Biopharma Co. Licenses Orphan Drug to UK Firm for $450M

May 9, 2022

Source: Streetwise Reports   05/05/2022

Intercept Pharmaceuticals Inc. shares traded 20% higher after the company reported it entered into a $450 million licensing agreement with Advanz Pharma in markets outside of the U.S. for Ocaliva® for use in treatment of primary biliary cholangitis, a progressive and chronic autoimmune disease which affects the liver.

Telemedicine

Biopharmaceutical company Intercept Pharmaceuticals Inc. (ICPT:NASDAQ), which concentrates its efforts on developing and commercializing medicines to treat non-viral liver diseases, today announced “it has entered into an agreement to sell to Advanz Pharma, a pharmaceutical company with a strategic focus on specialty and hospital pharmaceuticals in Europe, certain foreign subsidiaries and rights regarding Intercept’s international operations, including a license to commercialize Ocaliva® (obeticholic acid) outside of the U.S.”

Intercept Pharmaceuticals’ President and CEO Jerry Durso commented, “This agreement marks an important step forward for Intercept as the value it brings to our company allows us to significantly strengthen our balance sheet while providing us with greater strategic optionality during this transformational year and beyond…We are committed to investing in our core focus areas in the U.S., including our PBC business, potential future activities in NASH, and our advancing and expanding pipeline. At the same time, we are confident that the strong international team will continue to build on our successful PBC business as they transition to Advanz Pharma.”

Under the terms of the agreement that in aggregate is valued up to $450 million, Advanz Pharma is required to pay Intercept Pharmaceuticals an upfront payment of $405 million and an additional payment of $45 million if Advanz Pharma is successful in receiving an extension of pediatric orphan exclusivity in Europe.

In addition, Intercept will also be entitled to receive royalties on future net sales of obeticholic acid in nonalcoholic steatohepatitis (NASH) outside of the U.S. in the event that Advanz Pharma elects to pursue marketing authorization for this indication in areas outside of the U.S.


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The agreement provides that Intercept will continue to be tasked with the global manufacture and supply of obeticholic acid with Advanz Pharma assuming responsibility for product packaging, distribution and marketing in its assigned territories.

The company noted that the most of its staff outside of the U.S. will be integrated into Advanz Pharma as employees though a small number of them will remain employees of Intercept.

Intercept stated that the transaction is expected to close within two to three months but remains subject to ordinary to closing conditions and regulatory requirements.

The company advised that the European Commission granted conditional approval for Ocaliva in combination with ursodeoxycholic acid (UDCA) and as a monotherapy for use in treatment of PBC. The firm stated that Ocaliva has now been approved in over 40 countries.

Intercept Pharmaceuticals is a biopharma firm based in Morriston, N.J. that focuses on developing and commercializing therapeutics for use in treating non-viral, progressive liver diseases such as primary biliary cholangitis (PBC) and nonalcoholic steatohepatitis (NASH). The company has operations in the U.S., Canada and Europe.

The company explained that “Ocaliva® (obeticholic acid) is a farnesoid X receptor (FXR) agonist that is indicated for the treatment of adult patients with primary biliary cholangitis (PBC) without cirrhosis or with compensated cirrhosis who do not have evidence of portal hypertension, either in combination with ursodeoxycholic acid (UDCA) with an inadequate response to UDCA or as monotherapy in patients unable to tolerate UDCA.”

Advanz Pharma is headquartered in London and manages greater than 175 well products in over 75 countries. The company has a network of commercial partners worldwide and offers expertise in management, direct sales, marketing, and various medical capabilities. The firm has vast experience in the areas of anti-infectives, central nervous system, critical care, endocrinology and oncology.

Intercept started the day with a market cap of around $481.1 million with approximately 29.71 million shares outstanding and a short interest of about 27.7%. ICPT shares opened 19% higher today at $19.32 (+$3.13, +18.84%) over yesterday’s $16.19 closing price. The stock has traded today between $17.30 and $19.65 per share and is currently trading at $19.425 (+$3.235, +19.98%).

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