Intercept, Intercepted Before The NASH Goal Line

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Vision and Value


  • Intercept is popular with investors due to possibly being first to market in NASH.
  • Ocaliva has many problems to face in the NASH market.
  • NASH patients may be better off waiting for safer and more efficacious therapies.
  • Ocaliva has no long term competitive advantages in NASH.

Introduction: Theory Versus Reality


Anyone who has run a clinical trial, treated a patient, started a new medical practice, etc., knows that many good ideas are just not as effective in reality as they are on paper- the difference between those ideas and well-executed plans always comes down to the details.

In this article, I will explain why I do not believe that Intercept Pharmaceuticals' (NASDAQ:ICPT) Ocaliva is all that it is hyped up to be. While the drug may ultimately occupy a niche in the NASH field, I do not believe that Ocaliva is a key NASH drug, due to several issues in safety and efficacy data across multiple studies, and due to an insufficient framework to practically justify administering Ocaliva to patients or to practically monitor patient response to therapy.

Instead of discussing the modest efficacy of Ocaliva, doctors, investors, and patients must consider the practical and toxicological issues the drug will have in the real world.

A Key Detail: Monitoring Therapy

In Intercept's 18-month Phase 3 NASH study, the highest-dose Ocaliva reduced fibrosis stage one stage without worsening of NASH in 21% of patients, compared to 10.6% of placebo patients. For the drug to be profitable in NASH, Intercept will need insurers to pay for it, which will require patient monitoring.

The phase 3 REGENERATE study required invasive liver biopsies to determine response to therapy in patients with early-stage 2 and 3 liver fibrosis. Will this work in the real world insurance and hospital setting?

NASH is a "silent disease" and insurance companies may be hesitant to pay for a drug that requires invasive biopsies when the patient is symptomless, but liver biopsies are hardly innocuous. (Though with other liver diseases such as PBC, doctors check alkaline phosphotase levels and antimitochondrial antibodies, so repeat biopsies are not necessary.) And there is no alternative - as the situation currently stands, there are no accurate non-biopsy NASH fibrosis biomarkers available to allow doctors to monitor patients' responses to treatment. To monitor patients, elastography in conjunction with serum markers could be used to assess fibrosis score, but these measurements differentiate much better between cirrhosis and intermediate fibrosis rather than gradations; for instance, F2 and F3, or F1 and F2.

Since Ocaliva only had a delta 11% response rate in fibrosis reduction (compared to placebo), many patients could be taking Ocaliva for years and not be quite certain if Ocaliva has or will ever move the needle. In addition, the drug does a poor job of actually resolving NASH, as shown in the REGENERATE trial topline results. Meanwhile, the many toxicity risks of the drug could be mounting up. See, the modest efficacy would not be an issue if the drug wasn't expensive and if there were no toxicity risks. But, that is not the case.

The following figure shows the relative 10-year liver event risk from F0 to F4 cirrhosis. Here, one can see at a glance why insurance companies may hesitate to pay, and why doctors may hesitate to prescribe a drug that requires invasive biopsy and has serious toxicity risks, weighed against the relatively small risk of a liver event in F2 and F3.


Are doctors really going to dose NASH patients without following their development, while there are potential toxicities? Well, not every patient is the same. Some will respond and some won't. If Ocaliva isn't working, doctors and patients need to know. If it is, and fibrosis is reduced to innocuous levels, doctors and patients should know - do you stop administering the drug at that point, or do you keep dosing?

Furthermore, if inflammation isn't reduced but fibrosis is, one still needs a lifestyle change. How else does one find out besides biopsy, which has a 1/1,000 mortality rate? Does a patient want to spend money on drugs, and time and money on biopsies, when he or she currently has little to no symptoms and can make a lifestyle change? Will a physician administer a drug to a patient when there is no way to truly follow through except for another biopsy?

The Fly quoted a UBS analyst as saying that Ocaliva reimbursement will "take time". I believe that the questions posed above are some of the reasons insurance companies will not be itching to reimburse Ocaliva for NASH.

Future Liver Complications Versus Impending Treatment Induced Complications

Speaking of itching, in my last general article, "Gilead's Mousetrap", covering NASH antifibrotics and Gilead's (GILD) selonsertib failure, I gave multiple reasons why Gilead would surely not acquire Intercept. Intrigued by a NASH "leader" with a problematic drug, there were a variety of toxicity and adverse event questions raised. In summary for those who did not read the previous article, bile acids such as Ocaliva undergo enterohepatic circulation, which means that they are circulated in the body as shown in the picture below:


The implications for a bile acid drug that can promote cholestasis, or bile acid buildup (reduction or stoppage of bile flow) and that is an FXR agonist are: (1) cholestasis causing pruritus, which can be absolutely unbearable and significantly reduce a patient's overall quality of life, (2) induction of a great increase in FGF19, which is tumorigenic in some organs, (3) induction of apoptosis in cardiomyocytes via FXR signaling, which can cause dangerous cardiac issues such as arrhythmia, and (4) accumulation of hydrophobic bile acids due to cholestasis, causing liver inflammation and injury.

Outside of the NASH issues, we already know that Ocaliva's safety record isn't exactly clean. Intercept's currently approved indication of primary biliary cholangitis had some patient deaths reported in late 2017. Intercept claimed that doctors prescribed the wrong doses in an already weak population that had a high mortality risk without the drug, saying that it "just takes time for some physicians to truly understand how to appropriately prescribe a drug", essentially blaming doctors. This is the equivalent of saying that "it takes a while for a rocket scientist to understand how to calculate the force of gravity!" According to FiercePharma, "...the agency said Ocaliva may be associated with liver damage even in patients with mild PBC who'd been taking the correct dose."

Also, the French Formulary has currently banned doctors from prescribing Ocaliva. Some of these deaths were suspiciously deemed cardiovascular in nature; but that does not pass the "sniff test." Interestingly enough, those safety risks are, by no means, representative of all the problems Intercept must address regarding Ocaliva.

Additional Toxicities

There is an eye-opening, vast number of different toxicities that obeticholic acid may present to patients that I did not outline in my previous article. These toxicities can be very serious and are precisely what a patient with an asymptomatic disease that can naturally reverse needs to avoid. For instance, imagine someone with NASH fibrosis, who was never going to develop cirrhosis, develop acute kidney injury induced from Ocaliva. What would the patient's doctor say? "Oops!"?!? Below are the details of the aforementioned additional toxicities. (Keep in mind that issues arising from cholestasis are increasingly issues for later stages, where scarring disturbs the normal bile acid flow control systems. Ocaliva should not be as toxic in early-stage patients.)

Some make the argument that Ocaliva reduces bile acid synthesis - well, that may be true. However, at the end of the day, Ocaliva is a bile acid and exogenous additions of bile acids to the body when the liver is damaged is not good. The impaired liver is different than a normally functioning liver in terms of bile acid handling. Excess bile acid will spill over and become systemic, causing the issues discussed previously. Below, one can see the systemic exposure of Ocaliva compared to regular bile acids in various severities of liver impairment.


Hepatobiliary Toxicity

Gallstones are an inherent risk in chronic liver disease (CLD) patients. This complication can be quite problematic, and obeticholic acid can increase rates of gallstone formation. First, as per this review, in general, the frequency of gallstones in patients with CLD ranges from 3.6% to 46%, with an up-to-five-fold increase compared with the general population. So, gallstones are already substantially increased in CLD patients compared to the general population.


To compound on that effect, obeticholic acid has recently been observed to increase the risk of gallstone formation in susceptible patients. The theory is that obeticholic acid increases several risks for gallstone formation: decreasing gallbladder bile acids, increasing the biliary cholesterol saturation index, increasing the bile acid hydrophobicity index, and increasing the formation of cholangiocellular FGF19 (which was already discussed as a long term cancer risk in my prior article, "Gilead's Mousetrap", linked above). Below is a picture that summarizes the multiple increased risks explained.


This recent data showed that OCA may increase gallstone formation risks; indeed, Intercept detected this in their REGENERATE trial, with over three times as many patients on OCA 25mg forming gallstones compared to placebo.

NAFLD is also a specific risk factor for gallstones because of shared risk factors for NAFLD and gallbladder disease (GD). In addition, the risk of GD increases from about 15% in early NASH patients to 29% in F3 patients. When patients reach cirrhosis, the prevalence increases to a 56%. Clearly, these diseases are comorbidities [1,2,3,4], and the idea that Ocaliva can increase gallbladder disease prevalence in the NASH patient population that is already at risk is startling.

Why does all of this matter? This does not simply imply that some Ocaliva patients with recurrent gallbladder attacks should go get a cholecystectomy (which is one of the most common surgeries in the United States). Gallstones and liver cirrhosis are a deadly combination. Patients who have liver cirrhosis are more likely to get a cholecystectomy for emergent reasons compared to those without liver disease. These patients with liver cirrhosis have higher postoperative mortality - between 7.5 and 25% [5,6,7,8] - so the ultimate risk is of death, not simply gallstone pain.

However, recent advances in surgery have shown similar morbidity and mortality in early cirrhosis patients compared to the non-cirrhotic patient. Child-Pugh Class C patients undergoing cholecystectomy are more prone to acute liver failure, hepatic encephalopathy, acute respiratory distress syndrome (very high mortality), acute renal failure, sepsis, and death, compared to Class A or B patients, so it is hard to draw any conclusions.

There is one conclusion that can be drawn: the last thing a cirrhotic NASH patient needs is gallstones or gallstone pancreatitis. NASH patients are already at risk, and the state of their health will strongly diminish with gallstone formation. They do not need a drug that increases their risk of the painful and hazardous situation of a gallbladder obstruction.


Ocaliva used in later stage NASH patients also presents the risk of kidney injury [11,12,13]. Hepatocytes under cholestatic conditions attempt to limit increasing hepatocellular levels of bile acids and bilirubin via an alternate route. They induce basolateral hepatocellular export, which increases alternative elimination through the kidney. In cholestasis, increased urinary excretion of bile acids results from an increase in filtered bile acids which exceeds the capacity for tubular reabsorption and secretion. This is precisely what may cause renal injury. As stated in a recent cholemic nephropathy review:

"[Bile acids are] hypothesized to directly cause oxidative damage to tubular cell membranes with subsequent release of vasoactive mediators that in turn affect renal function through renal vasoconstriction and thus reduce GFR. In addition, the most recent published evidence from animal studies supports a pivotal role for bile acids in CN."

A picture of this process is shown below.


Why is Intercept putting two potentially nephrotoxic drugs together? Bezafibrate shows an increase in creatinine levels of about 5% on average in PBC patients. This could increase the likelihood of hepatorenal syndrome on top of the cholemic nephropathy risk when taking Ocaliva for NASH. While not necessarily a huge risk in earlier-stage patients, Cholemic nephropathy could pose a significant risk in later stage NASH patients.

Hepatic Toxicity

All in all, Ocaliva can actually increase a patients' overall risk of liver failure for cirrhosis patients (in PBC), which is precisely the primary problem to avoid. These risks carry over to NASH cirrhosis patients and imply a possible intolerance of Ocaliva later stage NASH fibrosis patients, in addition to having no efficacy in reversing the steatotic component of NASH, while reducing levels of HDL-C and increasing LDL-C. And that leads to the final health risk briefly mentioned in this review: an increased risk of coronary artery disease

Coronary Artery Disease Risk

Finally and briefly, decreased bile acid synthesis is a substantial risk factor in coronary artery disease. This is presumably because of the increased cholesterol resulting from decreased bile acid secretion. Bile acid synthesis is a major path of cholesterol metabolism.

Safety Conclusion

Clearly, this long list of toxicities underscores the issues with Ocaliva in NASH treatment, especially for later stages of the disease. However, toxicity issues are not the only problem. There are also some recent studies done that call into question Ocaliva's efficacy, which is truly peculiar.

New Data Challenging Ocaliva's Efficacy

Presumably, obeticholic acid is an antifibrotic - various data, including the Phase 3 REGENERATE trial, suggest that. Given Ocaliva is an antifibrotic, why did the Scripps and ContraVir (CTRV) preclinical human liver slice model, touted in Hepatology as an excellent NASH model, show almost no antifibrotic Ocaliva activity? In addition, other preclinical models - murine CCl 4 induced fibrosis [9] and human multilineage 3D spheroid [10] - show hardly any antifibrotic activity. Multiple recent preclinical models are challenging the data. One preclinical study may be an outlier, a hoax. However, multiple recent preclinical studies show little or no antifibrotic activity in various models...

As a baseball or football analogy, consider a major leaguer such as Ocaliva which passed a phase 3 and is ready for commercialization and put him back in AA baseball or high school football. He should be tearing up those leagues. Instead, he is striking out or throw interceptions. Multiple interceptions. Something with the data seems very, very wrong.

Even the scientific community is questioning OCA as a monotherapy antifibrotic and attempts are being made to combine with other drugs:

"However, recent clinical trials indicated that OCA might not be effective against liver fibrosis, possibly due to the lower dosage to reduce the incidence of the side-effect of pruritus"

In the REGENERATE trial, Ocaliva showed antifibrotic activity in 21% versus 11% percent in controls of one stage or higher, which is about a 1/10 increase in fibrosis reduction in only about ⅕ of patients total (in the higher dose arm). Even if one dismisses the recent models that call into question the phase 3 results, the potential side effects - especially in an F3 patient who is progressing to cirrhosis (after all, it looks like approximately 80% will) - are not worth the drug's benefits. The first role of a doctor is to do no harm - "primum non nocere".

Market Assessment for Ocaliva

There are clearly serious long term issues with Ocaliva as a viable candidate in NASH treatment. It is critical to constrain healthcare costs and treat patients with advanced NASH. Ocaliva presents issues in advanced NASH, and these issues would be ameliorated by using a synthetic, non-bile acid FXR agonist.

In early-stage NASH, there is hardly any incentive or urgency for patients to keep taking the drug with all its potential issues, above and beyond itching. Also in early-stage NASH, there is less reimbursement leverage. Furthermore, in early-stage NASH, Ocaliva has not been shown to have much of an effect on NASH resolution or steatosis per multiple studies; therefore why administer OCA as opposed to another drug such as a PPAR agonist or THR-b agonist that can address the underlying problem? Due to these issues, I believe that, in the long run, Ocaliva will have negligible sales across the NASH spectrum.

In addition, Ocaliva will likely run into serious problems surviving as a player in PBC. In a recent article in Hepatology June 2019, Clinical Director of Liver Transplantation and Director of Autoimmune and Cholestatic Liver Center at Harvard, Daniel Pratt, MD, suggests that "PPAR agonists have the potential to be a more-effective, better-tolerated second line therapy [to UDCA] in treatment of PBC than the FXR agonists" (The Role of Bezafibrate, a Peroxisome Proliferator-Activated Receptor Alpha Agonist, in Patients With Primary Biliary Cholangitis).

He recommends that patients who cannot tolerate OCA, do not want to take OCA, or are nonresponders for OCA could be considered for off label treatment with fenofibrate or could be referred to a clinical trial.

In summary, a leading liver expert at Harvard suggests using another drug for PBC, so Intercept can't even count on revenues from PBC in the future. Basically, he is saying that if patients don't tolerate or respond to ursodeoxycholic acid, they should go for the PPARs. Intercept throws another interception.

I will not attempt to create an approximate revenue forecast for Ocaliva; it is a silly exercise to try to generate reimbursement rates, market penetration rates, etc. for such an inferior drug. Perhaps a business perspective will help, rather than a revenue forecast and price target.

Jack Welch, famous General Electric (GE) CEO, notably stated that GE should only continue to do business in areas where it was number 1 or number 2. For the laggards, he explained: "When you're number four or five in a market, when number one sneezes, you get pneumonia."

Being first to market for a few years when the drug development cycle is so long doesn't make the company number 1 or even number 2. Investors should make sure that they are investing in best-in-class drugs in the healthcare sector. I believe Ocaliva falls far behind best-in-class. While their discovery pipeline and/or combinations developed may be more promising, investors should consider staying away from the stock until the company can develop a real advantage. That advantage may materialize in an OCA/bezafibrate combination, which needs to show superior efficacy and safety compared to the competition. Still, they will be combining bezafibrate with an inferior FXR.


When it comes to Intercept, in my opinion, there are more questions and problems than answers. What do these questions mean for future sales? It is hard to say. Does first-mover advantage mean anything when there will be an army of other drugs in coming years that have much better safety profiles and actually reduce inflammation? From a broad perspective, Ocaliva seems to be a mediocre drug that has questionable benefit vs. risk for the average NASH patient. However, when understanding the details of dosing a person -an individual - there is very little this drug has to offer.

Will patients and doctors spend money to risk the cholestasis, cholecardia, pruritus, possible cholemic nephropathy, long term cancer risks, hepatorenal syndrome, coronary artery disease, and even liver failure, or will they make lifestyle changes or take no action? I see no current flowchart to avoid administering Ocaliva to those who will have problems, and I see no clear way to monitor individual patient response if the drug is administered.

NASH patients typically have multiple comorbidities such as diabetes and hypertension. Physicians must do no harm. As a drug with minimal efficacy and no current way to truly, accurately monitor its effectiveness, Ocaliva is severely limited in the commercial field. Potential toxicities that go far beyond itching, and if given open-ended and for a long period of time, could manifest as the patient progress from an inflammation predominant NASH to a Fibrosis predominant disease. Toxicities in this situation will overwhelm any benefit that the drug might have to offer, since the efficacy is so modest.

When a drug only measurably works in a small percentage of the desired population and can cause damage to the majority of the people who have been placed on it, it is not a good drug. Other liver experts share the same concern: the efficacy is too weak for the side effect profile.

While I may be ultimately wrong, I am not betting on Ocaliva selling well, and I hope for patients' sakes that they approach their NASH problems with PPAR agonists and/or lifestyle changes instead. However, in Intercept's defense, if they can find a way to identify and easily monitor patients (like with serum biomarkers and elastography) who will respond to and not suffer from side effects of Ocaliva, the drug may be able to carve out a niche in the NASH market.

Another idea might be to combine Ocaliva with another NASH drug, in order to minimize side effects and maximize efficacy, but unfortunately, it looks like they have chosen another nephrotoxic drug, bezafibrate.

Finally, will the benefits of using non-bile acid FXR agonists prove that Ocaliva has no competitive advantages over other FXR drugs in NASH? I find it very likely that another drug such with higher efficacy and/or lower toxicity, such as Gilead or Novartis' (NVS) non-bile acid FXR agonist or some kind of PPAR agonist such as Genfit's (GNFT) elafibranor, will be the kiss of death to Ocaliva in NASH.

Editor's Note: This article covers one or more microcap stocks. Please be aware of the risks associated with these stocks.

This article was written by

Vision and Value profile picture
Investor and small business owner, mechanical engineer

Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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