The Rising Challenge for Intercept Pharmaceuticals: Analyst Downgrade Amid Ocaliva's DILI Concerns

Canaccord Genuity has lowered the price target for Intercept Pharmaceutical Inc ICPT from $26 to $12, with a Hold rating.

The analyst says Ocaliva, for PBC, is worth $16 per share, with OCA in NASH costing $4 based on overhead allocation for the rest of 2023 as it sees the program winding down.

The FDA has concerns about drug-induced liver injury (DILI) that could be fatal.

Related: What Now After FDA AdComm Rebuke for Intercept Pharmaceutical? Analyst Says Approval Of Intercept's 'OCA In NASH May Never Occur.

With 12 cases being presented at the AdCom, the analyst writes that the FDA was clear on its concern over how this could be magnified given the size of the patient population being targeted by OCA in NASH.

It also says that while Intercept provided a monitoring strategy for patients, the company's expert stated that monitoring aims to identify signals of DILI early in treatment but not to prevent DILI from happening.

Committee members were not convinced that the monitoring could satisfactorily catch all DILI cases.

Needham downgraded the stock from Buy to Hold, citing the FDA's tone was decidedly negative throughout the meeting and confirmed the agency's considerable concerns.

Needham analyst says there is some value in the PBC program, but it awaits more visibility into the long-term potential of this program given the competitive landscape.

Price Action: ICPT shares are down 2.89% at $9.26 on the last check Tuesday.