The Avanti Group the equities research house based in Tokyo, providing professional trading and investment research solutions to institutional and private investors across the globe have recently drawn their investor’s attention to recent developments within the pharmaceutical sector.

Partners in the development and distribution of a new liver treatment drug OCA, Japanese drug maker Dainippon Sumitomo and American Intercept Pharmaceutical have both surged on the news that FDA second round testing has been halted after overwhelmingly successful results were recorded in patient trials.

Dainippon Sumitomo saw a 17 percent surge in its value to the highest since in over a decade. The new drug is intended for the treatment of steatohepatitis, a condition that manifests similar liver damage experienced by heavy drinkers in patients that are light and non-drinkers. Intercept and Dainippon partnered in 2011 to develop obeticholic acid (OCA) for the treatment of steatohepatitus also known as Non Alcoholic Steato Hepatitis (NASH).

“The second round trial of OCA involved a group of 238 patients given either OCA or a placebo. To pass a drug they must show improvements of at least 2 points on an 8 point scale, which OCA did easily. With between 2 and 5 percent of the U.S population afflicted with NASH, the potential earnings for both companies are significant, not just in the U.S but elsewhere as FDA approval usually predicts similar approval in other countries,” said Senior Analysis and Researcher at The Avanti Group.

Although still in the final stages of testing for use and sale in the U.S, OCA has been licensed and used in both China and Japan since March 2011 and with its track record so far commercial sale in the U.S is considered imminent. Market reaction to the news that OCA had passed its second round trial in such a spectacular fashion created a storm of interest in Intercept’s share seeing them triple in value yesterday, before gaining a further 62 percent to $445.83 at close today.

“With the success in FDA trials and its already accepted use in Japan and China, OCA will be generating a lot of sales in the near future and this of course means additional gains for both of the companies responsible for its development and sale,” concluded Senior Analysis and Researcher at The Avanti Group.

The Avanti Group is an equity research house providing research and analysis outsourcing solutions for institutional financial traders worldwide, founded in early 2003.