Intercept Pharmaceuticals Reports Third Quarter 2013 Financial Results

    Intercept Pharmaceuticals Reports Third Quarter 2013 Financial Results

PR Newswire

NEW YORK, Nov. 14, 2013

NEW YORK, Nov. 14, 2013 /PRNewswire/ --Intercept Pharmaceuticals, Inc.
(NASDAQ: ICPT) (Intercept), a clinical stage biopharmaceutical company focused
on the development and commercialization of novel bile acid therapeutics to
treat chronic liver diseases such as primary biliary cirrhosis, today reported
financial results for the three and nine months ended September 30, 2013 and
announced presentations at upcoming investor conferences.

Third Quarter 2013 Financial Results

Results of Operations

Nine Months Ended September 30, 2013

For the nine months ended September 30, 2013, Intercept reported a net loss of
$55.4 million, or $3.15 per share, compared to a net loss of $15.5 million, or
$4.64 per share, for the nine months ended September 30, 2012. The $39.9
million increase in net loss was primarily due to the increase in the non-cash
charges related to the periodic revaluation of warrant liability of $29.6
million, which was primarily caused by the increase in the market price of
Intercept's common stock, and an increase in non-cash stock-based compensation
of $5.2 million.

Licensing revenue decreased by $825,000 to $1.2 million for the nine months
ended September 30, 2013, compared to $2.0 million for the corresponding
period of the prior year, because the up-front payment related to the Servier
collaboration was fully amortized as of the third quarter of 2012, and
therefore no amortized revenue related to this upfront payment was recognized
in 2013.

Research and development expenses increased to $18.4 million for the nine
months ended September 30, 2013 from $11.4 million for the corresponding
period of the prior year, primarily as a result of increased activities in
Intercept's development program for its product candidate, obeticholic acid
(OCA). The increase in R&D expense compared to the corresponding period of
the prior year includes an increase of $2.9 million in non-cash stock-based
compensation; increased direct development expenses of $4.6 million arising
from increased activities in Intercept's development program for OCA,
partially offset by decreased expenses of $2.2 million payable to the National
Institute of Diabetes and Digestive and Kidney Diseases (NIDDK)relating to
contractual milestone payments in 2012 for the FLINT study; and increased
compensation and benefit expense of $1.0 million primarily due to an increase
in personnel on Intercept's development team to manage its development program
for OCA.

General and administrative expenses increased to $8.4 million for the nine
months ended September 30, 2013 from $3.0 million for the corresponding period
of the prior year, primarily as a result of an increase of $2.4 million in
non-cash stock-based compensation; approximately $1.7 million of costs
associated with operating as a public company, including expenses due to
additional personnel; and $1.0 million in expenses arising from certain
pre-commercial activities related to market research.

Non-operating expenses increased by $29.3 million in the nine months ended
September 30, 2013 as compared to the corresponding period of the prior year,
primarily due to an increase of $29.6 million in the non-cash charge related
to the periodic revaluation of warrant liability, which was primarily
attributable to the increased market price of Intercept's common stock in
2013. In connection with equity financings prior to its IPO, Intercept issued
warrants that are classified as liabilities and are adjusted to fair value on
a quarterly basis with the change in fair value being included in net loss.
The amount included in net loss is a non-cash item as Intercept is not
required to expend any cash to settle the warrant liability. The warrant
liability is primarily affected by changes in Intercept's stock price during
each financial reporting period, which causes the warrant liability to
fluctuate as the market price of Intercept's stock fluctuates.

Quarter Ended September 30, 2013

Net loss attributable to common stockholders for the third quarter
endedSeptember 30, 2013was$31.7 million, or$1.65 per share, compared to a
net loss of$6.2 million, or$1.86 per share, for the same period in 2012. The
$25.5 million increase in net loss is primarily due to the increase of$19.3
millionin the non-cash charge related to the periodic revaluation of warrant
liability, primarily caused by the increase in the market price of Intercept's
common stock, and increased non-cash stock compensation expense of $2.5
million.

Cash Position

As ofSeptember 30, 2013, Intercept's cash, cash equivalents and investment
securities available for sale totaledapproximately $156.8 million, compared
to $110.2 millionatDecember 31, 2012. In June 2013, Intercept sold 1,989,500
shares of common stock at $33.01 per share in a public offering for net
proceeds of $61.2 million, after deducting underwriting discounts and offering
expenses. Based upon currently expected level of operating expenditures,
Intercept believes that it will be able to fund its operations through early
2016. This estimate reflects the ongoing POISE trial and long-term safety
extension of the POISE trial; nonclinical studies and clinical trials and
consulting expenditures to support Intercept's planned regulatory submissions
for OCA in PBC; anticipated pre-commercial launch preparation activities for
OCA in PBC; and IND-enabling studies of INT-767.

Subsequent Events: Strategic Collaboration Renewal

Effective October 1, 2013, Intercept extended the term of its research program
with Servier relating to the discovery of novel TGR5 agonists until September
30, 2015. The research program was extended on the same financial terms that
were previously in effect. Concurrently, Intercept also entered into
amendments to its consulting agreement with Professor Roberto Pellicciari and
its research agreement with TES Pharma Srl.

Upcoming Investor Conferences

Intercept's Chief Executive Officer, Mark Pruzanski, M.D., will present at the
following upcoming investor conferences:

  oJefferies 2013 London Healthcare Conference on November 21, 2013 at 8:40
    a.m. GMT
  o2013 Deutsche Bank BioFEST on Tuesday, December 3, 2013 at 11:20 a.m.
    Eastern Time
  oOppenheimer 24^th Annual Healthcare Conference on December 10, 2013 at
    3:20 p.m. Eastern Time

Additional information on these investor conferences is available under the
"Investors" section of Intercept's website at www.interceptpharma.com.

About Intercept

Intercept is a biopharmaceutical company focused on the development and
commercialization of novel therapeutics to treat orphan and more prevalent
liver diseases utilizing its expertise in bile acid chemistry. The company's
lead product candidate, obeticholic acid (OCA), is a bile acid analog and
first-in-class agonist of the farnesoid X receptor (FXR). OCA is initially
being developed for the second line treatment of primary biliary cirrhosis
(PBC) in patients with an inadequate response to, or who are unable to
tolerate, ursodiol, the only approved therapy for this indication. OCA has
received orphan drug designation in both the United States and Europe for the
treatment of PBC. Intercept owns worldwide rights to OCA outside of Japan and
China, where it has out-licensed the product candidate to Dainippon Sumitomo
Pharma. For more information about Intercept, please visit the Company's
website at: www.interceptpharma.com.

Safe Harbor Statements

This press release contains "forward-looking statements" within the meaning of
the Private Securities Litigation Reform Act of 1995, including, but not
limited to, statements regarding anticipated trends relating to our financial
position and our strategic directives under the caption "About Intercept."
These "forward-looking statements" are based on management's current
expectations of future events and are subject to a number of risks and
uncertainties that could cause actual results to differ materially and
adversely from those set forth in or implied by such forward-looking
statements. These risks and uncertainties include, but are not limited to: the
initiation, cost, timing, progress and results of Intercept's development
activities, preclinical studies and clinical trials; the timing of and
Intercept's ability to obtain and maintain regulatory approval of OCA and any
other product candidates it may develop, and any related restrictions,
limitations, and/or warnings in the label of any approved product candidates;
Intercept's plans to research, develop and commercialize future product
candidates; the election by Intercept's collaborators to pursue research,
development and commercialization activities; Intercept's ability to attract
collaborators with development, regulatory and commercialization expertise;
Intercept's ability to obtain and maintain intellectual property protection
for its product candidates; Intercept's ability to successfully commercialize
its product candidates; the size and growth of the markets for Intercept's
product candidates and its ability to serve those markets; the rate and degree
of market acceptance of any future products; the success of competing drugs
that are or become available; regulatory developments in the United States and
other countries; the performance of third-party suppliers and manufacturers;
Intercept's ability to obtain additional financing; Intercept's use of the
proceeds from its initial public offering in October 2012 and follow-on
offering in June 2013; the accuracy of Intercept's estimates regarding
expenses, future revenues, capital requirements and the need for additional
financing; the loss of key scientific or management personnel; and other
factors discussed under the heading "Risk Factors" contained in Intercept's
annual report on Form 10-K for the year ended December 31, 2013 filed on April
1, 2013 as well as any updates to these risk factors filed from time to time
in Intercept's other filings with the Securities and Exchange Commission. All
information in this press release is as of the date of the release, and
Intercept undertakes no duty to update this information unless required by
law.

Intercept Pharmaceuticals, Inc.
Condensed Consolidated Statements of Operations
(Unaudited and in thousands, except per share data)
                       Three Months Ended         Nine Months Ended
                       September 30,              September 30,
                       2012         2013          2012           2013
Licensing revenue      $       $        $        $      
                       523          405        2,041          1,216
Costs and expenses:
 Research and         3,318        8,393         11,396         18,358
development
 General and          991          3,115         2,994          8,402
administrative
Total operating        4,309        11,508        14,390         26,761
expenses
Other income
(expense)
 Revaluation of       (1,418)      (20,756)      (438)          (30,011)
warrants
 Other income         17           121           (165)          131
(expense), net
Net loss               $         $          $          $    
                       (5,187)      (31,737)      (12,953)       (55,424)
Dividends on
preferred stock, not   (1,000)      -             (2,500)        -
declared
Net loss attributable  $         $          $          $    
to common              (6,187)      (31,737)      (15,453)       (55,424)
stockholders
Net loss per common    $        $        $        $      
share, basic and       (1.86)       (1.65)        (4.64)        (3.15)
diluted:
Weighted average
number of shares of
common stock           3,329,266    19,198,923    3,329,266      17,585,531
outstanding, basic
and diluted:
Condensed Consolidated Balance Sheet Information
(In thousands)
                                                  December31,   September 30,
                                                  2012           2013
                                                  (audited)      (unaudited)
Cash, cash equivalents and                        $           $   
investment securities                             110,194       156,753
Total assets                                      112,179        158,891
Working capital                                   98,814         150,843
Deferred revenue,                                 12,162         10,946
total
Warrant liability,                                30,359         51,903
total
Total liabilities                                 46,267         67,929
Stockholders' equity                              65,912         90,962



For more information about Intercept, please contact Barbara Duncan or Senthil
Sundaram, both of Intercept Pharmaceuticals at 1-646-747-1000.

SOURCE Intercept Pharmaceuticals

Website: http://www.interceptpharma.com
 
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