Esperion Therapeutics Inc. Q1 2023 Earnings Call
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 maybe recorded.
I'd now like to hand, the conference over to Tiffany I'll Dream.
C a director corporate communications at Asbury. Please.
Please go ahead.
Thank you good morning, and welcome to U S theory on its first quarter 2023 earnings conference call I want to remind callers that the information discussed on the call today is covered under the safe Harbor provision of the private Securities Litigation Reform Act I caution.
The nurse that management will be making forward looking statements.
Actual results could differ materially from those stated or implied by our forward looking statements due to 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 presentation, and 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 may nine two.
'twenty three 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 an archive we issued a press release. This morning detailing the content of today's call a copy can be found at experian dot com within the investors and media section.
With us today are Sheldon <unk>, President and C E O band Holiday Chief Financial Officer, Dr. Joanna Food eat Chief Medical Officer, Eric Warren Chief Commercial Officer, and B J Swartz Chief strategy Officer, we will begin with prepared comments and then open the call for your question.
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 Sheldon.
Thank you Tiffany and good morning, everyone and thank you for joining us today to review, our first quarter results and significant recent achievement.
We reported revenue of $24 $3 million 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 year quarter. It's clear that we are off to a very strong start in 2023.
Let me now I'll share some of the highlights from the courtyard that are driving this positive momentum.
As you know he recently presented impressive clinically meaningful cardiovascular risk reduction results from our landmark clear outcomes trials at ACC in March as well as public these broadly disseminated data and the prestigious New England Journal of Medicine. This.
This was a major accomplishment for spirit with 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 submission, but you asked the FDA and the European Medicines agency in the first half of this year.
Once we file there is typically a 10 month review period. So our expectation is for the label change to become effective in the first half of 2024.
As a reminder, our sales reps are prohibited from mentioning anything beyond the current label.
Correct the label change to have a significant and positive impact on demand for our drugs.
New to brand prescription by 88% in the four week following our <unk> data presentation, and Eric will provide more color from the field to explain why we are seeing this trend so quickly and as head of our initial expectation.
We are also making swift progress in Europe . The international lipid expert panel has updated their guidelines now recommend that the joint App is head of P. C. S canine inhibitor either alone or in combination with <unk>.
Next our European partner has demonstrated persistent growth for the NEC football index of the franchise Nat geography.
Our European commercialization of debit uric 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 aimed at scientific and medical communities to further educate these important stakeholders about the benefit of Nerf football index was at.
Right.
Lastly, we recently announced the commercial partnership with <unk> Pharmaceuticals. This partnership will enable their 72 reps to promote Netflix all an expert that with primary care providers effectively doubling our promotional footprint.
Their reps are fully trained and in the field by July .
Let me now walk you through some key business accomplishments.
As you all know clear outcomes with a landmark trial unprecedented in its scope, which assess the ability of temperature like asset to improve outcomes in individual unable to maximize tolerate statin.
We focused on a significant underserved population unable to achieve their LDL cholesterol goals with current therapy.
It was conducted in nearly 14000 patients is 32 countries inclusive of approximately 50% women, which is an important and differentiating component compared to other cardiovascular trial, and which generated a round of applause from the physician audience at ACC.
Or do you vascular disease is the number one killer of women.
I wanted to take a moment to reiterate the high level findings from the clear trial, because they are so importantly, a cardiovascular risk reduction of more than 20%, including a reduction in non fatal heart attack.
This is a significant outcome not only for spirit, but more importantly for patients our jobs 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 them with Delek assets. 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 has been covered in over 500 trade and broadcast media pieces, garnering over 1 billion total impressions, which is equivalent to us getting approximately $200 million in paid advertising.
We're thrilled to see so much enthusiasm for our study and are proud to be at the forefront of this discussion about reaching cholesterol goals.
We'll continue the conversation, while increasing awareness about the importance of lowering LDL cholesterol.
With that I'll now turn it over to Eric Warren, our Chief commercial officer for a commercial perspective.
Thanks, Sheldon I'm incredibly excited about the performance of NEC football in Mexico is that in the first quarter. We are just scratching the surface on the true opportunity for these products.
<unk> out of ACC, we surveyed approximately 100 health care practitioners to assess their reaction to the results of declare outcome study.
An overwhelming 98%.
Positive are 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 two number one.
88% increase in new to brand prescriptions for the four weeks following ACC and number two approximately 1500, new writers of NEC football index towards that during that same time period.
Eric Dreamily proud of these results and believe that it is only the beginning of this significant growth opportunity that lies ahead.
But further context around these trends.
We believe that the growth is driven by net.
Prescriber engagement and conviction and the benefits of next football index was at the.
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 statin 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.
Incorporation of the clear outcomes data into the prescribing information.
Shedding the statin limitations and.
In adding high risk primary prevention patients.
As expected to not only dramatically increase the number of patients that will benefit from an extra tall index was that but solidify.
So will that apply their place.
The clear next step after statin.
And the first non statin LDL C lowering therapies.
Demonstrate outcomes benefits and a combination of high risk primary and secondary prevention patients 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 2024 from.
From revised segmentation to targeted consumer activities.
Sales for scaling and creative partnerships that expand PCP reach like the one we just signed with care acts that Sheldon mentioned the team is leaving no stone unturned to.
To enable next locale and next what debt to reach their full commercial potential.
I'll turn it over to Ben to review the detailed financials.
Thank you Eric earlier today, we issued a press release containing our financial results for the first quarter 2023, which is available on the investor page of our website. Please note that unless otherwise specified my comments reflect the results for the first quarter ended March 31 2023.
U S product revenue was $17 million up approximately 27% year over year.
Retail prescription equivalents for the first quarter 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 <unk> growth in the European territories.
97000 patients have now been treated in Europe through February of 2023.
As of March 31, 2023, cash cash equivalents and investment securities available for sale totaled $162 3 million compared with $166 9 million on December 31 2022.
This cash includes the recent $56 million raised in a registered direct offering in March before deducting placement agent fees and related operating expenses.
Collaboration revenue, which includes combined royalty and partner revenue was $7 3 million, an increase of 33% year over year.
Finally total revenue for the first quarter ended March 31, 2023 was $24 3 million, an increase of 29% year over year turning to expenses.
R&D expenses were $31 $4 million, an increase of 29% year over year. The increase is primarily related to costs associated with our clear outcomes trials, including closeout activities, our ACC presentation and regulatory submission preparation as previously guided.
SG&A expenses were $29 9 million, 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 care acts as a great example of how we can expand our commercial presence without significantly increasing our burn rate.
We still expect full year 2023 operating expenses to be approximately 225 million to $245 million and we are tracking in line with that guidance. This total includes $25 million and noncash expense related to stock compensation that can be further broken out as $100 million to $110 million in R&D expense and 125 to one.
<unk> hundred $35 million in SG&A expense.
I'll note that our operating 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 S and Europe as previously mentioned.
We expect second quarter expenses to be relatively in line with first quarter and then to moderate substantially in the second half of the year.
I now hand, it back over to you Sheldon.
Thank you Ben let me share a brief corporate update first we raised nearly $56 million in capital at the end of March which extends our cash runway and enables us to fuel continued growth.
Second 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 with the Southern District of New York with regard to European partner milestone payments, which we believe we are owed.
The amended complaint disclosing new evidence we believe further supports our position we feel confident in our legal standing and we will keep you posted as things progress.
<unk> and <unk> 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 with <unk> 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 our cross selling metrics following sherry 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 Mexico, Paul and after that.
I want to make something clear after statin net protocol and excellence that our next.
Thank you for your interest in spirit and for joining US today, operator, we are now ready for Q&A.
Thank you to ask a question. Please press star one one on your telephone and wait for your name to be announced to withdraw. Your question. Please press star one again, one moment, while we compile the Q&A roster.
Our first question will come from the line of Dennis Yang with Jefferies. Your line is open.
Thanks, Good morning, and thanks for taking my questions. Congratulations on all that on all the progress.
Two questions for me.
Number one on the Daiichi milestone dispute.
Previously mentioned.
Seeking around $300 million.
Value.
And that can obviously come in a variety of different ways. So can you give investors some clarity on what you mean by those then what factors are you taking into account when it comes to.
Pursuing 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&A and R&D and if there is some level of.
Conservatism baked into your guidance given.
<unk> co promotion agreement. Thank you.
Hi, Dan. This is first of all thank you so much for your question.
Wanted to be clear as it relates to the Daiichi Sankyo milestone our goal is to secure the full $300 million and value for our shareholders.
And.
That's what we will be pursuing and that's what we have always publicly stated.
And I think it's also important to again recognize the fact that the $300 million milestone is due upon our label change, which we expect to occur in the first half of 2024. So.
I know you used the word value.
We are looking to see the full $300 million payment.
And we will just leave it leave it at that.
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.
With R&D, yes, we have we have room to change in toggle up and down.
But with SG&A, we want to make sure that we're funding.
Great momentum that we saw post ACC.
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 go.
Scale up and scale down accordingly.
Thank you.
Thank you one moment for our next question.
Okay.
And that will come from the line of Serge Belanger with Needham Your line is open.
Hi, good morning, Thanks for taking our questions.
So on the first one is on the legal proceedings with European partner.
What's the next.
Potential development on that front and then maybe can you talk about the.
The potential range of timelines for resolution here.
And secondly, just you.
You talked about.
Data presentations over the rest of the year.
Maybe just give us a preview of what goes through there could be thanks.
Great Hey, Serge good.
To hear you. This morning, so as it relates to our label negotiations and preparing for both the U S and also the EMEA and what should be the European submission.
Submission everything remains on track.
Three 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 of 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 timeline. So we are in good shape, there regarding future presentations and data.
We will keep everyone updated.
There are some important meetings that will occur before the end of June and we will be continuing to show that 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 as you know this is a very large study and showed a fantastic data that's important to both physician and patient in and I'll add one more all health care providers.
Yeah.
Thank you one moment for our next question.
Yeah.
Okay.
And that will come from the line of Jessica Fye with Jpmorgan. Your line is open.
Hey, guys. Good morning, Thanks for taking my questions.
A few first can you elaborate on the economics of the <unk> agreement.
Second can you talk about your expectations for the timing for inclusion in <unk> guidelines is fall of this year possible and lastly.
What do you see as the current cash runway.
After the recent brands. Thank you.
Okay.
Okay.
Hey, Jeff, It's Eric Warren I'll take the first one on the <unk> financials. So.
We believe that that's correct arrangement.
Wonderful win win not only for the companies to work for patients. So we did provide <unk> with a small upfront.
The majority of the revenue will come as they generate new prescriptions and the target universe that theyre responsible for and that is unique group of primary care practitioners.
Good morning, Jeff This is Joanne.
As we think about the incorporation of the data from clear into guidelines and anticipate that there would likely be update.
Guidelines.
Paul.
Based on the strength of the data as you've already seen we've had guidance is up globally already updating.
Their statements and positioning either an extra color and excellent that after statin than before.
We would anticipate based on the strength of the clear outcome, particularly with data in both primary and secondary prevention that use guidelines with policy, presumably in the fall.
Yes, Jeff This is Matt on cash runway I think after this last fundraise as well as some of the tailwind we've seen after ACP I think we are where our cash runway now goes to about mid 2024.
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.
Yeah, So Jeff DSC as you know last week, we filed a new complaint they have until June 19th to respond to that complaint.
Keep in mind that the milestone payment due upon our label change, which we expect to occur in the first half.
2024.
Even filing the new complaint that does not delay anything so.
After that obviously, we filed the new complaint and we plan to ask the court to hold a trial and.
Early 2024, and Thats a standard timeline for these types of cases again keep in mind the milestone payment is not due until early 2024.
Great. Thank you.
Thank you one moment for our next question.
And that will come from the line of Jason Domanski with Bank of America. Your line is now open.
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 sensitivities 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 you know in terms of potential near term settlement.
Whatever that looks like and then regarding the correct steel.
When do you expect that to hit.
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.
Hey, Jason first of all thank you for the congratulations so as it relates to commenting on ongoing negotiations discussions et cetera.
Fortunately, we cannot comment on this as I'm sure you can appreciate I will say, though.
But keep in mind as I said earlier, it's business as usual with our partners as well.
As it relates to working on the label or joint commercialization sub teams et cetera, but we cannot comment on anything regarding the litigation as it currently stands.
As it relates to Cure act so that your access to 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 is about 72 of these folks across the country.
And we see them.
Engaging with customers with our products on July the first.
And I would go as far as to say that we.
We think that we believe that we will 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 will continue to update you as we go through the next few months. 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.
Great. Thanks for the color.
Okay.
Thank you one moment for our next question.
Okay.
And today's final question will come from the line of Troy Lankford with TD Cowen Your line is open.
Hi, Thanks for taking my question and congrats on all the progress.
Just a quick commercial question can you provide a little bit of additional color on the feedback from physicians that tried them for delek asset since the data at ACC.
Physicians seem to care at all about the specific level of risk reduction has been a clear outcome study or is it mainly just seems happy that showed a positive result.
Alright.
Eric Yes, the physician reaction to our products in general has been fantastic and Thats been before ACC.
As well as ACC ACC just opened the eyes.
Any physicians that were waiting for outcomes data 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 the fact that they care about the presence of data, but they actually care about to be at the actual data that we generated at from clear outcome. So they are impressed with the data and we've already seen some of the impact and again, that's pre commercialization and Joanne.
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.
Data has had a profound impact not only on their awareness, but their ability to have a new tool.
That's correct cardiovascular risk so excited about the oral excited about the differentiation in the study not only lowering LDL cholesterol, but also.
Protein.
It's like properties consistency with.
Got it.
Impact on outcomes have really been looked at very favorably and has really driven awareness, particularly in the cardiovascular.
And Joanne I will just add one more comment Troy This is Ed.
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 then it's documented they have something that they can turn to so I've heard the word game changer.
Real life discussions numerous times again very exciting.
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.
Again, thank you.
Okay, Great and then just one quick follow up if I can have youll see a shift in the type of prescribers, who tried to Houston podolak acid or where the prescribers have tried to use the crack at all in the treatment paradigm.
It's pretty pretty consistent we're still seeing about 60% of our prescriptions come from primary care.
Okay great.
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.
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 ADC payer conversations have been going do you get the sense that the AUC data was an offer that they might be waiting for a label change and how are you.
I guess the existing reimbursement challenges.
Affecting scripts and how could you see those potentially being let's get as reimbursement widen.
Yes. Thank you.
Post ACC excuse me, we have presented the cbot data to probably over 12 of the largest payers that account for a half of <unk>.
Our payor lives at.
If receptiveness has been incredibly positive.
We have commitments to actually look at the U M criteria prior to label and.
And we really we're really excited about it in the Medicare.
It's 34% coverage now and we've had that commitment to take that too.
Those 70% and we think that that could possibly happen before the end of the year, even before a label change.
Authorizations continue to improve we see an overall improvement of rate.
Growing hit the three payers, probably with the largest DBS ESI optum, we're probably seen approval rate.
15% and higher at this point.
P. J can I just add one more thing and that is hey, Judah is that we enjoy.
Even have the label yet and we see our reimbursement rate both for commercial and from a Medicare basis very similar to that of what PCF canine has so I think that gives you a good idea of the success that we're seeing as it relates to the detail that P. J provide it.
Great. Thank you.
Yeah.
Thank you. Thank you all for participating this concludes today's program you may.
Now disconnect have a wonderful day.
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