ICPT - Intercept Pharmaceuticals: Regulatory Challenges Offset The Bargain

• OCA, Intercept’s only commercialized product, is undergoing an FDA investigation on its safety.
• Once battered by a failed FDA approval for OCA as a NASH therapy, the stock slumped to trade near a 52-week low last week.
• The top-line growth hurt by the pandemic’s impact will slow even further due to reputational damage, and the regulatory path for OCA for the NASH approval hangs in the balance.
• With no reason to upgrade the current trading multiple, my optimistic revenue forecast identifies a thin premium that is not adequate to offset the uncertainties ahead.
• Despite Intercept’s dominance in experimental NASH therapeutics, I, therefore, maintain my neutral view on the stock.

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