Intercept Pharmaceuticals Reports Fourth Quarter and Full Year 2019 Financial Results, Issues 2020 Operating Expense Guidance and Provides Business Update
Worldwide Ocaliva net sales of
Our NDA was the first accepted by the FDA for liver fibrosis due to NASH
Completed enrollment of REVERSE, our Phase 3 study evaluating OCA for the treatment of compensated cirrhosis due to NASH
Conference call scheduled for
“2019 was a pivotal year for Intercept given the positive results in our Phase 3 REGENERATE study in liver fibrosis due to NASH and our subsequent filing for approval in both the
Ocaliva® (obeticholic acid) Commercial Highlights
Full year 2019 Ocaliva net sales were $249.6 million, which represented growth of 40% as compared to the prior year. Ocaliva net sales in 2019 were comprised of
We recognized $70.3 million of Ocaliva net sales in the fourth quarter of 2019, which represented growth of 33% as compared to the prior year quarter. Ocaliva net sales in the fourth quarter of 2019 were comprised of
Selected Fourth Quarter and Full Year 2019 Financial Results
We recognized $71.5 million in total revenue in the fourth quarter of 2019, as compared to $53.3 million in total revenue in the prior year quarter. Total revenue in the fourth quarter of 2019 included $70.3 million of Ocaliva net sales and approximately $1.2 million of licensing revenue, as compared to $52.9 million and approximately $0.4 million, respectively, in the prior year quarter.
We recognized $252.0 million in total revenue in 2019, as compared to $179.8 million in 2018. Total revenue in 2019 included $249.6 million of Ocaliva net sales and approximately $2.4 million of licensing revenue, as compared to $177.8 million and approximately $2.0 million, respectively, in 2018.
Our cost of sales was $2.5 million in the fourth quarter of 2019, as compared to $1.0 million in the prior year quarter. Cost of sales was $4.2 million in 2019, as compared to $2.5 million in 2018. Our cost of sales for the quarters and years ended December 31, 2019 and 2018 consisted primarily of packaging, labeling, materials and related expenses.
Our selling, general and administrative expenses increased to $93.7 million in the fourth quarter of 2019, up from $71.0 million in the prior year quarter. Selling, general and administrative expenses increased to $317.4 million in 2019, up from $255.5 million in 2018. The fourth quarter and full year period-over-period increases were both primarily driven by increases in launch preparation activities related to our lead product candidate, obeticholic acid (“OCA”), for the potential treatment of liver fibrosis due to NASH.
Our research and development expenses increased to $64.6 million in the fourth quarter of 2019, up from $63.3 million in the prior year quarter. Research and development expenses increased to $242.8 million in 2019, up from $207.3 million in 2018. The fourth quarter and full year period-over-period increases were both primarily driven by increases in development program expenses relating to OCA for liver fibrosis due to NASH and costs associated with the submission of our new drug application (“NDA”).
In the quarters ended December 31, 2019 and 2018, we recorded $160.8 million and $135.3 million, respectively, in total operating expenses and $145.4 million and $122.7 million, respectively, in non-GAAP adjusted operating expenses, which excludes non-cash stock-based compensation expense of $13.2 million and $11.5 million, respectively, and depreciation and non-cash operating lease cost of $2.2 million and $1.0 million, respectively.
In the years ended December 31, 2019 and 2018, we recorded $564.4 million and $465.3 million, respectively, in total operating expenses and $499.4 million and $410.8 million, respectively, in non-GAAP adjusted operating expenses, which excludes non-cash stock-based compensation expense of $56.0 million and $49.9 million, respectively, and depreciation and non-cash operating lease cost of $9.1 million and $4.6 million, respectively.
References in this press release to “non-GAAP adjusted operating expenses” mean our total operating expenses, as calculated and presented in accordance with
Interest expense in the quarters ended December 31, 2019 and 2018 was $11.6 million and $7.8 million, respectively. Interest expense in the years ended December 31, 2019 and 2018 was $41.1 million and $30.5 million, respectively. Our interest expense is related to the $460.0 million aggregate principal amount of 3.25% Convertible Senior Notes due 2023 (the “Convertible Notes”) that we issued in July 2016 and
In the fourth quarter and full year 2019, we reported a net loss of $98.2 million and $344.7 million, respectively, up from a net loss of $88.0 million and $309.2 million in the fourth quarter and full year 2018.
2020 Financial Guidance
The FDA has set a Prescription Drug User Fee Act (“PDUFA”) target action date of
We expect non-GAAP Operating expenses for 2020 to be in the range of
See “Non-GAAP Financial Measures” below. A quantitative reconciliation of projected non-GAAP adjusted operating expenses to total operating expenses is not available without unreasonable effort primarily due to our inability to predict with reasonable certainty the amount of future stock-based compensation expense.
Conference Call on
We are hosting our fourth quarter 2020 financial results conference call and webcast on
Intercept is a biopharmaceutical company focused on the development and commercialization of novel therapeutics to treat progressive non-viral liver diseases, including primary biliary cholangitis (PBC) and nonalcoholic steatohepatitis (NASH). Founded in 2002 in
Non-GAAP Financial Measures
This press release presents non-GAAP adjusted operating expenses on a historical and projected basis. For the periods presented, non-GAAP adjusted operating expenses exclude from total operating expenses, as calculated and presented in accordance with GAAP, the effects of two non-cash items: stock-based compensation and depreciation and non-cash operating lease expensecost. Non-GAAP adjusted operating expenses is a financial measure that has not been prepared in accordance with GAAP. Accordingly, investors should consider non-GAAP adjusted operating expenses in addition to, but not as a substitute for, total operating expenses that we calculate and present in accordance with GAAP. Among other things, our management uses non-GAAP adjusted operating expenses to establish budgets and operational goals and to manage our business. Other companies may define or use this measure in different ways. We believe that the presentation of non-GAAP adjusted operating expenses provides investors and management with helpful supplemental information relating to operating performance and trends. A table reconciling non-GAAP adjusted operating expenses to total operating expenses for all historical periods presented is included below under the heading “Reconciliation of Non-GAAP Adjusted Operating Expenses to Total Operating Expenses”. A quantitative reconciliation of projected non-GAAP adjusted operating expenses to total operating expenses is not available without unreasonable effort primarily due to our inability to predict with reasonable certainty the amount of future stock-based compensation expense.
About Liver Fibrosis due to NASH
Nonalcoholic steatohepatitis (NASH) is a serious progressive liver disease caused by excessive fat accumulation in the liver that induces chronic inflammation, resulting in progressive fibrosis (scarring) that can lead to cirrhosis, eventual liver failure, cancer and death. Advanced fibrosis is associated with a substantially higher risk of liver-related morbidity and mortality in patients with NASH and, as early as 2020, the disease is projected to become the leading cause of liver transplants in
About the REGENERATE Study
REGENERATE is a Phase 3, randomized, double-blind, placebo-controlled, multicenter study assessing the safety and efficacy of obeticholic acid (OCA) on clinical outcomes in patients with liver fibrosis due to NASH. A pre-specified 18-month analysis was conducted to assess the effect of OCA on liver histology comparing month 18 biopsies with baseline. REGENERATE has completed target enrollment for the clinical outcomes cohort, with more than 2,400 adult NASH patients randomized across 339 qualified centers worldwide, and will continue through clinical outcomes for verification and description of clinical benefit. The end-of-study analysis will evaluate the effect of OCA on all-cause mortality and liver-related clinical outcomes, as well as its long-term safety.
About Ocaliva®(obeticholic acid)
Ocaliva is indicated in
This indication is approved under the accelerated approval pathway based on a reduction in alkaline phosphatase (ALP) as a surrogate endpoint which is reasonably likely to predict clinical benefit, including an improvement in liver transplant free-survival. An improvement in survival or disease-related symptoms has not been established. Continued approval for this indication may be contingent upon verification and description of clinical benefit in confirmatory trials. We are conducting a Phase 4 clinical outcomes trial, which we refer to as our COBALT trial, of OCA in patients with PBC with the goal of confirming clinical benefit on a post-marketing basis.
WARNING: HEPATIC DECOMPENSATION AND FAILURE IN INCORRECTLY DOSED PBC PATIENTS WITH CHILD-PUGH CLASS B OR
- In postmarketing reports, hepatic decompensation and failure, in some cases fatal, have been reported in patients with Primary Biliary Cholangitis (PBC) with decompensated cirrhosis or Child-
Pugh Class Bor C hepatic impairment when OCALIVA was dosed more frequently than recommended.
- The recommended starting dosage of OCALIVA is 5 mg once weekly for patients with Child-
Pugh Class Bor C hepatic impairment or a prior decompensation event.
OCALIVA is contraindicated in PBC patients with complete biliary obstruction.
Warnings and Precautions
Hepatic Decompensation and Failure in Incorrectly-Dosed PBC Patients with Child-
In postmarketing reports, hepatic decompensation and failure, in some cases fatal, have been reported in PBC patients with decompensated cirrhosis or Child-Pugh B or C hepatic impairment when OCALIVA was dosed more frequently than the recommended starting dosage of 5 mg once weekly. Reported cases typically occurred within 2 to 5 weeks after starting OCALIVA and were characterized by an acute increase in total bilirubin and/or ALP concentrations in association with clinical signs and symptoms of hepatic decompensation (e.g., ascites, jaundice, gastrointestinal bleeding, worsening of hepatic encephalopathy).
Routinely monitor patients for progression of PBC disease, including liver-related complications, with laboratory and clinical assessments. Dosage adjustment, interruption or discontinuation may be required. Close monitoring is recommended for patients at an increased risk of hepatic decompensation. Severe intercurrent illnesses that may worsen renal function or cause dehydration (e.g., gastroenteritis), may exacerbate the risk of hepatic decompensation. Interrupt treatment with OCALIVA in patients with laboratory or clinical evidence of worsening liver function indicating risk of decompensation, and monitor the patient’s liver function. Consider discontinuing OCALIVA in patients who have experienced clinically significant liver-related adverse reactions. Discontinue OCALIVA in patients who develop complete biliary obstruction.
Liver-Related Adverse Reactions
Dose-related, liver-related adverse reactions including jaundice, worsening ascites and primary biliary cholangitis flare have been observed in clinical trials, as early as one month after starting treatment with OCALIVA 10 mg once daily up to 50 mg once daily (up to 5-times the highest recommended dosage). Monitor PBC patients during treatment with OCALIVA for elevations in liver biochemical tests and for the development of liver-related adverse reactions.
Severe pruritus was reported in 23% of PBC patients in the OCALIVA 10 mg arm, 19% of PBC patients in the OCALIVA titration arm, and 7% of PBC patients in the placebo arm in a 12-month double-blind randomized controlled trial of 216 PBC patients. Severe pruritus was defined as intense or widespread itching, interfering with activities of daily living, or causing severe sleep disturbance, or intolerable discomfort, and typically requiring medical interventions. Consider clinical evaluation of PBC patients with new onset or worsening severe pruritus. Management strategies include the addition of bile acid resins or antihistamines, OCALIVA dosage reduction, and/or temporary interruption of OCALIVA dosing.
Reduction in HDL-C
Patients with PBC generally exhibit hyperlipidemia characterized by a significant elevation in total cholesterol primarily due to increased levels of high-density lipoprotein-cholesterol (HDL-C). Dose-dependent reductions from baseline in mean HDL-C levels were observed at 2 weeks in OCALIVA-treated PBC patients, 20% and 9% in the 10 mg and titration arms, respectively, compared to 2% in the placebo arm. Monitor PBC patients for changes in serum lipid levels during treatment. For PBC patients who do not respond to OCALIVA after 1 year at the highest recommended dosage that can be tolerated (maximum of 10 mg once daily), and who experience a reduction in HDL-C, weigh the potential risks against the benefits of continuing treatment.
The most common adverse reactions from subjects taking OCALIVA for PBC were pruritus, fatigue, abdominal pain and discomfort, rash, oropharyngeal pain, dizziness, constipation, arthralgia, thyroid function abnormality, and eczema.
Bile Acid Binding Resins
Bile acid binding resins such as cholestyramine, colestipol, or colesevelam adsorb and reduce bile acid absorption and may reduce the absorption, systemic exposure, and efficacy of OCALIVA. If taking a bile acid binding resin, take OCALIVA at least 4 hours before or 4 hours after taking the bile acid binding resin, or at as great an interval as possible.
The International Normalized Ratio (INR) decreased following coadministration of warfarin and OCALIVA. Monitor INR and adjust the dose of warfarin, as needed, to maintain the target INR range when coadministering OCALIVA and warfarin.
CYP1A2 Substrates with Narrow Therapeutic Index
Obeticholic acid, the active ingredient in OCALIVA, may increase the exposure to concomitant drugs that are CYP1A2 substrates. Therapeutic monitoring of CYP1A2 substrates with a narrow therapeutic index (e.g. theophylline and tizanidine) is recommended when coadministered with OCALIVA.
Inhibitors of Bile Salt Efflux Pump
Avoid concomitant use of inhibitors of the bile salt efflux pump (BSEP) such as cyclosporine. Concomitant medications that inhibit canalicular membrane bile acid transporters such as the BSEP may exacerbate accumulation of conjugated bile salts including taurine conjugate of obeticholic acid in the liver and result in clinical symptoms. If concomitant use is deemed necessary, monitor serum transaminases and bilirubin.
Please see Full Prescribing Information, including Boxed WARNING and Medication Guide for OCALIVA.
To report SUSPECTED ADVERSE REACTIONS, contact
Cautionary Note Regarding Forward-Looking Statements
This press release contains forward-looking statements, including, but not limited to, statements regarding the progress, timing and results of our clinical trials, including our clinical trials for the treatment of nonalcoholic steatohepatitis (“NASH”), the safety and efficacy of our approved product, Ocaliva (obeticholic acid or “OCA”) for primary biliary cholangitis (“PBC”), and our product candidates, including OCA for liver fibrosis due to NASH, the timing and acceptance of our regulatory filings and the potential approval of OCA for liver fibrosis due to NASH or any other indications in addition to PBC, the timing and potential commercial success of OCA and any other product candidates we may develop and our strategy, future operations, future financial position, future revenue, projected costs, financial guidance, prospects, plans and objectives.
These statements constitute forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. The words “anticipate,” “believe,” “estimate,” “expect,” “intend,” “may,” “plan,” “predict,” “project,” “target,” “potential,” “will,” “would,” “could,” “should,” “possible,” “continue” and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this release, and we undertake no obligation to update any forward-looking statement except as required by law. These forward-looking statements are based on estimates and assumptions by our management that, although believed to be reasonable, are inherently uncertain and subject to a number of risks. The following represent some, but not necessarily all, of the factors that could cause actual results to differ materially from historical results or those anticipated or predicted by our forward-looking statements: our ability to successfully commercialize Ocaliva for PBC; our ability to maintain our regulatory approval of Ocaliva for PBC in the United States, Europe, Canada, Israel, Australia and other jurisdictions in which we have or may receive marketing authorization; the initiation, timing, cost, conduct, progress and results of our research and development activities, preclinical studies and clinical trials, including any issues, delays or failures in identifying patients, enrolling patients, treating patients, retaining patients, meeting specific endpoints in the jurisdictions in which we intend to seek approval or completing and timely reporting the results of our NASH or PBC clinical trials; our ability to timely and cost-effectively file for and obtain regulatory approval of our product candidates, including the regulatory approval of our NDA for liver fibrosis due to NASH; any advisory committee recommendation that our product candidates, including OCA for liver fibrosis due to NASH, should not be approved or approved only under certain conditions; any determination that the regulatory applications and subsequent information we submit for our product candidates, including OCA for liver fibrosis due to NASH, do not contain adequate clinical or other data or meet applicable regulatory requirements for approval; conditions that may be imposed by regulatory authorities on our marketing approvals for our products and product candidates, such as the need for clinical outcomes data (and not just results based on achievement of a surrogate endpoint), and any related restrictions, limitations and/or warnings contained in the label of any of our products or product candidates; any potential side effects associated with Ocaliva for PBC, OCA for liver fibrosis due to NASH or our other product candidates that could delay or prevent approval, require that an approved product be taken off the market, require the inclusion of safety warnings or precautions, or otherwise limit the sale of such product or product candidate; our ability to establish and maintain relationships with, and the performance of, third-party manufacturers, contract research organizations and other vendors upon whom we are substantially dependent for, among other things, the manufacture and supply of our products, including Ocaliva for PBC and, if approved, OCA for liver fibrosis due to NASH, and our clinical trial activities; our ability to identify, develop and successfully commercialize our products and product candidates, including our ability to timely and successfully launch OCA for liver fibrosis due to NASH, if approved; our ability to obtain and maintain intellectual property protection for our products and product candidates, including our ability to cost-effectively file, prosecute, defend and enforce any patent claims or other intellectual property rights; the size and growth of the markets for our products and product candidates and our ability to serve those markets; the degree of market acceptance of Ocaliva for PBC and, if approved, OCA for liver fibrosis due to NASH or our other product candidates among physicians, patients and healthcare payors; the availability of adequate coverage and reimbursement from governmental and private healthcare payors for our products, including Ocaliva for PBC and, if approved, OCA for liver fibrosis due to NASH, and our ability to obtain adequate pricing for such products; our ability to establish and maintain effective sales, marketing and distribution capabilities, either directly or through collaborations with third parties; competition from existing drugs or new drugs that become available; our ability to prevent system failures, data breaches or violations of data protection laws; costs and outcomes relating to any disputes, governmental inquiries or investigations, legal proceedings or litigation, including any securities, intellectual property, employment, product liability or other litigation; our collaborators’ election to pursue research, development and commercialization activities; our ability to establish and maintain relationships with collaborators with development, regulatory and commercialization expertise; our need for and ability to generate or obtain additional financing; our estimates regarding future expenses, revenues and capital requirements and the accuracy thereof; our use of cash and short-term investments; our ability to acquire, license and invest in businesses, technologies, product candidates and products; our ability to attract and retain key personnel to manage our business effectively; our ability to manage the growth of our operations, infrastructure, personnel, systems and controls; our ability to obtain and maintain adequate insurance coverage; the impact of general
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Condensed Consolidated Statements of Operations
(In thousands, except per share data)
|Three Months Ended
|Product revenue, net||$||70,284||$||52,874||$||249,570||$||177,782|
|Cost of sales||2,474||1,007||4,212||2,519|
|Selling, general and administrative||93,680||70,971||317,418||255,474|
|Research and development||64,636||63,273||242,799||207,301|
|Total operating expenses||160,790||135,251||564,429||465,294|
|Other income (expense):|
|Other income, net||2,758||1,720||8,890||6,771|
|Net loss per common and potential common share:|
|Basic and diluted||$||(2.99||)||$||(2.97||)||$||(10.89||)||$||(10.86||)|
|Weighted average common and potential common shares outstanding:|
|Basic and diluted||32,780||29,674||31,654||28,464|
Condensed Consolidated Balance Sheet Information
|Cash, cash equivalents, restricted cash and investment debt securities||$||657,347||$||436,160|
|Deferred revenue, total||$||-||$||2,432|
|Total liabilities (1)||$||703,330||$||490,037|
Reconciliation of Non-GAAP Adjusted Operating Expenses to Total Operating Expenses
|Three Months Ended
|Total operating expenses||$||160,790||$||135,251||$||564,429||$||465,294|
|Depreciation and non-cash operating lease cost||2,238||1,031||9,051||4,582|
|Non-GAAP adjusted operating expenses||$||145,379||$||122,721||$||499,396||$||410,798|
Source: Intercept Pharmaceuticals, Inc.