JMP Upgrades Intercept Pharma Ahead Of NASH Trial Data

Intercept Pharmaceuticals Inc (NASDAQ: ICPT) recently announced Jan. 7 that it expects to release top-line data from the interim analysis of the Phase 3 study dubbed "REGENERATE" during the first quarter. 

The study is evaluating obeticholic acid in non-cirrhotic non-alcoholic steatohepatitis, or NASH, patients with advanced liver fibrosis.

The Analyst

Ahead of the data readout, JMP Securities analyst Liisa Bayko upgraded Intercept from Market Perform to Market Outperform with a $175 price target.

The Thesis

The study readout has a good chance of achieving the fibrosis endpoint, which is necessary for commercial viability, Bayko said in the Wednesday upgrade note.

Technically, the success of Regenerate requires that at least one of two co-primary endpoints — patients with at least one stage of fibrosis improvement without worsening of NASH and patients with NASH resolution with no worsening of fibrosis — be met at 72 weeks, the analyst said. 

In order to be a commercial success, obeticholic acid should achieve the fibrosis endpoint, as side effects would be bearable for advanced patients but not for the broader NASH population, Bayko said. 

"We also believe that meeting the fibrosis endpoint would allow the company to maintain a premium pricing strategy, which would be appropriate for a drug that reduces fibrosis in advanced liver disease," she said. 

JMP maintains a 60-percent probability of success for the study and said it likes the risk-reward ahead of the data release. Positive fibrosis data would support regulatory submissions, Bayko said. 

Intercept shares could top $200 in the eventuality of the company acing the Regenerate trial, while a disappointment could send shares down to $75, according to JMP's projections. 

The Price Action

Intercept shares were set to close Wednesday's session up 3.13 percent at $115.86. 

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