Intercept Pharma Retreats from Big Gains
NEW YORK (AP) — Shares of Intercept Pharmaceuticals, which skyrocketed last week, retreated Tuesday on concerns that the company's liver disease drug might be linked to increased levels of "bad" cholesterol.
Intercept shares climbed sixfold percent from Wednesday's close through Friday. The company said Thursday that its experimental drug obeticholic acid worked in a clinical trial. It is studying the drug as a treatment for nonalcoholic steatohepatitis, or NASH, a chronic liver disease that can cause inflammation and scarring, which may lead to cirrhosis, liver failure and death.
But Wall Street may be concerned about possible side effects mentioned in a release on Sunday. Shares dropped 30 percent to $255.12 Tuesday after shedding 18 percent Monday. The stock is still more than triple its value at Wednesday's close.
On Sunday, the company said "lipid abnormalities," including higher levels of "bad" LDL cholesterol and total cholesterol, were more common in patients treated with its drug than with a placebo.
Intercept said the National Institute of Diabetes and Digestive and Kidney Diseases, which is part of the National Institutes of Health, said lipid abnormalities are common in patients with NASH, and patients in the study will be monitored to see if their lipid levels decrease after they are no longer being treated.
Analysts said there are no approved treatments for NASH, which could make obeticholic acid into a big seller. Intercept doesn't have any approved drugs.
Citi Investment Research analyst Jonathan Eckard said he was aware of OCA's cholesterol effects, and they don't change his view that the drug could be in high demand and achieve around $5 billion in annual sales. He said the side effects could be managed with a statin or similar drug.
Eckard rates Intercept shares "Buy," and he raised his price target to $600 from $400.