Thursday, May 29, 2014

Intercept Pharmaceuticals: Another Double?

Can a stock that has already more than tripled this year double from here? If it’s Intercept Pharmaceutcials (ICPT), then the answer could be yes, says Wedbush analyst Liana Moussatos.

Last night, Intercept reported that the FDA had granted fast-track status to its obeticholic acid, or OCA, for treating primary biliary cirrhosis, or PBC, in which the bile ducts in the liver are destroyed. Moussatos discusses the implications for Intercept Pharmaceuticals:

The FDA designates Fast-Track status to a therapy that treats a condition that has no current therapy or to a therapy that shows some advantage over available therapy, such as superior effectiveness or the ability to address an emerging or anticipated public health need. The company and we believe the designation signals that the FDA recognizes that OCA has the potential to address a significant unmet need. Currently, the only approved treatment for PBC is ursodiol, and about half of PBC patients who are unable to tolerate or have an inadequate response have no other treatment options except for liver transplant. With Fast-Track designation, Intercept is eligible for more frequent meetings and written communications with the FDA. Additionally, there is the potential for a faster review process (6 months vs. 10 months) for OCA.

Moussatos expects a third-quarter trial update to be the next catalyst for Intercept Pharma’s stock, which she says has an acquisition value of $493.

Shares of Intercept Pharmaceuticals have gained 2.9% to $240.73 at 10:17 a.m. today.

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