Top Analyst Cuts Price Target For Intercept Pharmaceuticals Inc (ICPT) By 50%; Here’s Why

Intercept Sank 40% in September following Dear Doctor and FDA warning letters; Ritu Baral weighs in.


Shares of Intercept Pharmaceuticals Inc (NASDAQ:ICPT) remained in freefall Friday as investors digested the FDA’s warning letter. In reaction, Cowen’s top healthcare analyst Ritu Baral slashed her price target for ICPT from $232 to $112, while reiterating a Buy rating on the stock.

Baral commented, “Based on the tone of the letter language as well as discussions with our FDA consultants, we strongly believe the main goal of the letter was to prevent overdosing and encourage reporting of any other Ocaliva related events. As such, we believe that update label language for Ocaliva is almost certain. We think there is an almost 100% chance the need for a lower dose in moderate/severe patients, need for liver function monitoring and potential overdose risk will be highlighted through formatting and placement changes. We also think there is a high likelihood of a black box that will highlight overdose risk in these patients. We doubt that any black box language will cover potential risk in mild patients however. We highly doubt FDA will withdraw the drug from the market. We also think its unlikely option is institution of a REMS plan to more carefully monitor dosing levels and force liver function monitoring. Our consultant indicated the timeline for such labeling changes could be ~6 months.”

According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, 5-star analyst Ritu Baral has a yearly average return of 24.3% and a 54% success rate. Baral is ranked #56 out of 4657 analysts.

Most on Wall Street anchor a bullish perspective on the drug maker as TipRanks analytics showcase ICPT as a Buy. Based on 11 analysts polled by TipRanks in the last 3 months, 8 rate a Buy on Intercept stock, 2 maintain a Hold, while only 1 issues a Sell on the stock. The 12-month average price target stands at $168.44, marking a nearly 140% upside from where the stock is currently trading.