Intercept Pharmaceuticals Downgraded

Bank of America downgraded Intercept Pharmaceuticals Inc ICPT Tuesday from Buy to Neutral and maintained a $315 price target.

Analysts led by Ying Huang mentioned that that company “announced the much anticipated protocol of its Phase 3 REGENERATE trial to evaluate OCA for the NASH indication. The study will initiate in 3Q15 and will enroll up to a total of 2,500 patients at 250 centers.”

Huang said that anticipation of the Phase 3 trial was a key catalyst for the stock and for the remainder of the year there were no other catalysts on the horizon to drive shares higher.

“Accelerated approval will be based on co-primary endpoints - 1) % of OCA vs. placebo-treated patients achieving at least one stage improvement in fibrosis with no worsening of NASH and 2) % of OCA vs. placebo-treated patients achieving NASH resolution with no worsening of fibrosis,” according to the analysts.

Huang estimated that it would take approximately one year to compete enrollment, which suggested potential interim results coming on the first half of 2018. “For a positive trial, both co-primary endpoints will need to be met by the overall study population but not on an individual patient basis."

Investors would now focus on the PBC approval and launch which was anticipated 1H 2016. The analysts, however, believed that the PBC catalyst was already reflected in the company’s valuation.

“OCA could be the first approved treatment for NASH; however, there are a number of other NASH therapies under development and OCA may not present the best profile for a chronic treatment for a largely asymptomatic disease,” Huang concluded.

Intercept Pharmaceuticals closed at $263.50, down 16.08 percent.