Intercept Pharmaceuticals Inc. (Nasdaq: ICPT) stock surged 45% today (Tuesday) to a new 52-week high of $349.08 after the company reported Q2 results and provided promising updates on several of its key drugs.
Tuesday's meteoric gains were expected after ICPT stock soared 65% to $378.50 after-hours Monday following the company's reports.
What sent ICPT shares skyrocketing was new data on the biopharmaceutical company's experimental fatty liver drug, obeticholic acid (OCA).
The trial-stage drug is used in the treatment of fatty liver nonalcoholic steatohepatitis, or NASH. NASH, a liver-damaging disease, is estimated to affect up to 5% of Americans. Presently, very few good treatment options for the disease exist.
It's hoped that Intercept's OCA could change that.
Data showed OCA had a less harmful impact on patient's cholesterol levels than previously thought. The drug stopped liver scarring (improvement) in 46% of patients who received the treatment in clinical studies versus 21% taking a placebo.
Study participants receiving OCA experienced increases in LDL cholesterol, or "bad" cholesterol, by the end of the 72-week treatment period, rising nine points on average from a baseline of 112. However, 24 weeks after treatment ended, LDL levels in patients taking OCA had declined 12 points from the baseline, which Intercept explained may have been due to "more rigorous cholesterol management," such as the use of anti-cholesterol drugs.
Intercept Chief Executive Officer Mark Pruzanski said the results gave the company "increased confidence" in OCA.
Intercept said it is working with the U.S. Food and Drug Administration to expedite development and bring the drug to market.
Late-stage trials are expected to begin in the first half of 2015. The company also is testing the drug to treat primary biliary cirrhosis, an autoimmune disease in which bile ducts in the liver are destroyed.
Analysts believe the drug has multibillion-dollar sales potential should it gain regulatory approval and hit the market.
Tuesday, research/investing firm Leerink Swann upgraded ICPT to "Outperform" from "Market Perform."
Intercept Pharmaceuticals stock was up a stratospheric 250% year to date as of Monday's close. With Tuesday's gains, ICPT is up a blistering 350% since the start of 2014.
Interest in ICPT began in early January.
Intercept shares quadrupled on Jan. 9, gaining a whopping 280%, after the company said an analysis by an independent safety committee showed its liver disease drug met the main goal of a mid-stage trial.
Shares were sharply boosted on speculation the 12-year-old company would be able to receive fast-track regulatory approval for OCA, its promising trial drug.
The stock shed some of those gains over the next several months amid concerns about the drug's side effects. Investors took profits as they awaited full clinical trial results.
Few details emerged over the next several months and some investors grew impatient.
Monday's updated data was what investors and analysts were waiting for before piling further into ICPT shares.
"The fear that investors had regarding the safety of the drug have now been put to rest with this update," Oppenheimer analyst Akiva Felt told Reuters. "The statistically significant results of the trial are also a positive new development."
Intercept also reported Q2 earnings results on Monday
The company posted a profit in the second quarter ended June 30 compared with a loss a year earlier, helped by a one-time gain related to revaluation of warrants.
Q2 earnings per share came in at $1.51, compared to a net loss of $0.79 per share in the same quarter a year ago. Net income came in $33.5 million, compared to a net loss of $13.5 million in the same quarter a year ago.
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