NEW YORK, Aug. 10, 2020 (GLOBE NEWSWIRE) -- Intercept Pharmaceuticals, Inc. (Nasdaq: ICPT), a biopharmaceutical company focused on the development and commercialization of novel therapeutics to treat progressive non-viral liver diseases, today announced its financial results for the quarter ended June 30, 2020.

“Our PBC business achieved its highest quarterly net sales to date in the second quarter,” said Mark Pruzanski, M.D., President and Chief Executive Officer of Intercept. “We plan to continue to invest in our growing PBC business and announced 2020 Ocaliva net sales guidance earlier this morning. We anticipate that our Ocaliva net sales, together with the announced reduction in our 2020 non-GAAP adjusted operating expense guidance, will help to ensure that we are financially well positioned to support the path forward in NASH. In the meantime, we are preparing to meet with the FDA to discuss the basis for resubmission of our NDA seeking accelerated approval of OCA for the treatment of advanced fibrosis due to NASH, and continue to believe that OCA has the potential to become the foundational treatment for these patients. I am encouraged by the outpouring of support we have received from the liver community in recent weeks and we remain committed to our goal of bringing the first therapy to market for patients with this serious condition.”

Ocaliva® (obeticholic acid) Commercial Highlights

We recognized $77.2 million of Ocaliva net sales in the second quarter of 2020, as compared to $65.9 million in the prior year quarter. Ocaliva net sales in the second quarter of 2020 were comprised of U.S. net sales of $59.6 million and ex-U.S. net sales of $17.6 million, as compared to U.S. net sales of $50.7 million and ex-U.S. net sales of $15.2 million in the prior year quarter.

Selected Second Quarter 2020 Financial Results

Revenues

We recognized $77.2 million in total revenue in the second quarter of 2020, as compared to $66.3 million in total revenue in the prior year quarter. Total revenue in the second quarter of 2019 included approximately $0.4 million of licensing revenue.

Operating Expenses

Our cost of sales were $1.9 million in the second quarter of 2020, as compared to $0.7 million in the prior year quarter. Our cost of sales for the quarters ended June 30, 2020 and 2019 consisted primarily of packaging, labeling, materials and related expenses.

Our selling, general and administrative expenses increased to $93.4 million in the second quarter of 2020, from $69.7 million in the prior year quarter. The increase was primarily driven by activities associated with our preparation for the potential approval and commercialization of obeticholic acid (OCA) for liver fibrosis due to nonalcoholic steatohepatitis (NASH).

Our research and development expenses decreased to $34.0 million in the second quarter of 2020, down from $59.6 million in the prior year quarter. The decrease was primarily driven by UK R&D tax credits of $22.0 million recognized as a reduction of research and development expenses during the three months ended June 30, 2020, and lower NASH development costs, based on the completion of enrollment activities for our Phase 3 REGENERATE and REVERSE studies prior to the start of the second quarter of 2020.

In the quarters ended June 30, 2020 and 2019, we recorded $129.3 million and $130.0 million, respectively, in total operating expenses and $112.4 million and $114.2 million, respectively, in non-GAAP adjusted operating expenses, which excludes non-cash stock-based compensation expense of $16.1 million and $14.8 million, respectively, and depreciation expense of $0.8 million and $0.9 million, respectively.

References in this press release to “non-GAAP adjusted operating expenses” mean our total operating expenses, as calculated and presented in accordance with U.S. Generally Accepted Accounting Principles (“GAAP”), adjusted for the effects of two non-cash items: stock-based compensation and depreciation. See “Non-GAAP Financial Measures” below. A reconciliation of non-GAAP adjusted operating expenses to total operating expenses for all historical periods presented is included below under the heading “Reconciliation of Non-GAAP Adjusted Operating Expenses to Total Operating Expenses.”

Interest Expense

Interest expense in the quarters ended June 30, 2020 and 2019 was $11.9 million and $9.9 million, respectively. For the quarter ended June 30, 2020, interest expense related to the $460.0 million aggregate principal amount of 3.25% Convertible Senior Notes due 2023 that we issued in July 2016 and the $230.0 million aggregate principal amount of 2.00% Convertible Senior Notes due 2026 (the “2026 Convertible Notes”) that we issued in May 2019.

Net Loss

In the second quarter of 2020 we reported a net loss of $63.3 million, a decrease compared to a net loss of $71.4 million in the second quarter 2019.

Cash Position

As of June 30, 2020, we had cash, cash equivalents, restricted cash, and investment debt securities available for sale of approximately $540.6 million. As of December 31, 2019, we had cash, cash equivalents, restricted cash, and investment debt securities available for sale of approximately $657.4 million.

2020 Financial Guidance

On June 29, 2020, we announced that the U.S. Food and Drug Administration (FDA) had issued a Complete Response Letter (CRL) regarding our New Drug Application (NDA) for OCA for the treatment fibrosis due to NASH. As a result, we no longer expect to launch OCA for NASH in 2020.

We are announcing 2020 Ocaliva net sales guidance of $300 million to $320 million, and lowering our previously announced 2020 non-GAAP adjusted operating expenses guidance by $100 million to a range of $460 million to $500 million from a range of $560 million to $600 million.

See “Non-GAAP Financial Measures” below. A quantitative reconciliation of projected non-GAAP adjusted operating expenses to total operating expenses is not available without unreasonable effort primarily due to our inability to predict with reasonable certainty the amount of future stock-based compensation expense.

About Intercept

Intercept is a biopharmaceutical company focused on the development and commercialization of novel therapeutics to treat progressive non-viral liver diseases, including primary biliary cholangitis (PBC) and nonalcoholic steatohepatitis (NASH). Founded in 2002 in New York, Intercept has operations in the United States, Europe and Canada. For more information, please visit www.interceptpharma.com or connect with the company on Twitter and LinkedIn.