Analysts Split On How To Read Intercept Switching Clinical Trial Endpoints

Intercept Pharmaceuticals Inc ICPT hosted a call on Friday to divulge information about changes it made to a late-stage REGENERATE study in Nonalcoholic steatohepatitis, or NASH.

Following the call, sell-side analysts gave contrasting views on the development.

The Amendments

The company updated the definition of NASH resolution to the newer objective definition, which has demonstrated improved efficacy of OCA after post-hoc analyses in trial-matched patients. The previous definition was the absence of at least one of the three components of NASH, namely steatosis, ballooning or inflammation.

The two co-primary end points, namely improvement of fibrosis with no worsening of NASH and the resolution of NASH with no worsening of fibrosis, will now be considered independently as two primary endpoints. Intercept also said it would enroll 750 patients compared to the 1,400 patients planned originally. The timeframe for the enrollment of patients was changed to mid-2017 from the first half of 2017.

See Also: What's With Wall Street's Lofty Price Targets On Intercept?

Amendments Lower Bar for Success

Wedbush said the amendments lower for the bar for success, while retaining significant upside. Analysts Liana Moussatos and Kelechi Chikere of Wedbush noted that the post-hoc analysis of the FLINT trial data using the new objective definition of NASH resolution calculated a response rate of 20 percent for OCA compared to 6 percent for placebo. This was up from 11 percent for OCA compared to 3.5 percent for placebo using the previous definition.

Wedbush expressed happiness over both the protocol amendments being approved by the FDA, which in its view reflects a positive evolution of the agency's view of an effective treatment for NASH. Wedbush believes there is significant upside if the study achieves both endpoints. The firm increased its estimated probability of success to 85:15 rom 80:20.

Meanwhile, Cantor Fitzgerald analyst Elemer Piros and Justice Kim do not see a change to their probability of success for OCA in NASH. The reasons for the sluggish pace of enrollment are difficult to reconcile for the analysts, given their estimates of 14-15 million NASH patients.

Cantor Remains Cautious

Cantor Fitzgerald said it remains cautious of Intercept's opportunity to treat NASH and place into perspective that the slippage in enrollment timeline comes after a nearly 50 percent reduction in target interim enrollment.

Wedbush reiterated its Outperform rating and $224 price target on shares, but Cantor Fitzgerald maintained its Underweight raring and $60 price target for the shares.