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Intercept Pharma (ICPT) Shares Soar on Liver Disease Drug News - Stocks in the News

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Intercept Pharmaceuticals ( ICPT ) is a New York based biopharmaceutical firm that focuses on finding innovative methods to treat chronic liver disease, mainly through bile acid chemistry. On Monday August 11 th 2014, the company announced that it had developed an effective treatment for liver disease, according to mid-stage trials.

Shares spiked upwards of 65%, or $391 a share, in the market after-hours on Monday as investors and traders looked to profit from the positive announcement, while mid-Tuesday trading had the stock up about 25% to just under $300/share. As of very recently, there has been no effective and tested treatment for liver inflammation in patients with non-alcoholic steatopatitis, however, ICPT has managed to use obeticholic acid to do so.

It is also important to note that ICPT has posted a profit in its second quarter results, which ended June 30, thanks to revaluation of a warrant, while Conatus Pharmaceuticals' shares also surged 10%, all the way to $8.32 a share.

Analyst Commentary

According to Street Insider, Oppenheimer analyst, Akiva Felt has stated that investors' worries over the drug's effectiveness and safety have been laid to rest as the trials have concluded otherwise. We have seen how this has also pushed other analysts, such as Leerink Swann, to upgrade ICPT to outperform with a target of $445.

Nomura Securities analyst, M. Ian Somaiya, has reiterated a buy rating with a price target of $456, while BMO Capital analyst, Jim Birchenough, followed suite with a $515 price target. Lastly, Deutsche Bank followed through on its buy rating, and iterated a price target of $500.

Bottom Line

If this positive update says anything for the future, it is very probable that ICPT's late stage drug tests, which will be taking place early next year, could pass the tests. This could mean a huge yield for investors who are looking at the company's long-term prospects.

It is also essential that one looks to see if there is a correction tomorrow, and how intense the pullback will be after short-term traders dump the stock, to see the real magnitude of ICPT's mid-stage testing success.

Short-term investors might be better served by selling after this pop, but longer-term investors should carefully study previous patterns and analyst ratings to see whether they would like to hold ICPT for next year's final stage testing, as high levels of volatility in this stock are likely to continue.

Intercept Pharmaceuticals ( ICPT ) has a Zacks Rank #3 (Hold), and its biomed industry currently has a Zacks Industry Rank in the top 37%.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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