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Intercept (ICPT) Outperforms Industry in 3 Months: What Lies Ahead?

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Shares of Intercept Pharmaceuticals, Inc. (ICPT - Free Report) have gained 1.6% in the past three months compared with the industry’s growth of 0.2%.

Zacks Investment Research
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The biotech industry has had a rough ride this year so far, with very few companies outperforming the overall industry.

Intercept primarily focuses on the development and commercialization of novel therapeutics to treat progressive non-viral liver diseases.

Lead drug Ocaliva is approved for the treatment of primary biliary cholangitis (PBC) in combination with ursodeoxycholic acid (UDCA) in adults who have not responded well enough to UDCA or alone for adults who cannot tolerate UDCA.

Ocaliva delivered strong double-digit revenue growth for Ocaliva, despite the challenges associated with the pandemic and the U.S. label update. Sales in 2021 came in at $363.5 million, up 16% from 2020.

The drug’s label is updated as there were cases of worsening liver problems or liver failure in patients with cirrhosis.

Intercept continues to see long-term potential for Ocaliva, given the number of patients with PBC who are eligible for second-line therapy. The company has guided Ocaliva net sales of $375 million to $405 million for 2022.

Intercept earlier suffered a setback when the FDA issued a complete response letter (CRL) for obeticholic acid as it was a frontrunner in receiving a potential approval for the treatment of non-alcoholic steatohepatitis (NASH).

Nevertheless, the company is focused on new data package from its phase III REGENERATE study. If the data support accelerated approval, it targets a potential pre-submission meeting with FDA in the first half.  Intercept plans to announce results from the phase III REVERSE study, the only active late-stage study in compensated cirrhosis due to NASH, in the third quarter.

While the NASH market promises potential with no approved therapies yet, it is quite challenging.  Hence, positive data from these late-stage studies will increase the chances of tentative approval of obeticholic acid for NASH and boost Intercept’s prospects significantly.

Another company, Viking Therapeutics (VKTX - Free Report) , is developing a candidate, VK2809, for biopsy-confirmed NASH and fibrosis. VK2809 is currently being evaluated in a phase IIb study in patients with NASH.  Viking expects to complete enrollment and report initial data on the primary endpoint by the end of 2022.

Zacks Rank & Stocks to Consider

Intercept currently carries a Zacks Rank #3 (Hold).  A couple of better-ranked stocks are Vertex Pharmaceuticals Incorporated (VRTX - Free Report) and Voyager Therapeutics, Inc. (VYGR - Free Report) , both carrying Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The consensus estimate for Vertex’s 2022 earnings has increased 25 cents over the past 60 days to $14.58. Shares of VRTX have gained 26.4% in the year so far.

Loss estimates for VYGR have narrowed to $1.35 from $2.20 for 2022 in the past 60 days. Earnings of Voyager surpassed estimates in three of the trailing four quarters and missed the same once, the average surprise being 41%.