Q2 2023 Esperion Therapeutics Inc Earnings Call

Speaker 1: Ladies and gentlemen, thank you for standing by and welcome. At this time, all participants are in a listen-only mode.

Speaker 1: Following the presentation, there will be a question and answer session. Please be advised that today's conference call may be recorded. I would like to hand the conference call over to Alexis Callahan, Head of Investor Relations at Esparion. Please go ahead, Alexis.

Speaker 2: Thank you, operator. Good morning and welcome to Experian second quarter 2023 earnings conference call. With us today are Sheldon Koenig, president and CEO , and Ben Halladay, CFO .

Speaker 2: Other members of the executive team will be available for Q&A following our prepared remarks.

Speaker 2: 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.

Speaker 2: I caution listeners that management will be making forward-looking statements.

Speaker 2: Actual results could differ materially from those stated or implied by our forward-looking statements, future risks, and uncertainties associated with the business.

Speaker 2: These forward-looking statements are qualified in their entirety by the cautionary statements contained in today's press release and in our SEC filings.

Speaker 2: The content of this conference call contains time-sensitive information that is accurate only as of the date of this live broadcast, August 1, 2023.

Speaker 2: We undertake no obligation to revise or update any forward-looking statements to reflect events or circumstances after the day of this conference call and webcast.

Speaker 2: As a reminder, this conference call and webcast are being recorded and archived. We issued a press release earlier this morning detailing the content of today's call. A copy can be found on the investor page of our website.

Speaker 2: We will begin the call with prepared remarks and then open the line for your questions.

Speaker 2: I'll now turn the call over to Sheldon Koenig, President and Chief Executive Officer.

Speaker 3: We reported $20.3 million in US revenue, reflecting 49% year-over-year growth. We attribute the strength of our US business to increase awareness of our brands and our clinical data, as well as solid execution of our commercial strategy as we prepare for full launch.

Speaker 3: Second quarter retail prescription equivalents from Nexpla-Tol and Nexpla-Vet grew 26% year over year, and we've been regularly hitting new weekly highs in prescriptions since our ACC presentation in the first quarter, bolstered by additional data released in the second quarter.

Speaker 3: New to brand prescriptions have also continued to grow, driven first by the robustness of our clear outcomes, cardiovascular risk reduction data presented at ACC in March, and second by the impressive primary prevention data presented at ADA in June .

Speaker 3: In the period from ACC through the end of June , we showed 60% growth in use of brand prescriptions.

Speaker 3: So the second quarter, NBRX increased by 28% quarter over quarter.

Speaker 3: Let me next walk you through some additional key highlights from the quarter. As I just mentioned, we saw continued RPE growth in the second quarter of 26% year-over-year. We are pleased with this trend, which we've been able to accomplish with the current label and promotional footprint. As promised, we submitted our regulatory filings during the second quarter in both the U.S. and East Asia.

Speaker 3: to compile the vast amount of data required for these submissions and which comes out of an outcomes trial of this scale and we're proud of their execution.

Speaker 3: We anticipate a standard 10-month review for both submissions and therefore expect regulatory approvals of expanded labels in both the U.S. and EU in the first half of 2024.

Speaker 3: We are continuing to pave the way for the significant growth we believe will result following labor change.

Speaker 3: Our targeted commercial approach involves strategically presenting relevant analysis to the right audiences at a regular cadence, which enables us to effectively educate the market and target different segments of the population.

Speaker 3: In June , we presented impressive new primary prevention data at the American Diabetes Association Congress, which showed significant and clinically meaningful reductions in cardiovascular risk and LDL cholesterol.

Speaker 3: This means that our therapies are not only effective in patients who have already had a cardiovascular event, but who are at high risk of one and meaningfully expand our addressable market.

Speaker 3: This primary prevention analysis was also simultaneously published in a prestigious journal of the American Medical Association reinforcing its clinical significance.

Speaker 3: We also presented new intention to treat and on treatment analysis at the Endocrine Society Congress, demonstrating improved outcomes and consistency of benefit, which is comparable to statins and better than PCSK9 inhibitors. We will continue to present results throughout the year at the highest level of the

at the European Society of Cardiology in August .

We are pleased to share that our partnership with CURAC launched in early Q3, as did another 20 in-house Salesforce members who joined Experian in new territories.

We look forward to seeing increased traction over time as these new additions ramp up their territories in subsequent quarters.

Lastly, we continue to have positive conversations with payers, and to date we've now presented outcomes data to pharmacy benefit managers and national payers who represent over 80 percent of total US pharmacy lives.

Feedback has been extremely positive across the board, and payers are already adapting utilization management criteria to reflect RCVOT data.

Based on our clear outcomes data, we believe we have the potential to benefit a much larger group of patients than is characterized by our current label.

Our current labels indicated for a small subset of patients with diagnosed atherosclerotic cardiovascular disease, ASEVD, and heterozygous familial hypercholesterolemia, who cannot meet their goal on a maximally tolerated statin. you

Our new and expanded label will add a broad cardiovascular risk reduction indication in both primary and secondary populations, as well as remove current limitations, including the requirement of a maximally tolerated statin therapy.

From a commercialization perspective, label expansion means we will be able to meaningfully increase our adjustable patient population.

Our clear outcomes data increases the total addressable population to approximately 70 million patients in the US alone.

Currently, our label covers approximately 10 billion patients with documented ASCVD, who are on a maximally tolerated statin, and who are still not at their LDL cholesterol

Our new label will enable us to treat not only that population, but also an additional 15 million high-risk primary prevention patients who are taking the statin, plus 5 million patients with ASCVD or at high risk for ASCVD and who are statin intolerant.

In total, our post-label change focus will be on these 30 million patients with additional potential upside from the untreated high-risk patient population, which represents another 40 million patients.

We are confident that Nexplo-Tol and Nexplo-Zet have blockbuster commercial potential, and we look forward to being able to reach even more patients who are unable to achieve their LDL cholesterol goals on current therapies alone.

With that, I will now hand it over to Ben Halliday, our Chief Financial Officer, for a more detailed overview of our second quarter performance.

Thank you, Shelton.

Earlier this morning, we issued a press release containing our financial results for the second quarter, which is available on the investor page of our website. Please note that unless otherwise specified, my comments reflect results for the second quarter into June 30th, 2023.

Overall, we posted strong second quarter results. We demonstrated persistent growth in retail prescription equivalents during the quarter, which increased 26% year over year and 16% quarter over quarter.

The weekly RPE trend is also impressive and we're proud to have recently surpassed the 10,000 RPE mark reflecting continuing positive reception of our CVOT data.

Our European partner continues to report strong growth of our therapies in its territories, showcasing the value these important medicines bring to clinicians and the patients they care for. At the end of May, 123,000 patients have now been treated with our therapies in Europe , with a median sequential three-month growth of 26% since February .

We also had a new Territory edition at the end of the second quarter with our products launching in Italy.

We also had a new territory edition at the end of the second quarter with our products launching in Italy. Turning to our financial results for the quarter.

As of June 30, 2023, cash, cash equivalents and investment securities available for sale totaled $138.5 million compared to $166.9 million on December 31, 2022.

We reported US product revenue of $20.3 million, representing an increase of 49% year-over-year. Collaboration revenue, which includes combined royalty and partner revenue, was $5.5 million, an increase of 4% year-over-year.

Finally, total revenue for the second quarter was $25.8 million, an increase of 37% year over year.

Turning to expenses. Cost of goods sold for the second quarter was $6.8 million, which is 26% lower than last year, driven primarily by decreased product sales to our collaboration partners due to the timing of battleship.

We've already seen an acceleration of shipments through July , which will be additive to our original expectation for the third quarter. We anticipate an increase in tablet sales over the next 12 months and therefore expect cost of goods sold to mirror this elevated demand.

R&D expense was $22.1 million, a decrease of 32% year-over-year reflecting lower costs following the readout of our clear outcomes study. S&T expense was $34 million, an increase of 15% year-over-year reflecting upfront training costs for our contract sales force as well as higher legal costs.

We still expect full year 2023 operating expenses to be between $225 and $245 million and we are tracking in line with that guidance. This total breaks out to $100 to $110 million in R&D expense and $125 to $135 million in SG&A expense. At this point, I have the position on GREEN, Premier vested assets for the transaction

As a reminder, our operating expenses are expected to be first-half loaded and to moderate the back half of the year.

I wanted to further elaborate on expenses and our approach to prudent cash management now and over the next year.

First, we have guided the having sufficient cash runway through mid-2024, which will take us beyond what we currently expect to receive approval of our new and expanded label and corresponding milestone payment.

Second, while we are not changing our expense guidance for 2023, we did outperform our internal spending expectations in the second quarter, and we will continue to look for opportunities to generate additional efficiencies in the back half of 2023 without impacting the quality of the full commercial launch we are planning next year.

These levers include internal cost control as well as slower pipeline investment, which will occur against the backdrop of continued sales growth.

Our plan is for continued execution of these initiatives for the remainder of the year as we approach full-scale commercialization in mid-2024. With our site set on the massive potential of our next-to-tall and next-to-set franchise, we are steadily and prudently working to reach our goal. With that, let me now hand it back over to you, Shelby.

through mid-2031. As no oppositions were filed, we anticipate receiving this Certificate of Extension in the next several months. Second, the Court has set an April 2024 trial date to hear the amended complaint our legal team at Gibson Dunn filed against our European partner as we requested.

We are pleased that our case is being treated with a sense of urgency and remain confident that this matter will be resolved in our favor and that we will receive the $300 million milestone payment we believe we are contractually entitled to.

Lastly, I want to emphasize our focus on head-stown execution of our strategic plan. We once again delivered on our promises for continued growth and prudent expense management in the second quarter. We still expect the true thousand flexion to come following label expansion and are diligently working to have echo and preparing for full-

generated a remarkable amount of high-quality data which enabled us to produce powerful subgroup analysis that are extremely relevant healthcare providers.

Next, our data will be used to support a highly differentiated label. Following this label expansion, we expect to see updates to physician treatment guidelines across the globe, and a meaningful shift in adjunctive therapy utilization.

Finally, we are continuing to execute on our strategic plan, prudently investing in growth initiatives, and working to educate healthcare providers and payers alike ahead of our label expansion next year.

I would like to wrap up our comments today with a reminder of the commitment this leadership team has made and continues to deliver on.

First, we promised to deliver consistent growth following our company reorganization in the fall of 2021. We did just that. This has never happened in our time.

Second, we promise to show accelerating growth following our CBOT readout in the spring of 2023. We are doing that. And third, we promise to demonstrate exponential growth following label expansion and full commercial launch in mid-2024. And we will do just that.

Plenty of work remains to be done, but I am proud of the progress we have made thus far. I want to thank the entire Experian team for its tireless work and commitment to this vision. I have unwavering confidence in our ability to succeed and look forward to demonstrating continued progress towards our goals.

And with that, operator, we are now ready for Q&A.

We are now ready for Q&A. Thank you.

And to have the question, please press star one one on your telephone and wait for you to be announced to withdraw your question just press star one one again. Please send by, we compile the Q&A roster.

One moment for our first question.

Our first question comes from the line of Dennis Ding from Jefferies. Your line is open. We'll happen again soon.

Hi, good morning and thanks for taking our questions. Two for me. Maybe talk about the April 2024 trial date and how set in stone is that date and could that be delayed in any way by the judge or by you, Jay? And then number two around your OpEx item.

Now you've reiterated your guidance this year, but I'm curious how much more could this be managed, particularly on the R&D line? Seems like your guidance is implying R&D spend to be at around 25 million a quarter in the second half. What has this really been spent on if you're seeing you have two preclinical assets and how much more could this be managed?

increased depth that current prescribers are you getting new physicians prescribing with therapy. And then I know you mentioned next year, you know, leading up to the full scale launch, hopefully after these label expansions are granted. Can you talk about how much you would potentially increase your footprint and maybe how much of that relies on the DAH2 milestone? Then last really quick question, obviously you talked about the appeal, but as we think about that April court date, when should we expect sort of the initial decision on the trial outcome? Is that in the order of three months or longer, kind of as we think about that first read from that trial, if it happens in April ? Thank you.

Thanks, Joe. Eric, you want to take the first two, and I'll take the legal question. So, lately, thanks for the questions, Joe. So, with regards to prescribing, so we're seeing both depth and breadth increases, and we're seeing it across cardiology and primary care. Right now, we're at about an equal split between primary care and cardiology.

Great, thanks Eric. Joe, regarding your question of how long would it take to make a decision? Simply answer is, we actually believe that that decision can happen very quickly. It could be a matter of days, possibly a week. But again, this was really a case of focusing on contract language in section 9.2 of the contract. And we've made that public in the second complaint that we had filed. So it would occur pretty rapidly.

Thank you very much. Thank you. One moment for our next question. And our next question on conflina of Tom Schrader from BTIG. Your line is open. Good morning. Like to take in the question. You mentioned primary prevention scripts. Is that a meaningful percentage yet? Is any of that reimburser of those self-pacetion? Then where are you in patient support? We have co-paid card issues for a long time.

Can you give us a sense of what the average co-pay is? Thank you. Eric, you wanna start that? And B.J.? Yeah, sure. So first question, Tom, with regard to primary prevention. So primary prevention isn't within our current label with the exception of the HESH patient and our focus has been on the ASCBD patient that's on maxly tolerated statin. That's not at their goal. With that said, there is a lot of pen depth demand for primary prevention.

As you know, our Clear Outcomes data incorporated primary prevention patients, which is going to put us in a really strong position for when we have the label change. But right now, our focus has not been primary prevention based upon our current label and on payer contracts. BJ? Sure. Tom?

I shall mention in prepared remarks, our clear results have been extremely positive from payers. And with that said, our prior observation steps and approval rates continue to improve and PAs admission rates are up over 8% with next to 12 next to that approval with key national payers, with an increase as much as 16% at some of some. Our average co-pay, we do have a co-pay by-down car.

But we probably are more at like a $20 for each, bringing that down for commercial patients. We also have a suite of services under our next step navigator services that includes pilot that we have done with reimbursement support, helping to educate offices. So all on an up-slating and all really showing this.

Next of all, next is the clear next step after it's gotten.

Okay, thank you. One moment for our next question. Our next question will come from the line of Jason Zemanski from Bank of America. Your line is open.."

Good morning. Congratulations on the quarter and thank you so much for taking our questions. I know we keep harping on this, but a couple more on the legal dispute. Appreciating there's a limit to what you can disclose here, but is there any dialogue between the two parties outside of the specifics of the case itself?

you know, to what extent do you think, to what extent would you be amenable to resolving the issues prior to the trial date? And while you really haven't disclosed many of the specifics regarding Daiichi's comments here, any sense of their flexibility on the willingness to forego the trial itself?

you know, to what extent do you think, well, to what extent would you be amenable to resolving the issues prior to the trial date? And while you really haven't disclosed many of the specifics regarding Daiichi's comments here, any sense of their flexibility on the willingness to forego the trial itself? Thanks.

Great. Hi, Jason. Thank you for your question. So as it relates to having any type of discussions or settlement discussions with DSE, right now we can't comment on our legal strategy in the ongoing suit. Our goal, again, is to secure the full $300 million that

contractually owed, and that's what we're focusing on. And then following the EMEA approval, which is expected in the first half of 2024, as we mentioned in the prepared remarks and some of my answers earlier today, that'll put us right in the timing of the April court date as well.

So, I think that's the best we can tell you at this point. And just as it relates to settlement or what would we approve or what would we take, etc. Obviously if we had something like that, my fiduciary responsibility to take something like that to the board.

At this time, that doesn't exist. Right now, as I mentioned, we're focusing on discovery and focusing on that core date in April .

Maybe as a follow up then, any contingency plans here in terms of potentially finding an alternative EU partner or something along those lines? Yes, really there's nothing that we're doing as it relates to that. As we mentioned today...

And I think that's something that's important on both sides. Both the Aspirion side, as we mentioned, we're focusing on heads down execution. They are as well. And this is why we're seeing the significant growth. And as we have always been saying that after a stat and next was all, next was that we're next. And we're seeing that both in the US.

One moment for our next question. Our next question will go for Diana of Joe Pan Guinness from H.C. Wainwright. Elan is open.

Hi, everybody. Good morning. Thanks for taking the questions. So, two, if you don't mind. So, first for Ben, just curious with your cost management commentary during your prepared comments, any more specifics with regard to, you said, pipeline impacts, and then maybe for Eric and Sheldon.

maybe getting a little more into the weeds on the detailing process. As you've been sharing the data and you've obviously seen some impact with regard to prescriptions on the clear outcomes data, what is the relative percentage or any details you could provide from physicians that essentially say,

Love the data, but I'm going to wait for the full approval before changing my prescribing habits. I'm going to wait for the full approval before changing my prescribing habits.

Yeah, thank you. Good morning, and thanks for the question. So as far as it goes for pipeline spending, we've done a great job here, sort of meaningfully progressing those assets while managing the spend. We've gotten very smart about where we put our money and sort of leveraging big data and AI technologies to maximize where we're putting that.

I think it's something that we can spend as much of a little on as we want, but still leverage a lot of the work that we've had and move those forward. Even if we do spend as much as we want, it's still, I would say, a reasonable amount, but it is something that we can toggle. And I mentioned in the prepared comments we have.

cash runway until middle of next year and I think we can potentially extend that further depending on how much we invest in both pipeline and some of the commercial stuff that we're doing.

And then I'll take the second part. Thanks, Joe, Derek. So with regards to the detailing process, our sales team as well as our commercial team marketing via digital activities have continued to focus on the current strategy.

which is the ASCPD patient that's on maximally tolerated statin. It's not a goal. Unfortunately, because our label isn't updated, our commercial teams do not have the ability to discuss the clear outcome data. They have been able to hand out a reprint from JAMA as well as from the New England.

we're seeing these increases based upon clinician appreciation for the data. So, our goal is to continue to execute on this. With that said, there is a lot of desire to expand the treatment of patients.

tolerated statin, as well as shedding the focus just on ASCBD and pulling in that high risk primary prevention. So I'm very pleased with what we're seeing now, but this isn't with us promoting clear outcomes data. When that happens.

We'll expand the population, we'll expand the type of evidence we're able to talk about, and we will expand the commercial footprint. So that's the exponential growth phase that we talked about.

Appreciate the comments. Thank you. You're welcome.

Thank you. One moment for our nextR

Our next question will come from Jason Butler from J&P Securities. Your line is open.

All right, thanks for taking the question. Just wondering if you could give us any more color about the reimbursement dynamics since the ACC. Have you seen any changes in approval rate or time from treatment decision to getting reimburse drug or any other color that supports the process is getting easier for physicians and patients? And then just.

One on, I guess, treatment ordering. Is there any changes that you're seeing in when the drug is being used now versus before ACC? Thanks. B.J., you want to answer the first part and Eric the second? Sure. So, I.

Certainly when you see the demand, this has been noticed by the payers and based on the presentations that we've had with over 85% of the pharmacy lives. What we have seen is actually an increase of our prior authorization rates being approved.

as well as just an overall with key national payers as much as up to 16% with this. Certainly educating the offices and what we put a laser focus on is educating the offices just on the prior authorization requirements and really.

certain tactics and really spending some time on that education, which has also helped with the approval rate. So we anticipate again, the closer we get and with the label, these will continue to improve. And we've absolutely seen a great improvement versus last quarter and over the last year.

And then Jason, with regards to any dynamic changes since ACC, as I mentioned, we've seen increases in both cardiology as well as primary care. I would say from a percentage perspective, there's been increased.

cardiology excitement because they have been recipient of the data. Still, again, the focus is on the AFCBD patient on maxly tolerated satinnotical. We have seen increases in nexletal. Still, nexplosage is there.

It's our leader, if you will, but we've seen increases in next little again based upon the press as well as the association between next little and clear outcomes. So our labels will expand for both brands and we anticipate again exponential growth post label change. And Eric, just a quick follow up there that the increase of maximum.

color there? Yeah, so starting to, Jason. So we have done many surveys, quantitative surveys, where ezetimibe tends to go down based upon seeing the clear outcomes data. Still early. So we have done many surveys, quantitative surveys, where ezetimibe tends to go down based upon seeing the clear outcomes data.

But yes, you know, is that a my, as you know, has a, but a 6% outcome benefit in that secondary prevention population and you're very familiar with our clear outcome data. So is that a my will come down still early now? And again, we're not promoting any of the clear outcome benefits.

Thank you. Now I'm not showing any further questions in the queue. I'll just turn the call back over to Shelden.

for Closer Works. Great, thank you so much. First of all, I just want to thank everybody for their interest and their questions and your support and the story on. Just a couple of key points I would leave you with. And again, what we've demonstrated this quarter is the fact that we've delivered growth across all KPIs.

We obviously beat expectations. We are very happy with where we see our prescriptions growing. And as we said before, this is without even having the full label approval behind us.

We're on track with our key litigation milestones. Again, the case being scheduled in April 2024, it's a significant win for us. Then lastly, again, and we're seeing it currently, after a statin, we're next. That's really supported by the 14,000 patient clear outcome study.

So thank you again and look forward to talking to all of you soon. Have a great day. This includes today's conference call. Thank you for participating. You may now disconnect everyone. Have a great day.