This January is going to be a big month for folks with fatty liver disease or need of a COVID-19 vaccine. It's also going to be a month of ups or downs for shareholders of some volatile biotech stocks.
Intercept Pharmaceuticals (ICPT) and Madrigal Pharmaceuticals (MDGL -2.66%) have important clinical trial readouts expected this month. After an excruciatingly long wait, Novavax (NVAX) could also announce some important progress with its COVID-19 vaccine.
Here's what investors want to know about upcoming binary events that could send these biotech stocks rocketing higher, or cause them to sink like a stone.
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Novavax
It's been more than 11 months since Novavax COVID-19 vaccine demonstrated 89.3% efficacy in a UK phase 3 trial, and the company still isn't quite ready to request emergency use authorization from the FDA. Unexpected delays have caused shares of Novavax to lose more than half their value since reaching a peak early last year.
On New Year's Eve, Novavax delighted investors with news it had finally submitted chemistry, manufacturing, and controls data to the FDA. All data required to request emergency use authorization is in front of the agency but Novavax will wait 30 days from the date of the final submission per the FDA's request.
Novavax stock could regain its former glory if it can keep its latest promise and actually request emergency use authorization of its COVID-19 vaccine at the end of January. The U.S. stock market is largely focused on potential U.S. sales while progress made outside of the U.S. goes mostly unnoticed.
Even if the FDA never gets around to authorizing the Novavax COVID-19 vaccine, the company could end up reporting significant sales soon. In December, the European Medicines Agency granted it a conditional marketing approval, India granted an emergency use authorization, and the World Health Organization gave it a second emergency use listing.
Intercept Pharmaceuticals
Shares of this biotech stock started last year with a bang but fell around 57% before the end of 2021. An upcoming readout for its lead drug, Ocaliva, could allow the company to replace its losses.
The FDA approved Ocaliva way back in 2016 to treat primary biliary cholangitis (PBC). This is a rare, chronic condition marked by inflamed bile ducts and liver damage caused by all the excess bile that builds up.
While PBC is rare, non-alcoholic fatty liver disease (NAFLD) affects around 24% of adults in America. Excess liver fat is generally benign, but somewhere between 1.5% and 6.5% of NAFLD patients also experience inflammation and damage of their liver, a life-threatening condition called non-alcoholic steatohepatitis (NASH).
There aren't any FDA-approved treatment options to treat NASH right now. Ocaliva has a chance to become the first, though, if it succeeds in an ongoing phase 3 trial called Regenerate that was supposed to read out results in December.
Before getting too excited about Intercept Pharmaceuticals' big catalyst, investors should know that delayed phase 3 results usually aren't worth the wait. Investors should also understand that NASH is a slowly progressing disease with lots of variation from patient to patient. Put it together and the odds of Intercept Pharmaceuticals reporting an unequivocal success appear exceedingly slim.
Madrigal Pharmaceuticals
Madrigal Pharmaceuticals is another NASH-focused biotech stock that could shoot higher if an experimental treatment succeeds in a long-running phase 3 trial. This clinical-stage biotech's lead candidate, resmetirom, is an experimental treatment that led to dramatic liver fat reductions during mid-stage clinical trials in 2018.
The long wait for long-term outcome data the company can take to the FDA is almost over. Results of the phase 3 Maestro study with resmetirom and NASH patients were expected in December of 2021. Madrigal Pharmaceuticals blamed its delay on unexpected staffing issues at the vendor it hired to run the numbers on trial data that's already been collected.
Madrigal's delay explanation is a tough pill to swallow when you consider this company has no other drugs in clinical trials and still managed to spend more than $300 million on research and development since the Maestro study began. Again, I'll be very surprised to see an unequivocal success from the Maestro trial.
