Intercept (ICPT) has taken a sharp drop after reporting earnings this morning, but I don’t want you to be alarmed. As I mentioned in my initial recommendation on Tuesday, earnings are not a key factor when investing in a biotech that has a lot of exciting development news on the calendar but has yet to book significant revenue. We already knew that ICPT was burning through cash, and that’s what the Street is overreacting to today. The only new piece of news is that the burn rate was around $0.60 per share hotter than what analysts had told traders to expect.

Again, this is not a catalyst behind our position. We’re invested in Intercept for its development calendar and the very close milestones it is due to report in the next few days. We still have this data to look forward to that should renew positive momentum in the name. Early research that came out overnight may mean that the company needs to recalibrate its dosing plans in order to avoid side effects, but even the doctor raising these concerns had admitted that the drug works well. Plus, previous safety trials uncovered no warning signs so I remain confident that management will fix any problems without major complications.

Biotechs can be volatile investments and that’s what we’re dealing with today. Good data and product news can easily swing shares back in the other direction, and I believe that’s worth holding on to. It may require some extra patience, but we should see that rewarded in the long run. Hold ICPT.