Why Intercept Pharma Stock Jumped Nearly 10% On Friday After Providing Phase III Update

Why Intercept Stock Jumped Nearly 10% On Friday After Providing Phase III Update February 10, 2017
By Alex Keown, BioSpace.com Breaking News Staff

NEW YORK – Shares of Intercept Pharmaceuticals spiked about 10 percent this morning to a high of $121.50 per share before falling back to $118.10 on news that protocols for its Phase III trial of obeticholic acid in patients with non-alcoholic steatohepatitis (NASH) therapy were changed, which is expected to accelerate the trial.

This morning New York-based Intercept said during a call with investors that it changed the trial protocols based on discussions with the U.S. Food and Drug Administration for its Phase III Regenerate study. What is expected to accelerate the trial is a change that includes a “new primary endpoint of fibrosis improvement or NASH resolution” as well as a “reduction in target enrollment from around 2,000 to now 750,” according to Benzinga. Endpoints’ John Carroll said before the changes were implemented, Intercept’s trial data was expected to show fibrosis improvement and NASH resolution.

“We now only need to achieve one endpoint for the trial to be considered successful,” Mark Pruzanski, chief executive officer of Intercept said on a call with analysts Friday morning, according to Endpoints.

Citing Pruzanski, Carroll said Intercept’s bar has been “lowered on success,” which increases the company’s odds of success. And if the drug hits both endpoints, Pruzanski said, Intercept will be able to “clearly differentiate this drug from others,” Carroll noted. Pruzanski added that Intercept has “derisked” the study without risking the integrity of the trial, Carroll said.

The FDA designated OCA as a breakthrough therapy in NASH patients with fibrosis. The interim data readout from the Phase III trial, which is expected to include about 2,000 patients, is expected in 2019.

The treat non-alcoholic steatohepatitis (NASH) market is huge, estimated to reach $40 billion by 2025, according to analyst predictions. The prevalence of NASH is increasing worldwide in part due to the increase of obesity and diabetes diagnoses. According to the National Institute of Diabetes and Digestive and Kidney Diseases, NASH affects 2 to 5 percent of people in the U.S. There are currently no specific treatments aside from weight loss, increased physical activity and avoiding alcohol and unnecessary medications. NASH is projected to become the leading indication for liver transplant by 2020.

In December there were rumors that Intercept was an acquisition target for Novartis . The rumors were spurred following the FDA’s approval of the company’s Ocaliva (obeticholic acid) to treat primary biliary cirrhosis (recently renamed primary biliary cholangitis, or PBC).

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