Intercept Pharmaceuticals Inc (NASDAQ:ICPT), a clinical stage biopharmaceutical company focused on the development and commercialization of novel therapeutics to treat non-viral, progressive liver diseases, today reported financial results for the fourth quarter and full year ended December 31, 2015 and provided other general business updates. Intercept will hold a conference call and audio webcast today at 8:00 a.m. Eastern Time to review this information with conference call details provided below.
Summary of Program Progress
- Primary Biliary Cirrhosis (recently renamed Primary Biliary Cholangitis [PBC]) Program
- Completed NDA/MAA filings for PBC June 2015
- Priority Review granted by FDA August 2015
- Nonalcoholic Steatohepatitis (NASH) Program
- Breakthrough therapy designation granted from FDA for OCA in NASH with liver fibrosis in January 2015
- REGENERATE Phase 3 trial in non-cirrhotic NASH patients with liver fibrosis initiated September 2015
- CONTROL Phase 2 statin trial initiated December 2015
- Primary Sclerosing Cholangitis (PSC) Program
- AESOP Phase 2 trial continued enrollment
- Biliary Atresia Program
- CARE Phase 2 trial initiated October 2015
- INT-767 Program
- Phase 1 trial initiated November 2015
Planned 2016 Milestones
- PBC Program
- Scheduled FDA Advisory Committee meeting April 7, 2016
- PDUFA date May 29, 2016 with planned US launch in June if NDA is approved
- Anticipated EU marketing authorization application decision in late 2016
- NASH Program
- Continued enrollment of REGENERATE and CONTROL trials
- Planning of NASH cirrhosis and non-invasive technology trials
- INT-767 Program
- Completion of Phase 1 trial and planning of Phase 2 trial
“2015 was a transformative year for Intercept, highlighted by the filing of our first NDA and MAA for OCA, the transition of the company to a commercial ready organization, and the initiation of REGENERATE, the first Phase 3 registrational trial ever conducted in NASH,” said Mark Pruzanski, M.D., Chief Executive Officer and President of Intercept. “We remain focused on obtaining regulatory approval of OCA in PBC in both the U.S. and Europe in 2016 and are preparing to launch OCA in these markets. At the same time, we plan to continue executing in our global NASH development program across our various ongoing and planned clinical trials.”
2015 Full Year Financial Results
Net loss for the full year 2015 was $226.4 million, compared to a net loss of $283.2 million for the full year 2014, representing a decrease of $56.8 million. Net loss for the full year 2015 included $34.2 million of non-cash stock-based compensation expense. The 2014 net loss included $170.8 million of non-cash warrant revaluation expense and $20.1 million in non-cash stock-based compensation expense. GAAP operating expenses for the full year 2015 was $231.9 million as compared to $114.9 million for the full year 2014, representing an increase of approximately $117.0 million. Adjusted operating expenses1 for the full year 2015 was $196.1 million as compared to $94.3 million for the full year 2014, representing an increase of approximately $101.7 million.
Research and development (R&D) expenses increased to $128.2 million for the full year 2015 from $80.3 million for the full year 2014. The $47.9 million net increase is primarily due to additional personnel on Intercept’s development team to manage the increased activities around the OCA development program; increased non-personnel expenses for the OCA development program; and increased expenses related to the INT-767 and preclinical programs.
General and administrative (G&A) expenses increased to $103.7 million for the full year 2015 from $34.6 million for the full year 2014. The increase in G&A expenses of $69.1 million was primarily due to increased expenses related to pre-commercialization activities both in the U.S. and internationally; and additional personnel to manage the increased operational activities, as well as increased operating costs such as legal, facilities and technology-related expenses.
For the full year 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. The amount included in 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.
Cash Position & 2016 Operating Guidance
As of December 31, 2015, Intercept had cash, cash equivalents and investment securities available for sale of approximately $628.1 million, compared to $239.7 million as of December 31, 2014. The increase is primarily due to the completion of two follow-on public equity offerings during 2015 resulting in net proceeds of approximately $558.7 million, offset by increased adjusted operating expenses discussed above.
Intercept currently projects adjusted operating expenses in the range of $360 million to $400 million in the fiscal year ending December 31, 2016, which excludes stock-based compensation and other non-cash items. These expenses are planned to support the continued clinical development program for OCA in PBC, NASH and PSC, increased OCA manufacturing activities, the continued development of INT-767 and other preclinical programs, as well as pre-commercial and commercial activities in both the U.S. and internationally. The build out of Intercept’s U.S. commercial infrastructure is mostly complete with the recent hiring of the U.S. territory business managers and other field personnel in October 2015. Intercept also significantly expanded its commercial and other international infrastructure in 2015, and plans on making additional investments over 2016 should key regulatory milestones be achieved.
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 GAAP. Adjusted operating expense is a financial measure not calculated in accordance with GAAP. (Original Source)
Shares of Intercept Pharmaceuticals closed yesterday at $121.76. ICPT has a 1-year high of $314.88 and a 1-year low of $89.76. The stock’s 50-day moving average is $116.00 and its 200-day moving average is $162.74.
On the ratings front, ICPT has been the subject of a number of recent research reports. In a report issued on January 29, Morgan Stanley analyst Andrew Berens upgraded ICPT to Hold, with a price target of $100, which implies a downside of 17.9% from current levels. Separately, on January 6, Oppenheimer’s Akiva Felt maintained a Buy rating on the stock and has a price target of $375.
According to TipRanks.com, which ranks over 7,500 financial analysts and bloggers to gauge the performance of their past recommendations, Andrew Berens and Akiva Felt have a total average return of 17.1% and -1.5% respectively. Berens has a success rate of 76.0% and is ranked #272 out of 3638 analysts, while Felt has a success rate of 33.2% and is ranked #2818.
Overall, 2 research analysts have assigned a Hold rating and 4 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 $355.00 which is 191.6% above where the stock closed yesterday.
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.