ICPT stock plummets on new obstacle for its NASH drug

intercept drugs (ICPT) said Friday its experimental treatment for liver disease will face a Food and Drug Administration panel in May, which would cause ICPT shares to fall.

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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 (NASH). The panel will make a non-binding recommendation on the future of the drug.

SVB Securities analyst Thomas Smith said the panel’s 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 look at FDA’s process for broader review of NASH drug applications,” he said in a report.

In today’s stock market, ICPT stock fell 13.9% to close at 16.12. Meanwhile, biotech stocks fell about 3.5%. The broader drop comes on concerns after federal regulators took action Control of Silicon Valley Bank. The investment bank handled about 44% of U.S. IPOs in the healthcare and tech sectors in 2022.

ICPT Stock: Expanding the capabilities of Ocaliva

Intercept faced an uphill battle with obeticholic acid in NASH. The drug is approved to treat another liver condition called primary biliary cholangitis. It is sold under the Ocaliva brand name.

There are no approved treatments for NASH. To be approved, a drug must improve fibrosis – a form of scarring of the liver – by at least one stage. Fibrosis is measured at stages 1-4. Or the drug needs to improve the symptoms of NASH and prevent the fibrosis from getting worse.

On September 30, Intercept said obeticholic acid made no difference in patients with the worst degree of fibrosis, stage 4. This means their livers had extensive scarring known as cirrhosis. As a rule, these patients only survive with a liver transplant. ICPT stock fell 15% on the day.

But in January, the FDA accepted Intercept’s application for obeticholic acid in NASH patients with less severe fibrosis. FDA will hold the Advisory Committee meeting prior to making a decision to approve or deny the application in June. SVB’s Smith expects the meeting to be a challenge for Intercept.

Intercept is in front Madrigal Medicines (MDGL) in this market. Madrigal achieved a win in December with strong Phase 3 results in NASH. As Madrigal shares tripled, ICPT stock fell 23.5%.

The meeting will provide comprehensive NASH insights

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, as well as broader insight into the regulatory review process for this indication, with important implications for other NASH players beyond Intercept,” he said.

He kept his ICPT stock market performance rating. On Friday’s news, shares fell below their 50-day moving average, MarketSmith.com shows. However, Intercept stock has a strong Relative Strength Rating of 93, putting the stock 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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