Piper Sandler analyst Yasmeen Rahimi says Intercept Pharmaceuticals' (ICPT) plan for a workforce cut of 25% has nothing do with the potential approval of obeticholic acid in nonalcoholic steatohepatitis.

The analyst continues to be confident in obeticholic acid's potential for approval. The recent European Association for the Study of the Liver presentations will "tilt the risk-benefit ratio in favor" of the drug, Rahimi tells investors in a research note. Intercept's workforce cut reflects a strategic decision to conserve financial resources and not uncertainty about obeticholic's approval, says the analyst.

Rahimi keeps an Overweight rating on Intercept with an $82 price target.

The stock closed Tuesday down 11% to $44.53 after the company disclosed plans to reduce its workforce.