Intercept's (ICPT) Liver Drug Ocaliva Approved In Canada

Intercept Pharmaceuticals, Inc. (NASDAQ:ICPT) announced that Health Canada has granted a conditional approval for Ocaliva (obeticholic acid) for the treatment of primary biliary cholangitis (PBC), when used in combination with ursodeoxycholic acid (UDCA) in adults with an inadequate response to UDCA or as monotherapy in adults unable to tolerate UDCA.

We remind investors that in May 2016, Intercept received FDA approval for Ocaliva, in combination with UDCA, for the treatment of PBC. In Dec 2016, Ocaliva was approved in the EU for the same indication.

Intercept’s share price movement in the last one year indicates that the stock has underperformed the Zacks classified Medical-Biomedical/Genetics industry. The company’s shares have lost 20.9% during this period, which compares unfavorably with the industry’s 12% fall.

The initial uptake of Ocaliva has been encouraging and sales of the drug should pick up further in 2017. Approval in other countries will boost sales further.

Meanwhile, Ocaliva is being evaluated for other indications including non-alcoholic steatohepatitis (NASH) and primary sclerosing cholangitis (PSC).

The FDA recently approved a redesign of the phase III trial, REGENERATE on Ocaliva for the safety and efficacy in treating NASH patients with liver fibrosis. The company now needs to achieve only one co primary endpoint- either fibrosis improvement or NASH resolution as compared to the earlier target of achieving both. The company plans to complete enrolment for the interim analysis cohort in the REGENERATE trial by mid-2017 (data readout in the first half of 2019).

Meanwhile, Intercept also initiated a phase II study, CONTROL (Combination OCA aNd sTatins for monitoRing Of Lipids), on OCA. The study is being conducted to evaluate the effect of Ocaliva in combination with statin therapy on lipid metabolism in patients with NASH. Enrollment in the study was completed in the third quarter of 2016, with top-line data expected in mid-2017.

The company also plans to initiate a phase III trial on Ocaliva in NASH patients with cirrhosis in the second half of 2017. The company will also initiate a phase II trial on another candidate, INT-767, in NASH patients with fibrosis in the second half of 2017.

We remind investors that some other companies like Novartis International (NYSE:NVS) and Gilead Sciences, Inc. (NASDAQ:GILD) have FXR agonists in phase II or earlier stages of clinical or preclinical development that could be used to treat PBC, NASH and the other liver diseases.

Zacks Rank & Key Pick

Intercept currently carries a Zacks Rank #4 (Sell). A better-ranked stock in the healthcare sector is VIVUS, Inc. (NASDAQ:VVUS) which currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

VIVUS’ loss per share estimates narrowed from 50 cents to 39 cents for 2017 over the last 30 days. The company posted positive earnings surprises in each of the trailing four quarters, with an average beat of 233.69%.

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