What happened
Shares of the non-viral liver disease specialist Intercept Pharmaceuticals (ICPT) are under heavy pressure today. Specifically, the drugmaker's stock was down by 9.7% on exceptionally high volume as of 3:02 p.m. ET Thursday afternoon.
The big loss came in response to weaker-than-expected 2023 first-quarter sales of Intercept's primary biliary cholangitis (PBC) therapy, Ocaliva (obeticholic acid). Intercept reported Q1 Ocaliva net sales of $68 million. Wall Street's consensus sales target, by contrast, stood at approximately $72.7 million for the three-month period prior to today's earnings release.
So what
This relatively modest revenue miss probably isn't the reason Intercept's shares are falling today. Instead, investors appear to be moving to the sidelines ahead of the upcoming advisory committee meeting to be held on May 19, 2023 for obeticholic acid as a treatment for pre-cirrhotic fibrosis due to nonalcoholic steatohepatitis (NASH).
The Food and Drug Administration's (FDA) target action date on the drug's NASH filing is presently set for June 22, 2023. If approved, Intercept would sport the first-ever drug approved for this increasingly common, non-viral liver disease.
What's spooking investors? FDA review panels are inherently unpredictable. As a result, some shareholders don't appear to be willing to hold the biotech's stock heading into this risk-laden regulatory event.
Now what
Is Intercept's stock a buy on this dip? It depends on your comfort level with risk. This upcoming regulatory review could be a major catalyst for the stock. A negative outcome, however, would likely spark another sell-off. Unfortunately, FDA drug reviews are rarely a straightforward event. As a result, this biotech stock is arguably only suited for aggressive investors at this critical point in its life cycle.
