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Intercept Shares Skyrocket on NASH Trial Data, Galectin Shares Jump Too

By  +Follow January 9, 2014 9:39AM
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Even those that have been around the market for decades don’t often see the type of move that shares of Intercept Pharmaceuticals, Inc. (ICPT) are making on Thursday. Shares have ballooned to add more than $4 billion to the market capitalization of Intercept on positive news from a Phase 2 clinical trial.

ICPT Could Have Effective Treatment for Fatty Liver Disease

The company said that the FLINT trial of its lead drug candidate obeticholic acid, or OCA, for the treatment of nonalcoholic steatohepatitis, or “NASH” or fatty liver disease as its more often called, was halted early because a planned interim analysis showed that it has met its primary efficacy endpoint. NASH is a chronic liver condition caused by excessive fat accumulation in the liver that can lead to fibrosis (scarring) and can progress into cirrhosis (severe scarring) and eventually liver failure.

There are no approved drugs for NASH, which has grown to epidemic proportions in the U.S., with about 12 percent of the population estimated to have the disease. Worse yet, it’s a silent killer, often not presenting symptoms until advanced stages.

Double-Blind Trial for OCA Stopped Early

The double-blind, placebo-controlled trial enrolled 283 patients with NASH (verified by a liver biopsy) across 8 U.S. sites.  Patients were either treated with a 25 mg dose of obeticholic acid or given a placebo for 72 weeks. Biopsies were taken again at the end of the trial and compared to the initial biopsies utilizing a NAFLD (Non-Alcoholic Fatty Liver Disease) Activity Score. The analysis of the data showed patients in the treatment arm to have a “highly statistically significant improvement” in the primary histological endpoint.

"The unexpected early stopping of FLINT due to OCA meeting the primary endpoint with such high significance is a major milestone," said Dr. Mark Pruzanski, chief executive of Intercept.

Intercept, an expert in bile acid chemistry, is evaluating OCA in three separate Phase 2 clinical trials (for portal hypertension, NASH and bile acid diarrhea) and a Phase 3 trial for primary biliary cirrhosis. The company currently does not have any approved drugs in its portfolio, so the lofty valuation is based on speculation that Intercept can bring a liver drug to market, likely resulting in blockbuster sales given the massive unmet medical need.

Shares of ICPT are trading ahead by 273 percent at $269.70 in Thursday action after closing Wednesday at $72.39. Shares printed as high at $305 in morning action (+318%).

GALT Also on the Rise on Fatty Liver Disease Treatment

Also making a run today is Galectin Therapeutics (GALT) , a pioneer in the industry space that is conducting a Phase 1 trial of GR-MD-02 in NASH patients with advancedfibrosis under a Fast Track designation that was granted by the U.S. FDA in August. 

Why the share appreciation for Galectin upon the Intercept news?  For starters, Intercept is putting a bright spotlight on the void on pharmacy shelves for drugs to treat fatty liver disease and subsequent, more serious diseases and the massive market potential of successfully developing a new drug.  Secondly, Galectin has a patent on a treatment for NASH that includes GR-MD-02 in combination with obeticholic acid, so OCA demonstrating efficacy could be valuable to Galectin in the future. Thirdly, there is still an important difference in the Phase 1 trial for NASH that is being conducted by Galectin and the Phase 2 trial of Intercept that is certainly worth noting.

Simply put, Intercept’s trial enrolled NASH patients with minimal fibrosis and Galectin is enrolling NASH patients with advanced fibrosis. That’s an important distinction because of the slow-developing nature of NASH that begins with little to no scarring before progressing to cirrhosis, meaning that the degree of scarring has a meaningful impact on clinical consequences. Pre-clinical research by Galectin showed GR-MD-02 to reverse fibrosis and cirrhosis in animal models, an effect that it is now being evaluated in humans, which could be more clinically significant than Intercept’s results.

That’s by no means to downplay the importance of Intercept’s clinical data or how valuable it can be to the company and the millions of people with fatty liver disease. It is, though, an explanation of a relevant difference between the two target indications and a highlight of the potential future growth in valuation of Galectin, being that its market cap is 96-percent less than that of Intercept.

The last update from Galectin in November said that 5 of 8 patients in first cohort of the blinded Phase 1 trial have been enrolled and infused with GR-MD-02. At the time of the update, no serious adverse advents had been reported. Data from the first cohort is anticipated early this year, which could serve as a catalytic moment for the company.

Shares of GALT are ahead by 46 percent in Thursday trading, climbing up to $12.37, equating to a market capitalization of approximately $226 million. 

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions.


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By  +Follow January 9, 2014 9:39AM
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