Esperion Therapeutics, Inc. (ESPR) Earnings Call Transcript & Summary

Great. Good morning, everyone. My name is Jess Fye. I'm one of the biotech analysts at JPMorgan. And we're continuing the 2020 conference today with Esperion. Quick housekeeping note. Since we're coming up on lunchtime, the breakout session for this company is going to be at 1:30 in the Elizabethan C room, so right next door. So come back at 1:30 if you want to hear Q&A with management. But for the presentation, I'll pass it over to the company's CEO, Tim Mayleben.

I was waiting for some applause. No. I'm kidding. Thank you, Jess, for the opportunity to be with you here this morning. This is a really transformative year for our company. And so I'm especially pleased to be here with you. If you remember anything today, I'd like you to remember 3 things: First of all, something we've been saying quite consistently now, we're here in the beginning of 2020. When I started in this industry more than 20 years ago, heart disease was the #1 cause of death in the U.S., above all others. I'm sad to say, in some ways, that is still the fact. Cardiovascular disease remains the #1 cause of death in the U.S. High cholesterol levels, as perhaps all of us know or should know by now, is a key risk factor in cardiovascular disease. As a result of that, 18 million people in the U.S. have unhealthy levels of bad cholesterol, 18 million people, despite the fact that there are 240 million or 250 million prescriptions a year written for statins. We have 18 million people who are still suffering with unhealthy levels of cholesterol. Third, we have 2 non-statin cholesterol-lowering drugs that we've developed over the last 10 years. And if you're keeping track, you should be keeping track of this, upon approval, which we're expecting next month, will be the first non-statin, once-a-day pills approved in the U.S. in almost 2 decades, 2 decades. So I'll tell you a little bit more about our company. As I mentioned, we call ourselves the lipid management company, we have for a number of years. We're experts in lipids. For the nonindustry folks, lipids, cholesterol, so we know a lot about cholesterol. We're experts in developing and bringing new medicines to patients for cholesterol lowering. We're pricing our drugs for the many, not for the few. Again, if you follow this space, you know that there have been some innovative drugs introduced but they've been expensive. They've been injectable, not convenient. We've put together what we think is the best team available to -- best team ever perhaps to commercialize now these therapies. And I don't think it's an overstatement to say that upon approval, these are a couple of the most anticipated launches of 2020. So let me introduce you to our therapies, if you haven't been paying attention. So we have 2 drugs. And as I mentioned, upon approval, these are going to be the first, new oral, non-statin, LDL-cholesterol-lowering drugs approved in the U.S. in almost 2 decades. Bempedoic acid, our drug, PDUFA date is February 21. And the bempedoic acid/ezetimibe combination tablet, which has a PDUFA date of February 26. What stands out as you look at the characteristics of our products or the product profile is that, first of all, these are convenient, once-daily pills, once-a-day pills. In the tradition of all successful LDL-cholesterol-lowering drugs, they're oral once daily. Importantly, they're non-statin. It's got a non-statin mechanism of action. They're ATP citrate lyase inhibitors, and of course, they're very well tolerated as well. Our positioning -- and this is really important and often misunderstood, the positioning for both of these drugs, we are not replacing standard-of-care statins. These drugs are positioned to complement, to add on to standard-of-care statins. And upon approval, as I said, these will be the first non-statin, once-a-day pills approved in the U.S. in almost 2 decades. Little bit about our history, so we've been around for a little bit more than 10 years. As I mentioned earlier, we know cholesterol. To paraphrase Sam Cooke, we don't know much about lots of things but we do know a lot about cholesterol, whether that's developing cholesterol medicines or whether it's commercializing LDL-cholesterol-lowering drugs, we have the experience. So starting in 2008 with the founding by our scientific founder, Roger Newton, the IND filing in 2009, followed by the initiation of our Phase III program. Fast forward to 2016 and then completion of that program in 2018. 2019 though, if you look at the far right-hand of the slide, was an amazing year for us. We submitted 4 NDA -- well, sorry, 2 NDAs, 2 MAAs, but 4 regulatory submissions in February of last year, 4. I don't think there's been a big pharma company or any other pharmaceutical company who has accomplished that. But we did. Earlier in the year of course, we had signed a transformational commercial collaboration with Daiichi Sankyo. We also had our NDAs and MAAs accepted for filing and validation during the course of the year. And we signed another funding agreement with Oberland Capital in the middle part of the year, and then we also completed the enrollment in our cardiovascular outcome study. So an incredibly eventful year for Esperion, one of great accomplishment and put us with a lot of momentum heading into 2020. So I'm going to shift gears and talk a little bit about the problem that I mentioned at the top, which is that cardiovascular disease remains the #1 cause of death in the U.S., 800,000 people. 800,000 people in the U.S. die every year from cardiovascular disease. And again, we show a little bit of context because I'm sure all of you saw the news last week that there has been a tremendous decline in the rate of cancer deaths. That's great. I mean that is absolutely phenomenal news except if you're suffering from cardiovascular disease because there hasn't been a tremendous amount of innovation or even investment in cardiovascular disease, therapies to treat cardiovascular disease and in particular, therapies to treat lipid disorders, cholesterol, bad cholesterol. There are 2 well-accepted ways to lower cardiovascular disease risk. One of them is cholesterol lowering; the other, of course, is blood pressure. There are literally hundreds of drugs to treat high blood pressure. There are 15 for lowering bad cholesterol. And that's a testament obviously, to the dominance of statins but that also speaks to the lack of innovation in the development of drugs to lower bad cholesterol. Let's look more closely now at the patients. Starting at the bottom rather than the top of this slide, I'd like to just draw your attention to the fact that the 18 million people in the U.S. that have unhealthy levels of cholesterol and then we circle here on the left and right, these 2 patient populations. One, there are people taking a statin. They're maximally tolerated statin who aren't achieving a healthy cholesterol level, about 8 million people. Perhaps more importantly, and you've heard us talk about this a lot over the years, perhaps more importantly, it's the patients who can't or won't take a statin. Not because any philosophical reason, because they can't tolerate the side effects, because they can't tolerate the side effects. Statins are great. My job is not to say bad things about statins. Statins are great for 8 out of 10 people. 8 out of 10 people benefit, they get to a healthy cholesterol level, tolerability profile is excellent. But for the 2 out of 10 -- and again, that's 18 million people because there are 100 million people in the U.S. who suffer from hyperlipidemia. So these are the patients that we're targeting to get to healthy cholesterol levels with a non-statin, once-a-day pill. A little bit more about positioning of our drugs. Most important point to remember again, is we are not replacing standard-of-care statins. We're complementing maximally tolerated -- maximally tolerated does not mean the highest dose because that maximally tolerated statin is different for every person in this room. Some of you, perhaps you're on a statin today, can tolerate the highest dose of Lipitor, 80 milligrams, 40 milligrams of Crestor. But many can't. In fact, the highest doses of both Crestor and Lipitor represent less than 25% of all statin prescriptions. Why? Why wouldn't everybody take the highest dose of statin? Because they're not well tolerated. So our job with these therapies is to complement these statins and provide physicians and patients with alternatives, with an option, with a non-statin drug to lower their cholesterol. And again, I'll keep saying it. Upon approval, these will be the first non-statin, once-a-day pills to be approved in the U.S. in almost 20 years, in almost 20 years. We have done a massive amount of research, and to put this in context, we have talked to more than 2,000 physicians, more than 2,000 physicians in the U.S. over the past 1.5 years. I would tell you that we probably know more about how physicians think about LDL-cholesterol lowering than anybody on the planet today. You want to know how doctors think about LDL-cholesterol-lowering therapies, we can probably answer it for you because we have this tremendous database of research that we've completed. What we learned, shown on this slide, is that 70% of physicians are likely to prescribe our drugs. Why you might say, why you might ask. First and foremost, and this is probably the most underappreciated aspect of our therapies, is that they're once-a-day pills. In the tradition of every successful cholesterol-lowering drug in history, once-a-day pill matters. Also, they like the efficacy profile, and they like the safety and tolerability profile, which is comparable to placebo. Shift gears and talk a little bit about our managed care strategy. We think there are 3 key ways to be successful with managed care: first of all, positioning. I talked about our positioning. We're not saying to manage care, we want your patients on statins to go on our drug. We're not saying that. Our -- we want every patient who can tolerate a statin to be on a statin, every patient. And that's our messaging to managed care. We show here on the slide as well, the compendia. Getting separate compendia classification is key here in the U.S. That is key. This is a database of drugs. We have an ACL inhibitor drug. It will be in its own class. We will not be competing with other LDL-cholesterol-lowering drugs for formulary positioning. We will have -- our expectation is we will have our own classification. Pricing. Pricing is absolutely key. We've learned that over the last 5 years. There's plenty of drug pricing rhetoric. Almost every day, you can pick up a paper, turn on the news and read about it. We have taken a traditional approach. We're winding the clock back on pricing for drugs. We're pricing our drugs the way that LDL-cholesterol-lowering drugs were priced years ago, when Vytorin went off patent, when Zetia went off patent, when Crestor went off patent. Check it out. Our list price, our WAC price is going to be in the same range as those drugs, those incredibly successful drugs. And then of course, we will be providing rebates to payers. And the feedback from payers about this messaging so far has been incredibly encouraging. The result is that we're projecting that on launch or within weeks of launch that we will have 40% to 50% commercial coverage. We said this back in June during our Investor Day, we're repeating it again today, and 20% to 25% Part D coverage. Let's look now at plans for our sales team. So a quick hiring update. We've hired a very seasoned team of regional managers, 30 regional managers here in the U.S. And on average, they have 22 years of pharmaceutical sales experience, 15 years of sales leadership experience, most in the CV space. Combined, this team has launched almost 300 drugs. We're interviewing this week for the territory managers or the sales reps as we call them, and we expect to complete hiring and offers this month, contingent offers that upon PDUFA, upon approval, will turn into real offers. And we will have a 300-person sales force ready to get into the field within a month of our PDUFA dates. So what is our launch plan? First, you should note that it's specialist focused: cardiologists, lipidologists, endocrinologists, high-prescribing PCPs. This is a specialist-focused launch. Don't call it a primary care launch. Not a primary care launch. We have 300 reps, 300 highly experienced reps, reps who already have relationships with physicians. And our goal, as we show here, is to access those doctors that are writing 40% of all LDL-cholesterol-lowering prescriptions today. And what I'd like to do is just show you how this compares with other recent -- relatively recent cardiovascular drug launches. So we've got a couple of examples here: first, the Entresto launch, which you can see on the far left; the Xarelto launch, Factor Xa inhibitor, first-in-class; and going back to the days of Advicor, the Advicor launch back in 2002. So what you should note is that our launch analog and keep track. You should be able to keep track of this as we move along through to and through the launch. Xarelto launched in 2011. It has already achieved peak revenue in the multibillion-dollar range, but you'll note that they launched with about 300 sales reps and expanded over time as they got additional indications. It is a cardiovascular drug. It is a first-in-class. It was the first-in-class Factor Xa. Notable difference, when it was launched, it was to replace Coumadin, safer, slightly more efficacious. Again, I'll highlight positioning: We are not positioning our drugs as a replacement for statins. We're adding on, a notable difference from the Xarelto launch. No perfect launch analog, but this one is a pretty good one. So look at the Xarelto launch, it's one that we will be tracking as we continue to move along. The team is shown here. I'll just highlight 3 folks. And before I do that, I would just say, this is a team that has delivered world-leading results in development, and you should expect that we will develop -- we will also provide for you world-leading results in the business and commercial side as well. So I'll just highlight 3 folks here. Ashley Hall is our Chief Development Officer. Prior to coming to Esperion, she led the regulatory -- she was the regulatory lead for Repatha, when she was at Amgen. Bill Sasiela, our Head of Clinical Development, prior to coming to Esperion, was the clinical development lead for Regeneron and PRALUENT. When I say Regeneron, cardiovascular for Regeneron and for PRALUENT. And then lastly, Mark Glickman, who is our Chief Commercial Officer, here in the room with me. Mark has over a dozen product launches. I think he would be the first to say he's had some very successful launches, and he's also had some not-so-successful launches. But I think as we all know, we don't want Mark to learn about unsuccessful launches here. So we're glad he had that prior experience, and he is going to apply his experiences and his team's experiences to make sure that we have an incredibly successful launch in the months and years ahead. No presentation like this would be complete without patting ourselves on the back a little bit about the things that we achieved in 2019 and also give you an idea of what 2020 looks like. I won't read all of these to you, but again, just to highlight 2 things: one, PDUFA dates, measured in weeks. So within a few weeks, we will know about the approvals here. We're also expecting to have a positive CHMP opinion this quarter followed by EMA approval in the second quarter, which will trigger rather the additional Daiichi Sankyo milestone. Many of you have heard us also talk about the rest of world. We have a process ongoing to monetize rest of world rights to bempedoic acid in fixed-dose combination. That process is highly competitive, and we signaled that we will complete that process after approval. We're targeting April, and we feel very confident in being able to deliver that for you. But what about beyond 2020? So putting this all together, I think this is what it means for the future. We have the right drugs, non-statin oral drugs, cholesterol-lowering drugs. We have the right time now. We know that to be successful in this space, you can't have an injectable, high-priced drug. That doesn't work. We have the right access model. We are not doing anything but partnering with payers. This is a collaborative process to bring these medicines to patients. And in order to do that, we have to collaborate with payers, and that's what we're doing. We have the right team here as well. And I think what this means is, as you can see on this slide, I know it's a little bit of an eye chart and a little bit busy, but if you go down to the bottom, you'll notice that 1.2 million and 0.6 million add up to about 1.8 million patients. We expect at peak to have 1.8 million patients on our therapies. We have high aspirations. Again, bringing it all back, we're the lipid management company. We're lipid experts. We know cholesterol. We know cholesterol medicines. We know how to get these in the hands of patients and physicians. Our therapies are going to be priced for the many, not for the few, and we're working to ensure that all appropriate patients will have access to our therapies at an affordable price. And as I said, these are 2 of the most anticipated product launches for 2020. So thank you very much for being here. And I think, as Jess said, we'll have the breakout in a little over an hour.