NEW YORK, July 31, 2017 (GLOBE NEWSWIRE) -- Intercept Pharmaceuticals, Inc. (Nasdaq:ICPT), a biopharmaceutical company focused on the development and commercialization of novel therapeutics to treat progressive non-viral liver diseases, today reported financial results for the three months ended June 30, 2017, and provided other general business updates.

“I’m very pleased with our commercial performance to date and continued momentum as a leader in progressive non-viral liver disease,” said Mark Pruzanski, M.D., President and CEO of Intercept. “In the U.S., we have seen strong execution in the first year of our Ocaliva launch, with steady quarter over quarter growth. In Europe and Canada, we remain focused on securing reimbursement and are pleased with initial uptake in our early access markets.”

“Today we also announced exciting topline results from two important Phase 2 trials,” added Dr. Pruzanski. “In AESOP, our Phase 2 trial in primary sclerosing cholangitis (PSC), OCA met the primary endpoint of statistically significant reduction in alkaline phosphatase (ALP), a clinically important biomarker in this aggressive cholestatic liver disease. And in CONTROL, we achieved our objective in demonstrating that the lowest available dose of atorvastatin rapidly reverses OCA associated LDL changes to below baseline levels in nonalcoholic steatohepatitis (NASH) patients with fibrosis or cirrhosis.”

Ocaliva Commercial Update

Intercept recorded $30.4 million of worldwide net Ocaliva sales in the second quarter of 2017.

Net U.S. Ocaliva sales were $27.9 million for the second quarter of 2017.

Ocaliva was approved by the U.S. Food and Drug Administration (FDA) in May 2016 for the treatment of primary biliary cholangitis (PBC) in combination with ursodeoxycholic acid (UDCA) in adults with an inadequate response to UDCA or as monotherapy in adults unable to tolerate UDCA. Intercept commercially launched Ocaliva in the United States in June 2016 and in conjunction launched Interconnect®, a comprehensive, personalized program that connects patients with dedicated care coordinators who help them understand their disease and provides treatment support and, for eligible patients, financial assistance options.

Net ex-U.S. international Ocaliva sales were $2.5 million for the second quarter of 2017.

Ocaliva was granted conditional approval by the European Commission in December 2016 for the treatment of PBC in combination with UDCA in adults with an inadequate response to UDCA or as monotherapy in adults unable to tolerate UDCA. We commenced our European commercial launch in January 2017. Ocaliva was granted conditional approval by Health Canada in May 2017.

Anticipated 2017 Milestones

• PBC Program
  • Continue growth in ongoing U.S. Ocaliva launch
  • Launch Ocaliva in key European markets and seek regulatory approval in other target international markets
  • Continue enrolling COBALT (Phase 4 confirmatory trial in PBC)
• NASH Program
  • Continue enrolling clinical outcomes cohort in REGENERATE (Phase 3 trial in NASH patients with fibrosis)
  • Initiate Phase 3 trial in NASH patients with cirrhosis during 2H 2017
• Pipeline
  • Define path forward for OCA in PSC
  • Initiate Phase 2 trial of INT-767 in NASH patients with fibrosis during 2H 2017

Financial Results

Three Months Ended June 30, 2017

For the three months ended June 30, 2017, Intercept reported a net loss of $86.6 million. GAAP operating expense for the three months ended June 30, 2017 was $111.4 million. Non-GAAP adjusted operating expense¹ for the three months ended June 30, 2017 was $96.0 million, which excludes non-cash stock-based compensation expense of $14.3 million and depreciation expense of $1.1 million.

Revenues

Intercept recognized $30.4 million of net sales of Ocaliva for the second quarter 2017. Intercept currently recognizes revenue using the sell-through method (i.e., when its specialty pharmacies dispense Ocaliva to patients, not when products are sold to the specialty pharmacies). Revenue recognition will transition from the sell-through method to the sell-in method once a sufficient period of commercial experience has occurred to enable Intercept to estimate product returns.

Intercept recognized $0.4 million and $5.4 million of license revenue related to the amortization of the up-front and milestone payments under the collaboration agreement with Sumitomo Dainippon for the three months ended June 30, 2017 and 2016, respectively.

Expenses

Costs of goods sold (COGS) was negligible for the second quarter of 2017. Prior to the FDA approval of Ocaliva, Intercept had expensed costs related to the manufacturing and buildup of commercial launch supplies of OCA. Therefore, COGS was only reflective of packaging and labeling costs incurred during the period. Intercept expects COGS to remain negligible until previously expensed supplies of OCA are sold.

Selling, general and administrative expenses increased to $66.9 million for the quarter ended June 30, 2017, up from $48.7 million for the quarter ended June 30, 2016. The increase from the prior period was primarily driven by expenses related to Ocaliva commercialization activities and additional personnel-related costs to support our commercial and international initiatives.

Research and development expenses increased to $44.2 million for the quarter ended June 30, 2017, up from $34.9 million for the quarter ended June 30, 2016. The increase over the prior period was primarily driven by increases in clinical development programs for OCA and infrastructure to support such programs.

Interest expense for the quarter ended June 30, 2017 was $7.3 million. The interest expense is related to the 3.25% convertible senior notes due 2023 issued in July 2016.

Six Months Ended June 30, 2017

Intercept reported a net loss of $176.5 million for the six months ended June 30, 2017, compared to a net loss of $204.0 million for the six months ended June 30, 2016. The net loss included $28.3 million and $14.5 million of non-cash stock-based compensation expenses for the six months ended June 30, 2017 and 2016, respectively, as well as a one-time net expense of $45.0 million for the settlement of the purported securities class action lawsuit in the six months ended June 30, 2016.

Cash Position

As of June 30, 2017, Intercept had cash, cash equivalents and investment securities available for sale of approximately $550.3 million, compared to $689.4 million as of December 31, 2016.

Financial guidance

Intercept continues to project non-GAAP adjusted operating expenses of $380 million to $420 million for the fiscal year ending December 31, 2017. This guidance excludes non-cash items such as stock-based compensation and depreciation. These expenses are planned to support the continued commercialization of Ocaliva in PBC in the United States and other markets, continued clinical development for OCA in PBC, NASH and PSC and the continued development of INT-767 and other pipeline programs.

Intercept anticipates that stock-based compensation expense will represent the most significant non-cash item that will be excluded in adjusted operating expenses as compared to operating expenses under GAAP. Adjusted operating expense is a financial measure not calculated in accordance with GAAP. A reconciliation of projected operating expense calculated in accordance with GAAP to non-GAAP adjusted operating expense is not available on a forward-looking basis without unreasonable effort due to an inability to make accurate projections and estimates related to certain information needed to calculate, for example, future stock-based compensation expense.

About Intercept

Intercept is a biopharmaceutical company focused on the development and commercialization of novel therapeutics to treat non-viral, progressive liver diseases, including primary biliary cholangitis (PBC), nonalcoholic steatohepatitis (NASH), primary sclerosing cholangitis (PSC) and biliary atresia. Founded in 2002 in New York, Intercept now has operations in the United States, Europe and Canada.