Intercept Pharmaceuticals (ICPT) ended the fourth quarter of 2018 on a strong note. In February, the company announced solid Q4 revenue growth of 41% over the prior-year period.
Any questions that investors had about whether Intercept's momentum would continue into 2019 were answered when the company announced its Q1 results before the market opened on Wednesday. Here's what you need to know from Intercept's Q1 update.
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By the numbers
Intercept's top-line performance again improved nicely in the first quarter. Revenue jumped 45% year over year to $52.2 million. Analysts estimated that the company's revenue for the first quarter would come in at $51.98 million.
On a GAAP basis, Intercept's net loss in the first quarter was $90.3 million, or $3.03 per share. The company's bottom line reflected some deterioration from the prior-year period's GAAP net loss of $81.6 million, or $3.22 per share. Analysts expected a Q1 net loss of $2.51.
Intercept ended the first quarter with cash, cash equivalents, and short-term investments of $353.5 million. This was a decrease of 19% from the $436.2 million on hand as of Dec. 31, 2018.
Behind the numbers
The company's primary biliary cholangitis (PBC) drug Ocaliva was the key to this quarter's success. Ocaliva net sales jumped 47% to $51.8 million worldwide. Most of the drug's sales were made in the U.S. -- around $38 million. Sales for Ocaliva outside of the U.S. totaled $13.8 million.
Despite the strong sales growth for Ocaliva, however, Intercept's bottom line worsened. The culprit was higher spending.
Cost of sales rose 50% to around $600,000 because of packaging, labeling, materials and related expenses. Selling, general, and administrative expenses went up 23.5% to $77.2 million due to the increases in nonalcoholic steatohepatitis (NASH) pre-launch activities as Intercept plans for a new indication for Ocaliva in treating NASH. Research and development expenses increased 20% to $58.4 million, driven by increases in NASH development program expenses, including costs associated with the company's late-stage clinical study evaluating Ocaliva in treating NASH.
Looking ahead
The company boosted its full-year 2019 guidance. Intercept now projects Ocaliva net sales guidance to be between $235 million and $245 million, up from its previous forecast of a range of $225 million and $240 million. Non-GAAP adjusted operating expenses guidance range is expected to be between $470 million and $500 million up from previous guidance of $450 million and $470 million.
Investors can especially look forward to Intercept's planned U.S. regulatory filing for Ocaliva in treating NASH. This filing is expected to be submitted to the Food and Drug Administration in the third quarter of 2019. Intercept CEO Mark Pruzanksi said that the company has a "unique competitive opportunity to become the first approved NASH therapy." He's probably right -- and that means Intercept should have more great quarters on the way.
