Intercept Pharmaceuticals, Inc reported big news, that its new liver drug, obeticolic acid (OCA), can effectively treat primary biliary cirrhosis (PBC), an autoimmune disease that damages bile ducts in the liver. The findings bring the company a step closer to filing for market approval.

Intercept is unique for being a pharmaceutical company specializing in a single area, “the development and commercialization of novel therapeutics to treat chronic liver diseases.” These diseases include not only PBC, but also non-alcoholic steatohepatitis (NASH), a disease by which fat accumulates in the liver, much like the “fatty” liver disease of alcoholics.

However the company breaks further ground for singularity among drug makers in that its stock price has skyrocket almost 700 percent since the beginning of the year, now hovering around $643 per share, and they have no product, no drug, on the market. By comparison Merck’s stock currently sells for $56 a share and Pfizer sells for $31. Both of these companies have been around for a long time and have strong product lines.

However the plot thickens. Citigroup’s Jonathan Eckard raised Intercept’s target price to $700 per share. And, that, on the heels on a proposed class action suit on the behalf of stock owners who lost a bundle after the stock plummeted by over 30 percent on January 14, following the announcement, by the National Institute of Health, that Intercept’s new liver drug, OCA, resulted in increased LDL cholesterol in NASH patients. The NIH sponsored the study.

However the irony is that, prior to learning the news, the trial had been stopped because there was clear evidence that OCA had a significant benefit for NASH patients. In medical studies where favorable trial evidence for a medication is strong, they are stopped to maintain the ethics of equality among all subjects. If the evidence from the NASH study for the new liver drug was indeed that powerful, that could mean big news for Intercept.

In fact, Eckard upgraded Intercept’s stock on the premise that the increase in LDL cholesterol was “likely to receive less scrutiny” from the FDA than anticipated. Also others are betting on the same outcome, as evidenced by the rebound in the stock price.

If Intercept’s new announcement has any teeth, the new liver drug could mean more than just stock value for those suffering from PBC and NASH, for which there are presently no cures. Both diseases result in progressive destruction of the liver, ending in cirrhosis and death. Victims of liver failure experience horrible symptoms and are admitted frequently as inpatients in hospitals.

So the stakes are high with exorbitant stock prices and a virtual promise for a treatment for two devastating diseases. Whether or not there will be a payoff is yet to be seen. The company’s CEO, 45 year-old Mark Pruzanski, M.D., has a profile that includes other start-up ventures such as Tigris Pharmaceuticals, whose website address leads to a generic dead-end. However the eyes of stockholders and patients are anxiously looking to see what lies ahead. If Intercept’s new liver drug, OCA, lives up to its claims, that will be big news indeed.

By Robert Wisnewski

Sources:
Reuters
Forbes
Barron’s