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

All right. Good morning, everyone, and welcome to our final day of our BofA Virtual Vegas Healthcare Conference. My name is Olivia Brayer, and I'm on the U.S. Biopharma team here at Bank of America. And we're very happy to have with us today, Chief Operating Officer of Esperion Therapeutics, Sheldon Koenig. Thanks so much for being with us today, Sheldon.

Thanks, Olivia. Great to be here.

Yes. So let me turn it over to you to go over to some slides and just the broader overall Esperion story.

Will do. Thanks, Olivia, and good morning, everybody, and thank you so much. It's a pleasure to be here representing the team for Esperion. We have an exciting and compelling story. And I'll just jump right into it going to Slide 2, just our safe harbor forward-looking statements. And moving to Slide 3. I'll be periodically calling out the slide numbers, as I know folks are going through the slides on their own. So this is our team. We have a strong team with many years of experience, not only in biotech but also big pharma. All of us are dedicated to our mission in really improving cardiovascular health for patients. And as we move to Slide 4, why is that? We know that cardiovascular disease is still the #1 cause of death worldwide causes more annual deaths in all forms of cancers combined. I'm a cancer survivor myself, and I'm dedicated to really educating and bringing forward more and new information to those patients suffering from cardiovascular disease as the team is. We know that studies show reducing LDL levels with lipid lowering agents lowers the incidence of ASCVD events. But what we also know, moving to Slide 5, is that high cholesterol has been treatable for decades, but something isn't working. There's still a treatment gap. We know that patients still have trouble reaching their goals. Nearly 80% of high-risk patients do not meet a guideline recommended LDL target. And close to 9 million patients do not reach their LDL goals despite taking a statin. And as we know, statins have been around -- actually since the launch of Mevacor in 1991. If we switch and we look at patient adherence and we look at patients as it relates to taking their medications up to 20% of people who could be treated with a statin, experience statin intolerance. They have muscle aches, et cetera, and they can't take their drug. And over 1/3 of these patients discontinue statin treatment within a year. And that really gets us to about close to 10 million patients who have high LDL, not on statins often due to tolerability concerns. So when you roll these numbers up, there's over 18 million patients in the U.S. that require additional LDL lowering therapy. So despite all the therapies that have been existent, there still is this treatment gap And this is where, at Esperion, we feel we can address this gap with the introduction of both NEXLETOL and NEXLIZET. Both of these compounds were launched last year, really in the -- really in the middle of COVID. And what's interesting about NEXLETOL and NEXLIZET. NEXLETOL being bempedoic acid. This is a compound that works upstream to an HMG-CoA reductase inhibitor. This is a novel mechanism of action, new therapy first-in-class. It's the first oral LDL lowering drug to be approved in over 20 years, the last being ezetimibe. And NEXLIZET is the first combination in 20 years in the LDL lowering drug with the combination of bempedoic acid plus ezetimibe to also ever be approved. So where do these agents fit? And what I'm showing you here on Slide #7 is really where we can address a gap in oral medicines. We all know that statins are baseline therapies. I talked earlier about the fact that there's over 18 million patients who need additional LDL lowering. And there are patients currently on ezetimibe, formerly known as Zetia. And many of these patients are not achieving goal. And I'll go later into the presentation of how we're addressing these patients and how large this market actually is. But if we take a look at all these products, there's still -- there's this gap. And that's where NEXLIZET and NEXLETOL can fit this gap. Also, you might have seen earlier in the year, we've licensed in an oral PCSK9 inhibitor. This is a first-in-class potential, and we're excited about the development of this compound. And then obviously, on the right end of the continuum are injectable medications. And what we do know is that 4 out of 5 patients prefer a pill. Most patients do not want to have an injection. And again, this is one of the advantages of NEXLETOL and NEXLIZET is that this is a small molecule product. So if we advance to Slide 8, it's important to note, what's the comparison of our products as it relates to elements that you see on the Y axis here, dosing LDL lowering mechanism of action, et cetera. On the x-axis, you have all the different LDL-lowering products, statin, ezetimibe, NEXLIZET, NEXLETOL, PCSK9s. But what I'll address your attention to is the LDL-lowering ability of NEXLIZET and NEXLETOL. NEXLIZET in clinical trials reduced LDL lowering by 38%; and NEXLETOL, 18% to 25%, respectively. We've actually received reports from the field of physicians who are using drugs such as NEXLIZET, where they are sometimes seeing as much as a 50% reduction. So it's always good to see that your Phase III clinical trials are not only meeting what we've shown, but even going beyond that. I talked earlier about the mechanism of action. This is a unique mechanism of action. It inhibits NPC1L1, and this, again, is the only product that does that. What also is a great interest to us, which is something that will be further explored in our outcome study is the fact that we lower hsCRP, which is an indicator of inflammation. This is important because there's many hypotheses out there that cardiovascular disease is a disease of an anti-inflammatory type nature, that was somewhat proven out in the CANTOS trial as well. And this will be part of one of the secondary endpoints that we'll be exploring, when our outcomes out of that we'll report out in the second half of 2022, the CLEAR study with over 14,000 patients, which I will address later will be explored. And as you can see, if you look at that across the continuum, what you'll see is we are very comparable from the LDL perspective, if not more significant. And from an hsCRP perspective, as a non-statin, we're really the only product that shows this type of lowering ability. Again, further to be explored. Moving to Slide 9. So how are we doing? I mentioned the fact that we launched these products last year, and I would go as far as to say that the company really did not get a fair shot or opportunity at the launch because it really was in the middle of COVID. And what we demonstrated when we reported our earnings for our first quarter is that we actually grew demand from Q4 to Q1 by 46%. So despite the COVID-19 pandemic and also seasonality as it relates to reimbursement, we are actually able to grow this brand. And some of it has been simply done by changes we've made in our management, our incentive compensation with representatives, our targeting of physicians, and we are now in the process of actually rolling out a new strategy as well, which if I address your attention to the right-hand side of this graph, will further accelerate our growth as we move into the future. And so how will we approach this growth? And Slide 10 is really a cartoon, if you will, where we look at 3 growth phases. Earlier in the presentation, I mentioned that there's over 18 million patients who have an LDL abnormality that's not being addressed. We are only scratching the surface. We have approximately 35,000-plus patients on NEXLETOL and NEXLIZET. So we have a tremendous opportunity to continue to grow. We have a long runway to do that. What we're focusing on right now is adding NEXLETOL to those patients who have ASCVD plus HeFH who are on a statin and ezetimibe, we believe there's 1 million patients there. There's an additional 8 million patients where we can add NEXLIZET where there's patients on a statin and also taking -- could benefit from both ezetimibe and bempedoic acid. And this, if you will, is a pre-CVOT strategy. We believe we have significant opportunity to grow prior to our CVOT reading out. And then post-CVOT, the last circle on this graphic is really unlocking the ability to possibly actually have an indication in primary prevention and also exploring some of the other endpoints that I mentioned earlier. But right now, we have the ability to really gain access to 9 million patients in front of us with an additional 10 million patients post-CVOT. And how are we doing that? If we move to Slide 11, we're really looking at 3 different areas: one, how do we drive awareness using our medical science liaisons and also establishing a scientific platform. And this is something we didn't have an opportunity to do while at launch, but we're doing that now. We're expanding our medical education. Prior, we never had any type of continuing medical education. We'll be doing that. We just introduced an enhanced strategy, refined our positioning and our targeting. We just rolled that out in April. We also initiated a real-world evidence study, and we're really utilizing our health economics and outcomes research group to really paint the value proposition that NEXLIZET and NEXLETOL has. So it's not only the clinical message of efficacy and safety, but the value that our product brings to payers, providers, physicians and patients. And last but not least, pulling through our managed care. And I'll give you a quick example of that on Slide 12 of how we're doing that. It really falls under 3 pillars: refine our payer value proposition, broaden coverage with Medicare Part D payers, and generate supporting real-world evidence. I won't read through the entire slide, but I will direct your attention to the middle column or pillar of broadening our Medicare Part D payers. You may be aware that recently on May 1 we actually were able to have NEXLIZET and NEXLETOL added to the formulary of the largest Medicare provider in the United States with Humana giving us access to these drugs to over 9 million Medicare patients. So we're very pleased with this acceptance. It's actually -- I will show you later, increase our Medicare coverage to 60%. And as it relates to generating supportive real-world evidence, I mentioned earlier, our Health Economics Outcomes Research Group. combined with our payer group, we are able to paint a message to Humana, where they understood our positioning, understood our value, and we're furthering that by actually doing other collaborations. We just announced that we're collaborating with UT Southwest to actually look at a real-world evidence study. And we hope to have that to report out before the CLEAR study that I mentioned earlier. We're also in discussions with the FH Foundation, they have a significant database that we would also like to tap into, and we're partnering with them and other partners, again, to really demonstrate the value of our product, to gain awareness as well. And to give you a snapshot of our coverage, I mentioned earlier, our commercial coverage is 95%. We have broad coverage. Our Medicare Part D coverage has increased to 60%. And for our commercial coverage, we have very favorable coverage in our Tier 2 and Tier 3, averaging anywhere between $25 and $45 co-pay. And market research will show you, this is a co-pay that most patients will pay without abandoning their prescriptions. So this gives you an idea of what we're doing from a commercial perspective, how we're moving forward with our strategy. We have a clear strategy. We have a clear positioning so that physicians know where to use NEXLIZET and NEXLETOL, what type of patient to use them in, establishing the coverage for these patients so that they have affordability to have these drugs and also doing work in the background to continue to generate new information regarding NEXLIZET and NEXLETOL before our CLEAR outcome study. This is a good point to transition to Slide 14, which is really focusing on the CLEAR outcomes study. And really, this is going to be a landmark cardiovascular outcome study. It's a first-of-its-kind study. We're looking at a population of more than 14,000 patients in 32 countries. 48% of the enrollees are women, 42% of enrolled patients have diabetes. We are currently on track to reach our target number of MACE endpoints in the second half of 2022. That's when we believe that our top line will be presented. And maybe to just go into a bit more further detail regarding the CLEAR Outcome study. We believe that our outcome study is designed in such a way that will really give us differentiation. And what you see in front of you is a comparison of the CLEAR Outcome study versus studies that have been done in the past. The IMPROVE-IT study, which, of course, was ezetimibe; FOURIER, which was evolocumab; and ODYSSEY, which is for alirocumab. I'll address your attention to the right side of the slide, and this is Slide 15. Under the CLEAR study, and the first thing that you'll note is if you look at baseline LDL, our baseline LDL is 139 -- 139-milligram per deciliter of LDL, significantly higher than what you've seen in IMPROVE-IT, FOURIER or ODYSSEY. More importantly is our median treatment of duration, almost 4 years, and this is significant. This is something that investigators are always clamoring for [ and why, ] and this study is designed to do that. I think what's also interesting, and I somewhat alluded to this earlier, is that if you address your attention to the Y axis and you see effect on CRP, effect on weight, effect on glycemic control, effect on new onset of type 2 diabetes. These are all secondary exploratory endpoints. We believe we'll actually be able to show some type of data in all of these areas. And this is significant because as you can see, as you compare those to the 3 studies that we've mentioned earlier, there's really been no effect. And so once the study reports, this is something that we will continue to look at and explore, I think it speaks to, again, the novel mechanism of action of bempedoic acid, and it really opens the door for future and potential studies as it relates to NEXLIZET and NEXLETOL. We have partnered with our -- for global commercial success, we have a significant part partnership with Daiichi Sankyo. As you know, we have a partnership with Daiichi Sankyo in Europe. We just recently announced that we have expanded that for the ASCA region, milestones totaling $1.1 billion. And this is obviously related to once we also complete our CLEAR Outcomes study. We also have a significant partnership with Otsuka for the commercialization of NEXLIZET and NEXLETOL in Japan as well. Moving to Slide 17. We're always thinking about how to expand the franchise. About a month ago, we published a Phase II study, which showed the triple combination of bempedoic acid with ezetimibe and atorvastatin. and it demonstrated that this triple combination lowered LDL-cholesterol by almost 61% versus placebo. You may recall I showed the graph earlier, that was looking at LDL comparisons. And this is a -- this 60.5% is actually an LDL reduction that's even greater than PCSK9s today. I mentioned earlier that we've in-licensed the program with PCSK9 and oral PCSK9. And this just really shows our overall attention to life cycle management. And what we're thinking about as we move into the future with all of our products. So there's 3 strategic priorities, if you move to Slide 18, that we are really interested in: one, driving adoption of NEXLETOL and NEXLIZET in the United States. We feel that we're well on our way of establishing the platform to do that as we emerge out of COVID, as more patients get vaccinated. I think I saw yesterday over 100 million patients are now vaccinated. A normalcy is returning. We'll be out there driving growth and accelerating growth. We want to collaborate with our commercial and development partners outside of the U.S. We have a great relationship with our partners and we want to advance the next generation of innovative oral nonstatin LDL-lowering medicines, including our new oral PCSK9 inhibitor. We have strong intellectual property as denoted on Slide 19, not only in the United States, but across the European Union and also Japan. So from an IP perspective, we believe we have a great basis to move forward as well. And to give you an idea on Slide 20 of just our cash position, we have as of Q1 2021, the pro forma cash balance of almost $300 million, future ex-U.S. collaboration milestones of close to $1.2 billion. We have not given revenue guidance for 2021. But what we do know is that we're going to capitalize on our strong partnerships to strengthen our cash position. As I mentioned earlier, we're not in this alone. We're also partnered with Daiichi Sankyo and also Otsuka, who also believe in these medications. And so I'll end with this slide, and that is who is Esperion today. Well, we launched the first new oral medicines for cholesterol management in 20 years. We realized that there's a treatment gap. I talked earlier about the fact that we're committed to making sure we can help patients and address the #1 killer in cardiovascular disease. We believe we can really assist with that with NEXLIZET and NEXLETOL. We have the fully enrolled first-ever CVOT study in the CLEAR trial that focuses solely on statin-intolerant patients, and we have partnerships driving royalties from Europe. And tomorrow, the future? Well, again, we see that we'll have commercial acceleration upon the launch of the CVOT Outcome study. But again, we believe we'll have a lot of acceleration and momentum now. So I always view this as more of a secondary inflection point and the CVOT study will build further evidence to what we've been speaking to earlier. And what's been always known as the LDL hypothesis. We'll also be launching medicines in additional geographies and again, expanding easy treatment options with oral PCSK9 inhibitor programs. I mentioned earlier that we know that patients do not like taking injectable medications. And so we've seen an opportunity of what oral PCSK9 could mean to these patients. So with that, I really want to say thank you to everyone for listening to the story of Esperion Therapeutics. All of us here at Esperion are committed to, again, addressing the #1 cardiovascular killer, cardiovascular disease. We believe we have drugs that will really add to the armamentarium of physicians and really benefit patients. So thank you again, and I'll take any questions that we may have. Thank you, Olivia.

Okay. Thanks so much, Sheldon. Great. Really helpful overview on all the progress and what's next to come. We do have some time left, so maybe I'll just squeeze in a couple of bigger picture questions, if that's all right?

Please. thank you.

Sheldon, when you think about the positioning of the company this year, but also looking to next year when some of the pandemic headwinds are mostly behind us -- hopefully behind us. I know you touched on this on the slide, but what are some of the key things that you'd point to that you think Esperion can do to really help drive that successful launch in the U.S.?

I think one of the largest things, our field was out there the entire time. I wasn't here at the time, but most companies that actually -- their field representatives were not out in the field, and our representatives were doing the best to really drive awareness. I think one of the issues has been, though, that physicians' offices weren't really open. We've actually conducted market research that showed that telehealth doesn't work in cardiovascular medicine. So one of the things that's really tried and true is really our representatives getting out there, holding programs, meeting with physicians live, and that's happening now. We're actually seeing that increase. We get qualitative feedback from our representatives on a daily basis. And every day, we hear more and more physicians are returning to offices, patients are returning to offices. And I think what's going to really help continue to drive our acceleration is we have the payer coverage. Now it's a matter of getting our strategy out there, our positioning for our products, in live discussions with physicians. I talked about continuing medical education. That's one way to really expand to a broader audience. We've got several programs that we're investing there that had never been done before. So really creating that stereo sound. I'm not only at major meetings, but in the offices, that's really what's going to help us drive awareness and continue to drive demand.

Okay. Great. And you touched on this on the slide, but you guys obviously have a PCSK9 program. So maybe just give us an update on where that program is and when we could get any updates on the clinical plan there?

Sure. So currently, that program is very early in development. It's very early stages. The actual development program is really something that's continuing to be mapped out. I'm actually a participant on the development team. We're already thinking about -- which is something that's not done quite often with new products, really thinking about what could the label look like? What do you really need to demonstrate from a value proposition perspective? What would you need to show to payers, et cetera. So that's why we're in the process right now is really laying out, what is that plan of what would the label need to look like? What would folks need to see with a product like this? And how do we then develop the studies as we move forward? So we're very early with this compound. This compound is years away as it relates to the -- coming into the market. But what we plan to do is we continue to go through the development stages to update everyone of exactly where we are from that planning perspective. Right now, it's really paper on table and thinking about timing and what needs to be done early on.

Okay. Great. Yes, it sounds great. I mean we are definitely excited. We've gotten a lot of inbound interest in that program. So exited to see where you guys take it. Sheldon, maybe I'll just ask 1 final question. You guys have obviously -- you're obviously in a strong position, right, with all your collaboration agreements with DSE, especially outside the U.S. But when you think about the U.S. launch, are there any opportunities for agreements there? I don't know how you guys would necessarily structure it, but that's definitely something that we get asked about a lot. I'm sure you do as well. So it would just be helpful to get your latest thoughts around specific to U.S. partnerships or agreements.

Yes. I think it's always something that we're thinking about same as you're receiving inbound calls on it. I think the way that we look at it right now is we're operating as we are, and we're trying to drive as much awareness as we can, not only amongst cardiologists but primary care physicians. We're seeing that primary care physicians are more and more writing both NEXLIZET and NEXLETOL. This is similar to what was seen with ezetimibe as well. I think the best way to answer that is if there's ways that we could get to -- our drugs to patients and physicians faster. We're always interested in listening to those ways and listening to those ideas in order to do that.

Okay. Perfect. That sounds great. Well, Sheldon, great discussion and presentation. Really happy to have you guys participate. And hopefully, see you guys live next year in Vegas.

Yes. Well, thank you, again, Olivia. We really appreciate the opportunity and everyone taking the time to listen to the story of Esperion. It's a great story. And yes, I'm fully vaccinated, and hopefully, everyone else will be by then, too. And hopefully, we see you in Las Vegas next year. Thank you.

Yes, definitely. Looking forward to it. Thank you.

Take care. Bye-bye.