Regulatory Intercept Abandons NASH Research, Lays Off Staff After FDA...

Intercept Abandons NASH Research, Lays Off Staff After FDA Rejection


In 2020, the FDA rejected Intercept’s medicine and requested completion of a Phase 3 trial before reapplication. Intercept instead sought “accelerated” approval based on surrogate markers, but both the FDA and an advisory committee remained unconvinced. As a result, Intercept has made the decision to discontinue NASH research and lay off employees. 

The company will now focus on a lower-dose version of OCA called Ocaliva, used to treat primary biliary cholangitis (PBC). TIntercept, a previously unknown biotech firm, gained sudden attention when its Phase 2 trial of obeticholic acid (OCA) showed promising results. The drug targeted NASH, a liver disease affecting millions worldwide. With soaring stock prices and competitors unable to match its success, Intercept led the race to bring a NASH treatment to market. 

However, as more data was gathered, the benefits of OCA became less certain and safety concerns, particularly drug-induced liver injury, became apparent.his strategic shift involves shutting down the Phase 3 study, REGENERATE, and cutting all other NASH-related spending, resulting in a reduction of approximately one-third of the workforce, totaling 341 employees by the end of 2022. The layoffs are projected to save Intercept around $140 million annually and pave the way for profitability in 2024.

While Intercept redirects its efforts towards the PBC market, it faces competition from rival drugs developed by Genfit and Cymabay Therapeutics, which are expected to release study results this year. These competitors possess potential advantages in terms of efficacy and safety, posing a risk to Intercept’s market share, as highlighted by RBC Capital Markets analyst Brian Abrahams.

Additionally, Intercept plans to invest in the development of a fixed-dose combination of OCA and bezafibrate, currently undergoing Phase 2 testing. The company believes that this combination therapy may offer enhanced effectiveness compared to using OCA alone.

Intercept’s cost-cutting measures and strategic realignment align with their goal of achieving profitability in 2024. In 2022, Ocaliva generated sales of $343 million worldwide, with a projected slight decrease to between $310 million and $340 million in 2023.

Despite the setback in NASH research, Intercept remains committed to meeting post-marketing requirements for Ocaliva’s use in PBC treatment. The company anticipates submitting a regulatory application to the FDA in 2023 to fulfill these obligations.

This rejection from the FDA marks Intercept’s second unsuccessful attempt to gain approval for OCA. The initial New Drug Application (NDA) filed in 2019 was accepted but later declined in 2020 due to insufficient evidence establishing a favorable risk-benefit profile for the drug. In response, Intercept initiated the REGENERATE study, which led to a resubmission of the NDA in 2022, accepted by the FDA in 2023. However, it appears that this second rejection is final.

Intercept’s restructuring initiative aims to refocus its operations and strengthen its commitment to rare and serious liver diseases. CEO Jerry Durso emphasizes that reshaping the company will enhance long-term growth, drive patient-centered innovation, and create value for shareholders.

OCA, an agonist of the farnesoid X receptor, gained FDA approval in 2016 under the brand name Ocaliva for the treatment of primary biliary cholangitis. The oral drug carries a boxed warning regarding the risk of hepatic decompensation and failure. Intercept’s decision to shift its focus to PBC reflects their confidence in the potential of Ocaliva as the sole FDA-approved second-line treatment for PBC patients.

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