Intercept is trading like the NASH boom never happened
On Jan. 10, 2014, as the biotech world wrapped its head around the blockbuster opportunity presented by a prevalent liver disease called NASH, a share of Intercept Pharmaceuticals went for $445.83. Today, after clinical disappointment, FDA rejection, and a round of layoffs, Intercept is trading at its lowest value since NASH first became a billion-dollar indication in the eyes of the industry.
The latest news, announced yesterday, is that Intercept is laying off about 170 employees, a quarter of its staff. That’s a reaction to the FDA’s June decision to reject Intercept’s drug, Ocaliva, as a treatment for NASH.
Intercept hasn’t given up on Ocaliva as a treatment for NASH, and the company plans to meet with the FDA later this year to discuss a path to approval. But the company’s seven-year journey to where it started is a handy illustration of the biotech hype cycle. NASH arose as the next lucrative target for drug makers, and Ocaliva was the most advanced candidate to treat it. A few years and a few failures later, there are no drugs approved for NASH, and Intercept closed at about $45 a share.
The latest news, announced yesterday, is that Intercept is laying off about 170 employees, a quarter of its staff. That’s a reaction to the FDA’s June decision to reject Intercept’s drug, Ocaliva, as a treatment for NASH.
Intercept hasn’t given up on Ocaliva as a treatment for NASH, and the company plans to meet with the FDA later this year to discuss a path to approval. But the company’s seven-year journey to where it started is a handy illustration of the biotech hype cycle. NASH arose as the next lucrative target for drug makers, and Ocaliva was the most advanced candidate to treat it. A few years and a few failures later, there are no drugs approved for NASH, and Intercept closed at about $45 a share.
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