The U.S. Food and Drug Administration’s staff reviewers did not raise any major red flags over Intercept Pharmaceuticals Inc’s liver drug on Tuesday, sending the stock up as much as 19 percent.
The drug, obeticholic acid (OCA), is being reviewed for use in patients with primary biliary cirrhosis, a rare liver disease resulting from an autoimmune destruction of the bile ducts.
Several analysts said the documents released by the staff leaned towards an approval.
“Our read of the FDA comments suggest commentary in line with a reasonably high likelihood of approval,” RBC Capital Markets analyst Michael Yee wrote in a note.
A panel of outside advisers to the FDA is scheduled to vote on the drug during a meeting on Thursday. The FDA is not obliged to follow the advice of its advisory panels but it usually does.
Among other questions, the advisers will discuss Intercept’s choice of the main goal for its late-stage study and whether a different dosing regimen is required for more severely-affected patients.
The reviewers, however, did recommended a less frequent starting dose for patients with moderate to severe liver disease, saying they had been unable to assess the drug’s safety in such patients.
Data also supported the use of the drug as a standalone treatment in patients who did not respond to the current standard-of-care therapy, ursodeoxycholic acid.
Intercept is seeking approval for OCA as a single agent or in combination with ursodeoxycholic acid.
Use of OCA has been associated with elevated lipid levels, which is generally an indicator of cardiovascular risks. The drug has also been linked to increased instances of an itchy skin condition called pruritus.
FDA staff members said while they did not note a major change in lipid levels among patients taking the drug, the matter would be considered in the overall risk-benefit analysis.
The company is also conducting late-stage studies on the same drug to treat nonalcoholic steatohepatitis (NASH), which has no approved treatment.
The NASH indication remains the jewel in Intercept’s pipeline.
OCA’s approval for primary biliary cirrhosis is only a stepping stone for Intercept, with late-stage NASH data anticipated in first half 2018, Leerink analyst Joseph P Schwartz wrote in a note.
Intercept shares were up 14 pct at $152.25 on Tuesday on the Nasdaq, after touching a three-month high of $159.20. Up to Monday’s close, the stock had fallen about 10 pct this year.
(Reporting by Amrutha Penumudi and Rosmi Shaji in Bengaluru; Editing by Anupama Dwivedi and Anil D’Silva)