ESPR - Esperion - taking on the Statin market

Does anyone on this board have access to IMS script data?

I tried looking into it, but seems for the commercial side and not just something a random guy on the internet like me can subscribe to (for fee or free).

The reason I am interested is that analysts on ER call referenced script trends, and a guy on other mssg board claims to have access and mentioned scripts up prior week 5%. Curious what the most current week’s data is showing, and apparently they are released on Fridays. While scripts and revenue aren’t 100% correlated, it is pretty meaningful…it would be like knowing Datadog’s total client # every week and being able to see and measure (and extrapolate) the trends.

Anyway - let me know.

Two roadshow conferences next week, and I expect the insurance/payer status is a top focus, so I will try to listen in or at least catch the transcript or replay if they have one.

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Dreamer

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Enjoy the weekend all!
Dreamer

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A couple things today:

Another Roadshow conf call:

Seeking Alpha article out on ESPR:
https://seekingalpha.com/article/4694468-buy-esperion-therapeutics-despite-an-abiding-skepticism-weighing-on-the-stock

Otsuka - the partner for Japan (a larger market). Just finished their stage 3 study.
That means they can now start the process to file and get approval (early 2025) - this leads to Esperion getting more payout milestones (north of $100m…a bit unclear exactly how much) spread out thru 2025, it looks like.

Dreamer

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And now the label officially expanded in Europe. So their partner DSE (Europe and some Asian countries) should have hockey stick growth on too of the already strong growth trends they have been showing.

All the news has been positive for 2024, except one round of dilution.

Onky thing holding it back now, imo, is they need to “prove” their US growth is moving due to US label expansion.

So either a buyout happens or we wait for Aug and Nov ERs.

Dreamer

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Nexletol mentioned by GoodRx here:

https://www.goodrx.com/drugs/news/fda-top-new-approvals

Also apparently Aetna has now approved it without need for prior authorization. Trying to find confirmation of cost. I happen to get my annual physical this month, and asking Dr for Nexletol rx, as I use Aetna, to see what costs actually are.

Dreamer

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again - want to caution the difference between what stock price might do next 3-6 months and reality of what is happening on payer front and with actual sales…they should be correlated but life is never that simple.

On Jeffries conf call yesterday, a short 20-25 min, mostly recapping the expanded label news, and how their Japan partner Otsuka also received positive trial news, but the biggest takeaway was that 9 payers have adjusted their UM or Utilization Mgmt criteria. This means coverage has been adjusted, and in this case always in a good way. The Nexletol and Nexlizet drugs have been moved up to Tier1/2 status, depending on how those payers grade things…both are ideal. Then they also have been removing the need for PA or prior authorization, which is like needing a cardiologist approval in addition to your general physician, to get a prescription.

So the barriers to entry, and corresponding cost, of the drugs is going down.
Major players like Aetna appear to be part of the 9 payers that have made these adjustments, and on the call they stated that (7) of those happened just this week. (start of June)

Ok.

So we know Q1 sales were decently up y/y, but that was before any real impact from the label change, which happened near end of March.

During Q2, apparently scripts have been up y/y in 6 out of the 7 weeks thus far, and the way scripts are measured they don’t include this discount program thru ASPN (sounds sort of like a GoodRX type of thing). And on the conf call they mentioned good growth via ASPN and that it was “not an insignificant amount of scripts”.

So we are seeing script growth in April + May.
Now in June, the payers are joining the party.

We can make the assumption, or at least I will, that June should be the start of an inflection point. Remains to be seen how much Q2 numbers will be up y/y and Q/Q, but odds seem to be getting higher every day.

Again - the stock price seems gun shy…this company underperformed since 2020 when it tried to hype an early but very LIMITED label it received. Sort of like open a pizza place but only having the ingredients for the crust.

The stock price chart looks horrid over past 5 years, but realize that company had to dilute to stay financially above water, and they have 10x the number of shares. So $2 today is about $20 three years ago.

At near $2.50 share now, they are roughly $500m mkt cap.
When you start thinking about buyouts, you have to come up with your own exit price and napkin math. Do you think they would be bought for $1b, $2b, $3b, etc… If no further dilution, and they are flush with cash at moment, but do have some capital issues to work thru over next 6-9 months, then $15 stock price = $3b mkt cap buyout.

Split the difference and you are at $7.50 for $1.5b buyout, or a 3x from here.

Stock is about to hit/start hyper-growth.
I am just a guy on the internet, so do your own DD…but I think the Aug ER should show the modest uptick (mainly thanks to what should be a robust June) and then Nov ER should be first full Q with a good payer backdrop and the hockey stick should start materializing in scripts/rev.

Or you could hope NVIDIA doubles again from $3T to $6T market cap, I suppose.

Dreamer

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enjoy the weekend,
Dreamer

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this guy (just a guy on the internet, of course) Dave100 on Stocktwits had some good DD. Thought I would share.

Q1 24 report, collaboration revenue minus the $100m milestone was $12.979m. They stated $6.6m of this was royalty revenue so at a 15% rate that came from $44m in sales. The remaining $6.379m in collab revenue is the proceeds from the bulk pill sales to DSE, which ESPR stated are currently at a 30% loss. This goes away with the manufacturing transfer to DSE. This means the pills they sold to DSE in Q1 cost $9.1m. Back of the envelope, $9.1m worth of pills were sold by DSE for $44m for a multiplier of 4.8.

ESPR has stated the pills take about 12 months to manufacture, so we should see inventory building. It has gone from $35.2m at 12/31/22 to $73.1m at 3/31/24. Assuming it is carried at cost and using the 4.8 multiplier, ESPR is manufacturing pills for $351m in sales over the next year and that doesnt take into account they can be making less now as DSE is taking over their own manufacturing.

At the Jeffries conference they discussed profitability coming sooner than expected. One place to see why is to look at the cost of goods sold line item from last quarter. It decreased from $11.7m in Q1 23 to $10.1m in Q1 24, a decrease of 14%. Over that same time period, sales (US product sales plus collaboration revenue minus milestones) increased by 55%. That is some amazing efficiency gains that probably doesnt yet include any of the benefit of DSE taking over manufacturing for their piece.

let’s try to come up with some buyout numbers based on actual data. Novartis bought the psck9, Inclisiran in 2019 for $9.7 billion. It was a single product purchase and wasn’t approved. Sales have disappointed and most think they overpaid.

Another point is to think about what makes sense for DSE who I would expect to be most likely to make an offer. Between their DS and DSE agreements they are on the hook for another $300m and $175m in commercial milestone payments if sales targets are met. If DSE sales increase for the next 5 years at their forecast rate and we assume the median royalty rate that is $1.12 billion in royalties over five years. For the DS territories if sales start at $50m and hit $250m in five years that is another $94m in royalties. Total milestones and royalties Daichii is expected to pay ESPR over 5 years is $1.7 billion. If they offered that today they would get US rights and the Otsuka payments for free. $2 B is the absolute bottom of the buyout range.


regarding the $50m Otsuka payment for MACE outcomes and CV risk reduction in the US label, the most recent quarterly report says this payment would be made following Regulatory Approval and NHI Price Listing. This does match up with the company’s recent statements at one of the conferences that no Otsuka payments would be expected prior to 2025. This does mean there are about $140m in Otsuka payments to be expected around the same time in 2025. After collecting the $140m, ESPR would still have $310m in sales milestones to be earned over time from Otsuka in addition to the tiered royalty payments of 15-30%.


At this point now that the senior execs and board have all received their stock and option grants i would think they should be laser focused on getting the stock price up. i am assuming they aren’t playing for a 4X gain as that wouldnt really be life changing money for them but they are at risk of shareholders approving a sale at 4X the current price. That would only be $2 billion. in 2019, Novartis bought Inclisiran (the twice yearly pcsk9) for $9.7 billion before it was even approved. In 2023, Inclisiran sold less than $400m in the US. They should be doing everything in their power to get this to at least $10 a share before people even start talking buyout.


Across the 8 non-executive board members they issued 138k in new shares and 325k in options with a strike price of $2.25 today. For almost everyone on the board this at least doubles or tripled their exposure. everything has a 1year vesting schedule but i’m sure it fully vests upon a buyout. Assuming the C-suite is probably getting the same treatment soon. to me this greatly lessens the chance of any further dilution.

stock moving nicely past week or so…and they have a Goldman Sachs conf on Wed:

Will be interesting to see if that results in bull trap or turns the current gains into support. Or are we gonna keep doing the $2-$3 roller coaster until sales inflection is verified with Q2 & Q3 ERs?

Dreamer

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I should note that his concern about BoD getting a bid under $10 and shareholders accepting is/was found to be incorrect, as we believe the BoD doesn’t have to bring forward any bid it doesn’t think is worth considering.

I haven’t been involved in buyouts, so no experience in this area. Curious about others here?

Dreamer

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Dipped my toes in the water with a small purchases. After reading up on ESPR, interesting. Thanks for bringing it to all of our attention.

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I have been trading ESPR a bit. I sold at a near term bottom on 4/23 and 4/24 at $2.06 and $2.15. Then bought at $2.14 on 5/8 and bought higher on 5/23 and 5/24 at $2.27 and $2.26. Sold on 6/17 at $2.91 and $2.92. Would buy again at $2.20 range.

I also sold most of my ENVX and an agriculture commodity ETF this week. Bought some JEPQ (ETF with selling calls strategy on QQQ) and added to short term treasury ETF’s.

Underperforming market with this macro-dominated positioning, collecting monthly dividends. My one remaining share of NVDA is doing quite well, thank you.

KC

im shareholder of $ESPR as well. Looks very promising. It will be interesting to see US revenue. EU is growing with label extension.

Only weak point is Managment. I still can not trust them (really no dilution ?).

And sure a buyout can happen anytime soon, as always for blockbuster drugs.

You know $ARDX ? Two approved blockbuster drugs, 200mil cash, profitable next year, X drug is really a game changer, great CEO. Its my biggest position in my biotech portfolio!

On Thursday, BofA Securities revised its stance on Esperion (NASDAQ:ESPR) Therapeutics (NASDAQ:ESPR) stock, shifting from a Neutral to an Underperform rating and adjusting the price target to $2.50 from the previous $2.90.

This change reflects concerns about escalating competition from pharmaceutical giant Merck. Last week, Merck announced its intention to compare its oral PCSK9 inhibitor, MK-0616, with Esperion’s bempedoic acid (BA) in clinical studies.

https://www.investing.com/news/company-news/esperion-stock-downgraded-by-bofa-on-mercks-competitive-move-93CH-3490024

I haven’t decided whether to buy back at the current level, $2.29.

KC

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So competition in 2030 possible (EOY 2029 pt3 data readout).

Enough time for making money?

I bought more - see this as classic FUD-caused dip.

as gerrard87 pointed out, 2029-2030 for Merck study completion. Have read elsewhere that it is “expected” on the market in 2026. I think the difference in dates is that you can have a product available but it may have a restrictive label.

Esperion essentially was in this boat from 2020 thru March 2024. They were “approved” to sell Nexletol and Nexlizet in 2020, but bc the label was restrictive, the insurance/payers did not cover nor did doctors readily prescribe.

I see this similarly. Merck pill might be available in 2026, but probably in same sort of limbo until trial done.

On top of all that, you don’t know if trial will yield good results or not.
Seems a real stretch to downgrade Esperion on an undefined threat that may occur at some point in 2-5 years.

That gives them all of 2H-24, all of 2025, and who knows how much of 2026 before Merck is even selling this thing, let alone selling it with a similar level of approved payers and positive label that Esperion already enjoys now.

The stock has fluctuated from $2-$3 for 6 months now.
This seems like yet another buying dip potentially.

We still have 5-6 weeks to kill until Q2 ER, and those results will be muted somewhat as the fun didn’t really start until June when majority of payers to-date came on board in a favorable way. Still hoping for something in neighborhood of $29m in US sales. Their European partner should have ER about a week prior, and likely will continue showing good growth, too.

Final point: BOA analyst made these comments, with the backdrop that BOA literally bought about 4-5m shares recently in Esperion in Q1.

image

Dreamer

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I placed good until order at $2.21 and will double at around that level if this first order fills.
I agree that this smells of FUD with lots of time for revenue growth for ESPR. We shall see.

KC

Jeffries responded to the BOA analyst note.
Crux seems to be that PCKS9, which are currently needle drugs, have oral competitors in the pipeline with both Merck and NAMS. Both similar stories of likely not on market until 2026 and then unclear what kind of label at that time as outcome studies need to finish. On top of all that, what is their price (list) and how will insurance payers compare that to Nexletol/Nexlizet which is already on a great new label and in which payers are all getting on board.

Jeffries note:


In the meantime, more positive coverage via Medicare for Esperion.

Final comments:

  1. this is still a risky stock, of course.
  2. the BOA comments seem even more FUD-ish when you realize there are 13 weeks in a Q, and he was talking down about the growth thru the first 10 weeks, which would include only the first week of June. The growth was 36% y/y in script growth and 9% q/q. Why does this matter? Because that growth is already decent, but the vast amount of payers started getting on board the first week in June. So those trends don’t account for (obviously) the final 3 weeks of June, which should/will be the most productive yet thanks to improved payer coverage since first week of June. (duh)

My goal for $29m in US still stands for Q2.

good luck out there,
Dreamer

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Getting late in my neck of the woods. So, I bought at $2.24 and then placed another good for 60 days order at $2.14. G’ night all.

KC

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