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Intercept (ICPT) Q2 Earnings Top Estimates, Revenues Up Y/Y
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Intercept Pharmaceuticals incurred a loss of 14 cents per share (from continuing operations) in second-quarter 2023, narrower than the Zacks Consensus Estimate of 56 cents. The company also reported a loss of 68 cents per share in the year-ago quarter.
Total revenues were $83.7 million, up 16.7% year over year. The top line beat the Zacks Consensus Estimate of $79 million.
Shares are up in pre-market trading.
In the year-to-date period, the stock lost 15.1% compared with the industry’s decline of 12.3%.
Image Source: Zacks Investment Research
Quarter in Detail
Total revenues comprise only Ocaliva (obeticholic acid or OCA) net sales in the United States. Ocaliva sales beat our model estimate of $78.4 million.
OCA is approved under the brand name Ocaliva. It is used for treating primary biliary cholangitis (PBC) (in combination with ursodeoxycholic acid [UDCA]) in adults with an inadequate response to UDCA alone or as a monotherapy for adults intolerant to UDCA. While the FDA’s approval for Ocaliva was under an accelerated pathway, the drug received a conditional license from the European Commission.
Selling, general and administrative expenses increased to $53.3 million from $39.9 million in the prior-year quarter. The increase was primarily driven by investment in non-alcoholic steatohepatitis (NASH) launch preparation.
Research and development expenses decreased by 16.7% to $37.3 million due to the completion of the REVERSE study.
As of Jun 30, 2023, Intercept had cash, cash equivalents, restricted cash and marketable securities worth $415 million compared with $435.2 million as of Mar 31, 2023.
2023 Guidance
Intercept now expects Ocaliva sales between $320 and $340 million in 2023 (previous guidance: $310-$340 million).
In June 2023, Intercept lowered its operating expense guidance to $350-$370 million for 2023, inclusive of restructuring costs. The company remains on track to achieve an expected net reduction in annual adjusted operating expenses of approximately $140 million.
Other Updates
Intercept suffered a huge setback as the FDA issued a complete response letter (CRL) in response to the company’s new drug application (NDA) seeking approval for obeticholic acid (OCA) for the treatment of pre-cirrhotic fibrosis due to nonalcoholic steatohepatitis (NASH).
The FDA indicated in the CRL that the NDA cannot be approved in its present form following a review.
The NDA resubmission will require successful completion of the long-term outcomes phase of the REGENERATE study as per the content of the CRL.
Consequently, Intercept announced a restructuring program in response to the same. Intercept will discontinue all NASH-related investments and immediately begin the process of closing out the REGENERATE study. Intercept expects to substantially complete the trial shut-down process by the end of 2023.
Apart from closing out REGENERATE, Intercept is also terminating all other NASH-related spending within its R&D, commercial, medical affairs and administrative functions.
The company will also cut one-third of its workforce to reduce operating expenses. Intercept expects to initiate workforce reductions in the third quarter of 2023, with the majority to be completed by the end of 2023.
Nevertheless, Intercept plans to maintain the scale of its current field sales organization to support the growth potential of Ocaliva.
Intercept is progressing its combination program for OCA, a farnesoid X receptor (FXR) agonist and bezafibrate, a pan-peroxisome proliferator-activated receptor (pan-PPAR) agonist. The company has now completed the enrollment in both phase II studies exploring a range of therapeutic doses for the combination of OCA and bezafibrate.
Intercept expects to have the necessary data from the OCA-bezafibrate combination program in 2023 to submit a request for an end-of-phase II meeting with the FDA. The data includes analyses from both phase II studies in addition to phase I and preclinical data.
Meanwhile, it is also progressing with the FRESH (FXR Effect on Severe Alcohol-Associated Hepatitis) study, a phase IIa trial evaluating the safety, tolerability, efficacy and pharmacokinetics of INT-787 in patients with severe alcohol-associated hepatitis (sAH).
Intercept Pharmaceuticals, Inc. Price, Consensus and EPS Surprise
Intercept puts up a good performance in the second quarter as losses narrow on higher revenues. With the setback in the NASH space, the company is now looking to develop other candidates in its pipeline.
However, the successful development of OCA for NASH would have given a significant boost to Intercept.
While the NASH market promises potential with no approved therapies yet, it is challenging. Quite a few players are trying their hands at successfully developing a treatment for the abovementioned condition.
Viking Therapeutics (VKTX - Free Report) is developing a candidate, VK2809, for biopsy-confirmed NASH and fibrosis. Viking initiated the VOYAGE study, a phase IIb study designed to evaluate VK2809 in patients with NASH and fibrosis. The study achieved its primary endpoint, with patients receiving VK2809 experiencing statistically significant reductions in liver fat content from baseline to week 12 as compared with placebo.
VKTX expects to report data from the secondary and exploratory objectives of the study, including the evaluation of histologic changes assessed by hepatic biopsy after 52 weeks of treatment, in the first half of 2024.
The Zacks Consensus Estimate for Alkermes’ earnings per share has moved up from 50 cents to $1.47 for 2023 and from $1.78 to $2.04 for 2024 in the past 60 days. The stock has risen 9.2% in the year-to-date period.
ALKS’ earnings beat estimates in all the trailing four quarters, the average surprise being 81.98%.
The loss per share estimate for DVAX has narrowed by 5 cents to 51 cents for 2023 in the past 30 days. Dynavax has risen 29.8% in the year-to-date period. DVAX’s earnings beat estimates in two of the trailing four quarters and missed in the remaining two, the average surprise being 65.18%.
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Intercept (ICPT) Q2 Earnings Top Estimates, Revenues Up Y/Y
Intercept Pharmaceuticals incurred a loss of 14 cents per share (from continuing operations) in second-quarter 2023, narrower than the Zacks Consensus Estimate of 56 cents. The company also reported a loss of 68 cents per share in the year-ago quarter.
Total revenues were $83.7 million, up 16.7% year over year. The top line beat the Zacks Consensus Estimate of $79 million.
Shares are up in pre-market trading.
In the year-to-date period, the stock lost 15.1% compared with the industry’s decline of 12.3%.
Image Source: Zacks Investment Research
Quarter in Detail
Total revenues comprise only Ocaliva (obeticholic acid or OCA) net sales in the United States. Ocaliva sales beat our model estimate of $78.4 million.
OCA is approved under the brand name Ocaliva. It is used for treating primary biliary cholangitis (PBC) (in combination with ursodeoxycholic acid [UDCA]) in adults with an inadequate response to UDCA alone or as a monotherapy for adults intolerant to UDCA. While the FDA’s approval for Ocaliva was under an accelerated pathway, the drug received a conditional license from the European Commission.
Selling, general and administrative expenses increased to $53.3 million from $39.9 million in the prior-year quarter. The increase was primarily driven by investment in non-alcoholic steatohepatitis (NASH) launch preparation.
Research and development expenses decreased by 16.7% to $37.3 million due to the completion of the REVERSE study.
As of Jun 30, 2023, Intercept had cash, cash equivalents, restricted cash and marketable securities worth $415 million compared with $435.2 million as of Mar 31, 2023.
2023 Guidance
Intercept now expects Ocaliva sales between $320 and $340 million in 2023 (previous guidance: $310-$340 million).
In June 2023, Intercept lowered its operating expense guidance to $350-$370 million for 2023, inclusive of restructuring costs. The company remains on track to achieve an expected net reduction in annual adjusted operating expenses of approximately $140 million.
Other Updates
Intercept suffered a huge setback as the FDA issued a complete response letter (CRL) in response to the company’s new drug application (NDA) seeking approval for obeticholic acid (OCA) for the treatment of pre-cirrhotic fibrosis due to nonalcoholic steatohepatitis (NASH).
The FDA indicated in the CRL that the NDA cannot be approved in its present form following a review.
The NDA resubmission will require successful completion of the long-term outcomes phase of the REGENERATE study as per the content of the CRL.
Consequently, Intercept announced a restructuring program in response to the same. Intercept will discontinue all NASH-related investments and immediately begin the process of closing out the REGENERATE study. Intercept expects to substantially complete the trial shut-down process by the end of 2023.
Apart from closing out REGENERATE, Intercept is also terminating all other NASH-related spending within its R&D, commercial, medical affairs and administrative functions.
The company will also cut one-third of its workforce to reduce operating expenses. Intercept expects to initiate workforce reductions in the third quarter of 2023, with the majority to be completed by the end of 2023.
Nevertheless, Intercept plans to maintain the scale of its current field sales organization to support the growth potential of Ocaliva.
Intercept is progressing its combination program for OCA, a farnesoid X receptor (FXR) agonist and bezafibrate, a pan-peroxisome proliferator-activated receptor (pan-PPAR) agonist. The company has now completed the enrollment in both phase II studies exploring a range of therapeutic doses for the combination of OCA and bezafibrate.
Intercept expects to have the necessary data from the OCA-bezafibrate combination program in 2023 to submit a request for an end-of-phase II meeting with the FDA. The data includes analyses from both phase II studies in addition to phase I and preclinical data.
Meanwhile, it is also progressing with the FRESH (FXR Effect on Severe Alcohol-Associated Hepatitis) study, a phase IIa trial evaluating the safety, tolerability, efficacy and pharmacokinetics of INT-787 in patients with severe alcohol-associated hepatitis (sAH).
Intercept Pharmaceuticals, Inc. Price, Consensus and EPS Surprise
Intercept Pharmaceuticals, Inc. price-consensus-eps-surprise-chart | Intercept Pharmaceuticals, Inc. Quote
Our Take
Intercept puts up a good performance in the second quarter as losses narrow on higher revenues. With the setback in the NASH space, the company is now looking to develop other candidates in its pipeline.
However, the successful development of OCA for NASH would have given a significant boost to Intercept.
While the NASH market promises potential with no approved therapies yet, it is challenging. Quite a few players are trying their hands at successfully developing a treatment for the abovementioned condition.
Viking Therapeutics (VKTX - Free Report) is developing a candidate, VK2809, for biopsy-confirmed NASH and fibrosis. Viking initiated the VOYAGE study, a phase IIb study designed to evaluate VK2809 in patients with NASH and fibrosis. The study achieved its primary endpoint, with patients receiving VK2809 experiencing statistically significant reductions in liver fat content from baseline to week 12 as compared with placebo.
VKTX expects to report data from the secondary and exploratory objectives of the study, including the evaluation of histologic changes assessed by hepatic biopsy after 52 weeks of treatment, in the first half of 2024.
Zacks Rank & Stocks to Consider
Currently, Intercept has a Zacks Rank #3 (Hold).
A couple of better-ranked stocks in the overall healthcare sector are Alkermes (ALKS - Free Report) and Dynavax Technologies (DVAX - Free Report) , each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Consensus Estimate for Alkermes’ earnings per share has moved up from 50 cents to $1.47 for 2023 and from $1.78 to $2.04 for 2024 in the past 60 days. The stock has risen 9.2% in the year-to-date period.
ALKS’ earnings beat estimates in all the trailing four quarters, the average surprise being 81.98%.
The loss per share estimate for DVAX has narrowed by 5 cents to 51 cents for 2023 in the past 30 days. Dynavax has risen 29.8% in the year-to-date period. DVAX’s earnings beat estimates in two of the trailing four quarters and missed in the remaining two, the average surprise being 65.18%.