Intercept (ICPT) Stock Rockets on Earnings, Positive Drug Results

Shares of Intercept Pharmaceuticals Inc. (ICPT) were up +137.82 or +58.11 percent to $375.00 per share in pre-market trading on Tuesday, after the company announced better than expected earnings late yesterday. The company also disclosed its obeticholic acid had less severe side effects and was more effective in treating liver disease than what was previously thought. Intercept Pharmaceuticals stock closed at $237.18 per share, up +2.58 or +1.01 percent in Monday's regular trading session.

New York City based Intercept Pharmaceuticals is a biopharmaceutical company specializing in developing and commercializing new treatments for chronic liver disease, such as primary biliary cirrhosis.
The company's main product is obeticholic acid or OCA, a substance structurally akin to naturally occurring human bile acid. The drug, which is a first in its class, selectively binds and activates "farnesoid X receptors or FXRs that the company believes has protective properties for the liver.

Intercept released its second quarter earnings yesterday after the close, which was the first piece of news sending the stock up as much as 65 percent in afterhours trading. The company reported earnings per share of +$1.51 in the quarter ended on June 30th, 2014, significantly better than the loss of -$0.79 in the same period last year, and notably higher than the loss of -$0.12 expected by analysts.

The company reported net income of +$33.5 million, versus a net loss of -$13.5 million in the same period one year ago. Second quarter net income included a $55.8 million non-cash gain that was recorded for the revaluation of all of Intercept's outstanding warrants exercised in April of 2014.

In a conference call after the earnings release yesterday, Intercept's Chief Executive Officer, Dr. Mark Pruzanski said that, "Our supporting studies are proceeding on track and we continue to anticipate completing our NDA and MAA filings in the first half of 2015. We will continue to work closely with FDA and MAA and are preparing for pre-NDA and pre-MAA meetings that we anticipate will take place in the fourth quarter 2014. We believe that the successful outcome of these meetings will give us an increased confidence in our regulatory strategy for OCA and PBC and facilitates for filing our NDA and MAA.

In addition to the positive earnings news, the company's tests of obeticholic acid on non-alcoholic fatty liver disease - no approved treatment currently exists - showed that the drug had stopped liver scarring in 46 percent of patients, compared to 21 percent who were given placebos. The drug also proved to have a less-harmful effect on cholesterol levels than previously feared. Intercept is also testing OCA in the treatment of biliary cirrhosis, an autoimmune disease.

Intercept stock quadrupled in January following news that clinical trials had been halted due to the drug's strong statistical performance. The stock continued higher, making an all time high of $497 per share in mid-March. Concerns over side effects of the drug put pressure on the stock, which has been range bound since mid-April. With today's action, the stock is clearly breaking out of its range and could possibly test its highs in the coming weeks.

Other News About Intercept Pharmaceuticals
Intercept Pharmaceutical Shares Up Amid Deutsche Bank Initiation
Bank initiates coverage of the stock with a buy rating and a $395.00 price target.
Biotech: Buy the Trial, Sell the Approval?
Barrons' article on the effects of FDA approval on biotech stocks such as Intercept.

Other Stocks in the News
Tesla Motors: Deutsche Bank Sees $310
Analyst at the bank raises price target from $220 to $310 per share.
JPMorgan Strikes Deal to Spin Off Its Private Equity Arm
Two investment firms will buy Morgan's stake in One Equity Partners.

Published on Aug 12, 2014
By Jay Hawk
Jay Hawk
Jay Hawk enjoyed a 12-year professional financial markets career incorporating extensive first hand futures and options experience obtained by trading in the stock, commodity and forex markets on U.S. exchanges. Since retiring as a full-time financial market professional, he has been actively trading stock, commodities, forex and options for his own account and managing funds for others, as well as writing financial market commentary and educational articles.

Copyrighted 2020. Content published with author's permission.

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