Intercept Pharmaceuticals (ICPT)

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Target Price ICPT 58$

(Updated - July 6, 2016 3:11 PM EDT)

Cantor Fitzgerald initiated coverage on Intercept Pharmaceuticals (NASDAQ: ICPT) with a Sell rating and a price target of $58. Analyst Elemer Piros is cautious on the company's opportunity in NASH. At most, he thinks its Phase III trial has a 25% chance to succeed.

"While Intercept just launched Ocaliva for an orphan liver disease (market potential: $700 million), we are unenthusiastic about the drug’s future in nonalcoholic steatohepatitis (NASH). We have identified six areas of weaknesses in the previous clinical package and the design of the currently ongoing Phase III trial," said Piros.

"There are ~50 million patients suffering from NASH in the U.S. and in key European countries. Untreated, 10% of patients may progress to serious liver disease, cancer or transplant. When compared to PBC, the opportunity in NASH is orders of magnitude higher. While at first glance the data supporting Ocaliva (aka OCA) in NASH appeared exciting, as more layers of the onion were peeled off, we have become less enthusiastic about its future," continued the analyst.

Piros added, "Analysis of the two Phase IIb trials (FLINT and a Japanese study) unveils significant weaknesses. First and foremost, the primary endpoint that made the FLINT trial an apparent success is not used in the ongoing Phase III trial. Individual components of the co-primary endpoints of the Phase III trial were not significant in FLINT or in the Japanese study. To make matters worse, these endpoints are now co primary. We believe that the Phase III trial has at most a 25% chance to succeed."

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Shares of Intercept Pharmaceuticals closed at $143.47 yesterday.