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Intercept (ICPT) Earnings and Sales Miss Estimates in Q3

Zacks Equity Research

Intercept Pharmaceuticals, Inc.’s ICPT shares declined 2% after it reported wider-than-expected loss for the third quarter of 2019 and revenues fell short of expectations as well

Shares of the company have lost 26.1% in the year so far against the industry’s growth of 0.9%.

The company 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. 

Intercept Pharmaceuticals, Inc. Price, Consensus and EPS Surprise

Intercept Pharmaceuticals, Inc. Price, Consensus and EPS Surprise

Intercept Pharmaceuticals, Inc. price-consensus-eps-surprise-chart | Intercept Pharmaceuticals, Inc. Quote

Our Take

Intercept reported a wider than expected loss and missed sales estimates in the third-quarter of 2019.

Nevertheless, the company’s efforts todevelop OCA for NASH is encouraging given the market potential. 

Zacks Rank & Stocks to Consider

Intercept currently carries a Zacks Rank #4 (Sell). 

A few better-ranked stock in the biotech sector are ASLAN Pharmaceuticals Ltd. ASLN Acorda Therapeutics Inc. ACOR and AVEO Pharmaceuticals Inc. AVEO both sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

ASLAN’s loss per share estimates have narrowed from 79 cents to 72 cents fr 2019 and from 83 cents to 71 cents for 2020 in the past 60 days. The company delivered a positive earnings surprise in three of the trailing four quarters by 24.65% on average.  

Acorda’s loss per share estimates have narrowed from $2.94 to $2.18 for 2019 and from $3.74 to $1.95 for 2020 in the past 60 days. The company delivered a positive earnings surprise in the trailing four quarters by 68.80% on average

AVEO’s estimates have gone up from a loss of 6 cents to a profit of 1 cent. The company delivered a positive earnings surprise in three of the trailing four quarters by 28.34% on average..    

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