Intercept Pharmaceuticals (NASDAQ: ICPT) and CV Sciences (NASDAQOTH: CVSI) have practically nothing in common. Intercept is a biotech focused on developing and marketing liver disease drugs, while CV Sciences is a leader in the hemp cannabidiol (CBD) market.
There are two similarities between Intercept and CV Sciences, though. Both stocks appear to have great long-term prospects. Both stocks are also down so far in 2019. But which is the better pick for investors now? Here's how Intercept Pharmaceuticals and CV Sciences stack up against each other.
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The case for Intercept Pharmaceuticals
Intercept's crown jewel is Ocaliva. Sales for the drug soared nearly 48% year over year in the first quarter to $51.8 million. Ocaliva received FDA approval two years ago for treating primary biliary cholangitis (PBC).
There's a significant market for Ocaliva in treating PBC. The chronic liver disease affects at least 75,000 people in the U.S. Ocaliva's price is around $70,000 per year. If Intercept could capture one-third of the addressable market, the company's annual revenue would be in the ballpark of $1.75 billion.
The international PBC market is even larger. Intercept has already won regulatory approvals for Ocaliva in the PBC indication in Europe, Canada, Israel, and Australia.
But there's an even bigger opportunity potentially ahead for Intercept. The biotech plans to file for FDA approval of Ocaliva in treating nonalcoholic steatohepatitis (NASH) within the next few months. There currently are no approved treatments for NASH. The disease is a leading cause of liver transplants. Analysts think that the market for NASH drugs could be huge, with some even predicting a market size of up to $35 billion annually.
Several drugmakers have experienced major clinical setbacks for their leading NASH candidates. Intercept, though, reported positive results from its late-stage study of Ocaliva in treating NASH. The company appears to be on track to be a first-mover in the potentially lucrative indication.
Despite the tremendous potential for Ocaliva, Intercept's market cap is only around $2.6 billion. The average one-year price target among Wall Street analysts for the stock is nearly double the biotech's current share price.
The case for CV Sciences
CV Sciences focuses on two areas. The company is best known for its top-selling hemp CBD products. However, CV Sciences also is developing experimental CBD-based drugs.
Business is booming for CV Sciences' hemp CBD products. The company's sales skyrocketed 85% year over year in the first quarter to $14.9 million. This sizzling growth should continue.