Intercept 3rd Quarter Call Points for Revenue Growth, Pipeline

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intercept (NASDAQ:ICPT) is a small biopharmaceutical company (with a market capitalization of $570 million) focused on therapy for non-viral liver diseases, and was a long-time leader in the NASH market, until its OCA NDA was derailed by a Complete Response letter (or CRL) from the FDA. The company reported net sales of Ocaliva in the US. $77.6 million, and increased their guidance, leaving a very doable $73-83 million for the fourth quarter. Because they have not reached profitability, a new indication is necessary. The NASH data combine the most recent consensus panel analysis of 3 pathologists of the main results (Figure 1) for the 931 patients included in the original 2019 NDA and, importantly, for additional patients who were He has since biopsied them. Investors should probably wait for more details, mainly on safety, from the annual meeting of the American Association for the Study of Liver Diseases (AASLD).

Main results of REGENERATE on fibrosis with NASH

Main results of REGENERATE (The Liver Meeting)

Some background on NASH is found in the recent article by Madrigal (MDGL). According to the FDA “Nonalcoholic Non-Cirrhotic Steatohepatitis with Hepatic Fibrosis” 2018 Guidance DraftAccelerated approval can be secured by demonstrating improvement with ANY of the following liver histology endpoints:

  1. Resolution of steatohepatitis on gross histopathology readout and no worsening of liver fibrosis on NASH Clinical Research Network (or CRN) Fibrosis Score. Resolution of steatohepatitis is defined as no fatty liver disease or isolated or simple steatosis without steatohepatitis and a NASH CRN Activity Score (NAS) of 0-1 for inflammation, 0 for ballooning, and any value for steatosis [NASH-EP]

  2. Improvement in liver fibrosis greater than or equal to one stage (NASH CRN fibrosis score) and no worsening of steatohepatitis (defined as no increase in NAS for ballooning, inflammation, or steatosis) [Fibrosis-EP]

  3. Both resolution of steatohepatitis and improvement of fibrosis (as defined above)

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Unlike Madrigal’s resmetirom, OCA, the first-in-class farnesoid X receptor (or FXR) agonist, demonstrated efficacy as an antifibrotic agent (Table 1) in REGENERATE, an ongoing Phase 3, randomized, double-blind, controlled study. placebo, multicenter, international study. A prespecified interim analysis was performed comparing month 18 biopsies with baseline. Biopsies that were initially performed by individual pathologists at the respective test sites were redone by a panel.

Table 1. New REGENERATE intermediate analysis over 931 topics

Percentage of patients with:

Placebo

OCA 25mg

p-value

≥1 stage improvement in fibrosis without worsening NASH [Fibrosis-EP]

9.6

22.4

<0.0001

NASH resolution (without increased fibrosis) [NASH-EP]

3.5

6.5

Insignificant

The original six-month NDA review given to a breakthrough therapy designated OCA was supposed to include a twice-postponed FDA advisory committee meeting that was never convened due to COVID-19 disruptions. Three days after the Prescription Drug User Fee Act (PDUFA) target action date of June 26, 2020, the Agency issued the CRL, stating that “the anticipated benefit of OCA based on a surrogate histopathologic endpoint remains uncertain and does not sufficiently compensate for the potential risks.The FDA then recommended “additional efficacy and safety data from post-interim analysis” of REGENERATE.

And so, Intercept has collected safety data from 2,477 subjects who received ≥1 dose of OCA, representing 8,000 patient-years. Of course, pruritus was the most common treatment-emergent adverse event (TEAE), as known from the outset. But since OCA has been sold as Ocaliva since 2016 (Figure 2) and patients take it long-term, the itch concern is probably overblown and managed appropriately in the real world. Similarly, more modest cholesterol issues were found to be back near baseline at month 12. So, everything looks set for the Intercept to resubmit the NDA by the end of the year.

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Figure 2.

Ocaliva quarterly net sales

Corporate Filing Interception

Also on the schedule for The Liver Meeting is Phase 1 data for the company’s next-generation FXR agonist. Of Summary #4758, one case of moderate TEAE (migraine) was observed at a low dose. The Intercept is expected to announce the INT-787 lead indication and updates to its proof-of-concept study, FRESH. Management has given indications that the 787’s FXR target is more likely to affect the gut than the liver. Phase 2 of a fixed-dose combination of OCA + bezafibrate was initiated in Europe.

Figure 3. Intercept Pipeline

Intercept Pipeline

Intercept

*Investigational. ± Intercept is licensed to develop and market only in the US.

Ocaliva is indicated for the treatment of adult patients with primary biliary cholangitis (or PBC). The growth of its sales has been constant (Table 2). However, after 3 consecutive revenue losses, analysts anticipate only $317.45 million for the year, although the high target is $349.61 million, which is in line with the company’s updated guidance of $340 million to $350 million. The operating loss is down to $10 million, while the Intercept’s cash position is close to $500 million, so they’re fine as long as NASH approval is secured. Otherwise, convertible notes in the total amount of $336 million may become a problem.

Table 2. Quarterly net sales of Ocaliva products in the US (thousands of dollars)

To conclude, investors can be confident that a favorable response to the new NDA is likely. At a minimum, the FDA should follow through on previous promises to conduct an Adcom. Any notable developments from The Liver Meeting will be posted in the Comments section; oral presentations are usually reserved for matters of importance; Intercept sessions are scheduled for November 7-8.

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