Post Q3 Earnings Beat Intercept Pharma’s (ICPT) Growth Hinges on Ocaliva, NASH Sales

By Carrie Williams

The latest pharma fizzle ensued mainly due to the political campaign of U.S presidential election regarding healthcare. The inclusion of certain provisions, such as; lowered prices of prescription drug and possible slashing down of biologic exclusivity period in the healthcare plan, set the sector stocks, including Intercept Pharmaceuticals (NASDAQ: ICPT), spiraling downwards. Shares of ICPT had plunged by nearly 76% within the past five weeks is currently trading at $97.84.

Although being a smaller player in the sector, multiple analysts weighed in on the biopharmaceutical company this past week. Credit Suisse analyst Alethia Young maintained their Outperform rating while lowering the price target to $197 from the former $200. The new PT is an upside of 101.4% from current levels. BMO analyst Ian Somaiya also reiterated his previous rating of Outperform and lowered their PT from $218 to $204 (108.5% upside).

Intercept Pharma had reported Q3 EPS of -$3.59 that beat the estimates by $0.23 and revenue of $5.18 million (+1051.1% YoY) vs the estimated $4.77 million. This was majorly due to the better than anticipated ($4.7 million) sales of the drug Ocaliva, which is used in combination with ursodeoxycholic (UDCA) for the treatment of primary biliary cirrhosis (PBC).

According to the pipeline updates from the company, Intercept has set plans in motion for the approval of Ocaliva in Europe as well as Canada. The company had filed a New Drug Submission to Health Canada for Ocaliva in September and is expected to be approved and launched in 2017 after being granted a priority review. Ocaliva had recently received a recommendation for conditional approval from European Medicines Authority’s (EMA) Committee for Medicinal Products for Human Use (CHMP) and expect its launch to happen by early 2017 after getting approval by end of 2016.

Meanwhile, ICPT also major positives in the third quarter that are expected to propel growth in later quarters. In addition to the optimism regarding approval of Ocaliva(OCA) in EU and Canada, the enrollment in two placebo-controlled Phase 2 trials of OCA in Nonalcoholic Steatohepatitis (NASH) and PSC was completed recently. This is expected to aid in ICPT’s efforts to expand its footprints in NASH, as ICPT’s drug belonging to a class called FXR agonists, is proved to be more potent than the competitors.

In addition, other things in the pipeline include the enrollment of interim analysis cohort for Phase 3 REGENERATE trial for NASH is targeted for 1H 2017, top-line results from Phase II AESOP trial for PSC is anticipated in 2017, and Phase 1 trial completion of INT-767 Program which is expected by YE 2016.

According to, based on the recent analyst ratings, ICPT has an overall consensus rating of a Moderate Buy and an average analyst price target of $214.20 (119% upside).