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

My name is Jason Zemansky. I'm one of the new SMID-cap analyst here at BofA. I'd like to welcome you to the final morning of our 2023 Healthcare Conference. Very pleased this morning to be introducing Sheldon Koenig, President and CEO of Esperion Pharmaceuticals. His first, I believe, conference pending -- following the dispute.

So I think why don't we just dive in? And let me ask, maybe to start things off, a question on most investors' minds. I appreciate things are a little in flux and there are some restrictions here. But can you provide a little color on what's going on thus far with the lawsuit and maybe potential time lines for resolution?

Yes. Great. So first of all, Jason, thank you very much on behalf of all the employees of Esperion. We really appreciate the opportunity to be here at the Bank of America Conference. And as I said to you before you entered the room, you're the -- and you said, we're the first conference post this conflict with DSE. As many of you know, we held earnings this week on Tuesday. We touched upon the suit. And as you know, last week, we issued a press release and we also filed a new complaint with our new attorneys, Gibson Dunn. We want to make sure we had the best litigators in the country to address this case. What you also notice is that in the new complaint, we were very clear, no pun intended, to demonstrate why we believe we are on the right. And I think it's important to state that we are very confident that we will receive the $300 million that Daiichi Sankyo owes us. No question about that. Why is that? Why? Because they always felt that in their mind that this payment was due based upon a MACE-4 endpoint. It's very clear in the new complaint that they had asked for that language back in 2019. That language was struck, and the language of cardiovascular risk reduction endpoints was added. So as it relates to time line, they have until June 19 to respond because with the new complaint, they get an additional 45 days. And we are in the process right now of waiting until June 19, and we will go from there.

Great. You mentioned you were confident in eventually having a positive resolution here. But in terms of the timing, the milestone was expected, I believe, mid-2024, in line with the label update, presumably. What is your confidence that you'll have that $300 million before that time?

Yes. So I really can't comment on what could happen before the payment is going to be due. But what I can say is the fact that related to the label update, both through the U.S. and the EMEA, we are on track, if anything, ahead of time on the filing for both the U.S. and the EMEA. And we believe we'll have those labels sometime by the first quarter of 2024. That's when the payment was going to be due anyhow. So we're confident based upon even these additional 45 days, it allows us to get to the first quarter. If we need to go into litigation, we will at the last time for discovery to look for bad e-mails and other evidence, et cetera, that supports our case. And we're very confident about the timing and where we'll be from a label perspective as well. So again, we will update everyone accordingly as we get more information. That is something I promise.

Great. Maybe pivoting to some more positive news. Recently, you presented the positive CLEAR Outcomes study, which was a landmark study on the use of bempedoic acid. Let's get into details in a second, but can you put the study into context? I mean what do you think are the key takeaways and why?

Sure. Well, first of all, this is one of the first lipid outcomes study that has in a non-statin that you've seen in over 22 years. And what's really important about this study, to remind everyone, this is 14,000 patients studying a new differentiated mechanism of action. We showed not only statistical significance in MACE-4 and MACE-3 endpoints, but other endpoints that really matter. We showed that we reduced non-fatal and fatal MI by 23%. We showed that we reduced revascularization by 19%, and that was only by using NEXLETOL. And the reason why we studied it using NEXLETOL only is to show how the mechanism of bempedoic acid works on its own. As Steve Nissen would say, imagine if the study had been looking at NEXLIZET, which even shows much more efficacy. The other 2 points to remind everyone is that 49% of the study population were women, 18% were Hispanic. So this is probably one of the most differentiated diversified studies that has really been seen and has really been desired by the cardiovascular community.

Great. The study had a somewhat of a unique design, specifically unlike a lot of other outcome studies. You enrolled patients that were largely intolerant to statins rather than add-on therapy to statins. Can you discuss a little bit why that decision was made and what the implications are here?

Yes, absolutely. So if you actually look at the epidemiology of cardiovascular disease, there's between 7% and 29% of patients are identified as statin intolerant. In our study alone, 20% of the patients were on a low-dose statin, 11% of the patients were on ezetimibe. So these are patients that can either not take a statin at all or they can only take a minimal dose of a statin. There's close to 30 million patients out there currently today that fit in 1 or 2 of those categories. Keep in mind also in the CLEAR Outcome study, we studied not only secondary prevention, but we study primary prevention. And that's a huge differentiation versus any other studies currently out there with non-statins. If you look at PCSK9, they only study secondary prevention. If you look at ezetimibe, they only study secondary prevention. So the fact that we studied both primary prevention and secondary prevention really goes a long way in not only differentiating the product, but the population. And again, if you think about close to 30% of the population is statin intolerant, that's a big market for us. But again, this is also an add-on strategy where you can add this drug onto existing therapy, whether it's statins, whether it's PCSK9. And with our label change, you'll be able to actually use the drug on its own.

Great. Let's talk just a little bit more about the study. One of the confounding features, I think, was the drop-in rate, where patients who went on another LDL-C lowering agent impacted the results. That improved the performance of the placebo arm and sort of also negatively impacted the relative rate of risk reduction. Can you talk a little bit about the implications there and some takeaways?

Absolutely. Sure. So unlike -- or not unlike any other cardiovascular studies currently out there today, there's ethics involved with studies. And physicians have that ability to make sure that they're taking care of their patients. So we always knew that there would be drop-ins into the study. I think on the placebo side, it was greater than 11%. But with that said, it actually almost reinforced just how efficacious our drug is because even with those drop-ins, it created more of a headwind for us to actually achieve statistical significance, and we're still able to achieve statistical significance in every category that we tested from a statistical hierarchical perspective. Just want to go one step further. What we've seen from physicians currently today with prescribing, as you know in the first quarter, we showed a significant increase in prescribing. We saw an 88% increase in new-to-brand prescriptions only 3 weeks after we showed the data. We showed a 56% increase overall when you look at it quarter-over-quarter. And so why is that? Because physicians, key opinion leaders, academics, they see the value of the study. They see how important the totality of the data of the study is. Nobody is questioning percentages, et cetera. What they're looking at is that this drug saves lives, and that's what's important.

So about 7% of these patients went on a statin despite sensibly being statin intolerant. Do you think that's going to weigh on the minds of prescribers at all?

Not at all. No, it's not even an obstacle that's been brought up to us. And as I mentioned before, the beauty about NEXLETOL or NEXLIZET is it can be added to a statin. My own personal case, I don't have my bottle, but I was prescribed NEXLIZET 4 weeks ago. I take 10 milligrams of rosuvastatin, that's the maximum. I'm a big runner. So any time I try to do something more, I get this nephropathy feeling in my legs, et cetera. My cardiologist at Penn said, you need to go on your drug, which she would never prescribe me until we had outcomes. And once we have the outcomes data, she came into the office, I was in the waiting room or -- not in the waiting -- well I guess it was a waiting room. And she said, "Congratulations on the study. By the way, I already prescribed your drug." Now what's interesting there is, she didn't realize she had to do a prior authorization. And I think in the marketplace that's still one of our biggest headwinds is that physicians need to identify the right patients and they need to fill out the prior authorization appropriately. And what we've seen out in the field is when physicians do that, the drug gets approved. And that's where the current label that we have today. There'll be less of that headwind once we have our new label come first quarter of next year.

Got you. Well, I think it's a great segue. Can you just give us a brief update on where you are with the label expansions and then we'll move from there.

Sure. Yes. So currently, as I mentioned earlier, we're in the process right now. We have a team of 8 people who are doing a tremendous job. As a matter of fact, we had an all company meeting and they graciously decided to stay back and work on the filing to accelerate the filing. We're on track to have both the EMEA and the U.S. filing done before the first half of this year, which gets us right in a nice spot for first quarter of 2024, which is where we've always said that we would be. maybe even a little bit ahead of that.