Esperion Therapeutics Q1 2023 Earnings Call Transcript

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May 9, 2023

There are 13 speakers on the call.

Operator

Ladies and gentlemen, thank you for standing by and welcome. 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 may be recorded. I would now like to hand the conference over to Tiffany Aldridge, Associate Director, Corporate Communications at Esperion.

Operator

Please go ahead, Tiffany.

Speaker 1

Thank you. Good morning, and welcome to Experion's Q1 2023 earnings conference call. I want to remind callers that the information discussed on the call today is covered under the Safe Harbor provisions 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 These forward looking statements are qualified in their entirety By the cautionary statements contained in today's press release, presentation and our SEC filings.

Speaker 1

The content of this conference call contains time sensitive information that is accurate only as of the date of this live broadcast, May 9, 2023. 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 issued a press release this morning detailing the contents of today's call. A copy can be found at experion.com within the Investors and Media section.

Speaker 1

With us today are Sheldon Koenig, President and CEO Ben Halliday, Chief Financial Officer Doctor. Joanne Fudi, Chief Medical Officer Eric Warren, Chief Commercial Officer and BJ Swartz, Chief Strategy Officer. We will begin with prepared comments and then open the call for your questions. Following today's call, the team will be available for follow-up questions. I'll now turn the call over to Sheldon for some prepared remarks.

Speaker 1

Sheldon?

Speaker 2

Thank you, Tiffany, and good morning, everyone. Thank you for joining us today to review our Q1 results and significant recent achievements. We reported revenue of $24,300,000 or growth of 29% year over year. Retail prescription equivalents grew by 15% year over year and new to brand prescriptions grew by 56% compared to the prior quarter. It's clear that we are off to a very strong Let me now share some of the highlights from the quarter that are driving this positive momentum.

Speaker 2

As you know, we recently presented impressive clinically meaningful cardiovascular risk reduction results from our landmark CLEAR outcomes trial at ACC in March, As well as published these broadly disseminated data in the prestigious New England Journal of Medicine. This was a major accomplishment for Aspirion that was years in the making And we're very proud of the team for their tireless work in achieving this milestone. I'll further discuss these positive results in a moment. Our entire organization is continuing to work expeditiously following our data announcement and we remain on track for regulatory submissions Both the U. S.

Speaker 2

FDA and the European Medicines Agency in the first half of this year. Once we file, there's typically a 10 month review period, So our expectation is for the label change to become effective in the first half of twenty twenty four. As a reminder, Our sales reps are prohibited from mentioning anything beyond the current label, so we expect the label change to have a significant and positive impact on demand for our drugs. New to brand subscription spiked 88% in the 4 weeks following our agency data presentation, And Eric will provide more color from the field to explain why we are seeing this trend so quickly and ahead of our initial expectations. We are also making swift progress in Europe.

Speaker 2

The International Lipid Expert Panel has updated the guidelines and now recommends bempatoid acid ahead A PCSK9 inhibitor either alone or in combination with ezetimibe. Next, our European partner has demonstrated persistent growth For the Nexlopal and Nexlodeca franchise in that geography, our European commercialization of gembitoic acid continues to expand And we are proud to report that reimbursement of the drug was recently approved in Italy and that marketing approval was obtained in Turkey. Next, we have launched a new scientific website targeting the scientific and medical communities to further educate these important stakeholders about the benefits of Nexlutol and Nexlutet. Lastly, we recently announced a commercial partnership with Curex Pharmaceuticals. This partnership will enable their 72 reps to promote Nextelita and Nextelivete with primary care providers, effectively doubling our promotional footprint.

Speaker 2

We expect their reps to be fully trained and in the field by July. Let me now walk you through some key business accomplishments. As you all know, CLEAR outcomes was a landmark trial unprecedented in its scope, which assess the ability of bempedoic acid to improve outcomes in individuals Unable to maximize or tolerate statin. We focus on a significant underserved population unable to achieve their LDL cholesterol goals It was conducted in nearly 14,000 patients in 32 countries, inclusive of approximately 50% women, Which is an important and differentiating component compared to other cardiovascular trials and which generate a round of applause from the physician audience As cardiovascular disease is the number one killer of women. I want to take a moment to reiterate the high level findings from the trial because they are so important.

Speaker 2

A cardiovascular risk reduction of more than 20%, including a reduction in non fatal heart attack, This is a significant outcome, not only for Aspirion, but more importantly for patients. Our drugs are literally saving lives. We will present additional analysis from this trial at multiple medical meetings throughout the year, which we expect will further raise awareness amongst prescribers. We saw significant coverage and excitement about bempedoic acid following the announcement of Clear Outcomes results, Not only from the medical community, but also from the media and the general public. This data has been so impactful that it has been covered in over 500 Trade and broadcast media pieces, garnering over 1,000,000,000 total impressions, which is equivalent to us getting approximately $200,000,000 in paid advertising.

Speaker 2

We're thrilled to see so much enthusiasm for our study and are proud to be at the forefront of the discussion about reaching cholesterol goals. We aim to continue the conversation while increasing awareness about the importance of lowering With that, I'll now turn it over to Eric Warren, our Chief Commercial Officer for

Speaker 3

a commercial perspective. Thanks, Sheldon. I'm incredibly excited about the performance of Nexlitol and Nexlazette in the Q1. We are just scratching the surface on the true opportunity for these products. Coming out of ACC, We surveyed approximately 100 healthcare practitioners to assess their reaction to the results of the CLEAR OUTCOME study.

Speaker 3

An overwhelming 98% had a positive or highly positive reaction, Reinforcing the clinical importance of these data. Even without the ability for our commercial teams to promote these data, We saw significant growth in multiple key performance indicators in Q1. I'll highlight 2. Number 1, An 88% increase in new to brand prescriptions for the 4 weeks following ACC. And number 2, approximately 1500 new writers of NexoTAL and NexoZette during that same time period.

Speaker 3

We are extremely proud of these results and believe that it is only the beginning of the significant growth opportunity that lies ahead. To put further context around these trends, We believe that the growth is driven by significant prescriber engagement and conviction in the benefits of Nexplitol and Nexpliset. The commercial team is doing an outstanding job executing our current positioning, Which is, as a reminder, for those patients with established cardiovascular disease on maximally tolerated statins and not at their LDL C goal. At the same time, the team is preparing for the significant changes that will come to our positioning post incorporation of the clear outcomes data into the prescribing information. Shedding the statin limitations and adding high risk primary prevention patients is expected to not only Dramatically increase the number of patients that will benefit from Nexolutol and Nexolazette, but solidify their place As the clear next step after statin and the 1st non statin LDL C lowering therapies to demonstrate outcomes benefits in a combination of high risk primary and secondary prevention patients.

Speaker 3

Multiple commercial activities are being implemented throughout 2023 to build upon the momentum we saw in Q1 And to prepare for our full launch in the first half of twenty twenty four, from revised segmentation The targeted consumer activities, sales force scaling and creative partnerships that expand PCP reach Like the one we just signed with Curex that Sheldon mentioned. The team is leaving no stone unturned to enable Nexlutol and Nexlutet to reach their full commercial potential. I'll turn it over to Ben to review the detailed financials.

Speaker 4

Thank you, Eric. Earlier today, we issued a press release containing our financial results for the Q1 2023, which available on the Investor page of our website. Please note that unless otherwise specified, my comments reflect results for the Q1 ended March 31, 2023. U. U.

Speaker 4

S. Product revenue was $17,000,000 up approximately 27% year over year. Retail prescription equivalents The Q1 increased 15% year over year and 7% quarter over quarter, reflecting very positive reception of the CLEAR outcomes data. Our European partner continues to report strong Nalendo and NuStendi growth in their European territories. A total of 97,000 patients Have now been treated in Europe through February of 2023.

Speaker 4

As of March 31, 2023, cash, Cash equivalents and investment securities available for sale totaled $162,300,000 compared with 100 and $6,900,000 on December 31, 2022. This cash includes the recent $56,000,000 raised in a registered direct offering in March before deducting placement agent fees and related offering expenses. Collaboration revenue, which includes combined royalty and partner revenue was $7,300,000 an increase of 33% year over year. Finally, total revenue for the Q1 ended March 31, 2023 Was $24,300,000 an increase of 29% year over year. Turning to expenses.

Speaker 4

R and D expenses were $31,400,000 an increase of 29% year over year. The increase is primarily related Costs associated with our CLEAR outcomes trial, including closeout activities, our ACC presentation and regulatory submission preparation as previously guided. SG and A expenses were $29,900,000 a decrease of 2% year over year, reflecting our commitment to expense management, while Continuing to support the momentum seen following our ACC presentation, our recent deal with Curex is a great example of how we can expand our commercial presence without significantly increasing our burn We still expect full year 2023 operating expenses to be approximately $225,000,000 to $245,000,000 We are tracking in line with our guidance. This total includes $25,000,000 in non cash expense related to stock compensation and can be further broken out as $100,000,000 to 100 $10,000,000 in R and D expense and $125,000,000 to $135,000,000 in SG and A expense. I'll note that our operating Our expenses are expected to be first half loaded, reflecting costs associated with the closure of our CLEAR outcomes trial ACC presentation regulatory filing submission work in both the U.

Speaker 4

S. As previously mentioned. We expect 2nd quarter expenses to be relatively in line with the Q1 and then to moderate substantially in the second half of the year. Let me now hand it back over to you, Sheldon.

Speaker 2

Thank you, Ben. Let me share a brief corporate update. First, we raised nearly $56,000,000 in capital at the end of March, which extends our cash runway and enables us to fuel continued growth. 2nd, we announced that we'll be holding our Annual Shareholder Meeting later this month on May 25. And third, we filed an amended complaint last week The Southern District of New York with regard to European Partner milestone payments, which we believe we are owed.

Speaker 2

This amended complaint discloses new evidence We believe further supports our position. We feel confident in our legal standing and we'll keep you posted as things progress. NexoPal and NexoVet are well positioned for significant growth in a large market and our data have driven awareness and acceptance on a global scale. We are on track to soon file for a broad cardiovascular risk reduction label and we plan to be extremely visible at upcoming medical congresses And in top tier journals, we are thrilled about the initial increases we've seen across selling metrics Following sharing and clear outcomes at ACC, we are implementing our strategic plan to capitalize on that momentum throughout 2023 For the upcoming label update and the full scale promotion associated with it, as we unlock the blockbuster potential of Nexlipol and Nexlipet. I want to make something clear.

Speaker 2

Astra statin, nexploTol and nexploTol are next. Thank you for your interest in Experian and for joining today. Operator, we are now ready for Q and A.

Operator

Thank you. Our first question will come from the line of Dennis Ding with Jefferies. Your line is open.

Speaker 5

Thanks. Good morning and thanks for taking my questions. Congratulations on all the progress. So two questions from me. Number 1, on the Daiichi milestone, did you you had previously mentioned you'll be seeking Around $300,000,000 in value and that can obviously come in a variety of different ways.

Speaker 5

So Can you give investors some clarity on what you mean by this? And what factors are you taking into account when it comes to Pursuing a near versus longer term resolution. And then my second question is around OpEx. Can you Remind us how much flexibility do you have on OpEx on either SG and A and R and D? And if there is some level of

Speaker 2

Hi, Dennis. First of all, thank you so much for your question. So, I want to be clear as it relates to the Daiichi Thank you, Milestone. Our goal is to secure the full $300,000,000 in value for our shareholders. And That's what we will be pursuing.

Speaker 2

That's what we have always publicly stated. And I think it's also important to again recognize the fact that the So, I know you used the word value. We are looking to seek the full $300,000,000 payment And we'll just leave it at that.

Speaker 4

Yes. Dennis, this is Ben. I'll touch on OpEx. So as far as flexibility, I mean, Let me be clear. We will always we always have and always will meaningfully manage the expenses of this company.

Speaker 4

With R and D, yes, we have room to change and toggle up and down. But with SG and A, we want to make sure that we're funding The great momentum that we saw post ACC and we don't want to derail that. So we will make sure that we're investing in the right areas, but We're going to walk the fine line of managing our burn rate as well as trying to keep that momentum going. But to answer your question, yes, there is room to You scale up and scale down accordingly.

Speaker 5

Thank you.

Operator

And that will come from the line of Serge Belanger with Needham. Your line is open.

Speaker 6

Hi, good morning. Thanks for taking the questions. Sheldon, the first one is on the legal proceedings with your European partner. What's the next potential development on that front? And then maybe can you talk about the potential range of Time lines for resolution here?

Speaker 6

And secondly, just you talked about additional data presentations over the rest of the year. Maybe just give us a preview of what those data could be. Thanks.

Speaker 2

Great. Hey Serge, good to hear you this morning. So as it relates to label negotiations and preparing for both the U. S. And also the EMEA, Which would be the European submission.

Speaker 2

Everything remains on track. In the U. S, we remain on track to file before This half of the year is over and the same is true for Europe and working with our European partners Daiichi Sankyo. So all that work, there is no change in any of the work or the Submission timelines, everything is on time. I would actually say even a bit ahead of schedule, you may recall we even talked about accelerating timelines.

Speaker 2

So We are in good shape there. Regarding future presentations and data, we will keep everyone updated, But there are some important meetings that will occur before the end of June. And we will be continuing to show data not only at those meetings, but Throughout the year, as we go into even the fall, if you think about the European Society of Cardiology and then after that the American Heart Association. So stay tuned. We have some, again, really exciting data.

Speaker 2

As you know, this is a very large study and showed Fantastic data that's important to both physicians, patients and I'll add one more, all healthcare providers.

Operator

And that will come from the line of Jessica Fye with JPMorgan. Your line is open.

Speaker 7

Hey, guys. Good morning. Thanks for taking my questions. A few. First, can you elaborate on the economics of the Curex Agreement.

Speaker 7

Second, can you talk about your expectations for the timing for inclusion in U. S. Guidelines? Is Fall of this year possible? And lastly, what do you see as the current cash runway after the recent raise.

Speaker 7

Thank you.

Speaker 3

Hey, Jess. It's Eric Warren. I'll take the first one On the Curex Financials, so we believe that this Curex arrangement is a wonderful win win, not only for the companies, but for So we did provide Curex with a small upfront, but the majority of the revenue will come As they generate new prescriptions in the target universe that they're responsible for and that is a unique

Speaker 6

Group of

Speaker 3

primary care practitioners.

Speaker 8

Good morning, Jess. This is Joanne. As we think about the incorporation of the data from Clear into guidelines, we would anticipate that there would likely be updates to U. S. Guidelines, presumably the fall, Based on the strength of the data, as you've already seen, we've had guidances of globally already updating There are statements and positioning either in exotol or in exotZed after statins and before the We would anticipate based on the strength of the clear outcome, particularly with data in both primary and secondary prevention that U.

Speaker 8

S. Guidelines would follow to Presumably in

Speaker 9

the fall.

Speaker 4

Yes, Jess, this is Ed. On cash runway, I think after this last fundraise as well as some The tailwinds we've seen after ACC, I think we're our cash runway now goes to about the mid-twenty 24.

Speaker 7

Great. Thanks. And just as a follow-up, what are the timelines we should expect for the litigation with DSC? And when Can we expect clarity?

Speaker 2

Yes. So, Jeff, DSC, as you know, last week we filed a new complaint. They have until June 19th to respond to that complaint. Just keep in mind that the milestone payment is Due upon our label change, which we expect to occur in the first half of twenty twenty four. So even filing new complaints that does not delay anything.

Speaker 2

So after that, obviously we filed the new complaint And we plan to ask the court to hold a trial in early 2024 And that's the standard timeline for these types of cases. Again, keep in mind, the milestone payment is not due until early 2024.

Speaker 8

Great. Thank you.

Operator

Thank you. One moment for our next question. And that will come from the line of Jason Zumansky with Bank of America. Your line is open.

Speaker 10

Good morning. Thank you so much for taking our questions and let me echo my congratulations on the progress. Look, I recognize there are some Sensitivity is regarding the ongoing legal dispute. But to the extent that you can comment, is there any ongoing open active dialogue Between you and your European partner, are there any negotiations that in terms of potential near term settlement, Whatever that looks like. And then regarding the KuraX deal, when do you expect that to hit?

Speaker 10

Should we expect the near term impact or is that going to kind of come on more steadily over the course of the year? Thank you so much.

Speaker 2

Hey, Jason. First of all, thank you for the congratulations. So as it relates to commenting on Ongoing negotiations, discussions, etcetera. Unfortunately, we cannot comment on this as I'm sure you can appreciate. I will say though Keep in mind, as I said earlier, it's business as usual though with our partners as well, as it relates to working on the label, Our joint commercialization sub teams, etcetera.

Speaker 2

But we cannot comment on anything regarding the litigation as it currently stands. As it relates to Curex, so the Curex folks, so the deal is done. We're in the midst of preparing them now to begin training, which is Something that they will do in their free time. Again, just be reminded, there's about 72 of these folks across the country. And we see them Engaging with customers with our products on July 1.

Speaker 2

And I would go as far as to say that We think that we believe that we'll have, as we've said previously, we're effectively doubling our sales force. So, we see having meaningful results, as they get started, and we'll continue to update you as we go through the next So we're very excited about the partnership and, it's really going to help us again continue the momentum that we generated from ACC.

Speaker 10

Great. Thanks for the color.

Operator

Thank you. One moment for our next question. And today's final question will come from the line of Troy Langford with TD Cowen. Your line is open.

Speaker 9

Hi, thanks for taking my question and congrats on all the progress. Just one quick commercial question. Can you provide a little bit additional color around the feedback from physicians that have tried Vimbitoic acid since the data at ADC? Have physicians seem to care at all about the specific level of risk reductions seen in the CLEAR OUTCOME study or have they mainly just seemed happy that showed a positive result?

Speaker 3

Hi, Troy. It's Eric. Yes, the physician reaction to our products in general has been Fantastic. And that's been before ACC as well as ACC. ACC has opened the eyes to many physicians that were waiting for outcomes data.

Speaker 3

As a reminder, we're not able to talk about those data, But I have done lots of market research projects where physicians are incredibly positive about these data. So they care about the presence of data, but they actually care about the actual data that we generated from clear outcomes. So They're impressed with the data and we've already seen some of the impact. And again, that's pre commercialization. And Joanne?

Speaker 8

And Troy, thank you again for the question. This is Joanne. I think as we look at the very highest level of key opinion leaders, scientific leaders, Particularly in the cardiovascular community that these data have had a profound impact not only on their awareness, but their ability Have a new tool to address cardiovascular risk. So excited about the oral, excited about the differentiation in the study, Not only lowering LDL cholesterol, but also protein and its statin like property consistency with statins And its impact on outcomes have really been looked at very favorably and has really driven awareness, particularly in the cardiovascular.

Speaker 2

And Joanne, I'll just add one more comment. Troy, this is a question that, of course, gets us excited because, I was actually just at a dinner with a few physicians in Washington, D. C. And, what they stated and we've heard this numerous times is that this drug is a game changer. This drug for patients who can only take a maximum tolerated dose of a statin, but still need to get to goal Or for patients who cannot take a statin and it's documented, they have something now they can turn to.

Speaker 2

So I've heard the word game changer, Real life discussions numerous times. Again, very exciting. The The study obviously unlocked a lot of potential for us, created a tremendous amount of awareness as we stated in our comments earlier this morning. So again, thank you.

Speaker 9

Okay, great. And I actually have just one quick follow-up if I can. Have you all seen a shift in the type of prescribers who have tried to use pemphidouac Or where the prescribers have tried to use the product at all in the treatment paradigm?

Speaker 3

It's pretty consistent. We're still seeing about 60 Percent of our prescriptions come from primary care.

Speaker 9

Okay, great.

Operator

Thank you. And we do have time for one final question. And that will come from the line of Judah Frommer with Credit Suisse. Your line is open.

Speaker 11

Hi, good morning, guys. Thanks for squeezing me in. I apologize if we missed this, but do you have any updates on how kind of post APC payer conversations have been going? Do you get the sense that the APC Data was enough or that they might be waiting for label change. And how are, I guess the existing reimbursement challenges Still affecting scripts and how could you see those potentially being lifted as reimbursement widens?

Speaker 11

Thanks.

Speaker 12

Yes. Thank you, Judith. Coast ACC, excuse me, we have presented the CVOT data to probably over 12 Of the largest payers that account for a half of all payer lives, the receptiveness has been incredibly positive. We have commitment To actually look at the criteria prior to label. And we really where we're really excited about is in the Medicare, It's 34% coverage now, and we've had that commitment to take that to almost 70%, and we think that, that could possibly happen Before the end of the year, even before label change.

Speaker 12

The prior authorizations continue to improve. We see an overall improvement of rates growing. If the 3 payers probably with the largest CVS, ESI and Optum, we're probably seeing approval rates

Speaker 2

of 15% and higher at this point. Vijay, can I just add one more thing? And that is, hey Judah, is that We don't even have the label yet and we see our reimbursement rates both for commercial and from a Medicare basis, Very similar to that of what PCSK9 has. So I think that gives you a good idea of the success that we're seeing as it relates to the detail that BJ provided.

Speaker 11

Great. Thank you.

Operator

Thank you. Thank you all for participating. This concludes today's program. You may now disconnect. Have a wonderful day.

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