Stock Update (NASDAQ:ICPT): Intercept Pharmaceuticals Inc Reports Second Quarter 2015 Financial Results and Provides Business Update


Intercept Pharmaceuticals Inc (NASDAQ:ICPT), a clinical stage biopharmaceutical company focused on the development and commercialization of novel therapeutics to treat chronic underserved liver diseases, such as primary biliary cirrhosis (PBC) and nonalcoholic steatohepatitis (NASH), today reported financial results for the three and six months ended June 30, 2015and provided other general business updates. Intercept will hold a conference call and audio webcast today at 4:30 p.m. ET to review this information with conference call details provided below.

Summary of Key Development Programs, Updates and Anticipated Milestones

  • PBC Program
    • Completed NDA/MAA filings for PBC in June 2015
    • Phase 3b COBALT confirmatory outcomes trial enrolling
  • NASH Program
    • Phase 3 REGENERATE initiation anticipated in 3Q 2015
    • Phase 2 lipid metabolism trial initiation anticipated in 2H 2015
  • Primary Sclerosing Cholangitis (PSC) Program
    • Double-blind phase 2 trial enrolling
      • First clinical trial of OCA in this orphan indication with high unmet medical need
  • Biliary Atresia Program
    • Phase 2 trial initiation anticipated in 2H 2015
  • INT-767 Phase 1 Trial Initiation Anticipated by Year-end 2015

Financial Results

Six Months Ended June 30, 2015

For the six months ended June 30, 2015, Intercept reported a net loss of $87.3 million, compared to a net loss of $212.6 million for the six months ended June 30, 2014. Net loss for the six month period ended June 30, 2015 included non-cash expenses totaling $19.6 million including $16.4 million of stock-based compensation expense. Net loss for the six month period ended June 30, 2014 included non-cash expenses totaling $183.6 million comprised primarily of a non-cash warrant revaluation expense of $170.8 million and other non-cash expenses of $12.7 million, including stock-based compensation expense of $11.2 million.

Research and development expenses increased to $56.3 million for the six months ended June 30, 2015 from $29.2 million for the six months endedJune 30, 2014 primarily as a result of an increase in i) expenses related to personnel and activities to support our NDA and MAA filings for OCA in PBC and other development initiatives, ii) activities associated with research and discovery initiatives, iii) expenses for the INT-767 program, and iv) product and manufacturing costs.

General and administrative expenses increased to $34.1 million for the six months ended June 30, 2015 from $13.6 million for the six months endedJune 30, 2014 primarily as a result of increased pre-commercial activities and the increase in personnel across G&A departments in support of these initiatives.

In the six months ended June 30, 2014, Intercept recorded a $170.8 million non-cash charge related to the periodic revaluation of a warrant liability primarily attributable to the significant increase in the market price of Intercept’s common stock in that period. In connection with equity financings prior to its initial public offering, Intercept had issued warrants that were classified as liabilities and were adjusted to fair value on a quarterly basis with the change in fair value being included in net loss. This net loss was a non-cash item as Intercept was not required to expend any cash to settle the warrant liability. On April 10, 2014, all warrants outstanding as of March 31, 2014 were exercised on a cashless basis and converted into shares of Intercept common stock. As such, Intercept recorded a final adjustment of approximately $56 million in non-cash income in the second quarter of 2014 and no further revaluations are necessary.

Three Months Ended June 30, 2015

Intercept reported a net loss of $47.9 million for the second quarter of 2015, compared to a net income of $33.5 million for the second quarter of 2014. Net loss for the three month period ended June 30, 2015 included non-cash expenses totaling $8.7 million including $6.6 million of stock-based compensation expense. Net income for the three month period ended June 30, 2014 included net non-cash income totaling $51.1 millioncomprised primarily of a non-cash warrant revaluation gain of $55.8 million offset by other non-cash expenses of $4.7 million, including stock-based compensation expense of $3.8 million.

Cash Position and 2015 Guidance

As of June 30, 2015, Intercept had cash, cash equivalents and investment securities available for sale of approximately $732.3 million, compared to$402.0 million as of March 31, 2015. The increase is primarily due to the completion of a follow-on public offering of 1,330,865 shares of common stock in April 2015 resulting in net proceeds of approximately $367.3 million.

Intercept projects adjusted operating expenses of $240 million in the fiscal year ending December 31, 2015, which excludes stock-based compensation and other non-cash items. This is an increase from the previous projection of $180 million to $200 million of adjusted operating expenses primarily due to accelerated infrastructure buildout supporting Intercept’s commercial and research and development efforts. These expenses are planned to support the clinical development program for OCA in PBC, NASH and PSC, the expansion of Intercept’s clinical, regulatory, medical affairs and commercial infrastructure in the United States, Europe and other countries such as Canada and Australia, increased OCA manufacturing activities, as well as the continued development of INT-767 and other preclinical pipeline programs. Intercept anticipates that stock-based compensation expense will represent the most significant non-cash item that is excluded in adjusted operating expenses as compared to operating expenses under U.S. generally accepted accounting principles, or GAAP. Adjusted operating expense is a financial measure not calculated in accordance with GAAP.  (Original Source)

Shares of Intercept Pharmaceuticals are currently trading at $259, down $1.09 or 0.42%. ICPT has a 1-year high of $349.08 and a 1-year low of $128.50. The stock’s 50-day moving average is $258.32 and its 200-day moving average is $251.86.

On the ratings front, Intercept Pharmaceuticals has been the subject of a number of recent research reports. In a report released yesterday, Wedbush analyst Liana Moussatos reiterated a Buy rating on ICPT. Separately, on July 23, RBC’s Michael Yee maintained a Buy rating on the stock and has a price target of $490.

According to TipRanks.com, which ranks over 7,500 financial analysts and bloggers to gauge the performance of their past recommendations, Liana Moussatos and Michael Yee have a total average return of 28.8% and 13.4% respectively. Moussatos has a success rate of 46.5% and is ranked #47 out of 3724 analysts, while Yee has a success rate of 71.3% and is ranked #167.

Overall, 3 research analysts have assigned a Hold rating and 9 research analysts have given a Buy rating to the stock. When considering if perhaps the stock is under or overvalued, the average price target is $409.09 which is 56.0% above where the stock opened today.

Intercept Pharmaceuticals Inc is a biopharmaceutical company. The Company is engaged in the development and commercialization of novel therapeutics to treat chronic liver disease utilizing its proprietary bile acid chemistry.