It has been about a month since the last earnings report for Intercept Pharmaceuticals . Shares have added about 0.6% in that time frame, outperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is Intercept due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.

Intercept Q2 Earnings Top Estimates, Revenues Up Y/Y

Intercept incurred a loss of 14 cents per share (from continuing operations) in second-quarter 2023, narrower than the Zacks Consensus Estimate of 56 cents. The company also reported a loss of 68 cents per share in the year-ago quarter.

Total revenues were $83.7 million, up 16.7% year over year. The top line beat the Zacks Consensus Estimate of $79 million.

Quarter in Detail

Total revenues comprise only Ocaliva (obeticholic acid or OCA) net sales in the United States. Ocaliva sales beat our model estimate of $78.4 million.

OCA is approved under the brand name Ocaliva. It is used for treating primary biliary cholangitis (PBC) (in combination with ursodeoxycholic acid (UDCA) in adults with an inadequate response to UDCA alone or as a monotherapy for adults intolerant to UDCA. While the FDA’s approval for Ocaliva was under an accelerated pathway, the drug received a conditional license from the European Commission.

SG&A expenses increased to $53.3 million from $39.9 million in the prior-year quarter. The increase was primarily driven by investment in NASH launch preparation.

Research and development expenses decreased by 16.7% to $37.3 million due to the completion of the REVERSE study.

As of Jun 30, 2023, Intercept had cash, cash equivalents, restricted cash and marketable securities worth $415 million compared with $435.2 million as of Mar 31, 2023.

2023 Guidance

Intercept now expects Ocaliva sales between $320 and $340 million in 2023 (previous guidance: $310-$340 million).

In June 2023, Intercept lowered its operating expense guidance to $350-$370 million for 2023, inclusive of restructuring costs. The company remains on track to achieve an expected net reduction in annual adjusted operating expenses of approximately $140 million.

Other Updates

Intercept suffered a massive setback as the FDA issued a CRL in response to the company’s NDA seeking approval for OCA for the treatment of pre-cirrhotic fibrosis due to NASH.

The FDA indicated in the CRL that the NDA cannot be approved in its present form following a review.

The NDA resubmission will require successful completion of the long-term outcomes phase of the REGENERATE study as per the content of the CRL.

Consequently, Intercept announced a restructuring program in response to the same. Intercept will discontinue all NASH-related investments and immediately begin the process of closing out the REGENERATE study. Intercept expects to substantially complete the trial shut-down process by the end of 2023.

Apart from closing out REGENERATE, Intercept is also terminating all other NASH-related spending within its R&D, commercial, medical affairs and administrative functions.

The company will also cut one-third of its workforce to reduce operating expenses. Intercept expects to initiate workforce reductions in the third quarter of 2023, with the majority to be completed by the end of 2023.

Intercept plans to maintain the scale of its current field sales organization to support the growth potential of Ocaliva.

ICPT is progressing its combination program for OCA, a farnesoid X receptor (FXR) agonist and bezafibrate, a pan-peroxisome proliferator-activated receptor (pan-PPAR) agonist. The company has now completed enrollment in both phase II studies exploring a range of therapeutic doses for the combination of OCA and bezafibrate.

The company expects to have the necessary data from the OCA-bezafibrate combination program in 2023 to submit a request for an end-of-phase II meeting with the FDA. The data includes analyses from both phase II studies in addition to phase I and preclinical data.

Meanwhile, it is also progressing with the FRESH (FXR Effect on Severe Alcohol-Associated Hepatitis) study, a phase IIa trial evaluating the safety, tolerability, efficacy and pharmacokinetics of INT-787 in patients with severe sAH.

 

How Have Estimates Been Moving Since Then?

It turns out, estimates revision flatlined during the past month.

The consensus estimate has shifted 8.17% due to these changes.

VGM Scores

Currently, Intercept has a nice Growth Score of B, though it is lagging a bit on the Momentum Score front with a C. Following the exact same course, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.

Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Intercept has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.

Performance of an Industry Player

Intercept belongs to the Zacks Medical - Biomedical and Genetics industry. Another stock from the same industry, GSK (GSK Quick QuoteGSK - Free Report) , has gained 2.8% over the past month. More than a month has passed since the company reported results for the quarter ended June 2023.

Glaxo reported revenues of $8.98 billion in the last reported quarter, representing a year-over-year change of +3.1%. EPS of $0.97 for the same period compares with $0.87 a year ago.

Glaxo is expected to post earnings of $1.04 per share for the current quarter, representing a year-over-year change of -4.6%. Over the last 30 days, the Zacks Consensus Estimate has changed +0.3%.

Glaxo has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of C.