UPDATED: Intercept shares tank as investigators question OCA's safety/efficacy for NASH

After crunching the data on Intercept's ($ICPT) clinical study of OCA for non-alcoholic steatohepatitis, investigators say they tracked some distinct improvements for patients suffering from the liver disease. But they also fretted about some troubling safety issues as well as inadequate efficacy endpoints that will have to be carefully considered in follow-up studies, tempering some of the high excitement that has been stoked by some analysts and the biotech's investors ahead of a pivotal Phase III study.

That's not what investors wanted to hear. Intercept's shares slid 30% by the end of the day on Friday--a $74 plunge--as fresh doubts prompted a big sell off.

Here's a look at the data:

On the up side: 45% of the patients in the drug arm saw an improvement in their disease, commonly called NASH, compared to only 21% in the placebo arm of the 72-week study. Fibrosis--scarring of the liver that can destroy the organ--was improved in 35% of the drug arm and 19% for the placebo.

On the down side: There was no significant difference in actually resolving this disease between the drug and placebo groups. There were clear signs that the drug arm suffered an increase in bad cholesterol (LDL). About one in four of the patients in the drug arm suffered from pruritis (itchy skin), including three cases which were deemed severe or life threatening. But most of the adverse events were well tolerated.

Bottom line: There's lots more work that needs to be done to clarify the real efficacy of this drug in resolving NASH, rather than hitting certain biomarkers, and the safety in still in question. 

"Treatment with obeticholic acid was associated with pruritus that rarely needed discontinuation," the investigators reported in The Lancet, "but treatment caused changes in the serum cholesterol pool and insulin resistance that could signal an increased risk of atherogenesis. Future studies of farnesoid X nuclear receptor agonists will need to address the consequences of these changes on cardiovascular outcomes. Thus, obeticholic acid improves the histological features of non-alcoholic steatohepatitis, but its long-term safety requires further clarification."

Intercept, though, viewed the glass as more half full than half empty at this stage, particularly considering that this is the first time a drug developer has demonstrated improvements for NASH patients. In a call with analysts on Friday, company execs declared that they were "thrilled" with the data, noting that the cholesterol issues appeared to be manageable.

Intercept CEO Mark Pruzanski

"We have a clear fibrosis benefit," said CEO and co-founder Mark Pruzanski. There was also no worsening of the disease, he added, and an encouraging trend on cirrhosis.

Pruzanski also discounted the comparisons the investigators made with improvements seen in earlier histological results for vitamin E and pioglitazone. And the Phase III, to get underway next year, can sufficiently evaluate cardiovascular and other safety concerns.

"The results of this landmark trial are exciting in light of the serious unmet need for new therapies for NASH," said Vlad Ratziu, the author of an accompanying editorial in The Lancet in a statement from Intercept. "The results show that OCA has a clear improvement in all histologic features of NASH, fibrosis and markers of hepatic damage. Importantly, these benefits were observed in a difficult to treat patient population, which included a large proportion of diabetics and vitamin E non-responders. If the FLINT results are confirmed in phase 3, OCA could become an important new therapy for NASH patients who currently have no effective pharmacologic options."

One of the reasons why every wrinkle in OCA data is followed so closely is that NASH, or fatty liver disease, is becoming an enormous health issue. Bloomberg Intelligence has noted that NASH is on track to become the primary trigger for liver transplants. The disease affects a fifth of the world's population and close to three out of four diabetes patients -- an enormous and growing population.

- here's the release
- here's the study in The Lancet

Special Report: The top 15 late-stage blockbusters in the pipeline