Shares of Intercept Pharmaceuticals Inc (ICPT.O) fell nearly 17 percent on Monday after the company said a trial showed patients taking its experimental liver disease drug experienced a higher number of heart-related problems than those given a placebo.
Intercept said in a filing late on Friday that two people had died of heart-related problems during the mid-stage trial. The company said 10 serious heart-related problems were reported in seven patients, or 2.5 percent of the patients in the trial.
The company noted that a division of the U.S. National Institutes of Health, which sponsored the trial, believed the heart-related problems in the two patients who died were possibly related to the treatment.
However, Intercept said it had determined that the deaths were unrelated to the drug.
Intercept said that although patients taking the drug had a higher number of heart problems compared with the group given the placebo, the difference between the two groups was not statistically significant.
The drug, called Obeticholic Acid, was being tested as a treatment for nonalcoholic steatohepatitis - liver disease caused by fat buildup.
"We already knew that (the adverse events) occurred when the results were announced in early January; however, we believe investors may have forgotten," Wedbush Securities analyst Liana Moussatos told Reuters, calling Monday's stock movement an "overreaction."
The mid-stage trial was stopped early after the drug showed significant improvement in patients in a review by an independent safety committee, Intercept said in January.
The company's shares have risen more than 500 percent since then.
"With Intercept's stock running up so far, so fast, even misperceptions can cause transient weakness," Moussatos said.
Intercept shares rose in early trading on Monday on separate late-stage data the company announced on Sunday, but were down 14 percent at $397.46 at midday.
Intercept said on Sunday that a late-stage trial showed Obeticholic Acid was effective in treating primary biliary cirrhosis, a disease in which bile ducts in the liver become damaged, allowing harmful substances to build up and scar liver tissue.
(Reporting by Esha Dey in Bangalore; Editing by Maju Samuel)