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Intercept Pharmaceuticals: Regulatory Challenges Offset The Bargain (NASDAQ:ICPT)

Intercept Pharmaceuticals: Regulatory Challenges Offset The Bargain (NASDAQ:ICPT)

Investment Thesis

Intercept Pharmaceuticals, Inc. (NASDAQ:ICPT) is in the news once again. This time, an article alleges OCA, the company’s only commercialized drug, has become the subject of an FDA investigation related to its safety. The stock, once battered by the company’s failed attempt to make OCA the first FDA-approved therapy for NASH, has slumped to trade near a 52-week low last week. The article has made no revelation, and the newly-identified safety signal, under evaluation as part of the FDA’s routine post-marketing surveillance, is classified as only a “potential risk” whose link to the drug is yet to be established.

As Intercept refocuses on OCA in PBC, the reputational damage can further decelerate the sale growth, already under pressure from the pandemic-related slowdown in new patient starts. Though the company leads in NASH therapeutic development, the highly complex path for a regulatory signoff rules out any premium for the current forward price-to-sales multiple, which, even with my optimistic revenue forecasts for 2020, identifies a modest premium for the stock. With the margin of safety being hardly adequate to offset the sales as well as R&D uncertainty, my neutral view on the stock remains.

Intercept Pharmaceuticals_Ocaliva

Source: Emedz.net

Intercept Suffers a Double Whammy

Not even a week had passed since its previous regulatory hurdle when I last penned my article on Intercept in early July. The stock had crashed ~39.7%, posting the sharpest one-day drop following the announcement of the CRL (Complete Response Letter), which relates to the NDA (New Drug Application) the company filed for OCA (obeticholic acid/Ocaliva) for liver fibrosis due to NASH (nonalcoholic steatohepatitis). Despite the neutral rating on the stock, based largely on the uncertainty linked to the clinical development of liver therapies, I remained optimistic about the company’s prospects. After all, the FDA’s decision was based on

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Fuel Retailers Need Creative Solutions to Offset Costs of EMV Compatibility Upgrades, Says TNS – Press Release

Fuel Retailers Need Creative Solutions to Offset Costs of EMV Compatibility Upgrades, Says TNS – Press Release

RESTON, Va.–(Business Wire)–As fuel retailers implement and complete projects to upgrade automated fuel dispenser (AFD) equipment at the forecourt to avoid the liability shift, the initial costs have proven to be a challenge for many. Yet it is critical to make these upgrades sooner rather than later to reduce fraud costs — leading Transaction Network Services (TNS) to introduce flexible pricing structures with the goal of helping retailers offset their upfront and ongoing costs.

The longer retailers wait to upgrade, the more it will likely cost. Conexxus, a non-profit trade industry technology organization, found that installation costs (e.g., labor) tend to increase due to high demand leading up to an industry-wide change. On average, installation costs rise 14% six months before the deadline, 23% three months before the deadline, and 33% at the deadline, and remain around 31% higher following the deadline.

Yet budgets have become especially tight this year due to the pandemic, leading many retailers to hesitate on starting their projects. TNS is responding to this challenging reality by creating pricing strategies aimed at relieving near-term spend for early movers and offering retailers the benefit of a tailored combination of services.

“TNS understands that retailers are constrained by tightening budgets amid a lower demand for fuel and reduced foot traffic as a result of the pandemic, and our pricing strategies are intended to give operators who work with us a reduction in the pain associated with near-term spend given this current climate,” said Dan Lyman, TNS’ Head of Payments Markets, North America. “We want to help them get the most value out of their upgrades by avoiding liability and fraud and implementing the fast, secure payments infrastructure that is extensible to create new revenue opportunities, enhance and personalize customer engagement, and improve the overall customer experience.”

TNS is

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