From IPO to $400/share in Less Than 18 Months – Intercept Pharmaceuticals

Intercept Pharmaceuticals (NASDAQ:ICPT) is a small drug development company based in San Diego, CA. The company’s IPO was in October 2012 at close to $20/share, and the company enjoyed steady share price increase for 14 months. On January 8th of this year (2014) the per share price was a healthy $72. Then the company announced the phase 2 trial of its drug obeticholic acid for nonalcoholic steatohepatitis (NASH) would be stopped early due to strong efficacy results.

Intercept Chart

In two days the stock skyrocketed to close at $448.83/share on January 10th, a more than 600% increase. Volume increased approximately the same magnitude (~650K on 01/08/14 to almost 7 million shares on 01/09/14 and 6 million shares on 01/10/14.). This past Friday (02/22/14), the stock closed at $370.17 on low volume (250K compared to the average ~750K) . More details here.

According to Reuters, there are 10 million potential patients worldwide and there was previously no specific treatment available for NASH. Still, it is fascinating to me that many billions of dollars went into this company in a matter of days – a company that does not have agency approval, and has not made a single dime in profit.

A Wall Street Journal write-up from 01/10/14 is here.

What do you think?

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