Monday, September 15, 2014

Seeking Alpha: Is Intercept Pharmaceuticals Building The Next Great Specialty Franchise?

As great as Alexion (NASDAQ:ALXN) has shown itself to be with its orphan drug Soliris for rare kidney ailments, Intercept Pharmaceuticals (NASDAQ:ICPT) may be establishing a similar path in the until-recently overlooked world of liver disease outside of hepatitis C. Intercept's lead compound OCA appears to have broad utility as an anti-inflammatory, anti-fibrotic liver treatment and the efficacy in nonalcoholic steatohepatitis (or NASH) may unlock potential akin to that of new HCV treatments.

It is important to point out, though, that there is a lot of risk in biotech investing and particularly in companies where the expectations are almost solely built around a single product. Making matters worse, there is considerable uncertainty as to the true number of potential patients for many of the diseases Intercept is targeting, to say nothing of uncertainty regarding competition, pricing, and clinical endpoints for clinical trials. Despite these risks, I believe Intercept ought to be trading closer to $420 today and even then I consider the underlying assumptions to be quite conservative.

Continue reading here:
Is Intercept Pharmaceuticals Building The Next Great Specialty Franchise?

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