ESPR - Esperion - taking on the Statin market

So I got turned on to this little guy, and unfortunately I only went in for under 1% allocation at the time. It has now grown over 1% thanks to about 220% gains in a very short period of time.

What is going on?
In short, it is a alternative to statins play.
Many know statins for cholesterol meds. I take statin pill daily myself, and have for a few years. I personally am not aware of side effects (except maybe poor investing results since 2022!) but apparently many folks have them.

I don’t know how comprehensive this first post will be, but will try and get a few things in. To work it backwards, here is latest “news” that helped start uptrend.

the U.S. Food and Drug Administration (FDA) has approved an updated LDL-cholesterol lowering indication for NEXLETOL and NEXLIZET to include the treatment of primary hyperlipidemia as a qualifier for existing approved populations. Additionally, the maximally tolerated qualifier for statin use has been removed, and the prior limitation of use stating “the effect of NEXLIZET or NEXLETOL on cardiovascular morbidity and mortality has not been determined” has also been removed.

These labeling modifications do not impact the full pending label approvals for cardiovascular risk reduction indications for NEXLETOL and NEXLIZET, which remain on track for anticipated approval in the first quarter of 2024. In June 2023, the Company announced its submission of four Supplemental New Drug Applications based on the landmark Cholesterol Lowering via Bempedoic acid, an ACL-Inhibiting Regimen (CLEAR) Outcomes trial, which demonstrated that bempedoic acid, contained in both NEXLETOL and NEXLIZET, can significantly reduce cardiovascular risk across a range of primary and second endpoints. These applications were accepted by the FDA which issued a PDUFA, or action, date of March 31, 2024. The Company’s EMA applications also remain on track, with anticipated approval in the first half of 2024.

Ok, so there was a label change/improvement, plus we see more approvals potentially on track for June 2024. This is sort of like CELH and distribution agreements, in the sense that the more approvals/uses, the greater access to buying patients and improved TAM.

This means future revenue increases and/or increased liklihood of being a buyout candidate by one of the bigger pharma giants. Either way, this is where the risk/reward in higher stock prices is coming from.

Most recent ER

– Q3 U.S. Net Product Revenue Grew 45% Y/Y to $20.3 Million; Q3 Total Revenue Grew 79% Y/Y to $34.0 Million –

– Q3 Retail Prescription Equivalents Grew 33% Y/Y and 8% Q/Q, Demonstrating Sustained Momentum into 2H 2023 –

The label we anticipate receiving in March, will add a broad cardiovascular risk reduction indication in both primary and secondary population as well as remove current limitations.

From a commercial perspective, our addressable patient population will significantly increase when we get our new CVOT label next year. Right now, our therapies are only indicated for about 10 million secondary prevention patients, with documented ASCVD or HeFH and who are on maximally tolerated statin therapy.

Our new label, that we anticipate by March 31, will reflect our CLEAR outcomes data and enable us to be indicated for an additional 20 million high-risk primary prevention patients. And any 30 million patients in total, will be our primary focus. There are another 40 million patients in the US, who are untreated and in high-risk for the event, and those patients represent additional potential upside. We look forward to being able to address the needs of millions of patients, who are currently still unable to achieve their LDL-cholesterol levels on current therapies alone.

Litigation as a catalyst

Current Status of the Daiichi Litigation

Esperion Therapeutics has initiated a lawsuit against its Nexletol partner, Daiichi Sankyo, seeking $300 million in milestone payments. This legal tussle is rooted in a 2019 arrangement where Esperion granted Daiichi exclusive rights to commercialize its drug, bempedoic acid (known as Nexletol in the U.S. and Nilemdo in Europe), in Europe and Switzerland. According to the agreement, Daiichi was to make regulatory milestone payments to Esperion based on specified outcomes, one of which is tied to the CLEAR outcomes study that examined Nexletol’s efficacy in reducing cardiovascular risks.

The crux of the disagreement lies in the interpretation of trial endpoints. The agreement specifies a $300 million payment if the CLEARS outcomes study demonstrates a “cardiovascular risk reduction” of 15% or more. Esperion claims they’ve achieved this, as the drug demonstrated a 27% decrease in heart attack risk. However, Daiichi refers to another endpoint, the MACE-4 outcome, which indicated a 13% cardiovascular risk reduction compared to a placebo. Daiichi contends that this specific metric should exceed 15% for the payment to be triggered. Esperion, on the other hand, argues that Daiichi’s interpretation is at odds with the clear terms of the agreement.

As of today, the case is currently in the discovery phase, set to conclude by March 2024.

Risks for Investing in ESPR:

  1. Litigation Outcome: The Daiichi litigation’s resolution remains uncertain. A verdict unfavorable to ESPR could significantly impact its financial standing and stock value.
  2. Reliance on Bempedoic Acid: ESPR’s valuation is majorly hinged on bempedoic acid. Any regulatory, commercial, or safety setbacks could adversely affect the company.
  3. Financial Sustainability: Despite potential reductions in R&D spend, ESPR’s financial health depends on achieving sales milestones and maintaining a manageable OpEx.
  4. Market Dynamics: ESPR operates in a competitive space, and new advancements or drugs from competitors could diminish bempedoic acid’s market share.

One reason I got interested and thought this moonshot play may be legit, was the mention by Peter Attia of their product. Peter is one of those popular online health/longevity guru types, and he seems well-respected enough.

Medication Nuances

While statins, like rosuvastatin (Crestor), are the go-to for many, there are alternatives like Bempedoic Acid (Nexletol) and PCSK9 Inhibitors. Each has its unique mechanism of action and benefits. For instance, PCSK9 Inhibitors can reduce Lp(a) levels by around 30%. Another medication, Ezetimibe, is often used alongside statins but comes with its considerations, such as potential liver enzyme elevation.

Nov 1, 2023 – Updated:

During Peter’s interview with Derek on MPMD he mentioned some updates, which I’ve listed below:

  • The stack he’s taking for cardiovascular disease is now: Ezetimibe, Rapatha & Bempedoic acid

Might follow up more with this, but given my initial investment was tiny, was inclination is to just let this thing run wild, one way or the other. Lot’s of “Ifs” but If litigation does well and Spring label changes go well, and TAM keeps growing and then this could truly have tremendous upside, coming off such as small mkt cap.

Obviously if it grows 30x or something nutso, I will likely sell, but seems like 2024 will be a news-worthy year for them, so just letting it ride for now.

Dreamer

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Bought more on dip.

Not clear that this was bad news.

The pharmaceutical company on Wednesday said it will receive a $100 million from Daiichi Sankyo in mid-January ahead of the expected type II variation approval for Nilemdo tablet and Nustendi tablet by the European Medicines Agency.

The company will receive an additional $25 million payment following the EMA’s decision on the pending application.

As part of the amendment to their collaboration, Esperion will also transition to DSE manufacturing and supply chain responsibilities in Europe, set to result in cost savings for both parties.

Dreamer

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Up near 50% since the unwarranted drop.

Steady going for this moonshot. Now at $3. Hopefully gets to $6-7 by EOY.
A buyout probably needs to be in the $20-30 range at minimum.

Still have a March catalyst of further label expansion/approval, plus another settlement they are working thru from a different partner.

Then it will be actual sales getting measured, starting with Q1 results (May 2024 likely). Expect Feb ER to be mostly forward-looking, as nothing earth-shattering about Q4 sales expected, as recent label changes won’t have kicked in for sales impact yet.

Dreamer

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New SA article

More buzz on Esperion, with March catalysts still to come.

Dreamer

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In case anybody is following and wondering why the plunge today:

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This might be a huge (but very speculative) opportunity.
Unfortunately I´m out of cash and the question is should I sell SMCI, IOT, CELH or TTD?

just dropping in to drop this off.

Esperion’s partner for EU sales is Daiichi Sankyo (DSE) and DSE had ER today.

cliff notes: scroll down for EUR dollar values and you see approx $35m (USD) for this most recent Q. Note that DSE is not on calendar Q’s, and so this most recent Q was their “Q3” as their year ends after March. That $35m represents 135% or so y/y growth.

Got a little growth stock on our hands. ESPR only gets a cut of this EU revenue from DSE, but the US sales are expected to also be entering hyper-growth, especially if/as they get the expected label improvements at end of March.

So the drug works, and it sells. Just a matter of executing. I think after the ESPR May Q1 ER, we will start to see the stock move from being a speculative drug play to being measured on growth numbers in the following Q’s. If so, multiple expansion should occur.

Still a risky moonshot, but path getting clearer, me thinks.

Dreamer

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