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Intercept (ICPT) Up 48.6% Since Last Earnings Report: Can It Continue?

Zacks Equity Research

It has been about a month since the last earnings report for Intercept Pharmaceuticals (ICPT). Shares have added about 48.6% in that time frame, outperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is Intercept due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.

Intercept Earnings and Sales Miss Estimates in Q3

Intercept incurred a loss of $2.59 per share in the third quarter, wider than the Zacks Consensus Estimate of a loss of $2.35 and the year-ago quarter’s loss of $2.18.

Quarterly revenues were $61.9 million, up from $46.9 million in the year-ago quarter. However, revenues missed the Zacks Consensus Estimate of $64 million.

Quarter in Detail

Lead drug Ocaliva (obeticholic acid or OCA) reported $61.5 million in sales, up from $46.6 million in the year-earlier quarter. Net sales in the United States came in at $45.2 million, while ex-U.S. Ocaliva net sales summed $16.3 million.

During the third quarter, the company submitted a new drug application (NDA) seeking accelerated approval of OCA for non-alcoholic steatohepatitis (“NASH”) in the United States. The   marketing authorization application (“MAA”) submission for the same is planned for fourth quarter of 2019

Research and development expenses increased 25.7% year over year to $60.2 million, primarily driven by higher NASH development program expenses and costs associated with the preparation of the NASH NDA submission.

2019 Outlook

For 2019, the company raised its net sales guidance for Ocaliva and expects it to be in the range of $245 million and $250 million up from the previous range of $235 million and $245 million. Intercept narrowed its adjusted operating expenses guidance range to $480- $500 million, from $470 -$500 million.
 

How Have Estimates Been Moving Since Then?

It turns out, estimates revision have trended downward during the past month.

VGM Scores

Currently, Intercept has a subpar Growth Score of D, though it is lagging a bit on the Momentum Score front with an F. Following the exact same course, the stock was allocated a grade of F on the value side, putting it in the lowest quintile for this investment strategy.

Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Intercept has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.



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