- Intercept Pharmaceuticals said Monday the Food and Drug Administration rejected what could have been the first drug for a liver disease that's thought to affect millions of people.
- According to Intercept, the agency said it's not convinced the benefits associated with obeticholic acid outweigh the potential risks when it comes to treating NASH, or nonalcoholic steatohepatitis, a liver condition in which the build up of fat progressively scars the organ. Intercept said the FDA wants to see more efficacy and safety data from an ongoing late-stage study, and indicated a long-term outcomes part of the study should keep running.
- Wall Street analysts have projected billions of dollars in sales should obeticholic acid, also known as OCA, gain approval in NASH. But some think the rejection, along with the FDA's reasoning, could end up putting Intercept at least two years behind in its approval plans. Such a delay would be damaging, particularly because the New York-based company has been burning through cash preparing for the drug's launch.
Intercept has held a commanding lead in the race to develop the first ever marketed NASH drug. So far, it's the only company to score positive late-stage data, with a trial called REGENERATE showing that one in four moderate-to-severe NASH patients given a high dose of OCA experienced significant improvements in scarred liver tissue without their disease worsening.
Intercept believed these results would push its drug across the finish line in NASH, in turn creating an immense opportunity for the small company. While OCA had already been approved for a separate liver disease, sales were relatively light. NASH, meanwhile, is estimated to affect millions of people in the U.S. alone, leading investment banks like JMP Securities to model billions of dollars in peak sales for Intercept's drug.
Yet, a string of setbacks have derailed the company's plans. Last year, for instance, the FDA issued guidance on NASH drug development that appeared to unnerve investors of Intercept as well as several other companies running NASH clinical trials.
More recently, the agency twice delayed an important meeting in which its staff and Intercept would debate the merits of OCA in front of a committee of experts, who then make judgments that help the FDA in its approval decision. The second delay led Intercept to believe it was unlikely that the FDA would make a decision by its stated deadline of June 26.
The outright rejection, however, seems to have taken Intercept by surprise — particularly in light of the discussions it had with regulators about its drug being eligible for an accelerated approval.
"At no point during the review did the FDA communicate that OCA was not approvable on an accelerated basis," CEO Mark Pruzanski said in a June 29 statement.
Pruzanski added that Intercept still believes the data it's thus far submitted is enough for approval, and that the agency conducted an "incomplete review" that didn't include perspectives from medical experts and patients.
"The FDA has progressively increased the complexity of the histologic endpoints, creating a very high bar that only OCA has so far met in a pivotal Phase 3 study," he said. "[W]e are very concerned that the agency's apparently still evolving expectations will make it exceedingly challenging to bring innovative therapies to NASH patients with high unmet medical need."
Intercept now intends to meet with the agency to discuss the rejection and the next steps. Those steps, though, could significantly delay OCA's path to a NASH approval.
Derek Archila, an analyst at Stifel, wrote in a note to clients that his team thinks the rejection is due to side effects seen in clinical testing of OCA. Namely, some patients experienced increases in "bad" cholesterol that in turn gave them a worse cardiovascular risk profile. That could have been an alarm to regulators, given that many NASH patients are already overweight or living with type 2 diabetes.
If the FDA requires data from the outcome portion of the REGENERATE trial, Intercept may be waiting until at least the back half of 2022 for a read out, according to Archila.
Such a delay could wipe out much of Intercept's lead, allowing rivals like Madrigal Pharmaceuticals and Viking Therapeutics to catch up.
Even so, some analysts and physicians anticipate a minimal first-mover advantage in the early NASH market, since many patients will likely require a combination of drugs to adequately control their disease.
Without any approved drugs, NASH patients have limited treatment options. Most are encouraged to make lifestyle changes like getting more exercise or adopting a better diet. But doctors caution that, while these changes are often effective, usually just a small percentage of their patients are able to lose weight and keep it off.
Intercept shares were down almost 40% Monday morning to trade at $47.25 apiece. Fellow NASH drugmakers also dipped into the red, with Madrigal down about 6% and Viking, Akero Therapeutics and GenFit each falling around 1%.