It's fair to say that 2019 isn't going nearly as well as Intercept Pharmaceuticals (ICPT +0.00%) shareholders would have liked. The stock is down close to 40% year to date after rising 20% by early April. Intercept's presentation of data from its study of Ocaliva in treating nonalcoholic steatohepatitis (NASH) disappointed many despite overall positive results.
Intercept had an opportunity to impress investors when the company announced its second-quarter results before the market opened on Wednesday. Here's what you need to know from Intercept's Q2 update.
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By the numbers
Intercept reported that its Q2 revenue jumped 52% year over year to $66.3 million. Analysts estimated that the company's revenue for the second quarter would come in at $58.67 million.
The company reported a net loss in the second quarter of $71.4 million, or $2.28 per share, on the basis of generally accepted accounting principles (GAAP). This reflected some improvement from the net loss of $75.2 million, or $2.58 per share, posted in the prior-year period. It was also better than the consensus estimate from Wall Street analysts of an adjusted net loss of $2.60 per share.
Intercept ended the second quarter with cash, cash equivalents, and investment debt securities available for sale of $758.5 million. This was much higher than the company's cash stockpile of $436.2 million at the end of 2018.
Behind the numbers
Liver-disease drug Ocaliva generated sales of $65.9 million in the second quarter. This represented a year-over-year increase of 53%. Ocaliva is currently approved for treating primary biliary cholangitis (PBC) in combination with ursodeoxycholic acid (UDCA). Intercept also made $406,000 from licensing agreements, the same amount recorded in the prior-year period.
The company's bottom-line improvement stemmed entirely from the sales growth for Ocaliva. Intercept's operating expenses in Q2 increased by nearly 15% year over year to close to $130 million, with higher spending across the board related to preparation for the anticipated launch of Ocaliva in treating NASH.
Intercept's significant improvement in its cash position stemmed from three transactions in May. The company issued and sold 2.76 million new shares of common stock in a public offering and 119,760 shares in a private placement. Intercept also issued convertible notes expiring in 2026. These transactions combined enabled Intercept to raise net proceeds of around $450.6 million.
Looking ahead
Intercept projects Ocaliva net sales will be between $235 million and $245 million for full-year 2019. The company also expects that adjusted operating expenses for the year will come in between $470 million and $500 million.
The big thing for investors to watch with Intercept is its planned submission for approval of Ocaliva in treating NASH. CEO Mark Pruzanski stated that the company is on track to file with the FDA later in the third quarter. He added that Intercept "continue[s] to believe that advanced fibrosis due to NASH represents a blockbuster opportunity" for Ocaliva.
