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

All right. Good morning, everyone, and welcome to day 2 of the Stifel Healthcare Conference. I'm Derek Archila, one of the senior biotech analyst here at Stifel. I'm pleased to be joined by our next presenter, Esperion Therapeutics. From the company, we have CEO, Tim Mayleben, to the left there; and then we have Rick Bartram, CFO, to the right there. Gentlemen, thank you so much for joining us.

Good morning, Derek. Thanks for having us. Look forward to the discussion.

All right. Well, maybe just to start. Maybe, Tim, do you want to just do a brief intro of what you guys have been up to and then we can kind of dig into the Q&A here?

Yes, sure. So thanks, Derek, for hosting us this morning. My name is, as Derek mentioned, Tim Mayleben, President, CEO of Esperion, we call ourselves the lipid management company. We have had a singular focus on developing convenient oral once-daily drugs to lower bad cholesterol. So our -- the entire focus of our company is on lowering bad cholesterol. We have 2 drugs, NEXLETOL and NEXLIZET, that were approved in February of this year here in the U.S. and in March in the EU. We launched those drugs commercially here in April, at the beginning of April, which also coincided with the height of the pandemic here in the U.S. So our drugs have been available to health care providers, patients and, again, we're very thankful for that. We've heard great reports from patients so far. But of course, the pandemic has had an impact on almost all of our lives in one way or another, and it's certainly impacted our launch. But we're a well-funded company with a singular focus on convenient oral drugs to lower bad cholesterol, very high unmet medical need, with almost 20 million people in the U.S. that need additional non-statin means to lower their bad cholesterol. And we think that with convenient oral therapies that we are in the best position to be able to meet that need. Those 20 million patients break down into about 10 million patients that can't or won't take statins. I think patients that we've referred to as statin-intolerant patients. The other half, almost 9 million patients that are taking a statin, they're so-called maximally tolerated statin, but still need additional means of lowering their LDL cholesterol. And of course, you can't double up on statin, so you need a non-statin means of lowering their bad cholesterol further. And again, with non-statin oral drugs that they can take with their statin conveniently each day, we think NEXLETOL an NEXLIZET has a really important place in the armamentarium for physicians as they seek to bring patients' cholesterol into the well-managed zone. So with that, maybe I'll turn it back to you, Derek, and we can answer any questions.

Excellent. Yes, that's a great place to start. So maybe first off, where are you guys seeing the most utilization for NEXLIZET and NEXLETOL right now? I mean, again, you kind of mentioned the 2 segments of patients that you're kind of targeting. But do you have any kind of early data or early kind of trends on where the utilization primarily is for those 2 products?

Yes. Thanks, Derek. I'll answer it in 2 ways. First of all, thinking about the prescribers. So there are 2 categories, primarily 2 categories of prescribers. One, of course, cardiologists who manage, obviously, many patients, especially those with more severe cardiovascular disease. They account for about 50% of the prescriptions that are written for our medicines so far. That's higher than you would expect in a non-COVID environment because, again, as you might expect, cardiologists' offices have been open and accessible. And of course, not dealing with COVID or COVID-related health issues, strictly dealing with cardiology issues, cardiovascular health issues for patients. So because those offices have been open, they've been -- they've had a more traditional patient flow of just cardiology patients, cardiovascular health-oriented patients, then they are writing a greater number of prescriptions. Primary care or internal medicine physicians are writing most of the other prescriptions, a few endocrinologists, obviously, but primary care docs have been, I think, either have offices closed or have been dealing with many of the acute COVID issues for their patients. So I think you may have seen the article in JAMA, a couple of weeks ago now that indicated that while there has been a move to telemedicine visits, especially among primary care physicians, the traditional cardiovascular health issues, blood pressure, cholesterol, have actually not been dealt with via telemedicine. Those particular cardiovascular health issues don't lend themselves well to telemedicine. So as the author said, those health issues, cardiovascular health issues have largely fallen through the cracks for telemedicine usage. With respect to the patients now -- turning to patients and where we're seeing patients use, the clear favorite early on in the launch of our medicines are the patients considered statin intolerant. And again, if you think about why -- just a little bit about why physicians may be prescribing our medicines at this early stage more for statin-intolerant medicine or statin-intolerant patients, it is because they are the most difficult to treat. They are -- the patients that have not wanted to take statins or can't take statins, they are the patients that don't want to inject themselves or for economic reasons, don't have access to the more expensive injectable biologics. So the statin-intolerant patients who need a non-statin means of lowering their LDL cholesterol seem to be more of the patients that are being prescribed our medicines. Now when I say that, I want to emphasize we don't have data on patients. We're hearing more of this anecdotally from physicians who speak to our sales representatives, but that's what they talk about most. And of course, what you would expect as time goes on is as they have success with their most difficult patients, and we're hearing great stories about patients, not only being able to tolerate both NEXLETOL or NEXLIZET, but also that they're getting -- they're seeing very good efficacy, very good LDL cholesterol lowering, depending on which medicine they're prescribed. So I'll pause there and see if you have additional questions in that.

Yes. I just want to touch on a few things. So first, in terms of the telemedicine, I guess, what percentage -- do you have a sense of what percentage of patients are being prescribed your medicines via telemedicine? Is that a good portion? Or is that -- I don't know, what trends -- what do those trends kind of look like? And then I guess as you think about going forward in the next couple of months, I guess, what's the level of awareness right now? Because you have a good base right now of prescribers, it sounds like. Is that -- how do you continue to grow that awareness? And where are you kind of -- what's the baseline awareness as we sit here today?

Yes. So with respect to telemedicine, again, I think not just our observation, but again, KOLs in the health care space are also saying cardiovascular health issues do not lend themselves to telemedicine. And so we're not seeing -- and we don't expect to see, honestly, Derek, we don't expect to see an abundance of prescribing through telemedicine for cholesterol lowering medicines. I think the overall context and maybe supportive of this is when you look at the therapeutic area overall, so all cholesterol lowering medicines. And you look at this period or this week or this month compared to the same period or month in 2019, new prescriptions for LDL cholesterol lowering drugs are down 30% as compared to last year. If you look at the beginning of this year, pre-COVID, so January, February compared to this period now, new prescriptions for LDL cholesterol lowering drugs are down 30%. So what that tells you is it's not just our medicines are lower than we would have expected pre-COVID, it is the entire cholesterol lowering class of medicines that is not being treated in this pandemic. And we can say, gee, that's not so great. Except last Monday, this Monday, we received news on the vaccines that, highly efficacious, safe, well tolerated. And I think for the first time, not only we, but I think everybody can now start to think about a time in which things will return to pre-COVID ways of doing things. And I think we think that mid-next year, when the vaccines are broadly distributed, that we will see a return to traditional management of cardiovascular health, and that is cholesterol lowering medicine. So again, as we think about our medicines launching here, we're going to continue to muscle through, I think, as we've been saying this pandemic. As we get access to physician offices as they hear about our medicines, they're prescribing them. As they're getting success with their first 1, 2 or 3 patients, then they're prescribing them more broadly within their practice. But it is, by no means, an indicator of the success or the anticipation for our medicines to look at the level of demand in this environment, I think we really have to look at when the overall cholesterol lowering medicine category improves, then we'll have a much better indicator of just how well accepted and how well our medicines will do from a demand standpoint.

Got it. And just -- do you think those trends that you're citing in terms of the decline in scripts for the overall like cholesterol management, is that largely because people are -- are they not refilling? Or is it more that people are not going to get their LDL checked during their maybe routine checkup or just they're monitoring, and they're just like, other, bigger things to worry about with COVID versus like going in and getting their LDL test. Is that kind of the theme?

Yes. Yes. So everything we're hearing, we've heard about medical distancing, that's become a term of ours during the pandemic. We've heard about the patient flow at physician offices. It was almost none, almost 0. During the height of the pandemic in Q2, we reported, and I think we've seen data from IQVIA and others that it's returned, again, depending on the specialty, but return to perhaps 60% to 70% of pre-COVID patient flow levels. And that's why we're seeing traction within the cardiology community. But that patient flow that's coming back to primary care is primarily COVID-related and not cardiovascular health. And then the medical distancing that I mentioned earlier is, I think you highlighted, it is, all of us -- or almost all of us, go in for an annual checkup with our physician. And of course, if you're a cardiology patient, you're usually going in twice a year, every 6 months or so to get your vitals checked. And those are either not happening in the case of primary care or they're happening with less frequency than they were pre-COVID. So again, I think as COVID dissipates, as primary care offices are no longer having to deal with either acute COVID cases or negative impacts from COVID, then we will see a return to normalcy or at least we're anticipating that, Derek. And as a result, we will see increased patient flow and the right kind of patient flow. People coming in for their annual physicals, getting their cholesterol checked, getting on a cholesterol lowering medicine. And of course, as the overall category improves. So as -- for every -- if you -- again, if you look at the history, for every 10 patients that start on a statin, 2 of them will end up not being able to tolerate it, either for muscle pain and weakness reasons or HbA1c worsening reasons or what others describe as brain fog from statins. And when they discontinue the statin, they still need to lower their LDL cholesterol. And we believe physicians will reach for the convenient oral option of NEXLETOL or NEXLIZET as the non-statin preferred alternative.

Got it. I guess, what do you think -- or what are your top priorities like between now and the middle of next year when you think COVID hopefully dissipates? And then like you said, the vaccine is getting broadly distributed and hopefully, you start to see a return to normalcy. What can you do? Or what are the 2 or 3 things that are the highest priority that you can do right now, in between now and then, to really kind of prime the market even more for that inflection in sales maybe in the second half of next year?

Yes. No, it's a great question. And I think one of the things I'm most excited about is our managed care coverage, not just me, but I think our entire team is excited about the managed care coverage. So on the commercial side, we're already at 90% of commercial lives covered at preferred brand Tier 2 with this PA to label. So the patient just has to be on a "maximally tolerated statin" or in the case of a statin-intolerant patient, have tried a statin and not been able to tolerate it. So that's great. But you've heard us talk about Med D, which, long term, will be about half of our patient population. Again, atherosclerosis, high levels of LDL cholesterol are primarily a disease of older people, unless, of course, there are some genetic disorders, but primarily a disease of older people. So Medicare Part D is going to be an important part of managed care access for us. So we're at about 50%, a little over 50% today. So during the course of the remaining period of this pandemic, we are working hard to bring the Medicare Part D coverage, the managed care coverage there, to the same level as on the commercial side. So by mid next year, when hopefully, COVID is behind us as a result of broad vaccine distribution then anybody, not just anybody who's got commercial coverage, but anybody who wants access to our medicines can do so through either Med D or commercial covered plans. And I think that will pay really significant dividends for us as this COVID-19 pandemic passes, and we have really reduced all friction on the managed care side by having not just commercial but also Medicare Part D access to our medicines.

When would that start? I might have missed that, but when would you get that access?