What happened

Shares of Intercept Pharmaceuticals (NASDAQ:ICPT) were soaring 10.4% as of 11:17 a.m. EST on Tuesday after rising as much as 19% earlier in the session. The biotech reported positive top-line results from its Regenerate phase 3 clinical study evaluating obeticholic acid (OCA) in patients with liver fibrosis due to nonalcoholic steatohepatitis (NASH).

Intercept stated that the primary endpoint of the study -- statistically significant improvement without worsening of NASH at 18 months -- was achieved with the 25 mg daily dose of OCA. In addition, more patients taking OCA at both doses of 10 mg and 25 mg achieved the primary endpoint of NASH resolution with no worsening of liver fibrosis than did patients taking a placebo. However, the difference wasn't statistically significant. 

Blue scan of a human body with the liver shown in red

Image source: Getty Images.

So what

Intercept rightfully claimed that its Regenerate study of OCA was the "first and largest successful pivotal phase 3 study in patients with liver fibrosis due to NASH." The key word in that statement was "successful." Gilead Sciences recently announced that its lead NASH treatment candidate, selonsertib, failed in a phase 3 study for improving fibrosis without worsening NASH.

How important are Intercept's results? NASH currently has no approved treatments. The disease has been referred to as the "next hepatitis C," as it has driven the numbers of liver transplants and cases of liver cancer higher. Some observers even predict that there could be a $35 billion market for NASH treatments in the future.

It would have been even better for Intercept had both primary endpoints been reached. However, the biotech needed only one of them to be met to file for regulatory approval.

The safety and tolerability data from the Regenerate study also wasn't ideal. More than half of the patients taking the 25 mg dose of OCA experienced mild-to-moderate pruritis (itching), with 9% of patients on the higher dose of OCA discontinuing treatment because of severe pruritis. OCA treatment was also associated with higher levels of "bad" LDL cholesterol. 

Check out he latest Intercept Pharmaceuticals earnings call transcript.

Now what

Intercept now plans to file for approval of OCA as a NASH treatment in the U.S. and Europe in the second half of 2019. The company will also report the results from the Regenerate study at the European Association for the Study of the Liver (EASL) conference in April. 

OCA is already on the market in the U.S. and Europe for treating another liver disease, primary biliary cholangitis (PBC), under the brand name Ocaliva. While there's no guarantee that the drug will also win approvals for NASH, Intercept's chances appear to be pretty good.