Since its launch in 2016, Ocaliva (obeticolic acid) has not only failed to successfully develop a new indication for MASH, but also struggled to survive in primary biliary cirrhosis (PBC), and is now facing regulatory scrutiny once again.

Recently, the FDA released a pre conference briefing document questioning the effectiveness and safety of Ocaliva for PBC in its approved indications.

In this briefing document, the FDA criticized two clinical studies, 747-302 and 747-405.

The FDA pointed out that the 747-302 trial failed to demonstrate statistically significant benefits of Ocaliva for PBC, but instead increased the risk of liver transplantation or death in patients. For 747-405, the clinical trial did not meet sufficient and well controlled regulatory standards.

Today, members of the FDA Expert Advisory Committee will vote on whether to convert it from accelerated approval to full approval.

Out of NASH

Ocaliva is a potent and specific agonist of the farnesol X receptor (FXR), developed by Intercept Corporation.

In May 2016, it was conditionally accelerated approved by the FDA as a second-line treatment for primary biliary cirrhosis (PBC). On December 12, 2016, it was approved for listing in the European Union. Ocaliva is also the first drug approved for the treatment of PBC in nearly 20 years.

Because this indication must be based on the premise that ursodeoxycholic acid is not applicable/has poor effect, and PBC itself has a small number of patients, which is a rare disease in clinical practice. The incidence rate of the general population is about 10-250/million. Therefore, the sales of Obey Cholic Acid has grown very slowly. After years of listing, Intercept has still not made a profit by virtue of Ocaliva.

Intercept urgently needs to expand into new indications, and NASH is a very lucrative blue ocean market. If approved, it will greatly expand its Ocaliva sales space.

Ocaliva was quickly granted breakthrough drug qualification by the FDA for the treatment of MASH liver fibrosis and became the first MASH candidate product to survive Phase III clinical trials. In September 2019, Intercept submitted a new drug application for Ocaliva to the FDA for the treatment of MASH.

However, surprisingly, the product was rejected by the FDA in June 2020. The FDA stated in its complete response letter that the benefits it can predict based on alternative histopathological endpoints are uncertain, and recommended that Intercept provide follow-up efficacy and safety data for the ongoing REGENREATE clinical study.

Although the listing application was rejected, Intercept did not give up. Based on the mid-term analysis data from the Phase III REGENERATE study, the NDA will be resubmitted in December 2022.

However, Ocaliva failed to dispel her doubts. On May 19, 2023, the FDA Gastrointestinal Drug Expert Advisory Committee (GIDAC) voted 12-2 against approval, and soon (June 22, 2023), the Intercept received the FDA's second CRL as scheduled.

The second rejection made it impossible for Intercept to continue advancing. The day after the announcement, Intercept announced the cessation of development for all MASH related projects and laid off one-third of its workforce.

Two pharmaceutical companies injured

Even after being completely kicked out of MASH and retreating to PBC as an indication, Intercept still caught the attention of a buyer.

On September 26, 2023, Intercept agreed to Alfasigma's offer of $19 per share (approximately $800 million) to sell Alfasigma for approximately $800 million, which is an 82% premium to Intercept's closing price on September 25.

Several Wall Street investment bank analysts also believe that this merger and acquisition transaction is a huge return for Intercept investors as it sells without losing money. Shortly after the announcement of the acquisition, Intercept's stock price soared by nearly 80%.

In Alfasigma's consideration, it may also be considered a good deal. Although Ocaliva's sales were far below the initial expectations, they remained stable at over $200 million. After 3-5 years, Alfasigma is expected to recoup its costs.

However, if it cannot obtain full FDA approval this time and therefore cannot continue to be marketed for sale, Intercep may be a loss making asset for Alfasigma.

Alfasigma is not the only one closely related to Ocaliva's fate. Advanz Company owns equity in Ocaliva outside of the United States. In 2022, Advanz acquired most of Intercept's subsidiaries and product equity outside of Europe, Canada, and the United States for a down payment of $405 million, including Ocaliva.

Recently, Ocaliva has experienced a delisting crisis in Europe. On September 3, 2024, the European Commission made a decision to revoke Ocaliva's conditional marketing authorization in Europe, as the drug was re evaluated and deemed to have greater risks than benefits. However, a turning point occurred within two days - the EU General Court resolutely ordered the suspension of the European Commission's decision.

In addition to regulation, Ocaliva is currently facing market competition, with Gilead's Livdelzi and Ipsen's Iqirvo having received FDA approval for the treatment of PBC.

Another group of generic drugs have been affected, and currently, generic drugs of obeticolic acid have been launched in countries such as the United States and Canada. There are also many generic drugs under development or application in China. In February of this year, the application for marketing of obeticolic acid tablets from Zhengda Tianqing was accepted and intended for second-line treatment of PBC.

Summary

Since Ocaliva's approval, it has been quite bumpy, plagued by safety issues such as liver damage and severe itching, which not only led to the failure of MASH, but also makes it difficult to maintain its position in PBC.

Given that two new PBC drugs have already been approved, the FDA will now be more critical of Ocaliva, and passing the expert advisory committee's test will require luck.

Exiting the market is the most likely outcome for Ocaliva.