UPDATED: Intercept shares dazzle after early success of PhIIb liver disease drug trial

Shares of Intercept Pharmaceuticals went into overdrive this morning, soaring more than 250% on the surprise news that a Phase IIb clinical study for its lead drug funded largely by the NIH ended early after achieving the primary endpoint.

The star of Intercept's ($ICPT) show is obeticholic acid, or OCA. The biotech believes OCA, which it calls a "first-in-class agonist of the farnesoid X receptor, or FXR," has broad liver-protective properties. The NIH had been studying OCA for nonalcoholic steatohepatitis, or NASH, which bears all the signs of liver disease seen in alcoholics, but in people who don't drink. The disease is triggered by a diet high in fat and sugar, and it's been spreading around the world after growing into a serious health problem in the U.S. and Europe.  

The results provide key clinical validation for several programs now underway, and investors rushed in to buy shares this morning, adding more than $3 billion to the biotech's market cap. By midmorning, shares were trading at $255, with the market cap closing in on $5 billion. Intercept has four programs in the clinic for OCA, with a late-stage study for primary biliary cirrhosis due to read out later in the year.

"The unexpected early stopping of FLINT due to OCA meeting the primary endpoint with such high significance is a major milestone," said Mark Pruzanski, the CEO at Intercept, in a statement. "NASH has grown to epidemic proportions worldwide, having become a leading cause of cirrhosis and liver failure. On its current trajectory, the disease is projected to become the leading indication for liver transplant. We are deeply grateful to the NIDDK and the NASH CRN for their longstanding commitment both to improving our understanding of the disease and to sponsoring ambitious trials like FLINT in their quest to identify novel treatments for patients suffering from NASH."

Intercept hadn't expected final results for FLINT until late this year. Investigators tested a 25-mg single daily dose of OCA versus placebo in 280 patients with NASH. The U.S. National Institute of Diabetes and Digestive and Kidney Diseases, or NIDDK, provided most of the funding and oversaw a clinical research network of 8 NASH centers in the U.S. The primary endpoint is based on a liver biopsy and is defined as an improvement of two or more points in an activity score--a system of scoring the histopathological features in the liver--with no worsening of liver fibrosis.  

Intercept's successful IPO in the fall of 2012 was one of the first signs that the biotech IPO window was beginning to creak open after remaining largely closed following the 2008 financial crisis. And there's certainly likely to be plenty of happily vested executives at the biotech who are glad this morning that they pushed ahead at a time when few drug developers were willing to brave a chilly market.  

Intercept controls all of the rights to OCA outside of China and Japan, where Dainippon Sumitomo has taken the lead after inking a $315 million pact. Intercept also has programs in the pipeline for fibrosis and Type 2 diabetes, where it's partnered with Servier.

- here's the press release

Editor's Note: An early version of this story mis-stated the stage of Intercept's OCA trial. It was in PhIIb.

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