NASH news: Are we sure this is a product?

Something that often goes overlooked in biotech is that proving your drug works is not an end in itself. Eventually, if you want to make any money, you have to convince people to use it.

Intercept Pharmaceuticals may soon become a case study for this principle. Ocaliva, Intercept’s treatment for the liver ailment NASH, succeeded in a late-stage trial, according to data released yesterday. That means that it beat placebo in preventing the tissue scarring that characterizes the disease.

But that “success” boils down to a placebo-adjusted benefit of only about 11 percent, and patients who got Intercept's drug were significantly more likely to suffer an itchy skin reaction than those who didn’t.

Those results are likely enough to convince the FDA to approve Ocaliva, analysts said, giving Intercept the first shot at the giant NASH market. But getting the drug into the hands of paying customers will require winning over payers, and that might be problematic.

Shelling out for Ocaliva could amount to footing the bill for a drug that helps 10 percent of the patients who get it. And when you consider that NASH afflicts about 20 million Americans, depending on whom you ask, that might sound to payers like expensive guesswork better avoided.