Editor’s note: This article was first published in January 2014; Intercept’s share prices, market capitalisation and 45-employee headcount are as of 10 January 2014. Obeticholic acid (Ocaliva) was later approved in 2016 for primary biliary cholangitis rather than NASH, and Intercept was acquired by Alfasigma in 2023.
2014 has got off to a good start for drug makers, but the big winner is undoubtedly Intercept Pharmaceuticals, a little-known biotechnology company whose shares have gone from $70 to $470 in just two days. But why is this company rising so much?
On Thursday the share price quadrupled, and today it is still climbing, up more than 70%. The monumental rise, according to the Wall Street Journal, comes from a clinical trial of an experimental liver therapy that the company stopped immediately because patients had noticed a significant improvement.
After this astronomical rise, the biopharmaceutical company, which has only 45 employees, now has a market capitalisation of more than $9 billion, driven by the excitement over such an unexpectedly positive result.
The company’s total gain over the last five days has been 583%, and since 1 January 2014 (the last ten days) it has risen by 1,200%.
This rally has turned the company from a speculative small cap into a player in the big league of companies with a stock market value of more than $1 billion.
It is simply crazy. As we can see, sometimes investors in the stock market also hit the jackpot.
See also: Where to invest in 2014: the real emerging markets
Featured image: Nephron, CC BY-SA 3.0, via Wikimedia Commons.
