What happened

Shares of the mid-cap biopharma Intercept Pharmaceuticals (ICPT) fell by 31.5% during the month of March, according to data from S&P Global Market Intelligence. The drugmaker's shares hit the skids last month for two reasons:

  1. The biopharmaceutical space in general got walloped in March due to the coronavirus. Investors fled this area of the market due to fears over global supply chain issues, disruptions in ongoing clinical trials, and regulatory delays in both Europe and the United States. Intercept, for its part, couldn't escape this "man with a hammer" approach to biopharma stocks last month.  
  2. In late March, the U.S. Food and Drug Administration (FDA) announced that it would delay the advisory committee meeting for Intercept's nonalcoholic steatohepatitis (NASH) drug candidate, obeticholic acid (brand name: Ocaliva). The meeting was originally slated for April 22, but it will now be held on June 9 due to the COVID-19 pandemic. 
A doctor holding his hand out with a holographic image of a liver hovering above it.

Image source: Getty Images.

So what

Intercept has a real shot at becoming the first company to bring a NASH drug to market. That said, there are dozens of other drugs racing to hit the market as well. So any delay -- like the one announced last month -- could cost the company a significant amount in future revenue. Ocaliva, after all, may have serious trouble fending off would-be competitors in a crowded marketplace.

Now what

While Ocaliva does have some minor safety issues in the NASH setting, these safety concerns shouldn't ultimately derail its commercial launch. Intercept should thus end up with the first approved NASH drug, barring an unexpected turn of events. This mid-cap biopharma stock, in turn, may be worth a serious look by risk-tolerant investors, especially after last month's sharp pullback.