Cowen And Company Analyst Explains Why Intercept Pharmaceuticals Is 'Absolutely A Buy'

Shares of Intercept Pharmaceuticals Inc (NASDAQ: ICPT) saw a massive rise on Friday on back of favorable ruling by the FDA on Thursday and a short squeeze. Ritu Baral, Cowen and Company, was on CNBC recently to discuss why Intercept makes a great buy right now.

“It’s absolutely a buy given the progress that I think that they are going to make over the rest of this year,” Baral said. “They have basically been given breakthrough status by the FDA, where the FDA comes in and says, 'We think your data as it stands is compelling, now you need to do a phase III trial and take it to the finish line essentially.'”

She continued, “So, we are going to see a phase III start in the NASH program. We are also going to see a filing for their LEAD program in another orphan liver disease, which has the potential to be approved by the FDA, maybe even by the end of the year possibly early 2016.”

Are Days Of High Volatility Over For Intercept?

“There is always volatility in small-cap, mid-cap biotech,” Baral replied. “Everything is very, very data driven. What drove I believe the incredible volatility of Intercept is the fact that the data as it was released last January was not in their control.”

“So, they had a top-line data release, the government let them bleed out the data and some of it was awesome, some of it looked little scary and they were not in control. Now, the trials going forward are entirely in their control and the data is going to come out in a more controlled fashion. That being said, it’s still biotech.”