Biotech Beat: Analysts Weigh In on Valeant Pharmaceuticals Intl Inc (VRX) and Intercept Pharmaceuticals Inc (ICPT)

Cowen remains bullish on Intercept Pharmaceuticals Inc (NASDAQ:ICPT) as the company designs Phase 2 and 3 trials for its pipeline drug aimed to treat liver disease. On the other hand, Deutsche Bank is staying on the sidelines after Valeant Pharmaceuticals Intl Inc (NYSE:VRX) cut ties with its specialty pharmacy in an attempt to recover from fraud accusations.

Intercept Pharmaceuticals Inc

Cowen analyst Ritu Baral of Cowen reiterated an Outperform rating on Intercept Pharma with a $412 price target in light of upcoming Phase 2 and 3 trials for OCA in NASH. The company’s pipeline drug, OCA, aims to treat NASH; a common cause of liver disease.

The analyst is bullish on the fact that Intercept is planning additional trials to “round out commercial opportunity in the disease.” The company recently revealed more details on the trial, highlighting that the trial will include “titrated atorvastatin treatment, with monitoring designed to look at dose dependent effects of OCA 5mg, 10mg and 20mg on lipids and lipid subfractions.” Furthermore, the company reported that Phase 3 trials will invoke hepatic venous pressure gradient as an endpoint because it is a “key independent risk factor for liver outcomes.”

Baral also noted that competitor GenFit will be starting a Phase 3 trial for GFT505, a competing pipeline drug. The design of the study is similar to that of Intercept’s Regenerate trial, though the analyst is “surprised by the study’s one dose design given the primary endpoint miss in GOLDEN.” In the GOLDEN trial, GenFit’s drug did not show significant improvement in the primary NASH resolution endpoint. She adds, “We also note that this trial is generally smaller than REGENERATE, although final trial details and powering is still tbd.”

According to TipRanks, 4 of the 7 analysts who have weighed in on the pharmaceutical company in the last 3 months are bullish on the stock, while 2 are bearish and 1 is neutral. The average 12-month price target between these 7 analysts is $315.71, marking an 87% potential upside from where shares last closed.


Valeant Pharmaceuticals Intl Inc

Gregg Gilbert of Deutsche Bank maintained a Hold rating on Valeant Pharma with a $136 price target due to survey results indicating that the effects of cutting ties with Philidor will have long lasting impact. To recap, Valeant had been under fire recently for fraud following accusations that the one of the company’s pharmacies, Philidor, was operating within a phantom network, indicating that Valeant was its only customer. To clear the air, Valeant has cut all ties with Philidor.

Gilbert commissioned a brief survey to 25 dermatologists in the wake of this move in order the gauge the doctors’ thoughts on the future of VRX’s medications. The survey asked several questions about how, or if, the doctors’ tendencies to subscribe Valeant drugs have changed since it ended its relationship with Philidor. When answering the survey, 68% of the doctors in question responded that they have subscribed fewer VRX drugs since the company ended its relationship with Philidor. Likewise, 68% of respondents said they expect their tendencies to subscribe VRX drugs in the future to decrease.

The analyst notes, “We are not changing our model or Hold rating as a result of this brief survey, but the results certainly suggest that the Philidor controversy could have longer-lasting effects vs. just the short-term disruption that management has suggested.” The analyst adds that there could be significant upside if the company reaches its targets, but he is curious to see if the company will change its guidance for the fourth quarter and next year.

According to the analysts polled by TipRanks, 13 remain bullish, 5 are neutral, and only 1 is bearish. The average 12-month price target between these 19 analysts is $170.82, marking a 143% potential upside from where shares last closed.

VRX Stat


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