I will be watching ICPT over the next weeks and possibly months. I am very interested in starting a position in this company at some point but that will depend on not only the fundamentals continuing to look strong but also the price action. I would like to see a bottoming process and long period of consolidation. I am not in any hurry to start a position, I am going to be patient with this one.
This is the weekly chart which looks horrible. After peaking in early 2014 ICPT started a downtrend that lasted about 3 years and 9 months. That was followed by another multi-year period which coincidentally lasted again about 3 years and 9 months where the price of ICPT moved basically sideways during a consolidation phase. ICPT broke down out of that consolidation phase when the FDA rejected their latest liver disease treatment in late June of this year.
Okay, so all of that sounds pretty bad but there are some things that I like about the company which I believe could make it a good long term hold.
Here is a list of what I see as positives for ICPT.
Very low float: Shares outstanding: 32.96 million Shares float: 27.80 million
ICPT already has one drug on the market called OCALIVA for the treatment of primary biliary cholangitis (PBC), sales from the third quarter of 2019 topped $60 million.
ICPT continues to see revenue growth.
ICPT is proactive at reducing it's cash burn rate, even at it's current burn rate ICPT's current cash on hand would last over two years.
ICPT continues to work to get OCALIVA approved for nonalcoholic steatohepatitis (NASH)
If Intercept gets approval to treat NASH patients with Ocaliva, that would be a huge deal -- 12% of the U.S. population, or almost 40 million people, have the disease, according to the NASH Education Program. The global NASH market could reach $18.3 billion in six years, according to a report by GlobalData.
Both ICPT's quick ratio and current ratio are very good, meaning the company is in very good position to cover short-term obligations or those due within one year.
ICPT has a large number of shares owned by insiders.
It is also owned by a pretty large number of institutions.
Intercept Pharmaceuticals Inc website:
This would be a highly risky investment but I believe that it may be possible to start building a position at prices that would offer much more upside then downside potential.
With time and a favorable decision by the FDA on a liver treatment I believe the price of ICPT could easily top $100 again.
I just wanted to share my thoughts on ICPT as a possible investment opportunity. Actually I wrote this more for me as a reference I can use to in the future to refresh my memory as to why I feel this stock has good investment potential.