Canaccord upgrades Intercept to Buy with focus on Ocaliva

Canaccord analyst Edward Nash upgraded Intercept Pharmaceuticals to Buy from Hold with a price target of $19, up from $12. Last week’s Complete Response Letter from the FDA in response to the accelerated approval application of obeticholic acid in nonalcoholic steatohepatitis was no surprise considering the negative panel vote in May, the analyst tells investors in a research note. With the NASH indication out of the picture, shares of Intercept are now valued purely on the company’s Ocaliva commercial operation, says the firm. It says there is now no clinical risk associated with the story and full focus will be on quarter-over-quarter Ocaliva revenue growth. Canaccord pegs Ocaliva’s valuation for primary biliary cholangitis $22.70 per share, with obeticholic acid in NASH costing $3.30 per share based on overhead allocation for the rest of 2023 as the program winds down.