February 24, 2020
BIOINVEST NEWS: Esperion (ESPR)
BioInvest News — FDA approves of NEXLETOL (bempedoic acid)— the first new non-statin once daily LDL-cholesterol lowering medicine in 20 year.
With a very seasoned management team that is extremely well-prepared for the imminent launch, on the positive news we reiterate our BUY rating.
Nexletol – A Major New Cholesterol Drug At A $10 Monthly Co-Pay!
The Esperion drug fills an unmet need for millions of patients with ASCVD or HeFH, with a co-pay of a very affordable $10 per month when the drug becomes available on March 30. The drug is indicated as an adjunct to diet and maximally tolerated statin therapy for the treatment of adults with heterozygous familial hypercholesterolemia (HeFH) or established atherosclerotic cardiovascular disease (ASCVD) who require additional lowering of LDL-C. The cardiovascular outcomes (or CVOT) trials using NEXLETOL are two years from completion; hence the approval press release reviews the label which includes the fact that outcomes have not yet been proven. The Company has just released an updated website that reflects the approval – https://www.esperion.com).
Monotherapy 18-28% Reduction In LDL; Higher in Combo Pill
Despite standard of care treatments, including statin therapy, it is estimated nearly 15 million patients (approximately one in four patients) in the U.S. cannot achieve guideline recommended LDL-C levels. In the label, NEXLETOL is shown to lower LDL-C by 18% versus placebo on top of moderate or high intensity statins. In patients on low doses or no statin at all, the drug reduced LDL by 28%. Esperion’s second LDL-C lowering medicine, the bempedoic acid / ezetimibe combination tablet, is currently under review by the FDA; the PDUFA goal date is this Wednesday, February 26, 2020. Patients given the combo pills saw LDL levels reduced by 38-44%.
Well-Tolerated
NEXLETOL was generally well-tolerated in clinical studies, with the majority of adverse events mostly mild in severity and balanced between drug and placebo (most of who also were on statins and have statin-associated side effects already). Because NEXTLETOL is synthesized in the liver and not the muscle, unlike statins the drug does not cause muscle aches/pains. The most common adverse events reported with NEXLETOL (incidence = 2% and greater than placebo) were upper respiratory tract infections, muscle spasms, hyperuricemia, back pain, abdominal pain or discomfort, bronchitis, pain in extremity, anemia, and elevated liver enzymes.
Expect Broad Insurance/Medicare Coverage
Esperion is working with health insurance providers to help ensure broad insurance coverage and patient access to NEXLETOL. Eligible patients with commercial drug insurance coverage for NEXLETOL may pay as little as $10 per prescription, up to a 3-month supply. Esperion believes that with NEXLETOL it will also be able to achieve the lowest branded tier coverage for Medicare patients. Esperion will provide resources to patients whose physician recommends treatment with NEXLETOL. These resources include educational materials, a dedicated call center, as well as a co-pay program for eligible patients. In today’s world of exorbitantly priced new medicines, in our view, Esperion’s price point is one of the most attractive we are aware of. As a result, we do expect a steady and sold launch that is likely to expand over time with patient and physician experience. Positive outcomes data due in 2022 will be the next major clinical catalyst. The Company has also supportive data for combination with PCSK-9 inhibitors such as AMGN’s Repatha and REGN’s Praluent and soon, MDCO/NVS’ inclisiran.
Takeover Value Rising
With breadth and depth of the imminent two drug launches in the largest cause of the deaths in the world, Esperion is, we believe, undervalued. With the drug partnered in Europe and Switzerland with Daiichi Sankyo ($150 million is due on the first sale in that territory, very likely this year), the US and Asian markets are still wholly-owned. Hence, we believe ESPR still makes a very attractive takeover target. At market cap of just ~$2 billion, compared with the recent MDCO takeover by NVS ($10 billion) and the market cap of AMRN ($6.5 billion), ESPR looks rather cheap to us.