Spurned by the FDA, Intercept brings out the budget axe and chops 170 jobs

The unexpected CRL that landed at Intercept Pharmaceuticals $ICPT 2 months ago is costing the biotech dearly.

In an SEC filing Tuesday, the company said that it is slashing 25% of its workforce, or a total of 170 jobs. The move — with the bulk of the cuts coming in Q3 — will cost the company $18 million, Intercept noted, adding that it’s required to conserve cash as they go on trying to get an approval for NASH.

That’s a difficult prospect.

Intercept execs led by CEO Mark Pruzanski said they were blindsided by the FDA’s rejection, as regulators called for more Phase III data to back up their surrogate endpoint on a reduction in liver fibrosis.

At the time they noted:

At no point during the review did the FDA communicate that OCA was not approvable on an accelerated basis, and we strongly believe that the totality of data submitted to date both meet the requirements of the Agency’s own guidance and clearly support the positive benefit-risk profile of OCA.

But that rejection would foretell two other unexpected CRLs for BioMarin’s gene therapy for hemophilia A as well as Gilead’s application on filgotinib.

Intercept now is digging in deep to defend its turf — and they’re downsizing the staff to make sure they can extend their work through the setback.

Intercept stock slid 10% by the closing bell Tuesday, ending at $44.53. The stock was trading at 77.49 before the CRL hit.

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