Advisers to the Food and Drug Administration on Friday recommended against approving an experimental drug for a common fatty liver disease called NASH, increasing the chance the medicine, developed by Intercept Pharmaceuticals, will be rejected for a second time.

The panel of experts voted 12-2, with two abstentions, that the benefits of the treatment, known as obeticholic acid or OCA, don’t outweigh its safety risks.

All but one panelist also voted the treatment shouldn’t be granted an “accelerated” approval. Intercept is betting the drug’s impact on a variety of surrogate markers will be enough to support a clearance for NASH, or non-alcoholic steatohepatitis. But the experts instead advised the FDA to wait until Intercept proves its drug can lower the risk of more concrete health risks, like liver transplants and death, in an Phase 3 ongoing trial. Those results aren’t expected until 2025.

“I’m just concerned about potential harm,” said Brian Lee, an assistant professor of medicine at the University of Southern California. ”I think it’s best to be prudent in this scenario.”

Intercept is seeking approval based on earlier results from that study showing 21% of patients on a high dose of OCA experienced no worsening of their disease and at least some improvement in liver scarring — a hallmark of NASH — after 18 months, versus 12% of those on a placebo.

FDA reviewers described that effect as “modest,” and noted how the study missed its other goal. That left panelists struggling with what to make of the impact of Intercept’s drug. Because NASH research is relatively new, experts don’t yet know whether an effect on markers of disease, such as fibrosis, will lead to a benefit.

“We actually have no idea,” said panelist James Floyd, the co-director of the University of Washington’s cardiovascular health research unit, who voted against approval. “We might hope or expect that it will,” he added, but “at this point in time, this is a very uncertain efficacy assessment.”

Experts were convinced by the agency’s concerns about the drug’s safety. FDA scientists associated treatment with the possibility of drug-induced liver damage that, in some cases, can be fatal. Statisticians noted that, in clinical testing, the death rate from liver damage among those treated with OCA was well above that of multiple drugs that were pulled from the market.

Panelists were also unsure whether a post-approval plan to lower that risk would be effective, given the unpredictable timing of when those events occur and the long-term monitoring required to detect them.

“At this point, I do not believe that the benefits outweigh the risk,” said committee chair Benjamin Lebwohl, an associate professor of medicine and epidemiology at Columbia University College of Physicians & Surgeons. Summarizing the panel’s position, Lebwohl said experts feared the “public health implications” of “unleashing a medication that has a non-trivial risk” on what’s estimated to be millions of eligible patients.

Intercept pushed back on the agency’s descriptions of its drug. “We continue to disagree with the FDA on certain characterizations of OCA’s efficacy and safety,” said company CEO Jerry Durso, in a statement following the vote.

The FDA often sides with its advisory committees, though not always. It’s expected to decide whether to approve OCA by June 22.

For years, Intercept has sought to make OCA the first approved therapy for NASH, which is caused by the buildup of fat in the liver. The disease affects an estimated 5% of the U.S. population and is the second-leading cause of liver transplants in the country, according to the FDA. Its prevalence is expected to double by 2030.

The biotech’s shares rocketed to over $400 apiece in 2014, when it revealed promising Phase 2 results for OCA that made the disease a top target for drugmakers. While several would-be competitors later failed to match Intercept, the company’s value declined as further data appeared more mixed. OCA was rejected by the FDA in 2020 because regulators weren’t convinced its benefits were worth the risks.

At the meeting on Friday, Frank Anania, the head of the FDA division that reviews liver disease drugs, said the regulator had urged Intercept to resubmit an application only after finishing its Phase 3 study. Intercept chose to seek an accelerated OK instead.

As a result, that study may never be completed and OCA’s potential in NASH left undetermined. Prior to the vote, the company’s chief medical officer, M. Michelle Berrey, warned it might not be financially feasible for Intercept to finish the trial without an early approval.

Meanwhile, competition from companies like Madrigal Pharmaceuticals and Akero Therapeutics has emerged recently, putting new pressure in Intercept.

The negative vote “may be a blessing in disguise” for Intercept given the growing likelihood OCA “would have been a niche, short-lived product,” wrote RBC Capital Markets analyst Brian Abrahams.