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Intercept (ICPT) Settles Litigation With Dr. Reddy's for Ocaliva

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Shares of Intercept Pharmaceuticals, Inc. (ICPT - Free Report) were up 3.65% on Aug 17 after the company announced a settlement agreement with Dr. Reddy’s Laboratories, Ltd.  (RDY - Free Report) .

On Aug 16, ICPT signed the settlement, resolving the previously disclosed patent litigation.

The patent litigation is primarily related to Dr. Reddy’s abbreviated new drug application (ANDA) seeking approval to market a generic version of Intercept’s lead drug Ocaliva (obeticholic acid) 5 mg and 10 mg tablets prior to the expiration of certain patents.

Per the terms, Intercept granted Dr. Reddy’s a non-exclusive, non-sublicensable, non-transferable, royalty-free license to commercialize its generic version of Ocaliva in the United States commencing on Oct 26, 2035, or earlier under certain circumstances. Other patent litigations previously disclosed by Intercept against five other ANDA filers seeking approval to market generic Ocaliva remain pending.

Ocaliva (obeticholic acid or OCA) is a farnesoid X receptor (FXR) agonist approved in the United States and other jurisdictions for the treatment of primary biliary cholangitis (PBC) in combination with ursodeoxycholic acid (UDCA) in adults with an inadequate response to UDCA or as monotherapy in adults unable to tolerate UDCA. The drug was approved by the FDA under the accelerated approval pathway.

Intercept’s shares have gained 14.9% in the year so far against the industry’s decrease of 19.2%.


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Intercept is currently in the process of compiling data from the post-marketing phase IV COBALT study. ICPT plans to submit data from this study to the FDA later this year to support the continued approval of Ocalvia for PBC indication.

The company is also evaluating OCA for the potential treatment of nonalcoholic Steatohepatitis (NASH). Last month, Intercept had a pre-submission meeting with FDA in July. It plans to resubmit its new drug application (NDA) for OCA in fibrosis due to NASH by the end of 2022. The top-line readout from the phase III REVERSE study in patients with compensated cirrhosis due to NASH is expected late in the ongoing quarter. This is a separate investigational new drug (IND) application in fibrosis due to NASH.

Intercept currently carries a Zacks Rank #3 (Hold). A couple of better-ranked stocks in the sector are Alkermes (ALKS - Free Report) and Dynavax (DVAX - Free Report) . Both carry a Zacks Rank #2 (Buy).  You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

ALKS’ earnings estimates for 2022 reversed from a loss of 17 cents to earnings of 20 cents in the past 60 days. Alkermes surpassed earnings in all the trailing four quarters, the average being 325.48%.

Dynavax’s earnings estimates have increased to $1.73 from $1.14 for 2022 over the past 60 days. Earnings of Dynavax have surpassed estimates in two of the trailing four quarters.


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