Intercept Tries to Outrun Big Pharma in Race for the Next Blockbuster
Source:

Riley Griffin, Bloomberg

April 10, 2019

Nearly two decades ago, doctor and venture capitalist Mark Pruzanski learned of a liver disease that could be lurking undetected in the bodies of tens of millions of people.

Since then, Pruzanski, founder and chief executive of Intercept Pharmaceuticals Inc., has hunted for a treatment for the disorder, known as nonalcoholic steatohepatitis, or NASH. The condition, marked by a buildup of fat and scarring in the liver, is thought to afflict 50 million Americans, many of them already sick from obesity and diabetes. Pruzanski, 51, has been inching closer to his goal; late-stage data released Wednesday confirmed the efficacy of Intercept’s medication, which the company calls OCA.

If approved, Intercept’s drug would be the first to market for NASH, though competitors are in pursuit. Gilead Sciences Inc., Pfizer Inc., Novartis AG, Allergan Plc, Merck & Co. and Bristol-Myers Squibb Co. are developing NASH drugs, as are dozens of biotechnology companies.

“There are so many players in the market, it’s like the Democratic field,” said Douglas Dieterich, director of the Institute for Liver Medicine at Mount Sinai Health System in New York. “This is a race to meet the ever-growing waistlines of America.”

Last month, Roth Capital Partners held a “Battle of the NASH Thrones” at the Park Hyatt in midtown New York. Bankers mingled with drug developers as executives were rumored to be stalking takeover targets. This week, the fight moves to Vienna, where Intercept will present its data at the European Association for the Study of the Liver’s annual International Liver Congress.

To make NASH drugs big hits, pharmaceutical companies will need to create an industrial complex around a disease few people have heard of and that many who suffer from it don’t realize they have. Its severity — and its need to be medicated — is difficult to determine without a painful biopsy.

“The burden of this disease is going to bankrupt our health-care system.”

NASH affects 15 percent of American adults and as many as 1 in 4 U.S. Hispanics, according to data that Pinnacle Clinical Research will present at the Liver Congress. The asymptomatic and slow-moving ailment can lead to cirrhosis and liver cancer. By 2020, it’s expected to overtake alcoholic liver disease as the leading cause of liver transplants, which can cost more than $500,000.

About 8 percent of patients who see their fatty liver disease progress die after seven years, according to Angers University Hospital in Angers, France. The new study was funded by Gilead, and will be presented at the Liver Congress.

Doctors encourage NASH patients to eat better and exercise more, but it’s an uphill fight, according to Sidney Barritt, a transplant hepatologist and associate professor of medicine at University of North Carolina at Chapel Hill. The number of Americans with obesity and type 2 diabetes keeps climbing, and more are being sickened by NASH.

“This isn’t just a medical issue, it’s a social and moral imperative,” said Barritt. “The burden of this disease is going to bankrupt our health-care system.”

NASH has granted drugmakers another chance to capitalize on the vast number of people with lifestyle-related health issues after failing to deliver on once-promising weight-loss medications.

In addition to researching therapies, the pharmaceutical giants are hunting for assets to buy. Pfizer Senior Vice President Morris Birnbaum, who leads the New York company’s internal medicine research division, said it is “having conversations and looking very hard” at biotechnology companies with late-stage NASH pipelines. Bristol-Myers has also said it’s looking for such deals.

Some doctors say that behavioral changes are the best option for those with earlier stages of the disease. They point to the regenerative capacity of the liver and the likelihood that NASH drugs will be costly and possibly produce unwanted side effects.

“There’s a need for pharmacological intervention, but taking a pill absolves us of doing the things we need to do, like staying active and eating healthy,” Barritt said. “We don’t know how this lifetime drug will work in the real world.”

Taking the Lead

Intercept’s OCA, which stands for obeticholic acid, is already prescribed for a bile-duct disorder. It’s part of a class of medications known as FXR agonists that have been shown to fight liver fibrosis, a type of scarring that occurs when the organ’s tissue is repeatedly damaged or inflamed. As the scarring progresses, the risk of other complications rises.

Data from Intercept’s late-stage clinical trial showed that 23.1 percent of patients who got the highest dose of OCA saw their fibrosis improve by one point or more on a four-point scale, compared with 11.9 percent of patients on a placebo. More than half experienced itching while on the highest dose, leading 9 percent of that group to stop treatment. Analysts don’t expect the itching to prevent U.S. approval.

“It’s been a long time coming,” said Pruzanski in an interview. “I knocked on a lot of doors, including Big Pharma. They turned me down, saying there was no regulatory pathway for the drug or that it wasn’t a real disease.”

Still, OCA is unlikely to be an immediate smash. For one, the company has to raise patient awareness. It may also need to convince symptomless people to undergo a cumbersome test.

Brian Harvey, executive vice president of the Global Liver Institute and a former Food and Drug Administration official, expects the regulator will initially require a biopsy to determine who should get the drug. To diagnose NASH for clinical trials, doctors have inserted a needle that can be as much as seven inches long through the abdomen and into the liver to remove tissue.

Skirting an invasive test would give patients an easier path to getting OCA. Imaging technologies exist that can quickly and cheaply reveal liver scarring and fat, and have already been used for informal diagnoses. Pruzanski said he’d be surprised if a biopsy was mandated on the drug’s label.

Stephen Harrison, the medical director of Pinnacle Clinical Research, said that payers are likely to suffer sticker-shock when they see the high cost of treating the large number of patients. Cigna Corp., the operator of one of the largest pharmacy-benefit managers, has signaled that it’s worried about the drug’s price.

Analysts estimate that OCA could cost as little as $5,000 a year or as much as $55,000. Intercept declined to provide details about its pricing plans.

Drugmakers have taken varying approaches to the complex disease, seeking to reduce and reverse liver fat, inflammation and ballooning of tissue, instead of tackling fibrosis. Pfizer, for example, is working on a treatment that targets fructose.

Rival drugmakers said that they are happy to follow Intercept. “We’ll be coming along in ample time,” said Paul Friedman, CEO of Madrigal Pharmaceuticals Inc., which has its own NASH drug in testing. Meanwhile, Intercept will bear the early market development risk, he said.

The hype around NASH can be hard to live up to. Intercept’s stock jumped more than 500 percent in early 2014, peaking at $462.26 a share, after a mid-stage NASH study showed promising results. The shares then plunged after the medicine ran into safety issues in a different condition. The stock now trades at about $122.

Harrison, who has been involved in researching OCA and other NASH drugs, says no single drugmaker will hold the throne for long. In the meantime, Pruzanski, who launched Intercept from a rental apartment 17 years ago, is closer to the finish line than ever — and less naïve than when he started.

“This is the wild west of biopharma,” Pruzanski said in his 37th-floor office overlooking New York’s glittering Hudson Yards development. “This is not for the faint of heart.”

Posted in: Approvals, Commercial

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