Esperion's Drugs In Review Hold Potential, Funds A Concern

We issued an updated research report on Esperion Therapeutics (NASDAQ:ESPR) on Aug 23. Shares of the company have decreased 19.8% so far this year against the industry’s rise of 5%.

The company does not have any marketed drug in its portfolio. However, regulatory applications for its pipeline candidates — bempedoic acid as a monotherapy and in combination with Merck’s (NYSE:MRK) Zetia (ezetimibe) — are under review in the United States as well as in Europe. The company is looking to the get the oral therapies approved for the treatment of elevated LDL-C (bad cholesterol) in patients receiving maximally-tolerated statins or Zetia and having inadequate response.

A decision from the FDA on the monotherapy regimen is expected by Feb 21, 2020, while a decision on the combination therapy should come by Feb 26, 2020. The FDA is currently not expected to hold an advisory committee meeting for discussing the new drug applications.

The regulatory applications were filed based on data from multiple pivotal studies evaluating bempedoic acid monotherapy and combination therapy.

Data from four phase III studies evaluating bempedoic acid monotherapy, presented previously, demonstrated that treatment with the therapy led to additional 18% reduction in LDL-C over 31% LDL-C reduction in statin-treated patients on maximally tolerated statin.

Data from the phase III study evaluating bempedoic acid/Zetia combination pill showed that the combination regimen reduced bad cholesterol by 35% compared with 24% for Zetia (20mg) monotherapy, 20% for bempedoic acid and 3% for placebo in patients receiving maximally tolerated statins.

The targeted indications represent a significant opportunity for the company. It is estimated that 78 million people in the United States have high levels of LDL-C along with 73 million people in Europe and 30 million people in Japan. Of these, an estimated 40 million patients in the United States are using statins, which is intolerable in 5% to 20% of this population. A potential approval will likely drive share price of the company higher. The company signed a deal with Daiichi Sankyo Europe in January for commercialization of the candidates in Europe. This deal has already boosted Esperion’s cash resources.

Meanwhile, the company expects to complete enrollment in the CLEAR cardiovascular outcomes study by the end of September. The study is evaluating bempedoic acid for occurrence of major cardiovascular events in statin averse patients with or at high-risk of cardiovascular disease.

However, any regulatory setback related to the company’s pipeline candidates will be a major disappointment for the company.

Esperion had $300 million as of Jun 30, 2019, sufficient to fund operations till operating cash flow remains positive. However, timely availability of fund is necessary for successful commercialization of the company’s drugs, following a potential approval. In June, Esperion entered into a revenue interest purchase agreement of $200 million with an investor group to extend its resources. However, these funds may prove inadequate for successful launch of the drugs as the company’s operating expenses remain significantly high.

Moreover, Esperion’s candidates will face significant competition from PCSK9 inhibitors — Sanofi (NASDAQ:SNY) /Regeneron’s (NASDAQ:REGN) Praluent and Amgen’s Repatha — already marketed for similar indications.

Zacks Rank

Esperion currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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