EMA filings;
• the initiation of a Phase 2 clinical trial for an additional indication
for OCA, such as portal hypertension, if warranted; and
• the work required for assimilation, preparation and submission of the
anticipated FDA and EMA filings.
The amount and timing of our actual expenditures will depend upon numerous
factors, including the ongoing status and results of the POISE trial.
Furthermore, we anticipate that we will need to secure additional funding
for the further development of OCA for other indications and for the
development of our other product candidates.
Our expected use of net proceeds from this offering represents our current
intentions based upon our present plans and business condition. As of the
date of this prospectus, we cannot predict with certainty all of the
particular uses for the net proceeds to be received upon the completion
of this offering or the amounts that we will actually spend on the uses
set forth above. The amounts and timing of our actual use of net proceeds
will vary depending on numerous factors, including our ability to obtain
additional financing, the relative success and cost of our research,
preclinical and clinical development programs, the amount and timing of
additional revenues, if any, received from our collaborations with DSP and
Servier and whether we are able to enter into future collaborations. As a
result, management will have broad discretion in the application of the net
proceeds, and investors will be relying on our judgment regarding the
application of the net proceeds of this offering. In addition, we might
decide to postpone or not pursue other clinical trials or preclinical
activities if the net proceeds from this offering and the other sources
of cash are less than expected.
Pending their use, we plan to invest the net proceeds from this offering
in short- and intermediate-term, interest-bearing obligations,
investment-grade instruments, certificates of deposit or direct or
guaranteed obligations of the U.S. government.
The biopharmaceutical industry is characterized by intense competition and
rapid innovation. Although we believe that we hold a leading position in bile
acid chemistry, our competitors may be able to develop other compounds or
drugs that are able to achieve similar or better results. Our potential
competitors include major multinational pharmaceutical companies, established
biotechnology companies, specialty pharmaceutical companies and universities
and other research institutions. Smaller or early-stage companies may also
prove to be significant competitors, particularly through collaborative
arrangements with large, established companies. We believe the key competitive
factors that will affect the development and commercial success of our product
candidates are efficacy, safety and tolerability profile, reliability,
convenience of dosing, price and reimbursement.
Our most advanced product candidate, OCA, is currently being developed as a
second line treatment for PBC. Currently, ursodiol is the only therapy that
is approved for the treatment of PBC. Although there are currently no other
drugs approved for the treatment of PBC, we are aware of other companies,
including Eli Lilly, Exelixis, Inc. and Phenex Pharmaceuticals AG that have
FXR agonists in Phase 1 or earlier stages of preclinical development that
could be used to treat PBC and the other liver diseases we are targeting.
In addition, Johnson & Johnson and NovImmune SA are each currently conducting
Phase 2a proof-of-concept open label clinical trials of monoclonal antibodies
as potential treatments for PBC. Finally, Dr. Falk Pharma GmbH, which markets
ursodiol, is conducting a Phase 3 clinical trial of combination ursodiol and
budesonide, a steroid, as a treatment for PBC.
For the treatment of portal hypertension, the only therapeutic products
available are beta blockers, which clinical studies have shown are effective
only in approximately 25% to 33% of patients, while having significant
safety issues. We are aware of only one other company, Dr. Falk Pharma GmbH,
which has a new product candidate in Phase 2 clinical development for the
treatment of portal hypertension.
There are currently no therapeutic products approved for the treatment of NASH
or NAFLD. There are several marketed therapeutics that are currently used off
label for the treatment of NASH, such as insulin sensitizers (e.g., metformin),
antihyperlipidemic agents (e.g., gemfibrozil), pentoxifylline and ursodiol, but none has been clearly shown in clinical trials to alter the course of the disease. We are aware of several
companies that have product candidates in Phase 2 clinical development for the
treatment of NASH, including Dr. Falk Pharma GmbH, Galmed Medical Research Ltd.,
Immuron Ltd., Mochida Pharmaceutical Co., Ltd., NasVax Ltd. and Raptor
Pharmaceutical Corp., and there are other companies with candidates in earlier
stage programs. In addition, it is possible that one or more of the FXR agonist
product candidates mentioned above that are being developed by our competitors
could be used for the treatment of NASH.
For the treatment of bile acid diarrhea, bile acid binding resins such as
cholestyramine are currently used as the only available targeted therapy.
Patients with this disease represent a subset of patients diagnosed with
irritable bowel syndrome with diarrhea, or IBS-D, and we are aware of several
companies with product candidates in Phase 2 or 3 clinical development for the
treatment of IBS-D, including Astellas Pharma US, Inc., AstraZeneca, Salix
Pharmaceuticals, Inc. and Tioga Pharmaceuticals, Inc. In addition, there are
several marketed products indicated for the treatment of IBS-D, including
GlaxoSmithKline’s Lotronex and the over-the-counter product Immodium.
We believe that OCA offers key potential advantages over ursodiol and other
products in development that could enable OCA, if approved for these
indications, to capture meaningful market share. However, many of our potential
competitors have substantially greater financial, technical and human resources
than we do, as well as greater experience in the discovery and development of
product candidates, obtaining FDA and other regulatory approvals of products
and the commercialization of those products. Accordingly, our competitors may be
more successful than us in obtaining approval from the FDA or from other
regulators for drugs and achieving widespread market acceptance. Our
competitors’ drugs may be more effective, or more effectively marketed and sold,
than any product candidate we may commercialize and may render our product
candidatesobsolete or non-competitive before we can recover the expenses of
their development and commercialization. We anticipate that we will face intense
and increasing competition as new drugs enter the market and other advanced
technologies become available. Finally, the development of new treatment methods
for the diseases we are targeting could render our product candidates
non-competitive or obsolete.
currently are limited therapeutic solutions.
Our Lead Product Candidate
Our lead product candidate, obeticholic acid, or OCA, is a bile acid analog
and first-in-class agonist of the farnesoid X receptor, or FXR, which we
believe has broad liver-protective properties. We are developing OCA
initially for the second line treatment of primary biliary cirrhosis,
or PBC. PBC is a chronic autoimmune liver disease that, if inadequately
treated, may eventually lead to cirrhosis, liver failure and death. We
are conducting a Phase 3 clinical trial of OCA in PBC, which we call the
POISE trial, that we anticipate will serve as the basis for seeking
regulatory approval in the United States and Europe. As of September
30, 2012, we had enrolled approximately two-thirds of the total number
of patients targeted for our POISE trial, and we currently expect
results from the trial to be available by mid-2014. OCA has received
orphan drug designation in the United States and Europe for the treatment
of PBC.
We own worldwide rights to OCA outside of Japan and China, where we have
exclusively licensed the compound to Dainippon Sumitomo Pharma, or DSP,
and granted it an option to exclusively license OCA in certain other
Asian countries. Patents covering the composition of matter for OCA expire
in 2022, before any patent term adjustments or patent term extensions.
Our current plan is to commercialize OCA in the United States and Europe
ourselves for the treatment of PBC by targeting a limited and focused
group of specialist physicians.
The liver performs many essential functions that are crucial for survival,
including the regulation of bile acid metabolism. A critical function of
bile acids is to facilitate the absorption of dietary cholesterol and other
nutrients by acting as natural detergent-like emulsifying agents in the
intestine. In the past decade, we have learned that bile acids are also
complex signaling molecules that integrate metabolic, immune and
inflammatory pathways involved in the healthy functioning of various tissues
and organs. The biological effects of bile acids are mediated through
dedicated receptors such as FXR, which regulates bile acid synthesis and
clearance from the liver, thereby preventing excessive bile acid build-up
in the liver, which may be toxic. In addition, bile acid activation of FXR
induces anti-fibrotic, anti-inflammatory and other mechanisms that are
necessary for the normal regeneration of the liver. We believe this makes
FXR an attractive drug target in a broad spectrum of chronic liver diseases.
Similar FXR-mediated protective mechanisms in other organs exposed to bile
acids also make it a potential target for the treatment of a number of
intestinal, kidney and other diseases.
PBC is a rare liver disease that primarily results from autoimmune
destruction of the bile ducts that transport bile acids out of the liver.
The disease causes a toxic build-up of bile acids in the liver, resulting
in progressive liver damage marked by chronic inflammation and fibrosis,
or scarring. In response to the bile acid mediated toxicity seen in PBC,
liver cells release alkaline phosphatase, or ALP, a liver enzyme that is
a key biomarker of the disease pathology. Elevated blood levels of ALP
are used as the primary means of diagnosis of PBC and are closely monitored
in patients as the most important indicator of treatment response and
prognosis.
The only approved drug for the treatment of PBC is ursodeoxycholic acid,
which is available generically as ursodiol. Ursodiol is itself a bile
acid that is present in small quantities in humans, and is the least
detergent of the various types of bile acids that make up the bile pool. Its
primary mechanism of action at therapeutic doses is to dilute more detergent
bile acids, but it has no known pharmacological effects mediated by FXR or
other bile acid receptors. Although ursodiol is the standard of care,
studies have shown that up to 50% of PBC patients fail to respond
adequately to treatment, meaning that they continue to be at significant
risk of progressing to liver failure even with treatment. The options for
end-stage PBC patients who fail to respond to ursodiol are limited, and
include liver transplant, which is associated with significant complications
and costs. Patients typically need to take approximately one gram of
ursodiol daily in divided doses, which we believe presents a compliance
challenge for some patients. Given this issue, coupled with ursodiol’s
limited efficacy in up to 50% of PBC patients, we believe that there is a
significant unmet need for a novel second line therapy in PBC. We believe
that OCA has the potential to provide significant benefits in the treatment
of PBC, including efficacy, pharmacological activity and ease of use.
According to industry data, there are approximately 300,000 people with PBC
in developed countries, of whom we believe approximately 60,000 have been
diagnosed and are on ursodiol therapy. Based on this estimate, we believe
there are up to 30,000 PBC patients who may currently be eligible for
treatment with OCA. With increasing identification of PBC through routine
liver function testing in primary care, we believe that there may be
significantly more patients who will potentially be eligible for, and be
interested in, receiving a new therapy if it becomes available on the market.
We have previously completed two randomized, placebo-controlled Phase 2
trials with OCA in PBC patients, one with OCA in combination with ursodiol
and one with OCA as monotherapy. The results demonstrated that over a
12-week period single daily doses of OCA at the lowest dose of 10 milligrams
(mg) met the primary endpoint in both Phase 2 trials, producing
statistically significant reductions in ALP levels of greater than 20%.
We consider reductions in ALP levels of greater than 10% to be a clinically
meaningful improvement. Pruritus, or itching, a very common symptom in PBC
patients, was the most common adverse event reported in our Phase 2 trials,
with severity increasing with dose.
Our Phase 3 POISE trial has been designed to study the safety and efficacy
of OCA in patients with an inadequate therapeutic response to ursodiol or
who are unable to tolerate ursodiol. The primary endpoint of the 12-month
double-blind portion of the POISE trial is the achievement of both an ALP
level of less than 1.67 times upper limit normal, or ULN, and a minimum 15%
reduction in ALP level from baseline, together with a normal bilirubin
level, as compared to placebo. Patients with ALP and bilirubin levels within
these thresholds have been shown in long-term studies to be at significantly
lower risk of progressing to liver transplant and death.
We are advancing a once daily 10 mg dose of OCA in the POISE trial as our
potential approvable dose. We recently completed an intention to treat
analysis for the 10 mg dose groups in our two Phase 2 trials that was
limited to those patients who would have met the POISE trial entry criteria.
This analysis demonstrated that after 12 weeks of treatment approximately 40%
to 45% of OCA-treated patients would have met the POISE trial primary
endpoint, as compared to 5% to 9% of the placebo-treated patients. In
addition, 80% of OCA-treated patients across our Phase 2 trials had a
reduction in ALP levels of at least 10%, as compared to 13% of
placebo-treated patients.
If the POISE trial is successful, we intend to submit a New Drug Application,
or NDA, to the U.S. Food and Drug Administration, or FDA, for approval of
OCA for the treatment of PBC in the United States and a Marketing
Authorization Application, or MAA, to the European Medicines Agency, or
EMA, for approval in Europe. Based on written scientific advice from the
EMA, we believe that the EMA will accept our current clinical program as
the basis for considering approval of OCA for PBC. With respect to the FDA,
we intend to request that the POISE trial primary endpoint be accepted as a
basis for approval of OCA under the FDA’s accelerated approval regulation
that enables the use of a surrogate endpoint reasonably likely to predict
clinical benefit. If the FDA agrees to consider the potential approval of
OCA in accordance with its accelerated approval regulation based on the
POISE trial results, we will likely have to conduct a Phase 3 clinical
outcomes trial to confirm the clinical benefit predicted by the biochemical
therapeutic response. This Phase 3 clinical outcomes trial would have to be
substantially underway at the time of the NDA submission and would be
completed after accelerated approval. We are in discussions with the
FDA about the details of such a clinical trial and are planning to initiate
it as early as the second half of 2013.
Additional Pipeline Opportunities Beyond OCA in PBC
In addition to PBC, we are pursuing other indications in our OCA development
program, including portal hypertension, nonalcoholic steatohepatitis,
or NASH, and bile acid diarrhea. The pipeline chart below shows the current
stage of development of OCA for these indications, as well as the
preclinical programs for our other product candidates.
We are currently conducting an open label Phase 2a trial of OCA in patients
with portal hypertension, and we anticipate receiving results from the 10
mg dose group of this trial by the end of 2012. There are currently no
approved therapies for the treatment of portal hypertension, although
beta blockers are commonly used to treat patients. In addition, OCA is
currently being tested in a Phase 2b trial for the treatment of NASH,
sponsored by the U.S. National Institute of Diabetes and Digestive and
Kidney Diseases, or NIDDK, in collaboration with us. As of September
30, 2012, the NIDDK had enrolled approximately 90% of the total number
of patients targeted for this trial. Based on the interim analysis that
was completed in June 2012, the NIDDK decided to continue this Phase 2b
trial and we anticipate that final results will be available in late 2014.
There are currently no approved therapies for the treatment of NASH. In
addition, investigators at the Imperial College of London initiated
enrollment in July 2012 in an open label Phase 2a trial of OCA as a
treatment for bile acid diarrhea.
By virtue of our patent portfolio and the proprietary knowhow of our
employees and our collaborators at the University of Perugia, we believe
that we hold a leading position in the bile acid chemistry therapeutic
field. Through a longstanding exclusive collaboration with Professor
Roberto Pellicciari, Ph.D., one of our co-founders, and certain scientists
in the medicinal chemistry group at the University of Perugia, we have
gained the capability to rationally design compounds that bind selectively
and potently to FXR and other bile acid receptors. Starting with OCA, which
was invented by Professor Pellicciari and, together with its underlying
patents, was assigned to us under our agreements with him and the
University of Perugia, our collaboration has resulted in a pipeline of
bile acid analogs in addition to OCA, which target both FXR and a second
dedicated bile acid receptor called TGR5, a target of interest for the
treatment of type 2 diabetes and associated metabolic diseases. We intend
to continue developing these and other product candidates as we advance
our pipeline, in some cases subject to the procurement of additional
funding or through strategic collaborations.
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We were incorporated in the State of Delaware on September 4, 2002. Our
principal executive offices are located at 18 Desbrosses Street, New York, NY
10013, and our telephone number is (646) 747-1000. We also have an office in
San Diego, CA. Our website address is www.interceptpharma.com.