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Friday, April 12, 2019

Intercept fairly valued following yesterday’s data, says Wells Fargo

Wells Fargo analyst Jim Birchenough views Intercept Pharmaceuticals as fairly valued following his review of the secondary endpoint per protocol analysis from the Phase 3 Regenerate study of obeticholic acid in non-alcoholic steatohepatitis. The analyst modestly raised his price target for the stock to $104 and keeps a Market Perform rating on the name. While the per protocol analysis should strengthen the conviction in obeticholic acid benefit in reversing histologic features of NASH in patients adhering to longer term treatment, the intent to treat analysis provides a better integrated perspective on expected real-world benefit, accounting for missed doses, non-adherence, drug discontinuations and other contributors to the “significant” number of patients in Regenerate that didn’t meet per protocol requirements, Birchenough tells investors in a research note. The analyst increased the probability of approval for obeticholic acid in NASH following yesterday’s data, but leaves his estimates unchanged as he believes that “breadth of use may be limited by potential liver biopsy requirements, high rate of pruritus, and potential drug discontinuation rates and that product labeling and reimbursement considerations will be key.”

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