January 15, 2014, 1:41 PM
By Russ Britt
Intercept Pharmaceuticals’ chief executive said Wednesday the company’s new drug could tap into a vast market to treat what he called “the next tsunami of liver disease.”
- Image of liver afflicted with NASH
Intercept ICPT +8.03% CEO Mark Pruzanski told the J.P. Morgan Healthcare Conference in San Francisco the liver disease his company hopes to treat — nonalcoholic steatohepatitis, or NASH — could affect 6 million adults. NASH also is expected to become the leading cause of liver transplants, and the market for treatments of the disease could be bigger than hepatitis C, Pruzanski said.
The disease creates fatty deposits in the liver and can lead to cirrhosis in roughly 10% of patients with 10 years, regardless of whether they drink alcohol. NASH patients are 10 times more susceptible to liver-related mortality. One-third of all patients with non-alcoholic fatty liver disease develop NASH, he added.
“This is considered to be irreversible on its own,” he said.
The company’s obeticholic acid, or OCA, met goals early in Phase 2 testing for treatment of NASH and was discontinued last week. That set off massive buying of the company’s shares last week. Now the company hopes to begin Phase 3 tests next year and seek expedited approval for the treatment from the U.S. Food and Drug Administration.
On Wednesday, Intercept was trading around the break-even point — up marginally to $255.97 in recent action. That’s relative calm compared with what the stock experienced over the last week, with its value multiplying almost seven times, from the low $70s to nearly $500 a share Thursday and Friday, then falling 18% Monday and 30% on Tuesday.
“It’s been an interesting few days,” Pruzanski said.
Some analysts reportedly believe the potential for OCA is strong. Bank of America analyst Rachel McMinn reportedly put a price target of $872 on the company’s shares; B. of A. won’t make its research notes public.
There is at least one caveat, however, as the National Institutes of Health pointed out over the weekend that OCA users experienced larger-than-expected levels of bad cholesterol after taking the drug. Pruzanski said those levels were up about 20% in some cases.
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