Intercept Pharmaceuticals Inc Soars After Positive News on Liver Drug

Intercept Pharmaceuticals Inc (NASDAQ:ICPT) has released drug trial results indicating that an experimental liver-disease may have had a more benign effect on patients’ cholesterol levels than initially thought. The company said it plans to start late-stage trials for the drug in the first half of 2015.

Near-60% surge in Intercept Pharmaceuticals’ stock price

Following the announcement of the clinical trial’s results, Intercept Pharmaceuticals shares surged nearly 60% in after-hours trading on Monday to $378.50 after closing at $237.18. Some analysts believe that the drug has multi-billion dollar sales potential if it gains regulatory approval and makes it to market.

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The biopharmaceutical company that is focused on the development of liver disease treatments is developing the drug called obeticholic acid, or OCA, for nonalcoholic steatohepatitis or NASH, a liver disease that’s estimated to affect up to 5% of Americans. Currently only a few good treatment options are available for the disease.

In January, shares of Intercept Pharmaceuticals Inc soared over 280% to $275.49 per share after the company reported that the data monitoring board had stopped an earlier clinical trial for its liver disease drug because of evidence that the treatment is effective.

Strong second quarter results

New York-based Intercept said Monday that liver scarring didn’t worsen in 46% of NASH patients who were given the drug, compared with 21% in the placebo group. According to Oppenheimer analyst Akiva Felt: “The fear that investors had regarding the safety of the drug have now been put to rest with this update. The statistically significant results of the trial are also a positive new development.”

The company also unveiled its second quarter results Monday, reporting second quarter EPS of $1.51, compared to the loss of 79 cents in the prior year period. The results beat analyst estimates of 12 cents per share in losses.

As reported last month, the top performing stocks on the Russell 3000 for the first half are dominated by the healthcare sector, which took the top four spots. Intercept Pharmaceuticals Inc would have been the fastest growing stock, gaining 383% in the first quarter before losing 28% in the second quarter. This clearly highlights just how speculative Intercept’s shares are.