Intercept Pharma (ICPT) Updates on Expected FY15 Milestones; Sees OCA NASH Phase 3 in H215

Intercept Pharma (NASDAQ: ICPT) provided a clinical update on obeticholic acid (OCA), a novel bile acid analog and first-in-class agonist of the farnesoid X receptor (FXR), as well as planned 2015 milestones and other general business updates. OCA is currently being developed for the treatment of several chronic liver diseases, including primary biliary cirrhosis (PBC), nonalcoholic steatohepatitis (NASH) and primary sclerosing cholangitis (PSC).

Summary of 2014 Year-End Program Updates and Planned 2015 Milestones

• PBC Program
  • Rolling NDA submission initiated in December 2014
  • Phase 3 confirmatory outcomes trial initiated in December 2014
  • Completion of NDA and MAA filings planned in 1H 2015
• NASH Program
  • IND and comprehensive FLINT trial datasets transferred from NIDDK to Intercept in December 2014
  • Phase 3 program initiation planned in 1H 2015
  • Japan Phase 2 trial data expected YE 2015
• PSC Program
  • Phase 2 trial initiated in December 2014
• Biliary Atresia: Phase 2 initiation planned in 2H 2015
• INT-767: Phase 1 initiation planned for YE 2015

OCA for Primary Biliary Cirrhosis (PBC)

In March 2014, we announced that OCA achieved the primary endpoint in a Phase 3 clinical trial (POISE) for the treatment of PBC. These results, along with two previously conducted randomized Phase 2 PBC trials, are planned to serve as the basis for seeking the first regulatory approvals to market OCA in the United States and Europe. OCA was granted Fast Track designation by FDA in May 2014 for the treatment of patients with PBC who have an inadequate response to or are intolerant of ursodiol. The Fast Track process allows a company to submit individual sections of its New Drug Application (NDA) for review by FDA on a rolling basis as they are completed. We initiated the rolling NDA submission in December 2014 under the accelerated approval pathway and plan to complete our filings for marketing approval of OCA in PBC in the United States and Europe within the first half of 2015.

As part of our strategy for filing the NDA under the accelerated approval pathway, two key events occurred in December 2014. First, we announced the publication in Gastroenterology of the largest meta-analysis of individual PBC patient data conducted to date, in which an independent group of researchers sponsored by us (the Global PBC Study Group) confirmed that levels of alkaline phosphatase (ALP) and bilirubin predicted clinical outcomes of patients with PBC. Second, we initiated a confirmatory clinical outcomes trial in PBC, as required under FDA guidelines for accelerated approval, with detailed input on the trial design from regulatory agencies. The goal of the trial is to confirm that reduction of ALP with OCA treatment is associated with a longer term benefit on liver-related clinical outcomes. This trial is expected to be completed on a post-marketing basis and is anticipated to enroll approximately 350 patients at 150 centers in over 20 countries.

"2014 was an important year for our PBC program with positive Phase 3 data from the POISE trial, the Global PBC Study Group publication and productive discussions with regulators," said Mark Pruzanski, M.D., Chief Executive Officer of Intercept Pharmaceuticals. "The initiation of our confirmatory clinical outcomes trial and rolling NDA are important milestones in our goal of bringing to market a treatment alternative for PBC patients with inadequately controlled disease."

OCA for Nonalcoholic Steatohepatitis (NASH)

OCA achieved the primary endpoint in a Phase 2b clinical trial (FLINT) for the treatment of NASH, which was sponsored by the National Institute of Diabetes and Digestive and Kidney Diseases (NIDDK), a part of the National Institutes of Health (NIH). The FLINT results were published online in The Lancet in November 2014. In December 2014, NIDDK transferred to us the Investigational New Drug (IND) application for OCA in NASH, along with comprehensive datasets from FLINT, allowing us to further analyze the trial results in support of our NASH program. Also in December 2014, the proceedings of a 2013 NASH endpoints workshop sponsored by FDA and the American Association for the Study of Liver Diseases (AASLD) were published online in Hepatology, focusing on improvement in liver histology as a basis for potential accelerated approval of NASH drugs.

We continue to plan for the initiation of our NASH Phase 3 clinical program in the first half of 2015, subject to the completion of our regulatory discussions with FDA and EMA. We also intend to initiate a clinical trial in 2015 investigating the lipid metabolic effects of OCA and cholesterol management effects of concomitant statin administration in NASH patients.

OCA for Primary Sclerosing Cholangitis (PSC)

In December 2014, we initiated an international Phase 2 clinical trial to evaluate the effects of 24 weeks of treatment with varying doses of OCA compared to placebo in patients with PSC. The primary endpoint is the reduction of serum ALP levels, as compared to placebo. In addition, OCA's effect on other secondary liver function endpoints, as well as symptoms of ulcerative colitis (a disease occurring in a majority of patients with PSC), will be assessed. This trial is anticipated to enroll approximately 75 patients in the United States and Europe.

Cash Position and 2015 Guidance

Intercept ended 2014 with approximately $240 million in cash and investments. For the full year 2015, we project adjusted operating expenses in the range of $180 to $200 million, which excludes stock-based compensation and other non-cash items. These expenses will support the clinical development program for OCA in PBC, NASH and PSC, expansion of our clinical, regulatory, medical affairs and commercial infrastructure in the United States and Europe, expansion of OCA manufacturing activities, as well as advancement of INT-767 and other preclinical pipeline programs. Adjusted operating expense, as presented above, is a non-GAAP financial measure. We anticipate that stock-based compensation expense will represent the most significant non-cash item that is excluded in adjusted operating expenses as compared to operating expenses under GAAP.

Upcoming Investor Presentation

Management will provide an update on the company followed by a breakout session at the J.P. Morgan Healthcare Conference on Wednesday, January 14, 2015 starting at 10:30 a.m. Pacific Time in San Francisco. Webcast information for the presentation and immediately following breakout session will be available on the Investors page of Intercept's website at http://ir.interceptpharma.com. An archived webcast will be available on Intercept's website for approximately two weeks.

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