Intercept drugs (ICPT) said Friday that the experimental treatment for liver disease will face a Food and Drug Administration panel in May, causing ICPT’s stock to tumble.
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The FDA’s Gastrointestinal Drugs Advisory Committee will meet on May 19 to discuss the benefits and risks of Intercept’s obeticholic acid as a treatment for nonalcoholic steatohepatitis, or NASH. The panel will provide a non-binding opinion on the future of the drug.
SVB Securities analyst Thomas Smith said the panel discussion will provide more clarity on how the FDA views obeticholic acid in NASH.
“We also expect this advisory committee to have important implications for other NASH drug developers as it represents the first detailed insight into the FDA’s process of more broadly reviewing NASH drug applications,” he said in a report.
In today’s stock market, ICPT shares fell 13.9% to close on 12/16. Meanwhile, shares of biotech companies fell about 3.5%. The broader decline is due to concerns after federal regulators took control of Silicon Valley Bank. The investment bank handled about 44% of US healthcare and technology IPOs by 2022.
ICPT Stock: Expanding the use of Ocaliva
Intercept has faced a tough battle with obeticholic acid in NASH. The drug is approved as a treatment for another liver condition called primary biliary cholangitis. It sells under the brand name Ocaliva.
There are no approved treatments for NASH. To gain approval, a drug must improve fibrosis — a form of scarring of the liver — by at least one stage. Fibrosis is measured in stages 1-4. Or the drug should improve the symptoms of NASH and prevent fibrosis from getting worse.
On Sept. 30, Intercept said obeticholic acid made no difference in patients with the worst level of fibrosis, stage 4. This means their livers had extensive scarring, known as cirrhosis. In general, these patients only survive with a liver transplant. ICPT shares fell 15% that day.
But in January, the FDA accepted Intercept’s application for obeticholic acid in NASH patients with less severe fibrosis. Before deciding whether to approve or deny the application in June, the FDA will hold its advisory committee meeting. SVB’s Smith expects the meeting to be a challenge for Intercept.
Intercept faces Madrigal Pharmaceuticals (MDGL) in this market. Madrigal secured a victory with strong Phase 3 results in NASH in December. While Madrigal shares tripled, ICPT shares plummeted 23.5%.
Meeting will provide broad NASH insight
The FDA meeting will provide some insight into the NASH development space, Smith said.
“We believe the advisory committee will serve as a forum to provide much-needed clarity on how the FDA views both the risk/benefit of obeticholic acid in NASH, and broader insights into the regulatory review process for this indication, with important implications for other NASH players past Intercept,” he said.
He maintained his market performance rating on ICPT stocks. On Friday’s news, shares fell below their 50-day moving average, MarketSmith.com shows. However, Intercept stocks have a strong Relative Strength Rating of 93. This puts stocks in the top 7% of all stocks when it comes to 12-month performance, according to IBD Digital.
Follow Allison Gatlin on Twitter at @IBD_AGatlin.
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