Intercept Pharmaceuticals (NASDAQ:ICPT) released its fourth-quarter report on Tuesday, and the among the highlights was an annual revenue figure 40% higher than 2018's result. Ocaliva, the company's primary biliary cholangitis (PBC) drug, brought in $70 million for the quarter and $249.6 million for the year.

Intercept has filed a new drug application with the Food and Drug Administration to expand the label indication for Ocaliva to include treating liver fibrosis due to non-alcoholic steatohepatitis (NASH). This is a common condition caused by fatty buildups in the liver. The company says that 16 million people worldwide have fibrosis due to NASH. There are no FDA-approved treatments for the disease; the company hopes Ocaliva will be the first. The FDA has set a target action date of June 26 to complete its review of the application.   

stages of liver disease

Image source: Getty Images

Will NASH make Ocaliva a blockbuster?

Some estimates peg the market opportunity in NASH drugs at $35 billion a year. Excitement about the possibility that Intercept would have a chance to address that need sent its stock into the stratosphere in 2014, up to $485 a share, after the company reported positive phase 2 results in its Ocaliva study. However, it's been all downhill since then, with the company's stock dropping all the way down to $93 a share six years later. 

In early data from its phase 3 NASH trial, the company reported that 23% of patients receiving the higher dose of Ocaliva had fibrosis improvement, versus 12% in the placebo group. With those numbers, it is likely that this new indication for the drug will be approved by the FDA. However, it is also likely that the level of adverse events associated with Ocaliva might limit the drug's appeal. Over half the patients taking the drug reported chronic itching.

Intercept's stock was down just over 1% at noon EST Tuesday.