- The Food and Drug Administration has for the second time rejected an experimental medicine developed by Intercept Pharmaceuticals for the fatty liver disease known as nonalcoholic steatohepatitis, or NASH.
- The decision on Intercept’s drug, obeticholic acid, came one month after FDA advisers voted against recommending an “accelerated” approval and urged the FDA to wait for the results of an ongoing Phase 3 trial. In its rejection letter, the FDA indicated Intercept would have to complete that study before resubmitting an application, the company said.
- Intercept executives previously said completing an additional trial may not be financially feasible, and the company made that clear Friday. In a separate announcement, Intercept said it plans to discontinue all investments in NASH and lay off about one third of its staff.
Intercept had been a little-known biotechnology company until nine years ago, when it became one of the sector’s most closely watched practically overnight.
The biotech’s shares soared to over $400 apiece in 2014 after it revealed promising Phase 2 results for obeticholic acid, or OCA. The findings immediately made NASH — a disease affecting millions and a leading cause of liver transplants — a top target for drugmakers. And for years, Intercept led the race to bring the first medicine for the disease to market, as several would-be competitors were unable to match its results.
But as Intercept accrued more data, the benefits of OCA became less clear, and its safety risks — particularly the potential for drug-induced liver injury — more apparent. Stronger competitors emerged. The FDA rejected the medicine in 2020 and asked Intercept to only file again once it completed a Phase 3 trial. Intercept instead chose to seek an “accelerated” approval based on OCA’s impact on a variety of surrogate markers. The agency, and an advisory committee it convened last month, were unconvinced.
Intercept is now abandoning its yearslong effort and pivoting to a lower-dose version of OCA that it sells as Ocaliva for the liver disease primary biliary cholangitis. In doing so, Intercept is shutting down the Phase 3 study, REGENERATE, and cutting all other NASH-related spending, including about a third of a workforce that included 341 employees at the end of 2022.
The layoffs will save Intercept about $140 million in yearly costs and position the company to become profitable in 2024, it said. Ocaliva generated $343 million worldwide sales in 2022 and Intercept expects that number to fall to between $310 million to $340 million in 2023.
Intercept’s also investing in a fixed-dose combination of OCA and another drug that’s in Phase 2 testing and the company believes can improve upon monotherapy. But rival PBC drugs from Genfit and Cymabay Therapeutics are advancing too, each with study readouts expected this year.
“Both have potential advantages” on efficacy and safety that “could lead to meaningful PCA market erosion” if they succeed, wrote RBC Capital Markets analyst Brian Abrahams, in a Thursday note to clients.