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Intercept's (ICPT) Q1 Earnings and Revenues Beat Estimates

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Intercept Pharmaceuticals, Inc. (ICPT - Free Report) incurred a loss of $2.86 per share in first-quarter 2020, narrower than the Zacks Consensus Estimate of a loss of $2.94 and the year-ago quarter’s loss of $3.03.

Intercept Pharmaceuticals Inc Price, Consensus and EPS Surprise

 

Intercept Pharmaceuticals Inc Price, Consensus and EPS Surprise

 

Intercept Pharmaceuticals Inc price-consensus-eps-surprise-chart | Intercept Pharmaceuticals Inc Quote

Total revenues of $72.7 million in the quarter beat the Zacks Consensus Estimate of $68 million. Revenues also surged 39% year over year, primarily owing to higher sales of lead drug, Ocaliva.

Quarter in Detail

The total revenues generated in the quarter comprised only Ocaliva (obeticholic acid or OCA) net sales. Net sales came in at $50.8 million in the United States and $21.9 million outside the country.

We remind investors that OCA is already approved under the brand name Ocaliva for treating primary biliary cholangitis (PBC) in combination with ursodeoxycholic acid (UDCA) in adults with an inadequate response to UDCA or as a monotherapy for adults intolerant to UDCA.

Ocaliva sales were better than anticipated in the PBC business, driven by continued strong total prescription trends and modestly higher-than-expected inventory demand toward the end of the quarter, as certain customers responded to the uncertainty of the early COVID-19 period. 

Research and development expenses decreased to $56.7 million from $58.4 million in the year-ago quarter due to lower nonalcoholic steatohepatitis (NASH) development program expenses and costs.

Selling, general and administrative expenses were $98.6 million, up 27.6% year over year, primarily driven by organizational growth and additional activities associated with the preparation for the potential approval and commercialization of OCA for liver fibrosis due to NASH.

As of Mar 31, 2020, Intercept had cash, cash equivalents, restricted cash and marketable securities of $554 million compared with $657.4 million as of Dec 31, 2019.

Other Updates

The FDA has set a Prescription Drug User Fee Act (“PDUFA”) target action date of Jun 26, 2020, for the completion of the review of the NDA seeking approval of OCA for liver fibrosis due to NASH.

The company did not provide any sales guidance due to the uncertainty related to the coronavirus outbreak.  

Our Take

Intercept reported better-than-expected results for the first quarter. The company’s efforts to expand Ocaliva’s label are encouraging as well, given the market potential of NASH. Shares of Intercept were up 3.01%. However, the stock has lost 27% in the year so far against the industry’s growth of 4.7%.

 

Shares gained as Intercept’s rival, Genfit (GNFT - Free Report) , announced disappointing results from a late-stage NASH study. Last year, biotech bigwig Gilead Sciences, Inc.’s (GILD - Free Report) candidate also failed in a late-stage study involving patients afflicted with compensated cirrhosis (F4) due to NASH. We note that Allergan plc has an ongoing phase III study of cenicriviroc, a dual CCR2 and CCR5 inhibitor, for the treatment of NASH.

The market for NASH is challenging but poised to witness rapid growth. Hence, all eyes are on Intercept’s OCA. A decision from the FDA is expected next month and a positive outcome will boost the stock significantly.

Intercept currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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