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

Great. Good afternoon, everyone. My name is Jess Fye. I'm a biotech analyst at JPMorgan, and we are delighted to be continuing the conference today with Esperion. We're not going to switch rooms for Q&A. Instead, if you have a question after the presentation, you can raise your hand, so one will bring you a microphone or you can submit your questions electronically as well. So with that out of the way, let me turn it over to Esperion CEO, Sheldon Koenig, for the presentation.

Good afternoon, everybody. Thank you. On behalf of Esperion, the company, all the employees, we're very happy to be here. Thank you to JPMorgan as well for allowing us to be here and share with you what's been really an exciting couple of months and a really exciting couple of days, and we're happy here to share that excitement with you. I have a countdown timer on my phone, although I don't have my phone on me because I can't bring it up here, but we're about 2 months and a couple of hours away from full data release of the CLEAR Outcomes study, which again will occur on March 4, 9:30 Central Time at ACC. I just also want to mention that this is a late-breaker clinical trial being presented by Dr. Steve Nissen out of the Cleveland Clinic. It's also what's opening up the conference. So it's the big show, the big event at the American College of Cardiology. And for some of us who've been in cardiology for many years, it's a big event. We feel really good about it, and look forward to seeing you in New Orleans, if not virtually. So our forward-looking statement and disclosures. And let me first start by talking about our 3-step plan to build shareholder value. We're continually, appropriately building the awareness of NEXLIZET and NEXLETOL. And of course, as we have announced, we met our top line related to the CLEAR Outcomes study. We purposely did not include the hazard ratio or a p value. We've been consistent in stating that. And the reason for that is, we do not want to break our embargo with the American College of Cardiology nor do we want to risk breaking the opportunity to have a simultaneous publication in a journal such as the New England Journal of Medicine. By the way, I'll say this now, ACC is just the start of information. We have a series of other presentations that we're planning at major scientific meetings. But of course, at ACC, it be the kickoff of the CLEAR Outcomes results amongst doctors, patients and yourselves, investors. Obviously, we're thinking about how do we actually pursue label expansions, and we do intend to file both in the United States and Europe. Esperion is responsible for both of those filings. So we will file simultaneous, the U.S. and EU labels. They take about 10 months to review and that will occur sometime late in the third quarter of 2024. This is a large market. This is a multibillion-dollar market, and we believe we have a product with a product profile and now with cardiovascular outcomes to actually achieve bempedoic acid, both NEXLETOL and NEXLIZET, in blockbuster status. And we're really excited about that opportunity. With our study, we have really leveled the playing field. We've already conducted market research, both from a qualitative perspective and quantitative perspective. We've always been anticipating what we thought our results would be. We've tested it with payers. We've tested it with physicians. And I can tell you, we feel very confident about the ability to actually grow these products, prescribing will change, barriers related to market access will also be less, which will allow more prescribing. [indiscernible] mention the aspect of our milestones, I want to spend just a few seconds on that. You may have seen that on Sunday, we had a press release, and our first bullet point on the press release was not only do we meet our primary endpoint, we also had positive results among key secondary endpoints. So we did acknowledge that. We had not acknowledged that in the top line, and that's because we just wanted to make sure that we essentially are being transparent. We have all of our i's dotted and our t's crossed as it relates to our data, and we want to go out there with the right data. We are confident -- let me state that again, confident that we will receive our milestone payments from our partners, both Daiichi Sankyo and Otsuka. And I think there's been a lot of question about that since we had issued our top line. And again, I'll use the word confidence one more time or maybe the fourth time, I have the confidence that we'll be receiving those payments upon inclusion of the outcomes data in the EMA label. So we were just chatting in the audience before I came up here. After statins, there's been very few approved lipid-lowering therapies with positive CVOT. As a matter of fact, many of large pharma companies got out of cardiovascular medicine because cardiovascular trials are such a heavy lift. Heavy lift not only as it relates to performing and doing the study, but the cost of a study. Our study, for instance, is anywhere between $400 million and $600 million when you look at all the personnel, et cetera. Many of these studies that you see on this chart, I've lived through. Some of those were $500 million to $1 billion, but the point to take away from this slide is the fact that most fail, most of them fail. Just taking a look at IMPROVE-IT, which is ezetimibe. Ezetimibe was a statistically significant positive study. However, Merck never filed for an indication related to that product. But all these other products that you see on the bottom, designated as rad, these are products that were not on the market yet, had outcome studies and all of them failed. So again, super excited about -- we had one that's positive and not many companies can actually say they have a positive 14,000-patient cardiovascular outcomes trial. So NEXLETOL and NEXLIZET truly optimized to address an unmet medical need. We're not going to replace statins, and statins still remain the first-line therapy of major adverse cardiovascular events. However, we do know that lower dose statins and withdrawal from statin therapy is associated with increased risk of adverse cardiovascular events. This is my first public service announcement, where I will tell you, if you have not gotten the lipid panel recently, you should. We were talking about earlier that every 34 seconds, somebody in the United States has an MI, and be reminded that cardiovascular disease is still the #1 cause of death in the United States and honestly, in the entire world. We know that up to 30% of patients are unable to tolerate guideline recommended doses of statins. And we also know that like statins, NEXLETOL, bempedoic acid is up -- actually upregulate LDL and increases clearance of LDL-cholesterol from circulation. I think an easier way for -- to say it as a nonscientist and the physician is, we work upstream from HMG-CoA reductase inhibition. And that's why we somewhat call this a designer drug. It's a drug that was designed to address the muscle pains associated with taking statins -- the side effects of taking with statins. And we know that there's many patients, as I mentioned earlier, who can only take a certain dose or who can't take a statin at all. And we plan to really own that segment. And keep in mind, NEXLETOL and NEXLIZET can also be used with statins. We can be used with PCSK9s. And we believe, based upon our cardiovascular outcomes trial that with our filing, as you know, this study addressed a broad secondary population and a primary prevention population, so secondary prevention and primary prevention. And we believe when we do our filing, et cetera, we'll have the ability to potentially not only talk about secondary prevention, but also primary prevention. And that's important for many reasons, as you know. The CLEAR program has assessed the impact of NEXLETOL and NEXLIZET in combinations with statins alone on key endpoints, including LDL-lowering and CV outcomes. And again, it gets to the fact that this is a drug that's been designed to help those statin-intolerant patients and patients already on therapy on statins, et cetera, to get them to LDL goal. Now with that said, there's been over 60,000 patients in over 30 countries that we've studied bempedoic acid. And I won't go through all of these for the sake of time. Some of these are actually studies that we're beginning -- we actually have a study that we'll be starting soon with Kaiser in acute coronary syndrome patients. We've already actually presented the Baylor Scott & White. So there's real opportunities there. We're looking at ways to work with other segments as well, and we're really proud about the background of work that has been achieved with these products, which then leads us to what's the cherry on top and that's the landmark CLEAR Outcomes study. Now we've used a lot of adjectives to describe our study. We've talked about clinically meaningful, and we've received a lot of questions on what this clinically meaningful means. And I think that really is a divergence of the investment community and the medical community to be frank. Clinically meaningful means this will make a difference in an option that the physician will have to treat a patient, and I've already talked about some of the various patient types. Landmark. Landmark because it was the first study to ever study patients defined as statin intolerance. And also just from the perspective, as I mentioned, because it was positive. And this is something I'll show you a bit later of how key opinion leaders also think about why this could be a landmark study. It's first-of-a-kind unprecedented CVOT. We focus on significant [ unserved ] population unable to maximize or tolerate statins. Our primary endpoint was a MACE-4 endpoint, the composite of time to first cardiovascular death, nonfatal myocardial infarction, nonfatal stroke or coronary revascularization. By the way, one of the differences with this and the PCSK9 is, they actually looked at unstable angina in their MACE-4 endpoint. Our study was conducted in over 14,000 patients in 32 countries. There's a lot of discussion around diversity in studies. We actually believe that we have one of the first studies that's really looking at diversity. Dr. JoAnne Foody, our Chief Medical Officer, is here with me; as well as our Chief Financial Officer, Ben Halladay. But JoAnne, if you don't follow her on Twitter, please do because she talks about the incidence of cardiovascular disease in women. And cardiovascular disease in women is the #1 killer in women today in the United States, closely followed by breast cancer. Our study had approximately 50% women in the study. Now I wanted to save this part for last. I briefly mentioned it. As I recall -- as you recall, when we issued our top line, we didn't talk about the secondary endpoint, but I want to talk to you about statistical hierarchy. So our primary endpoint was MACE-4. Once you receive the fact that you have a positive endpoint there, you can then go through the statistical hierarchy of secondary endpoints. We received a lot of questions of what they are. It's MACE-3. It's fatal and nonfatal MI, coronary revascularization, fatal and nonfatal stroke, death from cardiovascular causes and all-cause mortality. As I mentioned, we hit key secondary endpoints, and we'll go through the results of all of it. Actually, Dr. Nissen will at the time of ACC. And again, the importance of having a simultaneous publication is there's only so much you can cover in that 15 to 20 minutes for Dr. Nissen. So then you'll be able to have a 15 to 20-page manuscript with all the data, Kaplan-Meier curves, et cetera. And again, our hope is, it will be in a top-tier journal such as the New England Journal of Medicine. Just a little bit of a flavor from what key opinion leaders are saying. So I really love what Dr. [ Kausik Ray ] says. Many of you have -- probably have heard of him. He's been in the cardiovascular world for a long time as had Dr. Michael Gibson. But he refers to this as the fifth mechanism of LDL lowering that has translated into reductions in cardiovascular events. So another key takeaway here is the fact that bempedoic acid, both NEXLETOL and NEXLIZET, post-statins will be the only small molecule oral nonstatin that will have outcomes data in the language. So again, something that's very important. And fifth mechanism of LDL lowering that has translated into reductions in cardiovascular events. The question though is, do we need another asset? We absolutely do, and you heard why from the design of this drug, by the design of our study and by the fact that we know currently, there's still 18 million patients in the United States who are not at LDL goal, which leads to why we're seeing so many MIs still today. Mike Gibson, his thought about this also is now that we have a tool like this. This is yet just another tool that we can treat patients more urgently. And I think there's this belief out there as a nonphysician is that when you're diagnosed with a cholesterol high LDL issue, it's like, well, I can take a drug and everything will be fine from there on. But it's really about early treatment, early prevention, and that's what he is trying to stress. So we're going to do our job in promoting our data once we have our label. We're actually going to start preconditioning the market even now, which I will get into. Key opinion leaders are really excited about the fact that the study is positive. A lot of stakeholders are excited about this. We've heard from peers of the companies we used to work in, they're excited about studies like this. They want to know more about it. So it's really brought a lot of attention back to the cardiovascular community. What are we doing from a commercial perspective? Well, we're doing a lot. I've already talked about our market research. We're actually doing work right now to evaluate what we need to do to increase our field sales force. We're working with ZS to optimize our field sales force. I won't go into specific numbers, but what I can tell you is, we hope to have a pretty good number of people ready by the fourth quarter of 2023 to be trained, et cetera, put in territory and be ready for when the label comes out late sometime in the first quarter. We're preparing for our CLEAR launch campaign and promotional messaging. We've been working on that. We've been working on what our aids would look like. We're refining our positioning. I think something that's important, we actually released what our top line net results were for the fourth quarter. Keep in mind, even back in October of 2021, we stated that we would be able to demonstrate continuous growth through 2022, albeit very small. We purposely downsized our field. We have 60 representatives out in the field today. This is in the broad primary care market. We're selling more with 60 people than we are with 300 people. And you may ask why, and the reason is, is because we have the right positioning, we have the right strategy, we have the right leaders, and we have the right people in the field, and we made a concerted effort to do that. This is our financial strength to deliver growth. We finished fourth quarter with $166 million in cash and cash equivalents. We talked about our milestones. The milestones related to DSE are up to $300 million. With Otsuka, $150 million. When you look at everything combined with potential future milestones from partners and royalties that is greater than $1.2 billion, and we issued our range of $14.4 million to $15.1 million, which represents a 38% to 40% year-over-year growth. So our timeline and next steps. Well, we're already meeting with payers. We've actually had 2 large accounts [ have already ] removed in ezetimibe step edit in anticipation of CLEAR Outcomes. Keep in mind, our headwinds -- our biggest headwinds have been our prior authorizations because physicians have to write to label. And we see a significant transition in our label from patients not needing to be on the maximum tolerate dose of a statin, and also, we believe that we will be able to go to physicians providing attestation versus having to provide documentation to get patients on bempedoic acid. We've actually tested this with payers. We've actually had an advisory board with payers, and we've shown them what our target label is post outcomes, and they all believe with this. I mentioned segments earlier, the VA and Department of Defense are very big segments. The VA specifically said to us, we don't want to meet with you until you actually have outcomes [ data ]. When we put the top line out there, we have a meeting with them on March 6. So keep in mind, we're presenting the data on March 4, and we'll be meeting with them on March 6. If you haven't seen our partnership with RFK Racing, please check it out. We have the NEXLIZET and NEXLETOL car. These are actual race cars with NASCAR. This was something that we felt we could do and really get the awareness out there. NASCAR has over 18 million fans. It somewhat has an audience that could benefit from a NEXLIZET and NEXLETOL and other lipid-modifying agents. And I think the beauty of it is, we announced this today, they announced it, and I can't tell you how much awareness we have received. I mean, overnight, within 2 hours. We're excited about it. We'll actually have a show car at ACC. If you're at ACC, so you'll see it. I've talked about when the Late-Breaking Clinical Trial is. We are doing these enhanced commercial activities. And I've talked about the fact that we'll be doing a label update. And you can see with the [indiscernible] on the bottom of when the planned timing for this is. So 3 key takeaways for today that if you have to remember 3 things from this chat, and we're always happy to chat with any of you, so please let us know. We have a unique and successful outcome study in a large therapeutic category that demonstrates the benefit of bempedoic acid, the active ingredient in NEXLETOL and NEXLIZET. We're excited about the results that we have, and we can't wait to share the results. We are poised for a major inflection in sales and prescriptions, and as I mentioned, we're targeting blockbuster status. Based upon the robustness of the CLEAR Outcomes data, the company believes and the company is confident that we will receive our milestone payments from our collaborative partners upon inclusion of the risk reduction language in the U.S. and European labels. So with that, thank you so much.

Great. Thanks for that presentation. And as a reminder, if you have a question in the room, just raise your hand or you can submit them electronically. So maybe I'll start. You mentioned the robust effect on key secondaries. Does that mean all those secondaries that you listed hit or the first few, some of them?

Yes. We're actually -- we went as far as to say that just to give the confidence within the secondary endpoints because we haven't mentioned it in the top line. But I'm going to let Dr. Steve Nissen review that and disclose that at ACC so that we don't debate endpoints. But we're confident in the data that we've seen that it's -- I think people will be -- I'm always picking my words closely, Jess, because if I use the word meaningful, what does that mean? If I think something is exciting, what do you mean by exciting. But I think it really rounds out the study to make it what it needs to be to be a landmark study. And Dr. Nissen, I think, is more appropriately the person to speak to that.

Okay. We've got a number of questions coming in on the portal, so I'll just start reading some of these off. You mentioned the potential divergence between the investment community and the clinical community on the definition of clinically meaningful. Is that to say that the bar the investment community uses is too high? And if so, what is the bar the clinical community uses?

Yes. So we've never associated a bar [ relates ] to residual risk reduction as it being clinically meaningful. We've always just felt that as -- and we've used these words to and people have asked, well, does that mean practice changing? And it's more the ability of a physician to use something different to get patients to goal, et cetera, as the story that I told. I actually think the clinically meaningful aspect was brought more to attention because it was, do they have enough, do they have the data to achieve their milestone payments? And it wasn't necessarily related to what does it mean from a practice perspective. And I think that's what we're trying to get across is that clinically meaningful what we meant is that physicians are going to be very appreciative of the data, patients will benefit. And the reason why we came out with the press release that we did talking about our confidence in milestone payments was just to address that and really to kind of, if you would, make them a bit more mutually exclusive.

Great. So there have been a lot of questions on the milestones, and maybe just to round that out a little bit. Is there any scenario in which the outcomes data gets on the European label and you do not get a payment from Daiichi?

Yes. So as you know, we live in a very litigious society, and before you issue any type of press release, et cetera, we need to run it through several screens. And we -- on our own, when we look at the data, we could say, hey, we're going to get these milestones. But that's not good enough, and it shouldn't be. So we have to go through our regulatory department, and then we have to actually use lawyers, et cetera. And I don't see any situation of where we wouldn't receive it based upon the feedback we've received.

Okay. And to be clear, the milestone from Daiichi is associated with label inclusion, not necessarily a specific number?

Yes. So there are numbers associated. We haven't divulged what all those numbers are, but it's label inclusion as it relates to reduction in -- with cardiovascular endpoints. So that's essentially how it's -- we would define it and would be in the label. But there would be numbers associated to that. So original hazard ratios, et cetera.

Okay. Go back, if there's more questions coming in here. I think clarification from one of the comments you made during the presentation. Did you say that doctors thought IMPROVE-IT was clinically meaningful? What was the comment on IMPROVE-IT?

Yes. The comment with IMPROVE-IT was that the study had a statistically significant p value, had a residual risk reduction of 6.7%. And the comment I made was that, that product was on the market, but was never filed for an indication. There was actually an Ad Comm. I can stand here and confidently say that we are far and beyond what ezetimibe showed in the IMPROVE-IT study, and it's a brand I ran for 4 years.

[indiscernible]

Can you repeat the question?

Yes, I did. I actually ran prior in for 3 years. I'll actually use a language that I heard from somebody write in a financial note, not related to JPMorgan. But PCSK9s are somewhat unattractive and undesirable and what was meant by that and the note that this person read is that -- wrote is that they're hard to get. Primary care physicians, it's very difficult for them to get PCSK9. They actually usually have to go through a cardiovascular type of referral. I think the biggest benefit with us, though, is we're an oral product, and patients and physicians would prefer to have an oral pill versus an injectable and that's a huge differentiation. And we've actually have done market research to demonstrate that. And we're also less expensive, and that means a lot in prescribing today, fortunately or unfortunately.

Some more questions coming through here. Have you shared the results of the CLEAR Outcomes trial with your partners yet?

So with our partners, they've been invited to review the data, and we're just waiting for them to get us the people that are going to review the data.

Okay. And do you expect to get the maximum milestone payment with inclusion in the European label?

Yes. So we plan on essentially officially disclosing that at the American College of Cardiology upon the actual presentation, but I'll just go as far as to say, we feel good about the totality of the milestone payments.

Did the safety profile that you have on the label hold up during the CVOT trial?

Yes. So we haven't specifically mentioned it, et cetera, but we don't see any type of safety signal, et cetera.