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

And we're thrilled to have with us today Esperion. And speaking on behalf of Esperion with the new presentation is CEO, Sheldon Koenig. Sheldon?

Great. Thanks, [ Jeff ]. Appreciate it. Good afternoon, everybody, and thank you on behalf of Esperion Therapeutics. Really appreciate your time here to listen to our story. We have an exciting story, and let's get right to it. So just our forward-looking statement. We have to look back because I can't really see the screen. So if you don't mind, I'll pay my attention to the screen and pay my attention to you as well. And hopefully, we'll have a little bit of time for Q&A afterwards. So just to focus on Esperion, we've been evolving into really a unique cardiometabolic business. This company started in 2008 by Dr. Roger Newton. And some of you might be familiar with Dr. Newton. He was actually the Founder -- Co-Founder of Lipitor. And this was a company that was in Pfizer, then spun out of Pfizer. And as you know, we've been on our own since. In 2020, we launched 2 products, NEXLIZET and NEXLETOL. These are 2 innovative first-in-class mechanism of action products, NEXLETOL is bempedoic acid, NEXLIZET is bempedoic acid plus ezetimibe, and I'll go into greater detail of them later. Today, as I mentioned, we're really evolving into this global cardiometabolic company. And it's not too often that you find a company that's our size that is involved in something such as cardiovascular. And we really want to be the leaders in cardiovascular medicine, not only the commercialization of these products, but also research and development. We are advancing our CLEAR Outcomes trial. And just as a late-breaker, in first quarter, we announced that we were approaching 95% accumulation of our MACE-4 endpoints. We actually achieved 95% of our MACE-4 endpoints yesterday. So we're well on track in completing the study in the time that we've said with the readout of the top line, the top line, first quarter 2023 and then the data sometime soon after. So we're entering 2022 in a very strong position. As I mentioned, 2 drugs approved in March of 2020. With the CLEAR Cardiovascular Outcomes trial, we hope to achieve 100% MACE accumulation in the second half of 2022. Again, we just achieved 95%. We're very proud of that. And the market is a large market. This is a market that's worth $11.2 billion. So a very large market as we continue to progress. We have a very experienced management team, 2 of the folks are here today, Eric Warren, who's our Chief Commercial Officer; and BJ Swartz, who's our Chief Strategy Officer, sitting in the third row. We have compelling global partnerships, Daiichi Sankyo Europe is a partner with us in Europe and also rest of the world. And in Japan, we have a partnership with Otsuka, who just completed Phase II trials of bempedoic acid now entering into Phase III. And there are significant milestones associated with both of those partnerships upon completion of the CLEAR Outcomes study. In October of 2021, we did a significant restructuring to one, preserve our cash and also rightsize the company. And you may have seen with our first quarter results, we were able to demonstrate savings of $32 million quarter versus quarter, as well as consistent growth. So we're well on track on optimizing our cash burn. And we feel we have the cash necessary in order to complete the CLEAR Outcomes study and even to go beyond the CLEAR Outcomes study. This is our management team. It's an experienced management team. We probably have over 200 years of experience combined together. A lot of us have been here in this industry for 30 years plus. So I think it is important to note the cardiovascular disease is the #1 killer amongst folks today, not only in the United States, but the world. It has more annual deaths than all forms of cancer combined, it accounts for 1 in 3 deaths in the U.S. and Europe. Not on this slide, cardiovascular disease is also the #1 killer of women. And one thing I want to point out is that in the CLEAR Outcomes study, the enrollment 50% of the enrollment is actually women, and this is very significant. When you look at prior Outcomes studies, there has not been as many women in the study such as this. There's actually a paper 2 years ago at AHA regarding the fact that the amount of women that are in the study. So we think that will be a very interesting segment to explore. There's 18.3 million patients still in need to address their LDL cholesterol. So if you think about that, if you go all the way back to 1991 with the introduction of lovastatin, which was Mevacor, there are still 18.1 million patients in need. Why is that? Well, patients still have trouble reaching their LDL goals. 80% of these patients at high risk have not received or have not achieved their guideline recommended LDL goals. Close to 9 million patients did not reach their goal despite actually being on the statin. And that's because 20% of people who take statins cannot tolerate it. They have myalgia, they have muscle pain, et cetera, they don't want to be on the drug. 1/3 of patients discontinue treatment because of this. And again, this harkens back to why is it the #1 killer. And close to 10 million patients in the U.S. with high LDL are not on statins at all because of tolerability concerns, won't even try it. So again, if you think about our product, which is really a partner to statins, post CLEAR Outcomes study that actually can be used on its own for these patient types, et cetera. And I'll go through how the label will evolve once we have the CLEAR Outcomes study. So as I mentioned, we introduced these 2 oral non-statin products in March of 2020. Unfortunately, that was the same time as you may recall, COVID actually came upon us. So I'm a strong believer that these products never really have their fair opportunity to launch. That hasn't really occurred until January of last year with a new strategy and the rightsizing of the organization. I would say actually January of even this year. NEXLETOL, as I mentioned, is bempedoic acid, which in Phase III trial showed an 18% reduction in LDL. But let me address your attention to NEXLIZET, which is a combination of bempedoic acid and ezetimibe. This has LDL lowering effects of 38% and sometimes greater. In real-world experience and physicians that are writing these drugs, we have about 12,000 physicians across the United States writing these drugs, they have -- sometimes have seen LDL reduction of 50% in using NEXLIZET. So we've been very encouraged by physician feedback and what we're seeing in the real world. Just to give you also a flavor, about 60% of writers are primary care physicians and 40% writers are actually cardiologists. So not only do we have efficacy, but we also have safety established with these 2 products. And why do we need these drugs? Well, you heard me talk about cardiovascular disease being the #1 killer in the United States. I've discussed already the fact that we have tolerability issues with statins, et cetera, which are the cornerstone of therapy. However, there are still patients that need additional therapy. And that's where there's this fit for this, what we call oral non-statin gap. NEXLETOL, as I mentioned, broadly combinable with statins. NEXLIZET also broadly combinable with statins. And ezetimibe, which is a product that I managed some years ago, which is also available from a generic perspective is available today. But again, keep in mind, NEXLIZET is a combination of bempedoic acid plus ezetimibe. And, of course, we have the injectable medications or PCSK9. These are injectables, but it's important to note that oral medications, 4 out of 5 patients prefer a pill. Patients and physicians would rather take a pill than having to take an injectable. And to just give you an idea of efficacy and some other parameters on how we're differentiated from statins and other products available, I won't go through the entire chart, but what I will address your attention to is, again, the LDL lowering of statins are between 25% and 60% high dose, ezetimibe, 13% to 20%, NEXLIZET, 38%. And if you look at the PCSK9s are between 50% and 60% and 52%. What's interesting though about NEXLIZET and NEXLETOL, if I can address your attention to the hsCRP effect, we have a 35% reduction in hsCRP. This is a inflammation biomarker that we feel is significant. Also not represented on this slide is we also have positive effects on reducing glucose, also blood pressure and weight. And we think that's going to be very interesting. We'll have more readout on that data. These are exploratory endpoints in the CLEAR Outcomes study, and also speaks to further years of development from a pipeline perspective. From a CV Outcomes perspective, again, with ezetimibe, we saw a 6% residual risk reduction with the IMPROVE-IT study. Again, this is not in the label for ezetimibe. We expect our label -- our results in the second half of 2022 and then we can go and file post that. PRALUENT and REPATHA had a 15% residual risk reduction with both the ODYSSEY and FOURIER study. And Leqvio, which is the PCSK9 from Novartis, they have expected Outcomes in 2026. I think it's important though to differentiate how do these Outcomes studies differ amongst each other. And I'll get to that in just a moment. But again, I want to remind everybody what a large market this is. This was a market that in 2011 was, again, growing. We have seen some decrease, but we're starting to see the market with more therapies being introduced and the gap that's out there as it relates to patient needs, the market is actually starting to grow again. And we're actually seeing that from a prescription trend perspective, et cetera. In the first quarter of 2022, we actually grew 6.5% from the fourth quarter to the first quarter. And what we've stated since October is that we want to demonstrate consistent growth of NEXLIZET and NEXLETOL, with the real meaningful inflection point of volume occurring post the CLEAR Outcomes study. We've seen continued growth from a weekly franchise perspective and we're very impressed by that. As far as patients staying on the drug, we compare this to other drugs that are used out there today, drugs like Entresto, drugs like Xarelto, et cetera. And we have comparison or comparable, I should say results of patients actually staying on the drug. So that's also very encouraging to us. So I actually want to transfer to the CLEAR Outcomes study. Dr. JoAnne Foody, who's our Chief Medical Officer, unfortunately, had to leave earlier today, but I'll cover the CLEAR Outcomes study. This is really a study that we believe is unprecedented and also potentially practice-changing. It's really addressing cardiovascular risk reduction looking at bempedoic acid, a new class of medication, as I mentioned, since the ATP citrate lyase inhibitor. And again, we think this is something that is going to be differentiated because we have over 14,000 patients in over 32 countries. And this is the first of a kind ever of a study looking at statin-intolerant patients. So these were patients who took at least one statin and could not tolerate it or can only tolerate a certain dose. I talked about the fact that 50% of the studies enrolled is women. And what's interesting about the study and reasons to believe this is one of the highest baseline LDL criteria of all studies, and I'll show you a comparison chart next. Patients enrolled in the study started at 139 milligram per deciliter, whereas if you look at other studies that have been conducted, it's usually the enrollment is about 92 milligrams per deciliter. Longer duration of study allows us to actually assess the LDL lowering effects as it relates to CV Outcomes, and I'll show you what that duration is. And as I mentioned earlier, we think the anti-inflammatory effect and also the glucose lowering effect is going to be something that's going to be very interesting to explore and could also add to the overall efficacy and benefit of the drug. I already mentioned the late-breaker, we are approaching 95% MACE accumulation, and we hit that yesterday, proud to say, I can't say that enough. So this is a comparison chart. I won't go through the entire chart, but what I will address your attention to is median treatment duration. If you look across what you'll see is FOURIER study, which is REPATHA was 2.2 years, which is evolocumab. If you look at alirocumab is approximately 2.8 years. Our estimated follow-up time is almost 4 years. And we think this is something that will be highly differentiated for us. Let me just go back -- sorry, a highly differentiating feature for us moving forward. Our study is powered for a 15% residual risk reduction. But I will say that there was work that was done by [indiscernible] that was presented 2 years ago at AHA, this was a smart analysis, a simulation looking at the same patient type that we have in the CLEAR Outcomes study, again, the simulation that showed based upon the same criteria, a 20% residual risk reduction. So again, we'll have to see how the study plays out. We'll have the top line first quarter of 2023 and data soon after, but we're encouraged by some of the data that's already been presented. And just to give you an idea of how the label will evolve upon approval. So currently, today, if we look at our current label, we approximately can address 8 million patients. These are patients who have identified ASCVD, and they're on a maximum tolerated dose of a statin. Once we actually have our CLEAR Outcomes data in the label, we'll have a few things that will be different. One, we'll have additional information that talks about that we will reduce the risk of cardiovascular events. So actually have a preventative claim. 2, we won't have ASCVD, essentially patients who are suffering from hyperlipidemia or high LDL, can actually be put on either NEXLIZET or NEXLETOL. And it really expands to primary and secondary prevention. And something else I think is very interesting is that we would also potentially have an indication for statin intolerance. So the drug could be used on its own by itself without having to be used with a statin. And that's the beauty of these drugs. It can be a partner to any therapy that's out there. So we're very encouraged by that. And what also is it expands our treatment population by almost 10 million patients to 19 million patients in the U.S. alone. So again, it gives you an idea of how large of a market this is. This is why you see other large companies actually larger than us heading back into cardiovascular medicine. Something that's important is the guidelines. And what we'll see upon actual results is inclusion in guidelines. We're actually already included the ACE guidelines, but this gives you an idea of just looking across the paradigm from extreme risk to low risk where bempedoic acid could be used in guidelines. Now this is a subset from the ACE guidelines, you can see how we're already incorporated, but other large organizations such as AHA and ACC and even the European Society of Cardiology upon completion of the CLEAR Outcomes study will start thinking about where do we fit in broader guidelines. I think it's important to note that there's already individuals thinking today of potentially when would consensus start to thinking about that potential fit of guidelines. So this is very important. And what I failed to mention is that between guidelines and the Outcomes study, one of the headwinds that we face today are prior authorization. So physicians writing the drug, prior authorizations will be somewhat diminished. They won't be as high of a hurdle anymore, which will allow for much more easier prescribing as well. And to give you an idea of our engagement moving forward from a commercial perspective, this was all launched back in October of last year. It's really leveraging 3 different pillars: in-person medical communication and sales promotion to targeted cardiologists and endocrinologists and primary care. We're leveraging peer-to-peer networks. So we're actually -- similar to how this is being recorded, we have physicians who are meeting with physicians over Zoom or other media or using digital technology to actually talk about their experience with NEXLIZET and NEXLETOL. We've actually conducted return on investment analysis to say, does this work? And what we have found is that it does work, and that's what has allowed us to have a nice balance between personal promotion and also using digital pathways. And this really goes to driving broad awareness by really using digital media. I think one thing that COVID has taught us is that how can we be more resourceful and how can we leverage the digital tools to get our message across. We have strong intellectual property. Again, as I mentioned, not only here in the United States, but also in Europe and Japan. We have a composition of matter through 2031, and we're also looking for other ways to expand our patent. So we feel really good about our intellectual property and not an issue whatsoever. Esperion is a global company. We have global partnerships, strong partnerships with Daiichi Sankyo and also Otsuka. We've already launched in Germany, U.K. and Austria. It's interesting to know that in Germany, the amount of patients on bempedoic acid has already surpassed the total amount of patients on PCSK9s, which have been out there for approximately 8 years. As a matter of fact, we have close to 55,000 patients on therapy when looking at both Germany and the U.K. The U.K., we actually just started the launch there. We have 1,000 patients. We've expanded relationships to the rest of world with Daiichi Sankyo. So they have other countries such as Thailand, Korea, Brazil, et cetera. So they're actively working there. We have milestones totaling close to $1.2 billion, but we have a -- and that's including milestones as it relates to payments related to the CLEAR Outcomes study, but also royalties that we are paid. But just to give you an idea of one milestone, we can earn up to $300 million worth of a milestone from Daiichi Sankyo upon inclusion of the CLEAR Outcomes study into the European label. With Otsuka, I mentioned their Phase II study has actually completed. And with Otsuka upon the completion of the CLEAR Outcomes study and inclusion in label, we receive a $150 million milestone from them. So we have also a growing pipeline, and this is something that we haven't talked much about at Esperion, but I talked about the fact that we have effects on glucose lowering, we have effects on blood pressure, we have effect on obesity, and we have effect on inflammation. We have a second-generation ACL program, which we believe is a platform program. And we believe that we can address not only hyperlipidemia and cardiometabolic diseases, but also oncology, NASH, kidney disease and neurological disorders. And we will talk more about this in the second half of 2022 when we plan to have a Research and Development Day. We also have an oral PCSK9 inhibitor. It's actually more of a platform. This is based upon the allosteric approach, where we can actually look for what we think is the most potent candidate in this area. And we're in the process right now of really thinking about how do we get to what's the fastest way to achieving IND. So again, we'll cover this in the second half of the year when we have our Research and Development Day. But we're excited about this program. And again, it's not often that you find companies of our size that are not only commercializing products, but were also invested in research and development. From a cash perspective, we have significant cash raised in the fourth quarter of last year. Currently, we have $268.5 million in cash and cash equivalents. I've already covered that we achieved $13.4 million in the first quarter. We believe that we're well funded, again, to the CLEAR Outcomes study and beyond. And we have greater than $1.2 billion potential in milestones from Daiichi Sankyo and Otsuka in our future. So the key takeaway here is, again, we have the funds necessary to get to the CLEAR Outcomes study and even beyond the CLEAR Outcomes study. And the CLEAR Outcomes study, pardon the pun, is a clear inflection point for this organization. It's a trigger for many milestones and other events for us. Just to give you an idea of the upcoming events. We've discussed before the pipeline asset lead identification. This has to do with our second-generation ACL and oral PCSK9. Our second half of 2022 is going to be an exciting second half. We expect, again, the anticipated 100% from our MACE 4 endpoint for CLEAR and potential oral PCSK9 IND submission. And then as we move into 2023, I'll just address your attention to the first half of 2023, where we believe the top line results of the CLEAR Outcomes study will be presented at a major medical meeting. So the next 6 months to a year are going to be a really exciting time for Esperion. And so to finish, again, Esperion, we're in a very strong position. We have 2 approved drugs. We continue to stand behind these drugs and grow these drugs to our best ability in anticipation of the readout of the CLEAR Outcomes study, which I believe and many believe will be practice-changing. I failed to mention that Steve Nissen, who I think all of you know, a notable clinical trialist has been here for some time. He is our lead investigator in the CLEAR Outcomes study. And I know he is excited about the results when the results come out, and when he can get behind this, then he actually present those results. We're well funded. And we're looking forward to sharing those results with all of you as they come out. And we will continue to keep you updated on anything new as we continue throughout the year. And again, I just want to thank everybody. Also want to thank Bank of America for having allow us to have this opportunity to present all of you today. So thank you so much. I think we have a couple of minutes for questions if anybody has any.

Before the Outcomes study, is there -- how are you seeing as the pandemic kind of evolves to more endemic, and maybe some of the COVID headwinds kind of subside, is there an impact that you're seeing today in the U.S. commercially?

Yes. Not as much. I think it's become almost this is the world that we're living in now. And the reason why we made the changes back in October, and I think we are one of the first companies to do that. We dramatically slashed our sales force, and we had a lot of people think, are you going to be able to grow? We had some folks say to us when we actually went into the fourth quarter that, wow, okay, we're surprised you were able to grow in the first quarter as well. And I think it was really finding that balance between personal promotion and applying these digital tools. And we know that these digital tools do work because we measure them as I've mentioned. So this is the world that we live in. We're hearing that more offices are opening. There's a large cardiology practice in Atlanta that had been closed for some time that just started opening their doors again. And I think it's more just getting used to this environment and being able to market in this environment. And also, I'll just carry that one step further, Jeff, there's a lot of questions we get to is, did COVID have any effect on the CLEAR Outcomes study and enrollment, capturing data, et cetera. And I think we actually have a textbook analysis to say that no, it didn't. And I think someday, we have an abstract in our future of how do you conduct studies in a world where you have a potential pandemic going to endemic. So even from that end, we are okay as well. So feel good about that. Any other questions? All right. Okay. Well, thank you so much, everybody. Really appreciate your time, and have a great rest of the conference.