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Intercept (ICPT) Stock Gains 13% in 3 Months: Here's Why

Shares of Intercept Pharmaceuticals, Inc. ICPT have jumped 13% in the last three months against the industry’s decline of 9.7% on a string of positive updates in the time frame.

In July 2022, Intercept announced positive top-line data from a new interim analysis of its ongoing pivotal phase III REGENERATE study, evaluating the efficacy of obeticholic acid (OCA) in patients with liver fibrosis due to nonalcoholic steatohepatitis (NASH).

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OCA 25 mg met the agreed primary endpoint of improvement in liver fibrosis without worsening of NASH at 18 months (p<0.0001), consistent with the original REGENERATE analysis. OCA 25 mg demonstrated double the response rate in reduction of liver fibrosis without worsening of NASH veruss placebo.

The company held a pre-submission meeting with FDA in July. It plans to resubmit its new drug application (NDA) for OCA in fibrosis due to NASH by the end of 2022.

We note that OCA is approved under the brand name Ocaliva for treating primary biliary cholangitis (PBC) in combination with ursodeoxycholic acid (UDCA) in adults with an inadequate response to UDCA alone or as a monotherapy for adults intolerant to UDCA. While the FDA granted the approval for Ocaliva under an accelerated pathway, the drug received conditional approval from the European Commission. The company is also currently developing OCA for additional indications, including NASH.

Concurrent with the second-quarter results, management reissued guidance that was previously suspended due to the impact and lack of clarity on the timing for closing the sale of its international business. ICPT now expects net sales between $325 million and $345 million compared with the previous guidance of $375 million to $405 million. Investors were upbeat about the same.

A potential approval of OCA for NASH will be a significant boost for Intercept Pharmaceuticals.

While the NASH market promises potential with no approved therapies yet, it is challenging. Quite a few players are trying to successfully develop a treatment for the same.

Akero Therapeutics, Inc AKRO recently released positive top-line data from the phase IIb HARMONY study, currently evaluating the efficacy and safety of its lead product candidate efruxifermin (EFX) in patients with pre-cirrhotic nonalcoholic steatohepatitis (NASH), fibrosis stage 2 or 3 (F2-F3). The study met its primary endpoint for both the 50 mg and 28 mg EFX dose groups, with 41% and 39% of EFX-treated patients, respectively, experiencing at least a one-stage improvement in liver fibrosis with no worsening of NASH by week 24 compared with 20% for the placebo arm.  Shares of AKRO surged on the same.

Another company, Viking Therapeutics VKTX, is developing a candidate, VK2809, for biopsy-confirmed NASH and fibrosis. VK2809 is currently being evaluated in a phase IIb study in patients with NASH.  Viking expects to complete enrollment in the second half of 2022.

Intercept currently carries a Zacks Rank #3 (Hold).  A better-ranked stock in the healthcare sector is Bolt Pharmaceuticals BOLT which has a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Loss estimates for BOLT have narrowed to $2.25 from $2.87 in the past 60 days. BOLT surpassed earnings in three of the trailing four quarters, the average being 2.39%.

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