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Intercept Pharmaceuticals (ICPT) Gets Another Bull; Janney Capital Resumes at Buy

December 18, 2014 11:41 AM EST
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Price: $19.00 --0%

Rating Summary:
    13 Buy, 17 Hold, 3 Sell

Rating Trend: = Flat

Today's Overall Ratings:
    Up: 13 | Down: 10 | New: 11
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Intercept Pharmaceuticals (NASDAQ: ICPT) has been a controversial and volatile stock for the better part of a year, given the ups and downs surrounding the prospects of OCA as a treatment of Non-alcoholic steatohepatitis (NASH). Today, however, the bulls got another addition to their camp - Janney Capital analyst Chiara Russo resumed coverage on the stock with a Buy rating and $311 fair value target.

Russo believes OCA should receive accelerated approve in lead indication PBC, going to market with orphan pricing in 1H16. With pricing at $65,000/year for a typical orphan drug, the analyst said this provides a de-risked revenue stream. The analyst notes the NASH indication faces certain regulatory challenges, safety concerns, and even skepticism around the patient population. However, even with the risks Russo said they "simply cannot ignore the multi-billion dollar opportunity on a drug that clearly has demonstrated clinical benefit."

The analyst said if OCA is approved in its lead indication of PBC they expect over $200M in revenues through the first two years with the potential multi-billion dollar NASH indication to follow. Also, demonstrating the depth and versatility of the OCA compound, other indications include portal hypertension, primary & secondary bile acid diarrhea, and ultra-orphan indication of primary sclerosing cholangitis.

On NASH, the analyst said despite the risks it requires serious consideration for investors. For one, advanced forms of NASH effect approximately 6 people in the U.S. alone with no FDA-approved treatments. This represents a multi-billion dollar opportunity. "The early stoppage of the FLINT trial in January 2014 and subsequent deluge of data has given many people many things to talk about," Russo said. "There are safety concerns that need to be explored as well as the clinical path forward that required clarity, but we feel that these negatives have been over-weighted in the recent months contrary to the fact that OCA has a very clear fibrosis benefit."

For an analyst ratings summary and ratings history on Intercept Pharmaceuticals click here. For more ratings news on Intercept Pharmaceuticals click here.

Shares of Intercept Pharmaceuticals closed at $140.71 yesterday.



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