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

Okay. Good morning, everyone. Welcome to the BofA virtual Vegas health care conference. I'm Geoff Meacham. I'm the senior biopharma analyst here, and I have [ Olivia Brayer ] from my team on the line as well. We're thrilled for this session to have Tim Mayleben, who is CEO of Esperion Pharmaceuticals. Tim, welcome to the conference.

Thank you.

Perfect. So we'll do a Q&A here with Tim, but let me first queue him up for just a few minutes of background prepared remarks and get ready to some questions here.

Perfect. Thank you, Geoff, and thank you, [ Olivia ], as well. I want to thank you both for hosting us for the virtual conference. It's not quite the same as Las Vegas, but an awesome opportunity to [indiscernible] with you and other folks on the long line. So [indiscernible] getting to know Esperion, we are [indiscernible] management company. We're developing commercialized convenient oral launch daily medicines to lower [indiscernible]. Cardiovascular disease is still the #1 cause of death worldwide. LDL-cholesterol lowering a key risk factor for cardiovascular disease. And, of course, cardiovascular disease in this current COVID environment is a well-known risk factor for COVID-19 [indiscernible] a couple of months here. We have received 4 marketing approvals for our drugs, both in the [indiscernible]. Also, very recently, we signed a Japan-only development and patient collaborations [indiscernible] pharmaceuticals that just deal in the history of Japan deals with [indiscernible] in total upfront and milestones, another $100 million of [indiscernible] R&D [indiscernible] and then royalty of [ 15% to 30% ]. I note that this is the [indiscernible] precedent setting development deal by the Esperion team [indiscernible]. We expect [indiscernible] what we call a true rest of the world [indiscernible] non Japan follow by year-end. With -- just with the 2 deals that we have signed, we've got $1.5 billion of committed up fronts and milestones from these [indiscernible]. So we're adding 2 [indiscernible] here, as I said, by the end of the year. [indiscernible] note that with the DSC deal that we signed for the EU last year, we expect to start to recognize royalty revenue by this year, and any royalty revenue is incremental to that $1 billion [indiscernible]. From a commercialization standpoint here in the U.S. with the 2 approvals at the end of February, we've onboarded 300 territory managers. And even in the COVID-19 environment, we're continuing what we call a [indiscernible] launch. And what is an empathetic approach to individual health care [indiscernible] space and also, of course, geographies in the sense that COVID-19 is devastating effect globally, but there devaluation[indiscernible] hotspots [indiscernible] example, very different experience for the health care system and health care providers and patient care than in, say, Texas or Florida. We're tailoring our approach [indiscernible] the health care providers and these different [indiscernible]. NEXLETOL, which is formerly [indiscernible] acid, [indiscernible] available on March 3. Our territory managers initiate virtual engagement with [indiscernible] 20th. And [indiscernible] last week that [indiscernible] the combination of bempedoic acid [indiscernible] first non-stat combination medicine approved for LDL-cholesterol lower in the [indiscernible] actually. But NEXLIZET [indiscernible] available June 4. And just this week, I'm very happy to [indiscernible] managers [indiscernible] sales representative in [indiscernible] are initiating what [indiscernible] call traditional promotional activities. So 10% of our territory [indiscernible] traditional promotional activities this week. [indiscernible] Europe is planning to make both of the medicines available in the EU in Q3 [indiscernible] last week on our quarterly call with some [indiscernible] labels there. And then I would just finish by just, again, returning to the U.S. and [indiscernible] that we talked last week about the fact that we have both very broad and very high-quality managed care [indiscernible] formulary coverage, and this is Tier 2 with some [indiscernible] and over 20% Medicare Part D coverage at the lowest branded tier. And so for commercial covered patients, we expect them and we've seen so far them paying [indiscernible] out of pocket. And of course, Medicare [indiscernible] out of pocket is [ $45 ] [indiscernible]. So [indiscernible] pause, and Geoff, I'll turn it back to you to [indiscernible] Q&A session.

Okay. Great. I just wanted to ask you, I know we're obviously early days in the next NEXLETOL launch, but I wanted to get a sense from you what the feedback has been so far from prescribers. There's differences maybe between the conversations that you had prior to approval and looking at the product profile and then now that it's commercially available, what the response has been? Again, I know it's early, but just leading indicator type of things.

Yes. Yes. No. So [indiscernible], as you noted, [indiscernible] it is the early, but we have been conducting [indiscernible] advisory boards. And of course, these [indiscernible] virtual advisory awards. And we -- there's to be incredibly interested in doing them weekly -- as I said, almost weekly advisory [indiscernible] to talk with the labels, to talk with us our messaging and what they're hearing and seeing in the health care [indiscernible] we're hearing is the [indiscernible] nonstatin convenience of NEXLETOL is resonating incredibly well with health care providers. Especially if you think about the nonstatin therapies that are available, they are injectable, and patients have [indiscernible] to initiate not so with of course a convenient oral once-daily therapy. I think the other thing that I'd highlight is we're obviously very vocal about the affordability of our medicines and also the managed care coverage. And so we heard early on from health care providers when they've written [indiscernible] when they've heard from their peers [indiscernible] prescription. There has literally been [indiscernible] with the copay card, with getting the prescription for [indiscernible] these medicines [indiscernible] especially [indiscernible] experienced with the [indiscernible] injectable therapies that very different experience. And so affordability, low-patient out-of-pocket for patients and then [indiscernible] in the convenient oral once-daily [indiscernible] therapies and then being the [indiscernible] alternative. And again, keep in mind, we're positioning for these medicines. We're not replaced [indiscernible] tolerated in therapy. So that's been the early feedback from [indiscernible].

That's helpful. And then when you think about the metrics that the Street will see, Tim, looking at IMS, [indiscernible] scripts, just help us with kind of reconciling how representative of those may be with actual demand. I know, obviously, early in a launch, there tends to be kind of a period of uncertainty, right, to figure out how much -- how representative of the scripts really are, but I wanted to get your perspective on that early on.

Yes. So yes, it's a great one. And as [indiscernible] mentioned, we're 6 weeks [indiscernible] 6 weeks into the launch. We made next [indiscernible] available [indiscernible] March 30 [indiscernible] period. And until [indiscernible] that our [indiscernible] manage is completing the virtual [indiscernible] tools and digital. If you think about the [indiscernible] all of the traditional promotional [indiscernible] core visual aid, copay card, the [indiscernible] behind the [indiscernible] and the literature information that you populate physician in rooms and offices with [indiscernible] to be converted to digital. Then also the territory managers had to be trained on virtual detailing. And so there was a, like I said, all 3-week period until the week of April 20 that our territory managers were not promoting virtual promotion of our -- if you look at the [indiscernible] data from those [indiscernible] quite low. But having said that, if you look at -- so what I would say is certainly not [indiscernible] where we think in terms of when you see [indiscernible] that is nonpromotion dependent demand, lack of awareness, if you will, [indiscernible]. But to give you an idea of where [indiscernible] during the first week that our territory [indiscernible] April 20 that they were out, 200 virtual [indiscernible] with health [indiscernible] the second week, they had over [ 400 ] with -- again, virtual engagements with health [indiscernible]. And then more broadly, it's where we are now. So 3 weeks into the launch, we've had 2,000 touches or 2,000 engagements with health care providers. And so we're seeing a nice ramp in engagement. And again, keep in mind, this is in [indiscernible] a pandemic. The [indiscernible] world has not seen for over 100 years. And so [indiscernible] focused [indiscernible] on COVID-19 and COVID-19 issue. But now as we approach the end of April [indiscernible] we are in a couple of weeks of May, we can say that there has been a bit of [indiscernible], and their interest in engaging with our territory managers or health care provider about our products. Just one more statistic that I would share with you. When we did our virtual [indiscernible], we also decide our speaker [indiscernible]. And this is, again, part of a traditional [indiscernible]. We decided to move the [indiscernible] program to a virtual [indiscernible] bureau program. So while we had trained over 100 health care providers, [indiscernible] for NEXLETOL, we had fully deployed. And because a lot of [indiscernible] are done, we've -- national speak their bureau program now, and we've had 4 speaker bureau sessions, what we call smart casts, to a week. And this is the third week that we had over 250 over [indiscernible] health care providers who listen in to these smart casts. That's an average of [indiscernible] providers per session. And that is -- we've been told by the [indiscernible] most of these virtual sessions, that is [ 5 times ] what they are seeing with other speaker bureau programs. So we're not seeing it yet, obviously, in the script [indiscernible]. We do like the week-to-week increase in prescription volume, but [indiscernible] what we do really like [indiscernible] the physician health care provider engagement that we're seeing, the active interest in the smart bureau learning about NEXLETOL, peer-to-peer education. Then the last thing I like is that we have had [indiscernible] demand for [indiscernible]. And keep in mind that our samples are [indiscernible] blister packs. So we've seen a lot of engagement with the program and a lot of shipments out to physicians of samples of NEXLETOL.

Okay. That's helpful. And just to follow up on that last comment, Tim, I wanted to ask you if have there been any anecdotal kind of lessons to be learned in this telemedicine world for the NEXLETOL launch that could be applied when NEXLIZET launches in June?

Yes. So one of the things, Geoff, we've been saying is that [indiscernible] is no playbook [indiscernible] referenced to the 2 launch a new medicine [indiscernible]. No matter whether it's very affordable or how convenient and the [indiscernible] of the oral dosing, they're [indiscernible] a playbook for how to do that in this environment. But I think a few of the things we've learned is really resonated with the health [indiscernible] has been the empathetic approach that we've taken with the [indiscernible]. We haven't gone running into physician offices or with phone calls [indiscernible] or text messages, but we take an empathetic approach to making sure we understand what [indiscernible], what they [indiscernible] from us in this environment. And then if they're saying, hey, I just can't talk to you right now, [indiscernible]. That's difficult at times because so much of the training in our industry is aggressive and trying to get [indiscernible] of health care provider. Our messaging has been, hey, [indiscernible] behind. This isn't the time for it. This is a time for empathy, and that has been well accepted by [indiscernible] managers and even more [indiscernible] accepted by [indiscernible] target. So I think that's an important lesson. Two, I think as we've come to understand this, and I think others are [indiscernible] well, I mentioned earlier that [indiscernible] is not impacted the same. And so we have almost 300 [indiscernible] managers [indiscernible] said to them [indiscernible] the gap [indiscernible] local. So you develop a local business plan for your territory that is reflective of whether it has been a lockdown or not, whether you're [indiscernible] lockdown or not and what other dynamics may be impacting your [indiscernible]. So we've had approaches, as I mentioned in, well, [ 10 ] of our territory managers are just back now engaging in traditional promotional activities this week. That's the first time that our territory [indiscernible] is out with, of course, all of the PPE to make sure that they stay safe, that providers stay safe, their [indiscernible], but we are now starting [indiscernible] promotional activities. And again, we'll [indiscernible] and we'll start to see more of our territory managers engaging in traditional promotional activities here over the next [indiscernible]. So by the time of a launch, I would expect we could see [indiscernible] of our territory managers [indiscernible] in additional promotional [indiscernible]. And I think the last thing that I'd highlight is that speaker program I referenced earlier has been a real win. It is -- we didn't know what to expect when we move to the virtual speaker bureau program, but it has been [indiscernible] fairly well received. We've had nationally prominent [indiscernible] prominent speakers and attracted broad attention -- broad interest that, again, we wouldn't have expected, but now that now we've seen it, we think it's something that we can continue to do. And what we're going to see going forward is continuing to embrace some of the virtual programs extraordinarily [indiscernible]. And even when we get back to almost full traditional promotional activities [indiscernible] some of these virtual [indiscernible] worked timely well. And since that we [indiscernible] to the NEXLETOL launch and, of course, the NEXLIZET will also benefit for traditional and promotional activities because, as I said, I think we expect perhaps as much as [ 50% ] of our territory managers to be doing traditional promotional NEXLIZET when it launches next month.

Okay. That's helpful. I think, Olivia from the team had a question on the NEXLIZET launch. Olivia?

Yes. Tim, when you think about the launch, what drove that decision to shift the launch forward by that 1 month period? Was it more so based on physician feedback? Or was it related to the initial demand trends that you've maybe seen early on?

Yes. So it's an interesting question. And as I look back on our on [indiscernible], I mentioned, Olivia, that we have almost [indiscernible] advisory board, again, virtual advisory board with groups of physicians and [indiscernible] health care providers on these calls. And as we talk [indiscernible] I mentioned earlier, with the [indiscernible] they are able to initiate [indiscernible] how to inject themselves. I think it wasn't lost. It's not lost on physicians that, especially [indiscernible] are not on a background of statin [indiscernible] efficacy of NEXLIZET is very similar to PCSK9 [indiscernible] because PCSK9s have their greatest efficacy on a background of statin. So putting those together [indiscernible] we're looking for another tool in the toolbox, another [indiscernible] and asked if there's anything we can [indiscernible] forward in midst the COVID-19 environment? And so I think the combination of the success of the senior bureau program, the [indiscernible] of touches that we had made with health care providers virtually led us to the decision to move this by [indiscernible] month. And so I think we're confident that at this point that health care providers are going to be very receptive to the advance of the launch to [indiscernible] June 4 rather than in July. And I just -- it is totally precedent for [indiscernible] medicines to launch a -- at a stagger [indiscernible] the innovative medicine. And so we're very much following history in [indiscernible]. I think bringing it forward a month is one we all feel good. As we've talked with health care providers, they're excited to hear that we were receptive to moving the launch up.

Yes. Tim, we talked about the COVID impact. I want to get a sense from you, how are you thinking about the impact and the launch trajectory if we get perhaps a second wave infection later on this year just relative to what we've seen for the initial outbreak in reaction?

Perhaps, look, like you and many others, the idea of a second wave is hitting in terms of the impact it will continue to have both in terms of the health care system economy as well. So I think we're hopeful [indiscernible] to happen, but I think we're also realists and -- for such an eventual outlook. So from our standpoint, one of the things that we've seen is -- I mentioned that our territory [indiscernible] started virtual detailing the week of April 20. So about 3 weeks ago. And what we have seen, and again, I shared some numbers earlier, is that they have -- there's a learning [indiscernible] to any of these things. And the [indiscernible] has been [indiscernible] and we [indiscernible]. That is that our territory managers will continue to find new and better ways to deploy these digital assets and virtual tools. And [indiscernible] there are parts of the country that been contemplating a second wave may not opening or reopening much or a second wave hits. So I mentioned, we continue to think that as we get our territory managers into the field, we will continue to see reasonable transaction of our territory managers continuing to use only virtual [ promotion ] activity and virtual detailing tools. So I think for us, we continue to hope that we'll be able to do traditional in-person activities or that the majority [indiscernible] will be able to do that. But if second wave hits and we [indiscernible] situations in various parts, we will be prepared to get back and deploy or redeploy more broadly the virtual tools, the digital assets that have been becoming better and better at using. And so I think that we would see more of a balance toward virtual [indiscernible]. Again, [indiscernible] will experience this differently. So I think with the experience that we've had, we continue to expect that traditional in-person promotion safe, protected in-person promotion will continue, but we'll see the balance shift back and forth proportionally to if it was 80-20, leading in -- that is 80% in-person and 20% virtual leading into a second wave that we might see it return back to more of a 50-50 mix of virtual and traditional promotional activities. But I think that's how [indiscernible] and again, with the hope that the second wave is certainly not as impactful as the first.

[indiscernible]. Okay. And just a question on the webcast from an investor. When you look at the commercial sales that you guys actually recorded in the first quarter, was this right following approval? Or was it selected patients that were on the studies that were rolled to commercial, just some specificity there?

Yes. So it's a great question. And I think the way to look at the revenue from the first quarter is we recognize, I think, as [ Vic ] said, we recognize revenue when the wholesalers or what's called the [indiscernible], third-party logistics firm places [indiscernible]. So [indiscernible] in the first quarter was availability [indiscernible] it was an initial order by [indiscernible]. And so that will be worked -- being worked down during these first couple of months. And we [indiscernible] more of a routine ordering, and of course, we'll get -- that is from wholesalers and -- which is we recognize [indiscernible], and then we'll also obviously see -- continue to see the [indiscernible] as well. But the way to think that first quarter [indiscernible] was initial stocking [indiscernible]renew.

Okay. That's helpful. Well, with that, we're out of time. So Tim, thanks so much for the dialogue, and I really appreciate the conversation. Very helpful.

[indiscernible] catching up with you, Geoff, and again, thanks to you and Olivia for hosting [indiscernible] and definitely look forward to an exciting day today.

Yes. Likewise. Hopefully, next conference will be in-person, not a virtual Vegas.

Look forward to it. Thanks again, Geoff.

All right. Take care.

Yes. Bye-bye.