Intercept Pharma Analysts See Growth Ahead, But Keep Underweight Rating For Now

Following Intercept Pharmaceuticals Inc ICPT's strong second-quarter results and meaningful Ocaliva, or OCA, revenue growth, Cantor Fitzgerald maintains its Underweight rating on the shares of the company. However, the firm raised its price target for the shares from $60 to $69.

Strong Q2 But Tempered Forward Guidance

Analysts Elemer Piros and Justin Kim noted the company's revenues rose to $31 million, exceeding the consensus estimate of $28 million and their estimate of $23 million.

However, the analysts noted that optimism from the stellar second-quarter revenue growth was tempered by the management guidance for a steady consistent growth over the remainder of the year, as we approach a slow summer season.

Cantor Fitzgerald indicated that the company did not give formal guidance for the full year, citing variability associated with the early phase of the PBC launch.

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Positive Pipeline Readout

The firm noted that separately, Intercept Pharma provided clinical updates from its Phase 2 AESOP trial in OSC and Phase 2 CONTROL trial in NASH, with the company terming both results as positive.

"In AESOP, OCA-treated PSC patients demonstrated significant decrease from baseline in alkaline phosphatase (ALP) of -22% compared with placebo-treated patients' increase of +1% at 24 weeks," the firm said.

"Additionally, CONTROL demonstrated atorvastatin's ability to reduce elevations of LDL-C in OCA-treated patients by 40-48mg/dL."

However, the firm said pruritus or severe itching of the skin, remained a significant adverse event.

Although expressing safety concerns following the death of a patient in the LTSE portion of CONTROL, the firm said it is focused on the 750-patient interim analysis of phase 3 REGENERATE in NASH due in the first half of 2019.

Raising Estimates

Citing strong sales growth of the PBC franchise, Cantor Fitzgerald raised its OCA sales estimate for 2017 from $97 million to $122 million. The firm said it maintained its expectations for a slow and steady increase in PBC sales over subsequent quarters.

At the time of writing, Intercept Pharma shares were slumping 7.80 percent to $124.50.