A month has gone by since the last earnings report for Intercept Pharmaceuticals, Inc. . Shares have lost about 3.5% in that time frame, underperforming the market.
Will the recent negative trend continue leading up to the stock's next earnings release, or is it due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Intercept Q1 Loss Narrower than Expected, Sales Beat
Intercept posted a loss of $3.61 per share in the first quarter of 2017, narrower than the Zacks Consensus Estimate of a loss of $4.27 and also the year-ago loss of $5.17.
Quarterly revenues were $21.1 million, up significantly from $0.4 million in the year-ago quarter and beat the Zacks Consensus Estimate of $15.9 million.
Quarter in Detail
Ocaliva recorded $20.6 million sales in the first quarter of 2017. Note that in May 2016, Ocaliva was approved in the U.S., in combination with ursodeoxycholic (UDCA) for the treatment of primary biliary cholangitis (PBC) in adults with an inadequate response to UDCA, or as monotherapy in adults who are unable to endure UDCA. Sales from international markets were $0.8 million.
Research and development expenses shot up 36.9% year over year to $43.8 million primarily driven by increases in clinical development programs for OCA and infrastructure to support such programs.
General and administrative expenses decreased to $61.1 million from $95.9 million in the year-ago quarter as the year-ago quarter recorded one-time net expense of $45.0 million attributable to the settlement of a purported securities class action lawsuit.
2017 Outlook Reiterated
Intercept expects operating expenses in the range of $380–$420 million in 2017 to support the continued commercialization of Ocaliva in PBC in the United States and other markets, sustained clinical development for OCA in PBC and NASH and the continued advancement of INT-767 and other pipeline programs.
Pipeline Update
In Dec 2016, the European Commission granted conditional approval to Ocaliva for the treatment of PBC in combination with UDCA in adults.
Meanwhile, Ocaliva is being evaluated for other indications including non-alcoholic steatohepatitis (NASH) and primary sclerosing cholangitis (PSC).
The FDA recently approved a redesign of the phase III trial, REGENERATE on Ocaliva for the safety and efficacy in treating NASH patients with liver fibrosis. The company now needs to achieve only one co primary endpoint- either fibrosis improvement or NASH resolution as compared to the earlier target of achieving both.
The sample size of the trial has also been reduced to approximately 750 patients or about 250 patients per arm. The company plans to complete enrolment for the interim analysis cohort in the REGENERATE trial by mid-2017 (data readout in the first half of 2019).
Meanwhile, Intercept also initiated a phase II study, CONTROL (Combination OCA aNd sTatins for monitoRing Of Lipids), on OCA. The study is being conducted to evaluate the effect of Ocaliva in combination with statin therapy on lipid metabolism in patients with NASH. Enrollment in the study was completed in the third quarter of 2016, with top-line data expected in mid-2017.
The company also plans to initiate a phase III trial on Ocaliva in NASH patients with cirrhosis in the second half of 2017. The company will also initiate a phase II trial on another candidate, INT-767, in NASH patients with fibrosis in the second half of 2017.
The company also expects top-line results from the phase II trial, AESOP, in primary sclerosing cholangitis (PSC) in the middle of 2017. The company also continues to enroll in its phase IV trial, COBALT, to confirm Ocaliva's clinical benefit on outcomes in PBC.
How Have Estimates Been Moving Since Then?
Following the release, investors have witnessed an upward trend in fresh estimates. There have been one revision higher for the current quarter.
Intercept Pharmaceuticals, Inc. Price and Consensus
VGM Scores
At this time, the stock has a poor Growth Score of 'F', however its Momentum is doing a lot better with an 'A'. However, the stock was allocated a grade of 'F' on the value side, putting it in the fifth quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of 'F'. If you aren't focused on one strategy, this score is the one you should be interested in.
The company's stock is suitable solely for momentum based on our styles scores.
Outlook
Estimates have been trending upward for the stock. The magnitude of these revisions also looks promising. Notably, the stock has a Zacks Rank #3 (Hold). We are expecting an inline return from the stock in the next few months.
Image: Bigstock
Intercept (ICPT) Down 3.5% Since Earnings Report: Can It Rebound?
A month has gone by since the last earnings report for Intercept Pharmaceuticals, Inc. . Shares have lost about 3.5% in that time frame, underperforming the market.
Will the recent negative trend continue leading up to the stock's next earnings release, or is it due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Intercept Q1 Loss Narrower than Expected, Sales Beat
Intercept posted a loss of $3.61 per share in the first quarter of 2017, narrower than the Zacks Consensus Estimate of a loss of $4.27 and also the year-ago loss of $5.17.
Quarterly revenues were $21.1 million, up significantly from $0.4 million in the year-ago quarter and beat the Zacks Consensus Estimate of $15.9 million.
Quarter in Detail
Ocaliva recorded $20.6 million sales in the first quarter of 2017. Note that in May 2016, Ocaliva was approved in the U.S., in combination with ursodeoxycholic (UDCA) for the treatment of primary biliary cholangitis (PBC) in adults with an inadequate response to UDCA, or as monotherapy in adults who are unable to endure UDCA. Sales from international markets were $0.8 million.
Research and development expenses shot up 36.9% year over year to $43.8 million primarily driven by increases in clinical development programs for OCA and infrastructure to support such programs.
General and administrative expenses decreased to $61.1 million from $95.9 million in the year-ago quarter as the year-ago quarter recorded one-time net expense of $45.0 million attributable to the settlement of a purported securities class action lawsuit.
2017 Outlook Reiterated
Intercept expects operating expenses in the range of $380–$420 million in 2017 to support the continued commercialization of Ocaliva in PBC in the United States and other markets, sustained clinical development for OCA in PBC and NASH and the continued advancement of INT-767 and other pipeline programs.
Pipeline Update
In Dec 2016, the European Commission granted conditional approval to Ocaliva for the treatment of PBC in combination with UDCA in adults.
Meanwhile, Ocaliva is being evaluated for other indications including non-alcoholic steatohepatitis (NASH) and primary sclerosing cholangitis (PSC).
The FDA recently approved a redesign of the phase III trial, REGENERATE on Ocaliva for the safety and efficacy in treating NASH patients with liver fibrosis. The company now needs to achieve only one co primary endpoint- either fibrosis improvement or NASH resolution as compared to the earlier target of achieving both.
The sample size of the trial has also been reduced to approximately 750 patients or about 250 patients per arm. The company plans to complete enrolment for the interim analysis cohort in the REGENERATE trial by mid-2017 (data readout in the first half of 2019).
Meanwhile, Intercept also initiated a phase II study, CONTROL (Combination OCA aNd sTatins for monitoRing Of Lipids), on OCA. The study is being conducted to evaluate the effect of Ocaliva in combination with statin therapy on lipid metabolism in patients with NASH. Enrollment in the study was completed in the third quarter of 2016, with top-line data expected in mid-2017.
The company also plans to initiate a phase III trial on Ocaliva in NASH patients with cirrhosis in the second half of 2017. The company will also initiate a phase II trial on another candidate, INT-767, in NASH patients with fibrosis in the second half of 2017.
The company also expects top-line results from the phase II trial, AESOP, in primary sclerosing cholangitis (PSC) in the middle of 2017. The company also continues to enroll in its phase IV trial, COBALT, to confirm Ocaliva's clinical benefit on outcomes in PBC.
How Have Estimates Been Moving Since Then?
Following the release, investors have witnessed an upward trend in fresh estimates. There have been one revision higher for the current quarter.
Intercept Pharmaceuticals, Inc. Price and Consensus
Intercept Pharmaceuticals, Inc. Price and Consensus | Intercept Pharmaceuticals, Inc. Quote
VGM Scores
At this time, the stock has a poor Growth Score of 'F', however its Momentum is doing a lot better with an 'A'. However, the stock was allocated a grade of 'F' on the value side, putting it in the fifth quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of 'F'. If you aren't focused on one strategy, this score is the one you should be interested in.
The company's stock is suitable solely for momentum based on our styles scores.
Outlook
Estimates have been trending upward for the stock. The magnitude of these revisions also looks promising. Notably, the stock has a Zacks Rank #3 (Hold). We are expecting an inline return from the stock in the next few months.