Intercept Pharmaceuticals Inc (NASDAQ:ICPT) shares tumbled Tuesday as Wall Street came down hard on the company. The reason? The drug maker released a “Dear Doctor” letter, warning that serious liver injuries including death have been reported in liver-impaired PBC patients with chronic liver disease (Child-Pugh B and C) who have been improperly dosed with Ocaliva (OCA). As of this writing, ICPT shares are falling nearly 15% to $96.64.
Cowen analyst Ritu Baral points out that the potential risk of liver events in patients with moderate/severe PBC is widely known among PBC specialists and hepatologists, and therefore unlikely to impact hepatologists’ use of the drug in PBC.
“We do not anticipate this having any impact on our near-term market model assumptions since the population at risk represents only 3-5% of the overall PBC population and the treating clinician population is aware of risks with overdosing. Community gastros meanwhile, could be spooked, but likely do not drive a significant portion of current and near-term sales. While there could be some changes to Ocaliva label language, we think they would be mostly formatting in nature, increasing the prominence of the need to dose reduce in mod/severe patients,” Baral wrote.
“Also, given the generally much higher hepatic health of the majority of NASH patients vs. PBC patients, we do not see an impact on our current NASH market model (dependent on mild case report detail).”
As such, Baral reiterates an Outperform rating on Intercept shares with a price target of $232, which implies an upside of 131% from current levels.
According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Ritu Baral has a yearly average return of 21.2% and a 54% success rate. Baral has a -16% average return when recommending ICPT, and is ranked #70 out of 4635 analysts.
Most of the Street remains unfazed by the warning letter, supporting Baral’s vote of confidence, as TipRanks analytics exhibit ICPT as a Buy. Out of eight analysts polled in the last 3 months, six are bullish on ICPT stock, while one remains sidelined, and one is bearish. With a return potential of 113%, the stock’s consensus target price stands at $206.17.