Intercept to Cut 25% of Workforce after NASH Treatment Rejection from FDA

Intercept Pharmaceuticals plans to lay off 25% of its workforce, approximately 170 jobs, after its nonalcoholic steatohepatitis (NASH) treatment application for obeticholic acid (OCA) was rejected by the U.S. Food and Drug Administration (FDA).

In a Securities and Exchange Commission filing Tuesday, Intercept announced plans to cut 25% of its workforce. The company will take an $18 million charge in connection with the downsizing for severance pay as well as other termination-related costs.

The CRL indicated that, based on the data the FDA has reviewed to date, the Agency has determined the predicted benefit of OCA based on a surrogate histopathologic endpoint remains uncertain and does not sufficiently outweigh the potential risks to support accelerated approval for the treatment of patients with liver fibrosis due to NASH. The FDA recommends that Intercept submit additional post-interim analysis efficacy and safety data from the ongoing REGENERATE study in support of potential accelerated approval and that the long-term outcomes phase of the study should continue.

“At no point during the review did the FDA communicate that OCA was not approvable on an accelerated basis, and we strongly believe that the totality of data submitted to date both meet the requirements of the Agency’s own guidance and clearly support the positive benefit-risk profile of OCA,” said Mark Pruzanski, M.D., President and CEO of Intercept. “We are disappointed to see the determination the Agency has reached based on an apparently incomplete review, and without having provided medical experts and patients the opportunity to be heard at the anticipated Adcom on the merits of OCA, which is a designated Breakthrough Therapy. The FDA has progressively increased the complexity of the histologic endpoints, creating a very high bar that only OCA has so far met in a pivotal Phase 3 study. On behalf of the hepatology community, we are very concerned that the Agency’s apparently still evolving expectations will make it exceedingly challenging to bring innovative therapies to NASH patients with high unmet medical need. We plan to meet as soon as possible with the FDA to review the CRL and discuss options for an efficient path forward to approval.”