Shares of high-flyer Intercept Pharmaceuticals (ICPT - Get Report) fell 16% to $389 in Friday's after-hours trading session following the disclosure of cardiac adverse events reported in a study of fatty liver disease patients involving the company's experimental drug OCA.

Intercept also disclosed that results from the phase III study of OCA in PBC, a rare liver disease, will be announced later this month.

Intercept disclosed the new OCA safety findings in its 10-K filed Friday night. Here's the paragraph which spooked investors and caused the stock to fall:

We recently received a report of blinded FLINT safety data from the NIDDK and have learned that as of the end of December 2013 a total of ten cardiovascular serious adverse events had occurred in seven (2.5%) of the patients in FLINT across both treatment groups, at which point 207 (73%) patients had completed the 72-week treatment phase and 73 remaining patients had all been on study for 60 weeks or more. As part of its review, the trial's DSMB expressed concern regarding hyperlipidemia and the occurrence of serious cardiovascular events, both of which were seen in both the treatment and placebo groups, but disproportionately in patients receiving OCA. However, the NIDDK has advised us that while the incidence of the serious cardiovascular events was numerically higher in the patients receiving OCA therapy, it was not statistically significantly different as compared to the placebo group. [Emphasis added.]

In January, the FLINT study of OCA in patients with nonalcoholic steatohepatitis (NASH) was stopped early for overwhelming efficacy. Intercept shares soared on the news and it's the top performer among biotech and drug stocks this year. 

In its 10-K, Intercept provides additional information on NASH and OCA to put the cardiac adverse events into perspective -- and to downplay their significance.

More than half of the NASH patients enrolled in the FLINT study also suffered from Type 2 diabetes, which places them more at risk to cardiovascular events than NASH patients who are not diabetics. In previous studies of NASH in patients without diabetes, cardiovascular events were reported. 

Of the 10 cardiovascular serious adverse events reported in the FLINT study, none were considered probably or definitely related to OCA. The records of two patients were unblinded in the trial and both experienced cardiac adverse events while receiving OCA. However, both patients had confounding medical conditions which could have contributed to the cardiac adverse events, according to a medical review conducted by Intercept.

Intercept provides a detailed summary of these two patients in its 10-K.

The first patient:

The first of the unblinded serious adverse events occurred in a 73 year old patient who, along with NASH and type 2 diabetes, suffered from a number of other comorbid conditions for which she was taking numerous medications. This patient also had a history of recurring urinary tract infections. Approximately five weeks after initiating OCA therapy, she developed a urinary tract infection and urosepsis, which is caused by a bacterial infection that spreads throughout the body via the bloodstream and can rapidly lead to multiple organ failure and death. This resulted in the patient's immediate admission into the intensive care unit, or ICU, at which time her OCA treatment was discontinued. Over the subsequent month, during which time the patient remained hospitalized in the ICU, she experienced cardiogenic shock, respiratory failure, deteriorating kidney function and a number of other complications. She went on to develop congestive heart failure and pulmonary edema, then was reported to have experienced a stroke and died. However, based on a computed tomography, or CT, scan, the principal investigator subsequently found evidence against the occurrence of a stroke and concluded that the events resulting in the patient's death were unlikely related to OCA treatment. While there has been no reassessment made by the NIDDK, the principal investigator reported instead that in his view death was due to congestive heart failure and respiratory failure in the setting of the patient's recurrent urinary tract infections, sepsis and malnutrition.
The second patient:
The second unblinded serious adverse event occurred in a 59 year old patient who, along with NASH, suffered from numerous other comorbid conditions for which she was taking several medications. This patient also had a history of multiple prior surgeries, as well as hyperlipidemia, abnormally elevated liver enzymes, diabetes, obesity and hypertension. At approximately 30 weeks after initiating OCA therapy, a CT scan showed improved fatty liver in this patient. The laboratory results from this patient's visit approximately 60 weeks after initiating OCA therapy showed an improved lipid profile, normalized liver enzymes, and improved glycosylated hemoglobin, an assessment of diabetes control. Subsequently, the family of the patient reported that she had died of a suspected heart attack approximately two weeks after her last visit, although the cause of death was not confirmed by the patient's primary care physician.
While we know the FLINT study was stopped early because of OCA's benefit in NASH patients, detailed data have not yet been disclosed. In its 10-K, Intercept says it will receive final unblinded results in July. Presumably, Intercept will make a public announcement of the final FLINT study results at that time, although the 10-K doesn't say specifically. As previously reported, Intercept says the FLINT study data will be presented at the annual meeting of the American Association for the Study of Liver Disease (AASLD) in November. 

Intercept shares closed Friday's regular session at $462.26. 

Adam Feuerstein writes regularly for TheStreet. In keeping with company editorial policy, he doesn't own or short individual stocks, although he owns stock in TheStreet. He also doesn't invest in hedge funds or other private investment partnerships. Feuerstein appreciates your feedback; click here to send him an email.