Intercept Pharmaceuticals, Inc. ICPT posted a loss of $4.84 per share in the fourth quarter of 2016, wider than the Zacks Consensus Estimate of a loss of $3.58 and the year-ago loss of $3.62.
Quarterly revenues came in at $13.8 million, up significantly from $0.4 million in the year-ago quarter and comfortably beat the Zacks Consensus Estimate of $9.2 million.
The company’s shares were down almost 5.6% following the release.
Intercept’s share price movement in the last six months indicates that the stock has underperformed the Zacks classified Medical-Biomedical/Genetics industry. The company’s shares have lost 24.5% during this period, which compares unfavorably with the industry’s 5.3% fall.
Quarter in Detail
Ocaliva sales came in at $13.4 million in the fourth quarter of 2016. Note that in May 2016, Ocaliva was approved in the U.S., in combination with ursodeoxycholic (UDCA) for the treatment of primary biliary cholangitis (PBC) in adults with an inadequate response to UDCA, or as monotherapy in adults who are unable to endure UDCA.
Research and development expenses shot up 49.2% year over year to $53.8 million primarily due to higher staff and respective expenses as well as higher activities related to the research and development program for Ocaliva.
General and administrative expenses increased to $74 million from $53.3 million in the year-ago quarter driven by the commercial launch of Ocaliva in the U.S., along with increased international infrastructure and pre-commercial activities to support the drug’s anticipated launch in the ex-U.S. markets.
Revenues for 2016 came in $24.9 million, up from $2.9 million in 2015 and beat the Zacks Consensus Estimate of $20.6 million. Ocaliva sales in 2016 came in at $18.2 million. Loss per share was $16.74 from $9.56 in 2015 and was wider than the Zacks Consensus Estimate of $15.15.
Intercept expects operating expenses in the range of $380–$420 million in 2017 to support the continued commercialization of Ocaliva in PBC in the United States and other markets, sustained clinical development for OCA in PBC and NASH and the continued advancement of INT-767 and other pipeline programs.
However, sales in the first quarter will be impacted due to higher gross net impact early in the year while patients navigate through the annual change of insurance carriers and benefits, which can cause patients to have their benefits reauthorized and result in a delay in approval.
In Dec 2016, the European Commission granted conditional approval to Ocaliva for Ocaliva received conditional marketing authorization in Europe for the treatment of PBC in combination with UDCA in adults.
Meanwhile, Ocaliva is being evaluated for other indications including non-alcoholic steatohepatitis (NASH) and primary sclerosing cholangitis (PSC).
The FDA recently approved a redesign of the phase III trial, REGENERATE on Ocaliva for the safety and efficacy in treating NASH patients with liver fibrosis. The company now needs to achieve only one co primary endpoint- either fibrosis improvement or NASH resolution as compared to the earlier target of achieving both.
The sample size of the trial has also been reduced to approximately 750 patients or about 250 patients per arm. The company plans to complete enrolment for the interim analysis cohort in the REGENERATE trial by mid-2017 (data readout in 2019).
Meanwhile, Intercept also initiated a phase II study, CONTROL (Combination OCA aNd sTatins for monitoRing Of Lipids), on OCA. The study is being conducted to evaluate the effect of OCA in combination with statin therapy on lipid metabolism in patients with NASH. Enrolment in the study was completed in the third quarter of 2016, with data expected in 2017.
The company will also initiate a phase II trial on another candidate, INT-767, in NASH patients with fibrosis in 2017.
Intercept Pharmaceuticals, Inc. Price and EPS Surprise
Intercept Pharmaceuticals, Inc. Price and EPS Surprise | Intercept Pharmaceuticals, Inc. Quote
Intercept’s fourth-quarter results were mixed with company reporting a wider-than-expected loss but beating on revenues. Nevertheless, the initial uptake of Ocaliva has been encouraging and sales of the drug should pick up further in 2017.
The company does not expect much contribution from international markets in 2017 and most of it will be loaded in the second half as it works to obtain reimbursements in various European countries. However, expenses are expected to continue rising as the company invests in commercial activities related to Ocaliva.
Zacks Rank & Key Picks
Intercept currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the health care sector include Sunesis Pharmaceuticals SNSS, Celgene Corp. CELG and GlaxoSmithKline plc GSK. All three carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here
Sunesis’ loss estimates narrowed by 5.06% and 8.80% for 2016 and 2017, respectively, over the past 60 days. The company recorded a positive earnings surprise in three of the last four quarters, the average being 0.54%.
Celgene’s earnings estimates increased from $6.55 to $6.60 for 2017 and from $8.13 to $8.16 for 2018 over the last 30 days. The company posted a positive earnings surprise in three of the four trailing quarters with an average beat of 5.08%.
GlaxoSmithKline’s earnings estimates increased from $2.66 to $2.76 for 2017 and from $2.80 to $2.85 for 2018 over the last 30 days. The company posted a positive earnings surprise in three of the four trailing quarters with an average beat of 11.03%. Its share price increased 6.7% year to date.
Zacks' Top 10 Stocks for 2017
In addition to the stocks discussed above, would you like to know about our 10 finest tickers for the entirety of 2017?
Who wouldn't? These 10 are painstakingly hand-picked from 4,400 companies covered by the Zacks Rank. They are our primary picks to buy and hold. Be among the very first to see them >>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
GlaxoSmithKline PLC (GSK): Free Stock Analysis Report
Celgene Corporation (CELG): Free Stock Analysis Report
Sunesis Pharmaceuticals, Inc. (SNSS): Free Stock Analysis Report
Intercept Pharmaceuticals, Inc. (ICPT): Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research