Shares of Intercept Pharmaceuticals (NASDAQ:ICPT) are plunging on Friday after the company announced some bad news regarding its new drug application (NDA) for Ocaliva as a treatment for fibrosis (buildup of scar tissue) in the liver due to nonalcoholic steatohepatitis (NASH). Intercept's shares are down by 14.4% as of 11:34 a.m. today.
Intercept submitted an NDA to the U.S. Food and Drug Administration (FDA) for Ocaliva as a treatment for fibrosis due to NASH back in September 2019, and Ocaliva was granted priority review by the health industry regulator. Also, the FDA tentatively scheduled an advisory committee meeting regarding this application for June 9, 2020. Today Intercept announced that the FDA has decided to postpone this meeting indefinitely. This decision by the FDA will delay the approval process for Ocaliva as a treatment for fibrosis due to NASH.
Intercept has a lot riding on this application. Ocaliva is the company's only approved product at the moment, and although it is generating growing revenue -- sales of Ocaliva grew by 40% year over year to $72.7 million during the first quarter -- a new indication for this drug would help Intercept further boost its revenue and earnings. The pharma company estimates that there are about 19 million NASH patients in the U.S., and about 16 million of them suffer from fibrosis.
And considering there are currently no FDA-approved treatments for fibrosis due to NASH, Intercept's revenue could increase significantly once it receives approval for this indication. Even with today's setback, though, Intercept looks likely to earn FDA approval for Ocaliva as a treatment for fibrosis due to NASH, and the company's losses on the market may represent an opportunity for investors.