Intercept Shares Tumble on NASH Disappointment
By Josh Nathan-Kazis
June 29, 2020 4:05 pm ET
NASH was once the next big thing for big pharma; a newly defined disorder requiring chronic treatment afflicting millions of people in developed countries. Scores of companies are developing drugs for the disease, which can cause deadly conditions like decompensated cirrhosis or liver cancer.
But the quest for the first big NASH drug has hit some stumbling blocks. In May, a French company called Genfit (ticker: GNFT), which had one of the most advanced NASH programs, announced that a Phase 3 trial of its NASH drug Elafinbranor had failed to achieve its primary endpoint.
Now, another setback is tanking shares of Intercept Pharmaceuticals (ICPT), which analysts had expected to introduce the first NASH drug sometime this year. Intercept had submitted an application for accelerated approval with the Food and Drug Administration for its drug obeticholic acid as a treatment for NASH. On Monday, the company said that the FDA had sent it a letter saying that the expected benefit of the drug “does not sufficiently outweigh the potential risks.”
The company said that the agency had asked for additional analyses from an ongoing study. Shares of Intercept fell 39% on Monday. On an investor call Monday morning, Intercept CEO Mark Pruzanski called the FDA’s action “completely unexpected and disappointing.”
“At no point during review did the FDA communicate that OCA was not approvable on an accelerated basis,” Pruzanski said.
Questions about NASH drugs have been emerging for months. In December, Barron’s highlighted those concerns, arguing that investors should be skeptical of the field.
Intercept’s application for OCA was based on interim data from a study that found that liver scarring improved, and other NASH parameters did not worsen, in 23.1% of patients who received a higher dose of the drug, compared with 11.9% of patients in the placebo arm of the study.
In an interview in December, Pruzanski told Barron’s that the most important metric was the stabilization of fibrosis, and that 40% of the patients in the high dose group improved by a full stage of fibrosis.
The drug also raises levels of so-called bad cholesterol, which could be a concern given that the patients likely to take the drug to treat NASH are also prone to heart disease. In the December interview, an Intercept executive told Barron’s that the risk could be managed with other dugs.
Shares of Intercept are down 61.8% so far this year.