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Intercept's (ICPT) Q2 Loss Narrower Than Expected, Sales Beat

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Intercept Pharmaceuticals, Inc. ICPT incurred a loss of 33 cents per share in second-quarter 2021, narrower than the Zacks Consensus Estimate of a loss of $1.24 and the year-ago quarter’s loss of $1.92.

Total revenues of $96.6 million in the quarter beat the Zacks Consensus Estimate of $83 million and also increased from $77.2 million in the year-ago quarter.

Quarter in Detail

Total revenues generated in the quarter comprised only Ocaliva (obeticholic acid or OCA) net sales. Net sales came in at $68.2 million in the United States and $28.4 million outside the country.

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.

Research and development expenses increased to $37.8 million from $34 million in the year-ago quarter, primarily driven by the recognition of lower UK R&D tax credit versus the prior-year quarter, partially offset by lower nonalcoholic steatohepatitis (NASH) development costs.

Selling, general and administrative expenses decreased to $57.7 million from $93.4 million in the year-ago quarter. The decline was driven by actions taken to decrease expenses relating to the launch preparation activities associated with the potential approval and commercialization of OCA for liver fibrosis due to NASH following the complete response letter, which was received in 2020.

As of Jun 30, 2021, Intercept had cash, cash equivalents, restricted cash and marketable securities of $422.5 million.

Other Updates

The prescribing information for lead drug, Ocaliva (obeticholic acid or OCA), in the United States has been updated.

The update to the prescribing information was prompted by cases submitted to the FDA’s Adverse Event Reporting System and published in the medical literature. These were cases of worsening of liver problems or liver failure in PBC patients with cirrhosis treated with Ocaliva.

Consequently, the Boxed Warning has been updated and Ocaliva is now contraindicated for patients with PBC and decompensated cirrhosis, a prior decompensation event, or with compensated cirrhosis with evidence of portal.
The company is working with the FDA to finalize important changes to the prescribing information.

Meanwhile, the company plans to submit more data on NASH following the CRL.

The company recently initiated first-in-human studies on INT-787.

2021 Guidance

Ocaliva net sales are projected between $325 million and $340 million.

Our Take

The lower-than-expected loss in the second quarter was encouraging. While Ocaliva’s sales increased in the second quarter, sales might take a hit due to the label update.

The stock has slumped 29.4% in the year so far compared with the industry’s decline of 0.4%.

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Zacks Investment Research

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The CRL for OCA was disappointing as the candidate was a frontrunner in receiving approvals for the treatment of NASH.

While the NASH market promises potential, it is quite challenging as well. Bigwigs like Novo Nordisk NVO and Gilead Sciences, Inc. GILD are also evaluating candidates for NASH. Another company, Viking Therapeutics VKTX, is enrolling in the phase IIb VOYAGE study to evaluate VK2809 for biopsy-confirmed NASH and fibrosis.

Intercept currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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Novo Nordisk AS (NVO) : Free Stock Analysis Report

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