Intercept Pharmaceuticals' Shares Crash on FLINT Results - Analyst Blog

Shares of Intercept Pharmaceuticals, Inc . ( ICPT ) plunged 30.1% following the publication of additional results from the FLINT trial on its lead candidate, obeticholic acid (OCA) in The Lancet .

OCA is being developed for a variety of chronic liver diseases including primary biliary cirrhosis (PBC), non-alcoholic steatohepatitis (NASH) and primary sclerosing cholangitis (PSC).

The FLINT (Farnesoid X Receptor Ligand Obeticholic Acid in Nonalcoholic Steatohepatitis Treatment) trial (n=283) is evaluating OCA for the treatment of NASH wherein patients were randomized to receive either a 25 mg dose of OCA or placebo for 72 weeks.

The results showed that although OCA was superior to placebo in the primary endpoint of improved liver histology and the secondary endpoint of fibrosis improvement, the candidate affected cholesterol levels of patients adversely. Moreover, the study results showed that pruritus (itching) in the OCA treatment group occurred more frequently and at a higher grade (predominantly moderate pruritus), resulting in one patient discontinuation.

Consequently, the candidate will have to be evaluated further in other studies to examine other side effects and safety concerns.

The company had earlier reported positive results from the FLINT trial in Jan 2014 wherein OCA had led to the reduction in NAFLD Activity Score by at least 2 points with no worsening of fibrosis, as compared to placebo. Nevertheless, Intercept Pharma intends to initiate a phase III program on OCA for this indication in the first half of 2015.

Meanwhile, Intercept Pharma reported a loss of $1.69 per share in the third quarter, wider than the Zacks Consensus Estimate of a loss of $1.10 and the year-ago loss of $1.65 per share. Revenues, however, increased 9.8% year over year to $0.4 million.

Our Take

Investors were clearly disappointed with the study results as OCA is Intercept Pharma's lead candidate. The wider-than-expected loss in the third quarter also disappointed the investors.

We expect investor focus on further updates on OCA from other studies.

Intercept Pharma currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the health care sector are Auxilium Pharmaceuticals ( AUXL ), Biogen ( BIIB ) and Cytokinetics ( CYTK ). All these stocks hold a Zacks Rank #1 (Strong Buy).

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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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