Intercept falls on NASH study

Intercept falls after releasing ‘supportive data’ from Phase 3 NASH study

Intercept Pharmaceuticals (ICPT) overnight announced additional “supportive data” from its Phase 3 Regenerate study of obeticholic acid in patients with liver fibrosis due to nonalcoholic steatohepatitis.

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Intercept falls after releasing ‘supportive data’ from Phase 3 NASH study, Stockwinners

Nonalcoholic steatohepatitis (NASH) is liver inflammation and damage caused by a buildup of fat in the liver. It is part of a group of conditions called nonalcoholic fatty liver disease. You may be told you have a “fatty liver.”

The new data based on additional analyses show that obeticholic acid “demonstrated robust efficacy across a range of additional histologic and biochemical parameters,” Intercept said in a statement.

The data are being presented today at the International Liver Congress in Vienna, Austria.

The primary efficacy analysis assessed efficacy at 18 months in 931 patients with stage 2 or 3 liver fibrosis due to NASH.

Patients with biopsy proven NASH with fibrosis were randomized 1:1:1 to receive placebo, OCA 10 mg or OCA 25 mg once daily.

A repeat biopsy was conducted after 18 months for histologic endpoint assessment.

Overall, study discontinuations in the primary efficacy analysis population were balanced across treatment groups.

As previously reported, in the primary efficacy analysis, once-daily OCA 25 mg met the primary endpoint of fibrosis improvement with no worsening of NASH in 23.1% of patients compared to 11.9% of placebo patients at the planned 18-month interim analysis, the company said.

In the primary efficacy analysis, a numerically greater proportion of patients in both OCA treatment groups compared to placebo achieved the primary endpoint of NASH resolution with no worsening of liver fibrosis; however, this did not reach statistical significance.

As agreed with the FDA, in order for the primary objective to be met, the study was required to achieve one of the two primary endpoints, it added.

Additional supportive efficacy analyses were conducted using the per protocol population.

Approximately three-fold more patients in the OCA 25 mg group achieved an improvement of fibrosis by greater than or equal to 2 stages compared to placebo, Intercept reported.

ICPT is down 12%, or $14.14, to $106.54.

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Retail Stocks Continue to Slide

Retail sell-off continues with J.C. Penney report, dragging Nordstrom lower

Retail selloff continues with J.C. Penney report. See Stockwinners.com for details.

Shares of J.C. Penney (JCP) added to the retail wreckage of the last few days after reporting a larger than expected loss for the latest quarter, adding to concerns about the broader sector following disappointing reports yesterday from peers Macy’s (M) and Kohl’s (KSS).

Separately, higher-end peer Nordstrom (JWN) bucked the trend of declining sales in the sector, reporting a comparable store sales gain for its latest quarter and raising guidance.

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While Nordstrom shares briefly went into the green, they declined following the market open as the sector gives back some of the gains seen in the run-up to this week’s reports.

 

J.C. PENNEY

J.C. Penney reported an adjusted loss per share for the second quarter of (9c), compared to forecasts for a (5c) loss.

Comp sales slid 1.3%, falling below the retailer’s fiscal year guidance. The comp sales decline for the quarter resulted in a positive two-year stack of 0.9%, the company said.

Despite misses on the EPS and comp sales lines, revenue of $2.96B beat forecasts of $2.84B.

CEO Marvin Ellison said that while the broader retail sector “remains challenged,” all categories delivered improved sales results during the quarter, with beauty, home refresh and omnichannel continuing to deliver positive sales growth.

On the company’s earnings call, #Ellison said there was greater margin and EPS dilution than expected during the quarter following the liquidation of inventory in 127 closing stores, but said he believes this was “isolated” to Q2.

Looking ahead, J.C. Penney backed its guidance for fiscal 2017 adjusted EPS of 40c-65c and SSS down 1%-up 1% and said it expects improved results in the back half of the year.

Ellison said that July’s sales trend has carried into the early back-to-school season.

NORDSTROM

Nordstrom, meanwhile, yesterday reported EPS of 65c, beating analysts’ estimates of 64c, and total revenue of $3.79B also beat the $3.75B consensus. Comp sales for the quarter were up 1.7% compared to last year and followed an 0.8% decline last quarter.

Nordstrom raised its FY17 adjusted EPS view to $2.85-$3.00 from $2.75-$3.00, revenue growth view to roughly 4% from 3%-4% and backed its SSS growth view of approximately flat. Nordstrom said that its recent Anniversary Sale, historically its largest event of the year, performed better than recent trends.

WHAT’S NOTABLE

Mall-based retailers have been hurt by the increasing popularity of fast-fashion retailers like Zara, Forever 21 and H&M, as well as an increase in online shopping.

Nordstrom said in June that members of its founding family formed a group to explore the possibility of pursuing a “going private” transaction, but Women’s Wear Daily recently said that the retailer is not in negotiations with “anybody” regarding a potential sale.

Talks continue with potential parties to a deal, though they are described as informal, the report noted.

PEERS

Thursday August 10th, sector peer Macy’s (M) sunk after reporting another quarter of declining comps, though its EPS and revenue were above analysts’ estimates.

While Macy’s backed its guidance for FY17, it forecast third quarter comp sales on an owned plus licensed basis down 2.5% “or worse” and fall season comp sales on an owned plus licensed basis to be down 0.8% to down 2.6%. Gross margin for the year is expected to be down 50-70 bps vs. last year, better than previous guidance.

CFO Karen Hoguet said that there was “not a lot new” on Macy’s real estate initiatives since June’s investor meeting and that work on its Herald Square location “continues.”

Kohl’s also reported earnings yesterday, with EPS and revenue narrowly beating estimates, though its comp sales declined 0.4% from the year ago period. “The traffic momentum that we saw in the combined March/April period accelerated in the second quarter,” CEO Kevin Mansell said in a statement. “Though transactions for the quarter were lower than last year, July transactions increased. We are also excited by the sequential sales trend improvement in all our lines.”

Kohl’s said it is “on track” to achieve its financial goals for the year. On its earnings call, Mansell reiterated that Kohl’s sees an opportunity to capture sales from competitors’ stores that are closing, which may include closing stores from Macy’s and J.C. Penney.

Another peer, Dillard’s (DDS), also reported earnings yesterday, reporting much weaker than expected EPS on sales that missed estimates. CEO William Dillard, commented that “Significant markdowns led to a disappointing loss as we dealt with inventory, which was up 2% at quarter end.”

ANALYST COMMENTARY

Credit Suisse analyst Christian #Buss said this morning that “continued caution is in order” following J.C. Penney’s Q2 report, as he sees core operating profitability declining and underlying demand still being “tepid.”

UBS analyst Michael #Binetti said that while Macy’s results were better than expected, guidance for the second half has damaged confidence that positive trends are sustainable. The analyst maintained his Neutral rating on Macy’s but cut his price target to $21 from $23.

Meanwhile, Kohl’s was upgraded to Hold from Reduce at Gordon #Haskett and to Neutral from Underperform at Credit Suisse.

PRICE ACTION

In Friday morning trading, J.C. Penney is  down 17% to $3.91, while Nordstrom is down 2% to $44 per share.

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Watch Tetraphase!

Tetraphase announces positive top-line results from Phase IGNITE4 trial

Tetraphase announces positive top-line results from Phase3. See StockwinnersTetraphase Pharmaceuticals (TTPH) announced positive top-line results from #IGNITE4, the company’s phase 3 clinical trial evaluating the efficacy and safety of twice-daily intravenous #eravacycline compared to meropenem for the treatment of patients with complicated intra-abdominal infections.

Tetraphase Pharmaceuticals, Inc. develops various antibiotics for the treatment of serious and life-threatening multidrug-resistant infections. Its lead product candidate is eravacycline, an intravenous and oral antibiotic for use as a first-line empiric monotherapy to treat resistant and multidrug-resistant infections, including multidrug-resistant Gram-negative infections.

Meropenem, sold under the brandname Merrem among others, is an broad-spectrum antibiotic used to treat a wide variety of infections.

It gained US FDA approval in July 1996. It was initially marketed by AstraZeneca (AZN). It is on the World Health Organization’s List of Essential Medicines, the most effective and safe medicines needed in a health system.

Noninferiority trials are intended to show that the effect of a new treatment is not worse than that of an active control by more than a specified margin.

The results of #IGNITE4, which enrolled 500 patients, demonstrated statistical non-inferiority of eravacycline to meropenem for the primary efficacy endpoint of clinical response at the test-of-cure visit.

Noninferiority trials are intended to show that the effect of a new treatment is not worse than that of an active control by more than a specified margin.

PRICE RANGE

TTPH closed Tuesday’s trading at $6.90. It traded as high of $8.72 in extended trading. Shares have a 52-weeks trading range of $3.11 – $9.93.

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Zynerba is Worth Watching

Watch Zynerba ahead of trial data on its its ZYN002 for in adult epilepsy patients

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With #Zynerba Pharmaceuticals (ZYNE) expected to release data from a Phase 2 trial over the next several weeks,#Jefferies analyst Biren #Amin recently argued that a positive update could lead the shares north of $65-$75. However, a lack of treatment effect could drop the stock to $4-$5.

CANNABIDIOL GEL

Over the coming weeks, Zynerba is expected to announce data from its ZYN002 #cannabidiol, or #CBD, gel Phase 2 STAR 1 trial in adult epilepsy patients with refractory focal seizures.

ZYN002 is a synthetic CBD formulated as a permeation-enhanced gel for transdermal delivery.

BINARY EVENT

In a research note to investors, Jefferies’ Amin pointed out that the STAR-1 trial represents a “critical catalyst” for Zynerba as it provides the first proof of concept for transdermally delivered CBD.

Given investors naturally compare the program to GW Pharmaceuticals’ (GWPH) #Epidiolex, and oral CBD, the analyst believes a better comparison would be to therapies tested in patients with partial-onset seizures who are uncontrolled on their current therapy.

Additionally, Amin noted that while the study is designed for a 20% treatment effect over a placebo, an effect greater than 15% could be considered clinically relevant. A key question that remains unanswerable is the extent of activity observed with ZYN002 given this is the first study evaluating efficacy in epilepsy patients, he contended.

He told investors that positive data could lead to shares north of $65-$75, but a lack of treatment effect could drop shares to $4-$5. The analyst assumes ZYN002 is successfully developed and launched for refractory epilepsy in 2019.

Amin reiterated a Buy rating and a $32 price target on the shares.

PRICE ACTION

In Thursday’s trading, shares of Zynerba dropped 2% to $18.81. Over the last month the stock is up 10%, but over the last three months it has declined nearly 24%.

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