Intercept Pharmaceuticals Reports Second Quarter 2021 Financial Results and Provides Business Update
Worldwide Ocaliva® net sales of
Company reiterates 2021 financial guidance of Ocaliva net sales guidance of $325 million to $340 million and Non-GAAP adjusted operating expense guidance of
Updates to the Ocaliva
Company provides regulatory update on NASH fibrosis program in the
Company to host conference call today at 8:30 a.m. ET
“In the second quarter, we reported double digit sales growth driven by strong business performance both in the
“We continue to make progress on our development program in NASH fibrosis,” Durso continued. “Since the beginning of 2021, we have had frequent exchanges with FDA to gain alignment and feedback on safety, biopsy methodology and efficacy data. We have now gained enough insight from FDA in these critical areas to move forward on our plan, and with the right team in place, we have begun to generate what will ultimately be the largest data package ever produced in the NASH field. We will be evaluating available data internally to inform decision-making and expect that process to continue into the early part of next year, with a goal of holding our pre-submission meeting to review the data with FDA during the first half of 2022. The regulatory review of OCA in the EU remains on pause as we evaluate the potential to include additional data that may support our application. As we continue to advance our regulatory dialogue in NASH fibrosis, we also look forward to delivering the next major Phase 3 data readout in the field with REVERSE, our study evaluating OCA in patients with compensated cirrhosis due to NASH. This is a population with significant unmet need, and we expect topline results by end-of-year. We also continue to make progress on our pipeline programs including our OCA-bezafibrate fixed dose combination in PBC and our next-generation FXR agonist INT-787. We recently initiated first-in-human studies of INT-787 and look forward to sharing additional details about this compound in the future.”
- We recognized $96.6 million in total revenue in the second quarter of 2021, as compared to $77.2 million in total revenue in the prior year quarter. Ocaliva net sales in the second quarter of 2021 were comprised of
U.S.net sales of $68.2 million and ex- U.S.net sales of $28.4 million, as compared to U.S.net sales of $59.6 million and ex- U.S.net sales of $17.6 million in the prior year quarter.
- In the quarters ended
June 30, 2021and 2020, we recorded $95.8 millionand $129.3 million, respectively, in total operating expenses and $86.5 millionand $112.4 million, respectively, in non-GAAP adjusted operating expenses, which excludes non-cash stock-based compensation expense of $8.4 millionand $16.1 million, respectively, and depreciation expense of $0.9 millionand $0.8 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
U.S.Generally Accepted Accounting Principles (“GAAP”), adjusted for the effects of two non-cash items: stock-based compensation and depreciation. See “Non-GAAP Financial Measures” below. A reconciliation of 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.”
Cost of Sales
- Our cost of sales was
$0.6 millionin the second quarter of 2021, as compared to $1.9 millionin the prior year quarter. Our cost of sales for the quarters ended June 30, 2021and 2020 consisted primarily of packaging, labeling, materials and related expenses.
Sales, General & Administrative Expenses
- Our selling, general and administrative expenses were
$57.7 millionin the second quarter of 2021, down from $93.4 millionin the prior year quarter. The decrease was primarily driven by actions taken to decrease expenses relating to launch preparation activities associated with the potential approval and commercialization of OCA for liver fibrosis due to NASH.
Research & Development Expenses
- Our research and development expenses increased to
$37.8 millionin the second quarter of 2021, up from $34.0 millionin the prior year quarter. The increase was primarily driven by the recognition of lower UKR&D tax credit versus the prior year quarter, partially offset by lower NASH development costs.
- Interest expense in the quarters ended June 30, 2021 and 2020 was $12.6 million and $11.9 million, respectively. For the three months ended
June 30, 2021and 2020, interest expense related to the $230.0 millionaggregate principal amount of 2.00% Convertible Senior Notes due 2026 (the “2026 Convertible Notes”) that we issued in May 2019and the $460.0 millionaggregate principal amount of 3.25% Convertible Senior Notes due 2023 (the “2023 Convertible Notes” and together with the 2026 Convertible Notes, the “Convertible Notes”) that we issued in July 2016.
- In the second quarter of 2021 we reported a net loss of
$11.1 million, a decrease compared to a net loss of $63.3 millionin the second quarter 2020.
- As of
June 30, 2021, we had cash, cash equivalents, restricted cash, and investment debt securities available for sale of approximately $422.5 million. As of December 31, 2020, we had cash, cash equivalents, restricted cash, and investment debt securities available for sale of approximately $477.2 million.
2021 Financial Guidance
We are reiterating our full year 2021 worldwide Ocaliva net sales guidance of
We are reiterating our full year 2021 non-GAAP adjusted operating expense guidance of between $380 million to $410 million.
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 second quarter 2021 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. 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. 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 2,480 adult NASH patients randomized at over 300 qualified centers worldwide, and is expected to 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 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 PRIMARY BILIARY CHOLANGITIS PATIENTS WITH CIRRHOSIS
- Hepatic decompensation and failure, sometimes fatal or resulting in liver transplant, have been reported with OCALIVA treatment in primary biliary cholangitis (PBC) patients with either compensated or decompensated cirrhosis.
- OCALIVA is contraindicated in PBC patients with decompensated cirrhosis, a prior decompensation event, or with compensated cirrhosis who have evidence of portal hypertension.
- Permanently discontinue OCALIVA in patients who develop laboratory or clinical evidence of hepatic decompensation; have compensated cirrhosis and develop evidence of portal hypertension, or experience clinically significant hepatic adverse reactions while on treatment.
OCALIVA is contraindicated in patients with:
- decompensated cirrhosis (e.g., Child-
Pugh Class Bor C) or a prior decompensation event
- compensated cirrhosis who have evidence of portal hypertension (e.g., ascites, gastroesophageal varices, persistent thrombocytopenia)
- complete biliary obstruction
Warnings and Precautions
Hepatic Decompensation and Failure in PBC Patients with Cirrhosis
Hepatic decompensation and failure, sometimes fatal or resulting in liver transplant, have been reported with OCALIVA treatment in PBC patients with cirrhosis, either compensated or decompensated. Among postmarketing cases reporting it, median time to hepatic decompensation (e.g. new onset ascites) was 4 months for patients with compensated cirrhosis; median time to a new decompensation event (e.g. hepatic encephalopathy) was 2.5 months for patients with decompensated cirrhosis.
Some of these cases occurred in patients with decompensated cirrhosis when they were treated with higher than the recommended dosage for that patient population; however, cases of hepatic decompensation and failure have continued to be reported in patients with decompensated cirrhosis even when they received the recommended dosage.
Hepatotoxicity was observed in the OCALIVA clinical trials. A dose-response relationship was observed for the occurrence of hepatic adverse reactions including jaundice, worsening ascites, and primary biliary cholangitis flare with dosages of OCALIVA of 10 mg once daily to 50 mg once daily (up to 5-times the highest recommended dosage), as early as one month after starting treatment with OCALIVA in two 3-month, placebo-controlled clinical trials in patients with primarily early stage PBC.
Routinely monitor patients for progression of PBC, including hepatic adverse reactions, with laboratory and clinical assessments to determine whether drug discontinuation is needed. Closely monitor patients with compensated cirrhosis, concomitant hepatic disease (e.g., autoimmune hepatitis, alcoholic liver disease), and/or with severe intercurrent illness for new evidence of portal hypertension (e.g., ascites, gastroesophageal varices, persistent thrombocytopenia), or increases above the upper limit of normal in total bilirubin, direct bilirubin, or prothrombin time to determine whether drug discontinuation is needed. Permanently discontinue OCALIVA in patients who develop laboratory or clinical evidence of hepatic decompensation (e.g., ascites, jaundice, variceal bleeding, hepatic encephalopathy), have compensated cirrhosis and develop evidence of portal hypertension (e.g., ascites, gastroesophageal varices, persistent thrombocytopenia), experience clinically significant hepatic adverse reactions, or develop complete biliary obstruction. If severe incurrent illness occurs, interrupt treatment with OCALIVA and monitor the patient’s liver function. After resolution of the intercurrent illness, consider the potential risks and benefits of restarting OCALIVA treatment.
Severe pruritus was reported in 23% of patients in the OCALIVA 10 mg arm, 19% of patients in the OCALIVA titration arm, and 7% of patients in the placebo arm in a 12-month double-blind randomized controlled clinical trial of 216 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 patients with new onset or worsening severe pruritus. Management strategies include the addition of bile acid binding 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 patients, 20% and 9% in the 10 mg and titration arms, respectively, compared to 2% in the placebo arm. Monitor patients for changes in serum lipid levels during treatment. For 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 (≥5%) are: 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 co-administering OCALIVA and warfarin.
- CYP1A2 Substrates with Narrow Therapeutic Index
Obeticholic acid 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 co-administered 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.
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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, the review of our New Drug Application for OCA for the treatment of liver fibrosis due to NASH by the
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; our ability to timely and cost-effectively file for and obtain regulatory approval of our product candidates on an accelerated basis or at all, including OCA for liver fibrosis due to NASH following the issuance of the CRL by the FDA; any advisory committee recommendation or dispute resolution determination that our product candidates, including OCA for liver fibrosis due to NASH, should not be approved or approved only under certain conditions; any future 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, including OCA for liver fibrosis due to NASH, such as the need for clinical outcomes data (and not just results based on achievement of a surrogate endpoint), any risk mitigation programs such as a REMS, 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, including in connection with our update to Ocaliva prescribing information announced in
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|Condensed Consolidated Statements of Operations|
|(In thousands, except per share data)|
|Three Months Ended
||Six Months Ended
|Product revenue, net||$||96,576||$||77,249||$||178,237||$||149,901|
|Cost of sales||618||1,877||1,428||2,729|
|Selling, general and administrative||57,655||93,360||161,926||191,918|
|Research and development||37,792||34,042||88,558||90,729|
|Total operating expenses||95,816||129,279||206,824||285,376|
|Operating income (loss)||760||(52,030||)||(28,587||)||(135,475||)|
|Other income (expense):|
|Other income, net||735||682||2,081||2,921|
|Net loss per common and potential common share:|
|Basic and diluted||$||(0.33||)||$||(1.92||)||$||(1.55||)||$||(4.74||)|
|Weighted average common and potential common shares outstanding:|
|Basic and diluted||33,179||32,960||33,159||32,941|
|Condensed Consolidated Balance Sheet Information|
|Cash, cash equivalents, restricted cash and investment debt securities, available for sale||$||422,480||$||477,170|
|Total liabilities (2)||$||726,419||$||747,342|
|(1) Derived from the audited financial statements included in Intercept’s Annual Report on Form 10-K for the year ended
|Reconciliation of Non-GAAP Adjusted Operating Expenses to Total Operating Expenses|
|Three Months Ended
||Six Months Ended
|Total operating expenses||$||95,816||$||129,279||$||206,824||$||285,376|
|Non-GAAP adjusted operating expenses||$||86,489||$||112,388||$||188,208||$||255,248|
Source: Intercept Pharmaceuticals, Inc.