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NEW YORK (TheStreet) -- Shares of drugmaker Intercept Pharmaceuticals (ICPT) - Get Intercept Pharmaceuticals, Inc. Report are climbing after research firm Summer Street initiated coverage of the shares with a Buy rating and a $650 price target in a note to investors earlier today.

WHAT'S NEW: Intercept's obeticholic acid drug demonstrated such a high level of efficacy as a treatment for nonalcoholic steatohepatitis in a Phase II study that the trial was stopped early, analyst Jim Molloy wrote. Late stage nonalcoholic steatohepatitis, also known as NASH, affects about 8M people in the U.S. each year and causes victims to die unless they receive liver transplants. It's "hard to overstate the opportunity" for obeticholic acid, wrote Molloy, who predicts that the FDA will approve the drug in the fourth quarter of 2015. He notes that the company is looking at using the drug to treat a variety of other liver related indications as well.

OTHERS TO WATCH: Galectin Therapeutics (GALT) - Get Galectin Therapeutics Inc. Report has stated that it believes its drug candidates "have the potential to treat NASH and other forms of liver fibrosis."

PRICE ACTION: In early trading, Intercept gained $2.57, or 1%, to $273.51.

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Reporting by Larry Ramer.

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