Intercept Pharma’s Shares Spike Before Falling On Key FDA Panel Backing

Stocks Continue Downward Slide On Heels Of Yesterday's Extreme Fall
NEW YORK, NY - AUGUST 25: A trader is reflected in a market screen on the floor of the New York Stock Exchange (NYSE) on August 25, 2015 in New York City. Following a day of steep drops in global markets, the Dow Jones industrial average rallied early in the day only to fall over 200 points at the close. (Photo by Spencer Platt/Getty Images)
Spencer Platt—Getty Images

Intercept Pharmaceuticals’ (ICPT) stock rose as much as 11% in after-hours trading on Thursday after an FDA advisory committee unanimously recommended approval of a rare liver disease treatment developed by the company. But shares slumped nearly 7% in early trading Friday after Morgan Stanley downgraded the stock. Although Intercept’s shares have surged more than 30% in the past month in anticipation of the FDA ruling, Morgan Stanley analysts concluded that the liver drug may not fulfill its market potential due to safety concerns in some patients with more advanced versions of the disease.

Intercept is working on a treatment for primary biliary cirrhosis, or PBC, a chronic liver ailment that can eventually degrade bile ducts to the point of permanent scarring. The disease disproportionately affects women.

Thursday’s advisory panel voted 17-0 in favor of approving the drug despite some previously stated safety concerns. The FDA isn’t required to follow independent panel recommendations, but usually does, making the therapy’s approval all but assured.

The agency will decide whether or not to approve the treatment by May 29.

While an approval for PBC could bring in millions in sales, some analysts have also predicted that number could balloon into the billions if the Intercept drug can win an FDA approval for the more common nonalcoholic steatohepatitis, or NASH, a condition in which fatty deposits in the liver cause inflammation.


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