In the second quarter of 2024, Esperion (NASDAQ:ESPR) Therapeutics Inc. (NASDAQ: ESPR) reported a significant increase in revenue, driven by the successful commercialization of their cardiovascular therapies, NEXLETOL and NEXLIZET. CEO Sheldon Koenig highlighted the company's achievements, including a 39% increase in U.S. net product revenue, expanded labels, and a broadened patient population.
A transformational transaction monetizing the European royalty stream has also strengthened the company's financial position. International partnerships are set to bolster the company's presence, with plans to file a new drug application in Japan through partner Otsuka Pharmaceutical.
Key Takeaways
- Esperion's U.S. product revenue increased by 39% year-over-year.
- Expanded labels for cardiovascular risk reduction have driven revenue growth.
- The company's field sales team has expanded, and payer access now includes over 114 million lives.
- Daiichi Sankyo Europe and Otsuka Pharmaceutical are key partners for international market penetration.
- Financial stability improved through a monetization deal involving the European royalty stream.
- Total Q2 revenue reached $73.8 million, with a 727% increase in collaboration revenue.
Company Outlook
- Esperion is confident in its continuous growth trajectory within the cardiovascular market.
- The company sees significant opportunity in Japan, one of the largest markets, due to statin intolerance prevalence.
- Partnerships in Europe and Japan are expected to contribute to international expansion efforts.
Bearish Highlights
- The company did not disclose specific gross to net numbers but maintains that they are in a steady state.
Bullish Highlights
- Esperion is performing on par or ahead of competitors in the cardiovascular space.
- The company has experienced steady growth and momentum with their cardiovascular product launches.
Misses
- There were no specific misses discussed during the earnings call.
Q&A Highlights
- The call concluded without any further questions, indicating that the presented information was comprehensive and satisfactory to the participants.
In conclusion, Esperion's second quarter earnings call presented a robust financial and commercial performance, underpinned by strategic expansions and partnerships. The company is well-positioned to capitalize on the growing demand for cardiovascular therapies, both in the U.S. and internationally. With a solid financial base and promising market opportunities ahead, Esperion continues to be a noteworthy player in the cardiovascular treatment landscape.
InvestingPro Insights
Esperion Therapeutics Inc. (NASDAQ: ESPR) has demonstrated a remarkable surge in revenue, largely attributed to the successful commercialization of its cardiovascular products. InvestingPro data reinforces this narrative, with the company's revenue growth over the last twelve months reaching an impressive 183.74%. This growth is further accentuated by the quarterly revenue growth figure of 466.14%, underscoring the company's strong commercial momentum.
The company's market capitalization stands at $358.06 million, reflecting investor recognition of its market potential. However, it's important to note that the company operates with a significant debt burden, as highlighted by one of the InvestingPro Tips. This could be a factor for investors to consider when evaluating the company's long-term financial health.
Another InvestingPro Tip points out that analysts do not anticipate the company will be profitable this year, which is consistent with the reported negative operating income margin of -15.1%. This margin indicates challenges in converting revenue into operating profit, a common scenario for companies in growth phases or investing heavily in expansion.
Despite these challenges, the company's liquid assets reportedly exceed its short-term obligations, providing some financial cushion and flexibility. This is a crucial aspect for investors who are gauging the company's ability to manage its debt and fund operations without immediate profitability.
For those looking for deeper analysis and additional insights, InvestingPro offers more tips on Esperion Therapeutics, including perspectives on sales growth prospects and stock performance over various time frames. Interested readers can find a total of 8 InvestingPro Tips for Esperion at https://www.investing.com/pro/ESPR, which could further inform investment decisions and provide a more comprehensive understanding of the company's financial outlook.
Full transcript - Esperion Therapeutics Inc (ESPR) Q2 2024:
Operator: Ladies and gentlemen. Thank you for standing by. Welcome to Esperion’s Second Quarter 2024 Earnings Conference Call. At this time, all participants are in a listen-only mode. Following the presentation there will be a question-and-answer session. Please be advised that today's conference call may be recorded. I would now like to hand the conference over to Alina Venezia, Director of Investor Relations. Please go ahead.
Alina Venezia: Thank you, Operator. Good morning and welcome to Esperion’s second quarter 2024 earnings conference call. With us today are Sheldon Koenig, President and CEO, and Ben Halladay, CFO. Other members of the executive team will be available for Q&A following our prepared remarks. We issued a press release earlier this morning detailing the content of today's call. A copy can be found on our investor page of our website together with a copy of the presentation that we will also be referencing. I wanted to remind callers that information discussed on the call today is covered under the Safe Harbor provision of the Private Securities Litigation Reform Act. I caution listeners that management will be making forward-looking statements. Actual results could differ materially from those stated or implied by our forward-looking statement due to the risks and uncertainties associated with the business. These forward-looking statements are qualified in their entirety by the cautionary statements contained in today's press release and in our SEC filings. The content of this conference call contains time-sensitive information that is accurate only as of the date of this live broadcast, August 12, 2024. We undertake no obligation to revise or update any forward-looking statements to reflect events or circumstances after the date of this conference call and webcast. As a reminder, this conference call and webcast are being recorded and archived. We will begin the call with prepared remarks and then open the line for your questions. I'll now turn the call over to Sheldon.
Sheldon Koenig: Thank you, Alina, and good morning, everyone. Thank you for joining us today to review the meaningful progress we have made during the second quarter and to review our plans moving forward to continue to cement NEXLETOL and NEXLIZET as cornerstone therapies in reducing cardiovascular risk. The second quarter was an undeniably watershed period as we successfully executed our strategic initiatives across all areas of the business, key to building Esperion into a leading biopharmaceutical company improving outcomes for patients with or at risk for cardiovascular and cardiometabolic diseases. The second quarter was highlighted by double-digit increases U.S. product revenue, significant progress by our partners in expanding international access to NILEMDO and NUSTENDI, and importantly, the monetization of our European royalties from our partner, Daiichi Sankyo Europe, or DSE. And the early discounted payoff and termination of our existing revenue interest purchase agreement, or RIPA with Oberland. This strategic transaction significantly enhances our balance sheet and better positions us to focus on optimizing our U.S. commercialization efforts. Ben will discuss this transformational transaction in greater detail later. Now let me turn to our progress with our U.S. commercialization efforts, which are gaining momentum as validated by U.S. product revenue growth in the second quarter of 2024 of 14% sequential and 39% year-over-year growth. This growth was driven by the expanded new labels we received in late March. Our prior labels for NEXLIZET and NEXLETOL were limited to LDL-cholesterol reduction in a population of patients that already had a CD event and were on statin therapy. Our expanded labels have three significant differences; one, includes CV risk reduction benefits; two, expands the patient population by including primary prevention; and three, enables use in patients that are unable to tolerate or maximize statin therapy. NEXLETOL and NEXLIZET are now the first oral non-statin LDL-cholesterol lowering drugs to be approved by the FDA to reduce the risk of CV events in both primary and secondary prevention patients. We have the opportunity to bring the benefits of NEXLETOL and NEXLIZET to the 70 million patients eligible under the expanded new labels. To support these broad expanded labels and drive awareness and ultimately prescriptions, we increased our field sales team. Critical to continued growth in prescriptions and product sales is broadened payer access. Here, we have done excellent work partnering with major payers to update utilization management criteria to include the recent label updates. The majority of payer updates began on June 1, and we were finalized by mid-July, with more than 80% of UM criteria now in place. To-date, I am pleased to report that more than 114 million lives now have payer UM criteria updated to reflect the new label updates. We also continue to garner new formulary coverage, resulting in 92% preferred commercial coverage and increased our Medicare preferred coverage to greater than 50%. This strong payer acceptance that aligns with our new outcomes labels underscores the payers' recognition of the clinical benefit and economic value our products bring to both patients and the health care system, respectively. As a result of this enhanced patient access and streamlined prescription process, we expect increasing physician confidence in prescribing NEXLETOL and NEXLIZET, which should translate into increasing product sales in the upcoming quarters and beyond. With payer access advancing, our next important commercial initiative is to ensure we are further educating our health care providers, or HCPs. In tandem, we have a campaign aimed at empowering patients to talk to their HCP about their CV risk. We are using a variety of digital and traditional sales and marketing tactics that are gaining traction. For example, our expanded sales force has been targeting specific subsets of primary care physicians and cardiologists with in-person detailing. We also gained meaningful traction with our digital campaign where the team utilized eight digital channels, including search, e-mail, peer-to-peer, HER, point of care, banners and social media to reach over 90% of our targeted health care providers. As a result of these combined initiatives by our managed care, sales force and marketing teams, we now have more than 21,000 HCPs writing scripts, and total retail prescription equivalents increasing approximately 11% in the last four weeks of June, compared to the prior four weeks of May. I'll note that we used this comparison, because there were five weeks in May this year. This is truly a Herculean effort, and we are proud of the tremendous progress we have made throughout the launch so far. We have a tremendous opportunity ahead of us and are well poised to build NEXLETOL and NEXLIZET into blockbuster products for a variety of reasons. First and foremost, we have compelling clinical data from the CLEAR Outcomes study that supports and validates safety and efficacy in reducing cardiovascular risk reduction and lipid lowering in primary and secondary prevention patients. Second, there is a large underserved patient population of 70 million people at risk who need better treatment options. Finally, we have the right people and programs to drive this market and are taking all the right steps to successfully penetrate it. I say this because we have a team, who have all either led or been a part of successful pharmaceutical product launches during their careers, and I'm confident in this team's strategy and execution capabilities. Importantly, we are managing this launch in a methodical way, understanding that we need to have all the pieces in place for payers, physicians and patients to be successful. We see this like a flywheel. The initial rotations take time and effort, but the subsequent rotations create momentum that compounds. We are off to a strong start and are confident that the work we are undertaking today will translate into increasing scripts and ultimately, into accelerated product revenue. Let me now turn to the progress we and our partners are making internationally, starting with the EU, where our partner, DSE, is making important strides. DSE received its approved expanded label for NILEMDO and NUSTENDI from the European Commission, which reflects the new indications for cardiovascular risk reductions and expanded LDL-cholesterol lowering in primary and secondary prevention patients. They have begun launching these new labels in European territories, with most areas anticipated to be launched by year-end 2024 and Italy in 2025. We expect this to be a substantial market for DSE as up to 80% of patients in Europe are unable to reach guideline recommended levels for LDL-cholesterol despite taking statins. We are confident that with the strength of the approved indications, DSE will be able to position NILEMDO and NUSTENDI as the first and only non-statin, lipid-lowering medicine approved for CV risk reduction, both in primary and secondary cardiovascular prevention in Europe. DSE will have a medical and commercial presence at the upcoming European Society of Cardiology Congress at the end of this month in London. This exciting Congress is the largest cardiovascular medical meeting of the year and is well attended by key opinion leaders from around the globe, including the United States. Consequently, we expect the efforts DSE will make at ESC to also benefit our efforts to enhance the awareness and visibility of our products among U.S. HCPs. Beyond Europe, our partner, Daiichi Sankyo Company Limited, or DS ASCA, gained approval for NEXLETOL and NEXLIZET in Thailand and for NILEMDO and NUSTENDI in Macau and submitted new drug applications in Korea. While these are smaller regions, we expect to see incremental growth in our royalties from these product launches. Our Japanese partner Otsuka Pharmaceutical announced that the primary endpoint of LDL-cholesterol reduction from baseline at week 12 was achieved in their Phase 3 clinical trial in Japan for Bempedoic acid as a treatment for hypercholesterolemia. Otsuka plans to file a new drug application in Japan in the second-half of 2024 with expected approval at national health insurance pricing anticipated in 2025. We are enthusiastic about the continued momentum in Japan as it is one of the largest markets for lipid-lowering therapies. This could be a substantial market for Otsuka, as well as a valuable royalty contributor for Esperion growth in the future. Our Esperion team continues to make strides expanding the global reach of Bempedoic acid for use in cardiovascular risk reduction in patients with or at high risk for cardiovascular disease. We continue to advance our work to file new drug applications in Canada, Australia and Israel and are on track for these submissions by the end of this year. We are continually evaluating opportunities for additional collaborations and partnerships around the world, and given the label expansions for Bempedoic acid and the worldwide total addressable market for cardiovascular risk reduction, we believe we are an attractive partner with a compelling value proposition. Finally, we continue to build a growing body of scientific and clinical knowledge that support the cardiovascular risk benefits of our Bempedoic acid products. To that end, we are pleased to have two data sets published in peer-reviewed journals over the past months, including an article titled Comparative Cardiovascular Benefits of Bempedoic Acid and Statin Drugs, that was published in the Journal of the American College of Cardiology. This analysis of clear outcomes data demonstrated the cardiovascular risk reduction benefit of Bempedoic acid treatment predicted per unit decrease in LDL-cholesterol is comparable to that theme in statin trials. Another article on the impact of the COVID-19 pandemic on conduct and results of CLEAR Outcomes trial was published in the Journal of Clinical Cardiology. This analysis confirms the benefit of Bempedoic acid and suggests that the global COVID-19 pandemic may have underestimated the benefit of Bempedoic acid on both MACE-4 and MACE-3 based on the contribution of undetermined deaths that likely represented COVID-19 infection or pandemic-related fatalities. We will continue to publish our data and present it at key medical meetings and look forward to updating you on the progress over the months. With that overview of the business, let me turn the call over to Ben for a detailed review of our financial progress during the second quarter. Ben?
Ben Halladay: Thank you, Sheldon. Before I get into the details of the quarterly results, I want to highlight the transformational transaction we completed at the end of the quarter. We were excited to monetize our European royalty stream from DSE for a variety of reasons, not the least of which is it allows us more control to leverage our balance sheet and capital structure. As we reported, proceeds from the royalty purchase agreement facilitated early payout and termination of the Oberland RIPA, removing all leans and covenants associated with the agreement, avoiding a significant headwind of payment step-ups in 2025 and dramatically improving the liquidity outlook of the company. While we have made significant progress over the past two years in extending our cash runway, this is the single most important action we have taken to build our financial foundation for future growth. With that, let me now turn to our solid financial performance for the second quarter of 2024. I will provide a brief overview of the results, noting that additional information can be found in our press release issued early this morning and 10-Q that will be filed shortly. Please note that unless otherwise specified, my comments reflect results for the second quarter ended June 30, 2024. Total revenue for the second quarter of 2024 was $73.8 million, compared to $25.8 million for the comparable period in 2023. U.S. net product revenue was $28.3 million, compared to $20.3 million for the comparable period in 2023, an increase of approximately 39%. Sequential quarterly net revenue growth was 14%. We believe this revenue growth, along with the total retail prescription equivalents growth in June that Sheldon just discussed, are an early indicator of our progress with the launch and the potential for these drugs. Collaboration revenue was $45.5 million, compared to $5.5 million for the comparable period in 2023, an increase of approximately 727%, primarily due to the revenue recognized from our settlement agreement with DSE for the European Commission approval, increased product sales to our collaboration partners and royalty sales growth within our partner territories. We are working with DSE on the tech transfer to support their ability to manufacture NILEMDO and NUSTENDI on their own for European distribution. This will significantly reduce our future COGS for the product and reduce working capital costs once completed. We hope to complete this work in 2025 and for DSE to be producing their own product by the end of next year. Turning to the rest of the P&L. For the second quarter of 2024, research and development expenses were $11.5 million, compared to $22.1 million for the comparable period in 2023, a decrease of 48%, primarily attributable to our CLEAR Outcomes study that was completed in 2023. Selling, general and administrative expenses were $44.2 million, compared to $34 million for the comparable period in 2023, an increase of 30%. The increase is primarily related to increased commercial headcount in addition to bonus payments and promotional costs. We continue to manage expenses prudently and expect expenses to remain similar to the current levels. The company incurred a one-time loss on extinguishment of debt of $53.2 million due to the accounting of the termination of the Oberland RIPA. Total net loss for the quarter was $61.9 million, compared to a net loss of $49.9 million for the comparable period in 2023. Basic and diluted net loss per share was $0.33, compared to a basic and diluted net loss of share of $0.46 for the comparable period in 2023. Turning to our balance sheet. As of June 30, 2024, we had $189.3 million in cash and cash equivalents. By removing the Oberland RIPA, we are in a much better position to address the remaining debt on our balance sheet. We are reiterating our full-year 2024 operating expense guidance is expected to be approximately $225 million to $245 million, including $20 million of non-cash expenses related to stock compensation. Now let me turn the call back to Sheldon for final closing remarks. Sheldon?
Sheldon Koenig: Thank you, Ben. In closing, we are proud of the tremendous progress we have made throughout the first-half of 2024, and we are looking forward to an exciting second-half of the year as we continue to grow our U.S. product sales, expand internationally and strive to reach our goals to create and deliver innovative options to reduce the risk of cardiovascular disease for patients around the globe. Our accomplishments to-date are a culmination of the hard work of our talented and dedicated Esperion team, who are passionately committed to reaching goals and making a difference in patients' lives. Importantly, we could not have made these achievements without the ongoing support from our stakeholders. We are on an exciting journey together, and I look forward to sharing more successes with you in the future. Again, we thank you for your ongoing trust and support. Operator, we are now ready for Q&A. Question-and-Answer Session Operator [Operator Instructions] Our first question coming from the line of Dennis Ding with Jefferies. Your line is open.
Dennis Ding: Hi, good morning. Thanks for taking our questions. Two for me. Maybe can you just share a little bit about the feedback from doctors who are on the ground around setting PAs approved and there's been any directional improvements recently? And has that been going to your expectations? And then, number two, just curious on your thoughts on the momentum after June 1 and what more work you need to do for scripts to pick up? Thank you.
Sheldon Koenig: Eric, do you want to take that?
Eric Warren: I sure do. Got it. Good morning, Dennis. Good to hear your voice. So with regards to physicians on the ground, so clearly, over the past four years prior to the label change, it wasn't always easy to get our products, especially for some of the patients that they wanted to use it in specifically in the statin intolerant or in those primary prevention patients. But as a result of the label change in the work that BJ and her team have done progressively improving, and, as you noted, a pretty significant improvement in June 1. Takes a little time for clinicians to kind of regain that confidence, if you will, but they are progressively improving in their confidence. And I did see your primary care survey, I thought that was accurate. And that shows that there is still opportunity for us to reach these physicians, not only with the clinical message to get them excited about the brands, but also to get them over the edge from a prescribing and an access perspective. With regards to the momentum in June, so yes, as you saw a great pickup in June, directly related to sales force execution, but also the improvements that we had from a prior authorization from a UM perspective. I expect our growth to continue. I'm happy with that what we saw in June. I'm happy with the overall 14% that we delivered from Q2 -- Q1 to Q2, and I continue to expect progressive improvement in growth.
Dennis Ding: Thank you.
Eric Warren: Thanks, Dennis.
Operator: Thank you. And our next question coming from the line of Serge Belanger with Needham. Your line is open.
Serge Belanger: Hi, good morning. Congrats on the progress. A couple of questions for us. I guess, first on the coverage with that you've done some great work on the commercial side and are expanding on the Medicare side. Remind us what is the breakdown between those two segments for this market opportunity? And how much of a focus is it for the company to standing on the Medicare coverage side? And then secondly, can you remind us how many scripts are currently going through your specialty pharmacy, trying to figure out what we're missing out when we're looking at the good data set. Thank you.
Sheldon Koenig: So maybe I can start this, and I'll turn it over to BJ. First of all, surge, as you mentioned, our coverage is continuing to increase. Just from a commercial perspective, we have over 90% of the plans covered, from a Medicare perspective, we have over 50% covered. And we're pretty much there as far as maximizing all of our coverage. There is one Medicare account that we're still working with that we feel good about, so stay tuned there. But just from an overall coverage perspective, we're in a great place. And just to reiterate what Eric said earlier, as you know, one of our greatest headwinds, previous to our new label, were the utilization management criteria. That has gotten a lot easier. In some areas, there are -- for some accounts, there are no prior authorizations. As it relates to Aspen, what I would say is, remember, that was a bridge that we set up so that until we have this coverage, patients could get their medications until maybe their PA was approved, et cetera. So that was really a great stop gap measure from the team. And maybe I'll turn it over to BJ, if he wants to add any more color as it relates to prescriptions going through Aspen, et cetera.
Betty Swartz: Yes. Thank you, Sheldon. I would say, Serge, that Medicare is the most important channel to the agile lower -- lipid-lowering treatment. And so we are laser-focused to garner more coverage there and stay tuned. Positive negotiations continue there. So we were at 50% now. We continue to have that as a key focus going forward. Sheldon captured Aspen correctly. We used that. That was a great tactic for us to bridge patients, while payers were updating their UM criteria, but we were so pleased that payers really accelerated those reviews and so less and less patients went in there because of the payers now updating and we're getting patients on payer-paid prescriptions. So hopefully, that answers your question, Serge.
Serge Belanger: Thank you.
Operator: Thank you. And our next question coming from the line Jason Zemansky with Bank of America (NYSE:BAC). Your line is open.
Cameron Bozdog: Hey, good morning. This is Cameron on for Jason. Congrats on the quarter. So with regards to BA, when you think about launches in the cardiovascular space, they often require sometimes longer to ramp relative to other indications like oncology. So I'm curious what you expect dynamics to look like here for uptake we do you expect growth to continue to be more steady? Or are there factors that could potentially support a more near-term inflection? Thank you.
Eric Warren: I'm happy to...
Sheldon Koenig: Sorry, Eric. I was going to just leave this off and then turn overview, I was on mute here. First of all, thanks for your question. I would refer you to slide nine of our corporate deck, which is available, which aligns to our prepared remarks. And again, what you'll see is this 14% growth. And we've shown double-digit growth quarter-over-quarter. So we're seeing that ramp up now. And just taking a look at the launch angle that we have, we're going to continue to see that momentum and you're going to continue to see prescriptions go higher. And Eric, I'll turn it over to you because I know you've done some analysis.
Eric Warren: Yes, yes. Thanks, and thanks for your question. So absolutely, it takes a little bit more time than oncology to reach peak in this market. But we're confident in our ability to deliver continuous growth quarter-over-quarter, year-over-year. I did look at some other cardiovascular analog products that had significant CVOT trials that resulted in a label change and looked at their growth over the course of 3 years, also looked at their 1-year growth. And we're tracking right on if not ahead of where these competitive analogs are. Also remind you, from a PCSK9 perspective in Repatha, they're nine years into this mission, and they're still not peaked yet. So really confident in our ability to deliver a progressive continuous growth and realize the full potential of these molecules.
Operator: Thank you. And our next question coming from the line of Thomas Shrader with BTIG. Your line is open.
Unidentified Analyst: Hi, good morning. This is Sam on for Tom. Thanks for taking our questions. So two questions for us. So first, could you just provide any additional color on gross to net and any potential remaining headwind. And for the second question, just wanted to ask about what the market dynamics in Japan is and what the unmined related to that and tolerance?
Sheldon Koenig: So I'll go first with Japan, and then we'll hand it over to Ben Benjamin as it relates to GTN. The opportunity in Japan, Japan is, as we've said in our prepared remarks, one of the largest markets that is out there. As a matter of fact, with Zetia, Vytorin when I ran that brand, that was really kind of the number three market in the world. As it relates to statin intolerance, what we do know globally, and there's a little bit of debate around the percentages is that statin intolerance is anywhere between 15% to 20% of the population that could need a statin. And you've heard us talk about the millions of people out there that need LDL lowering. So just thinking about 15% to 20% of them, it's very big. But Japan is a great opportunity. Fortunate to have Otsuka as a partner and looking forward to their next steps and filing. Ben, do you want to speak to GTN?
Ben Halladay: Yes. Thanks, Sheldon. So as far as gross to net goes, we've had a good year, things have remained largely consistent with last year when we saw some significant [Technical Difficulty]
Sheldon Koenig: Did we lose Ben? I think we have lost, Ben.
Eric Warren: Yes, I think we have, Sheldon.
Sheldon Koenig: Yes. So maybe I'll speak to GTN. Sorry, I wasn't sure if the whole site has gone down, and we're texting each other. We don't disclose our gross to net, but I would say is that we are in a steady state. We're comfortable where we are now, not only from what we do from a contracting perspective, what we do with wholesalers, et cetera. So we've been managing that appropriately. I think we can go on to the next question.
Operator: Thank you. I am showing no further questions in the queue at this time. Ladies and gentlemen, this does conclude today's conference call. Thank you all for participating, and you may now disconnect.
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