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Fly News Breaks for September 13, 2017
Sep 13, 2017 | 08:18 EDT
BMO Capital analyst M. Ian Somaiya says the letter sent by Intercept to healthcare providers regarding its Ocaliva drug relates to failure by doctors to adhere to dose adjustments recommended in its label. Since no new adverse events were cited in the letter, the analyst does not expect any changes to the label. He continues to expect strong Ocaliva prescriptions to result in the company reporting beat and raise Q3 results, and he recommends buying the stock on weakness. He keeps a $221 price target and an Outperform rating on the stock.
News For ICPT From the Last 2 Days
Sep 22, 2017 | 16:22 EDT
The major averages finished the day little changed and on a weekly basis they were mixed. The Dow saw a small weekly advance, the S&P was nearly flat and the Nasdaq suffered under the weight of Apple (AAPL), which had a rough week as reviews came out for its new iPhone 8 and Watch and the products hit stores. However, the biggest of Apple's new products, the iPhone X, is still awaited, keeping a lid on any buying frenzy that may be ahead. ECONOMIC EVENTS: In the U.S., Markit's flash manufacturing PMI for September edged up 0.2 points to 53.0, matching the consensus forecast. The services PMI fell to 55.1, however, which was down 0.9 points from the last reading and below the 55.8 that was expected. In Europe, the composite PMI hit 56.7, with the manufacturing component reading of 58.2 and services component reading of 55.6 both topping expectations. COMPANY NEWS: Shares of a number of health insurers moved higher after Republican Senator John McCain of Arizona voiced his opposition to the Graham-Cassidy bill to repeal and replace the Affordable Care Act. In his statement, McCain stated: "I believe we could do better working together, Republicans and Democrats, and have not yet really tried." While some of the largest names in the space, including UnitedHealth (UNH), Aetna (AET), Anthem (ANTM) and Cigna (CI), did not see significant gains for the day, they all closed off their earlier session lows as this blow gives the legislation much slimmer chances of passing... Shares of First Solar (FSLR) advanced 5.4% after the International Trade Commission determined that silicon solar power cells being imported into the U.S. present a serious injury, or threat of injury, to the domestic industry. As a result, the ITC's investigation will move to a remedy phase, after which tariffs may be set on imported solar products... Apple slipped another 1% today as the iPhone 8 started appearing on the shelves of the company's retail stores. Compared to prior years, however, this isn't resulting in long lines, presumably because many buyers are still waiting for the company's high-end iPhone X. MAJOR MOVERS: Among the notable gainers was Finish Line (FINL), which gained 5.5% after the company reported quarterly earnings that were in-line with expectations. Also higher was Ascendis Pharma (ASND), which gained 23.4% after its competitor, Versartis (VSAR), reported that its Phase 3 trial testing a long-acting growth hormone as a treatment for pediatric growth hormone deficiency failed. Versartis, whose management reportedly indicated there was no path forward with this trial and no current plans for an additional trial, was downgraded by multiple research firms and the stock plunged 87.62%. Also lower was Intercept Pharmaceuticals (ICPT). Following a 25% decline yesterday, the stock fell another 16.4% to $61.59 today as several more analysts cut their price targets and ratings on the drugmaker in the wake of a "Dear Doctor" last week and an FDA communication yesterday that both contained warnings that Ocaliva could result in increased risk of serious liver injury and death. INDEXES: The Dow fell 9.64, or 0.04%, to 22,349.59, the Nasdaq gained 4.23, or 0.07%, to 6,426.92, and the S&P 500 advanced 1.62, or 0.06%, to 2,502.22.
Sep 22, 2017 | 13:57 EDT
Oppenheimer analyst Jay Olson downgraded this afternoon shares of Intercept Pharmaceuticals to Perform from Outperform. Following a 25% decline yesterday, the stock is down 15% to $62.69 in afternoon trading. Both the company's "Dear Doctor" last week and yesterday's FDA communication contain warnings that Intercept's Ocaliva could result in increased risk of serious liver injury and death, Olson tells investors in a research note. The drug's primary biliary cholangitis script growth is below the analyst's prior forecasted trajectory and he believes the warnings "could further attenuate growth." Further, Olson is increasingly concerned with the commercial implications of Ocaliva for nonalcoholic steatohepatitis, which he believes "necessitates a clean safety profile." Citi analyst Joel Beatty earlier today also downgraded Intercept.
Sep 22, 2017 | 09:31 EDT
Citi analyst Joel Beatty downgraded Intercept Pharmaceuticals to Neutral from Buy and cut his price target for the shares to $92 from $150 after the FDA yesterday issued a safety announcement on Ocaliva. Intercept, after declining 25% yesterday, is down 9% in early trading to $67.26. Beatty reduced his probability of success to 55% from 65% for Ocaliva in nonalcoholic steatohepatitis. The FDA announcement raised concerns beyond those mentioned in Intercept's "Dear Doctor" letter last week, Beatty tells investors in a research note. The FDA communication "is different in that it is worded to imply causation and adds that some patients experienced symptom resolution after discontinuing OCA," the analyst writes. He believes more safety issues could surface longer term and that doctors may be more inclined to stop treating patients who don't respond.
Sep 22, 2017 | 08:36 EDT
Morgan Stanley analyst Andrew Berens said the FDA communication sent regarding Intercept's Ocaliva suggests that adverse events may be occurring that are not due to dosing errors by doctors or occurring in patients without pre-existing liver disease. While it is possible that the much larger NASH opportunity will remain unaffected, he thinks this is "very unlikely," he tells investors. Following the latest safety communication, Berens has lowered his peak sales estimate for Ocaliva in PBC and cut his view of the probability of success and peak sales in NASH. He also lowered his price target on Intercept to $50 from $75 and keeps an Underweight rating on the shares.
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