ICPT - Bull Thesis

(Updated on 3/24/22 based on quarterly report)

BULL THESIS

• ICPT overall corporate and executive summary

  • Approved drug Ocaliva (OCA) for PBC (liver disease) has performed well

    • Revenue growth of 16% ‘21 vs. ‘20 ($363.5M vs. $312.7M) and 25% '20 vs. '19 ($312.7M vs. $249.6M)

    • Strong Q4 ‘21 sales of $92.4M despite 2021 negative label change

  • Reimbursement for (OCA) is broad >95% of covered lives

  • OCA is an antifibrotic and only therapy to demonstrate antifibrotic efficacy in a Phase 3 NASH trial

  • Q1 2022 huge REGENERATE trial Ph3 readout is somewhat derisked in including many more patients for more time and using new consensus biopsy read strategy, vs. prior positive interim readout.

• Ocaliva (obeticholic acid) (OCA) (FXR agonist)

  • Approved in PBC

    • Revenue has been good with over $360M annual in 2021, almost $93M in Q4 2021 despite 2021 negative label change

    • First new medicine for PBC in almost 20 years

    • First FXR agonist approved for liver disease

    • Patent term extension granted to give coverage out to 2033

    • Approved in over 40 countries

    • Broad payer coverage of >95% of covered lives

    • Long-term safety extension trial showed OCA improved transplant-free survival in patients with PBC

  • Fibrosis due to NASH

    • The REGENERATE trial is the first and only positive Phase 3 readout for any drug candidate in this indication

    • REGENERATE trial readout in Q1 2022 is somewhat derisked

      • Many more patients/patient years of data and interim data was stat sig

      • New consensus biopsy read should provide even more stat sig to the data

      • Positive data would lead to FDA and EMA resubmissions and possible stock run up

    • Even if only approved in F3 patients first, market opportunity would be very large

  • Cirrhosis due to NASH

    • REVERSE trial is only antifibrotic in Phase 3 trials for compensated cirrhosis due to NASH

    • Expected data in third quarter 2022 will be generated using the new consensus liver biopsy read methods that should increase sensitivity

    • Previous Phase 2 trial (CONTROL) met primary objective by showing that newly initiated treatment with atorvastatin rapidly reversed OCA-associated increases in LDL to below baseline levels

    • Phase 3 REGENERATE trial interim analysis showed once-daily OCA 25 mg met the primary endpoint of fibrosis improvement (≥1 stage) for patients with stage 2 or 3 liver fibrosis with no worsening of NASH at the planned 18-month interim analysis with high statistical significance (p=0.0002 vs. placebo)

      • REGENERATE focuses on patients w/o cirrhosis, but who are at a higher risk for cirrhosis

  • PSC

    • Positive Phase 2 results reported at The Liver Meeting 2017

      • Met primary endpoint of statistically significant reduction in alkaline phosphatase compared to placebo at 24 weeks

FS/MV 3/4/22

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