Will Intercept Pharmaceuticals Inc (NASDAQ: ICPT) stock recover?

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Intercept Pharmaceuticals Inc (NASDAQ: ICPT) stock bearish momentum continued even today, falling over 16.8% in the last two days (as of 12:33 PM; Source: Google finance) . The stock lost its momentum after the firm issued a letter warning physicians against overdosing some patients with Ocaliva, that has been tied to liver injuries and death.

The letter has warned physicians about post-marketing cases of liver injury, liver decompensation, liver failure and deaths in patients with liver impairment and a rare disease known as primary biliary cholangitis who receive Ocaliva more frequently than recommended. Further, ICPT has said in its letter that liver-related adverse events have occurred both early in treatment and after months of treatment. The current Ocaliva dosing recommendations are for 5 milligrams once a week in primary biliary cholangitis patients with liver impairment. The primary biliary cholangitis is a chronic liver disease that results from the progressive destruction of bile ducts in the liver.

Moreover, the warning could weigh on Ocaliva sales and help eventual sales of seladelpar, which is a treatment from CymaBay Therapeutics (CBAY) that is being investigated in primary biliary cholangitis. If others such as etrasimod (from Arena Pharmaceuticals (ARNA)) can show competitive (effectiveness) and safety profile, Ocaliva could face competition on multiple fronts, thereby increasing the important of Ocaliva’s prospects in nonalcoholic steatohepatitis.

Meanwhile, Leerink analyst Joseph Schwartz has rated Intercept at market perform. He noted that the warnings regarding liver injury and death were included on Ocaliva’s label for some patients with liver impairment. These issues were also raised at the advisory committee meeting. Still, the safety notice is a headwind for Ocaliva’s base business. The company has enjoyed a robust launch trajectory to date. However, in the second quarter, the management’s more tempered expectation for the remainder of 2017 had increased investor caution and the stock has accordingly been weak. As per the analyst’s view, the letter/disclosure, will likely add another layer of caution as physicians may find Ocaliva dosing more cumbersome and patients more reluctant to initiate therapy.

On the other hand, Pomerantz LLP is investigating claims on behalf of investors of ICPT. The investigation concerns whether the company and certain of its officers and/or directors have engaged in securities fraud or other unlawful business practices.

Additionally, the current average recommendation for ICPT has it holding a “Buy” rating. This is based on the 20 analysts that are covering the stock. There is one “Sell” rating, five “Hold” rating and 13 “Buy” ratings and one “Strong Buy” rating for the stock. According to the The Ledger Gazette, the average one-year price target for ICPT stock is currently sitting at $193.26.

 

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