UPDATED: Intercept restructures as Ocaliva's NASH hopes dashed again with FDA rejection

Even after a second application attempt, Intercept’s Ocaliva wasn’t the fatty liver disease breakthrough that the company had hoped it would be.

Three years after an initial rejection, the FDA once again turned down Ocaliva, or obeticholic acid, for nonalcoholic steatohepatitis (NASH) patients with stage 2 or 3 liver fibrosis, Intercept said Thursday.

The denial means patients with NASH will have to wait longer for the first FDA-approved therapy and that a market estimated to be worth multiple billions of dollars still awaits a winner. For Intercept, it also means it’s time for a new direction.

Intercept has decided to discontinue all NASH-related investment and restructure its operations, with the goal to save about $140 million in operating costs, the company said Friday. Measures it’s taking include winding down a long-term patient outcomes follow-up of the phase 3 REGENERATE study for Ocaliva in NASH. All R&D, commercial, medical affairs and administrative functions around NASH will stop.

The company will trim about a third of its workforce, with the majority of the layoffs done by the end of the year. As of the end of 2022, Intercept had 341 employees. The existing Ocaliva sales team will remain in place.

“We understand the implications of these changes on our employees and are committed to supporting them throughout this process,” Intercept CEO Jerry Durso said in a statement Friday.

The FDA’s complete response letter was largely expected after the agency raised concerns over the drug’s modest efficacy and range of safety problems. An external panel of experts followed that assessment with its own overwhelming vote against approval.

With the rejection, the FDA told Intercept that it must have long-term patient outcomes data if it ever wants to pursue an approval again. But Intercept doesn’t plan to go for a third try, having noted that it could take about three years to read out those clinical benefit results.

The company has suggested that continuing a long-term outcomes study without an approval in hand may not be economically feasible.

Ocaliva is currently approved in 5-mg and 10-mg daily regimens for primary biliary cholangitis (PBC), which is also a chronic liver disease. But the FDA added a warning to the drug’s prescribing information in 2021 because of risks of serious liver injury.

For NASH, Intercept proposed a 25-mg daily strength. In its pivotal study, the drug topped placebo at improving fibrosis with no worsening of NASH but showed no significant benefit on NASH resolution at 18 months. The REGENERATE study also revealed the potential for drug-induced liver injury in what the FDA described as a serious problem.

Liver fibrosis and NASH resolution are surrogate endpoints that measure liver status. The trial was also designed to evaluate whether Ocaliva can reduce death or other liver-related clinical progression or hospitalization. But Intercept has now abandoned that plan.

Instead, Intercept is shifting focus to PBC. It will prioritize R&D investment on its fixed-dose combination of Ocaliva and bezafibrate, a peroxisome proliferator-activated receptor agonist. The regimen is currently in midstage clinical testing, including two ongoing phase 2 dose-exploring trials that are expected to report interim data this year.

The NASH baton now passes on to Madrigal Pharmaceuticals, whose resmetirom now looks to be next in line for an FDA review, with a filing expected by the end of this month.

In its own phase 3 trial, Madrigal’s drug hit its goal on both NASH resolution and fibrosis improvement. Resmetirom at 80 mg and 100 mg helped 26% and 30% of patients, respectively, achieve NASH resolution with no worsening of fibrosis, versus 10% for placebo. About 24% and 26% of patients saw at least one stage of improvement in fibrosis while on the Madrigal drug’s two doses, respectively, compared with 14% for placebo. The data were presented at the ongoing European Association for the Study of the Liver Congress 2023.

What’s more, no drug-induced liver injury was reported in resmetirom’s MAESTRO-NASH trial.


Merck's efinopegdutide bests Ozempic in tease of phase 2 NASH data

Ocaliva’s negative review underscored the importance of having a clean safety profile when applying for an accelerated approval in NASH based on surrogate liver biopsy endpoints, SVB Securities analysts wrote in a note following the advisory committee meeting in May.

In that note, the SVB team said Madrigal’s resmetirom has less safety concern compared with Ocaliva. Besides, unlike Ocaliva, resmetirom also showed consistent histology benefits and also conferred significant improvements on other measures such as bad cholesterol, liver fat and lipoproteins, the analysts noted.

SVB has put resmetirom’s peak sales at about $2.5 billion in NASH. Madrigal will hold an investor call Saturday. 

Editor's note: The story was updated the morning of June 23 with additional information on Intercept's restructuring.

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