Good morning, Everybody. My name is Dennis Ding, biotech analyst here at Jefferies. Welcome to the 2023 London Healthcare Conference. You know, I have the great pleasure of having CEO Sheldon Koenig of Esperion here with us today. It's great to see you in person, Sheldon. It's great to see all the investors in the room, you know, this morning as well. So maybe to kind of level set all of us, just remind us of, you know, all the progress, you know, you guys have made this year, and how you think about the outlook for bempedoic acid going forward.
Great. Thank you, Dennis, and not to be rude, I'll look at the audience while I speak. First of all, I just wanna thank Jefferies on behalf of all employees at Esperion, for inviting us here to this conference. As it relates to bempedoic acid, as I was just saying to Dennis outside of the room, we're super excited of the progress that we've been able to make. You know, just going back to March the fourth, when we announced our CLEAR Outcomes data at ACC, this data was very compelling, as many of you know. One thing we promised, even going back to October of 2021, is we would always demonstrate continuous growth while also managing our burn rate. I'm pleased to say that we've been doing nothing but growing.
I think many of you saw our earnings release last week. We showed again that we've grown from third quarter to second quarter, 8%, 33% year-over-year. And we've seen growth in not only total RXs, but also new RXs. So this is very important. And this is with a very narrow indication, right? We still have... We're still waiting for the FDA to approve our outcomes data label, which we announced publicly last week. The PDUFA date is March 31. That will allow us then to really launch the label at the American College of Cardiology as well. So that was thoughtful purposely. And just one thing, if I may add, Dennis, you know, we haven't stopped there. You might have actually have seen, it's not just about selling the product. We're doing that.
We're in the process of actually expanding our field. We're hiring 65 new representatives who will be on territory and ready to sell April first, when we have our new label. But at AHA, there's two things that we announced. One was the TRANSFORM study. You might have seen that, and this is the first time that we're actually working with other partners. So we're actually working with the American Heart Association. We're working with a firm called Cleerly, and they are essentially using artificial intelligence. Lexicon is also a partner, but what we're really doing is studying patients who right now may not be at risk of having a heart attack, but could be at risk of having a heart attack, and NEXLIZET will be involved in that study. So we're excited about that.
Yesterday, we issued a press release, and this had to do with the effect of hs-CRP, as well as lowering LDL. The takeaway there, as you know, we lowered hs-CRP by about 22% in the CLEAR Outcomes study. We all know, staying here today, that lowering LDL is important to reduce risk of heart attack and stroke. What we're also finding out is the fact that lowering LDL and lowering hs-CRP is becoming more and more effective. You have to treat the inflammation and the LDL level, and that's another beauty of bempedoic acid.
So it's not only the direct selling that we're doing, and our field sales force is doing a great job, but we're also using other things, such as medical affairs, to really demonstrate the science of this product, how unique it is, and again, we believe that, you know, these will be blockbuster products.
So in terms of hs-CRP, you know, that's an interesting comment you made. Is that a widely accepted relationship or, you know, synergy between hs-CRP and LDL, from doctors?
It's not. It's actually becoming more and more... I think that's something that you'll be hearing us talk about. It's definitely something that differentiates us from other lipid-lowering medications. For example, PCSK9 do not have the ability to lower hs-CRP. Ezetimibe does not have the ability to lower hs-CRP. So you'll be hearing more and more about the importance of that, and that was really the purpose of the publication, and I would encourage everyone, if you have the opportunity, to read that abstract that was published yesterday.
Maybe remind us, you know, what the abstract showed. Just, you know, for everybody in the room.
Oh, yeah. So essentially, what the abstract showed is that there's definitely a correlation in results of lowering LDL cholesterol and lowering hs-CRP, that you have better benefit as it relates to patient outcomes. And as you all know, for fatal and non-fatal MI, we showed a 23% reduction, which was statistically significant. If you actually break those up, for non-fatal MI, there was actually a reduction of 27%. This is something, by the way, that will be in the U.S. and the E.U. label. And so it's almost, although you can't show the definitive correlation, that's something that's being worked on, but the assumption is that there is a correlation with reducing inflammation in those patients who have atherosclerosis, you know, associated with high LDL biomarker.
So maybe talk a little bit about the experience on the ground in terms of selling bempedoic acid in the U.S. since the phase III data that you guys presented at ACC. Like, how has reception been, what are people most enthused about, et cetera?
Yeah, so first of all, I think many of you also know, I myself take NEXLIZET. My LDL is at 50, and I'm on also rosuvastatin 10. And you might say: Well, you know, is that self-promotion, et cetera? No, but that's kind of the feedback that we actually hear in the field. We've heard words such as game changer, this is different. We're seeing more and more prescribing. I've been out in the field 3 times, 3 different areas in the country. I think the biggest headwind for us is still because we have a narrow label, because we don't have our updated label yet, it's really, we still run into payer difficulties, you know, it's difficult sometimes for physicians to identify patients who have documented ASCVD, who've been on 2 statins, who've also been on ezetimibe.
It's harder for them to get, who've been on the maximum tolerated dose of a statin. But we see all of those barriers actually going away once we have the label. You no longer will need to be on the maximum tolerated dose of a statin. You no longer will necessarily have to be documented ASCVD. Be reminded, in the CLEAR Outcomes study, we studied not only secondary prevention, but primary prevention, and we'll be able to speak to primary and secondary prevention. Last week, during the earnings call, I talked about how the population that we can, address right now is 10 million patients. Once we have our new label, we can actually address 30 million patients, and again, it really speaks to the size and the value that this market could possibly be.
But we just did some quantitative market research with 200 physicians, both GPs and cardiologists, and the research was really put out there to measure: Doctor, what is your intent to use bempedoic acid, NEXLIZET or NEXLETOL, as a standard of care? And we've seen that increase dramatically. And what we've done is we've done that research with the new label, so we've tested the new label, and that's why we've always said you'll see a significant inflection point once we actually receive our new label.
So when a doctor sees a patient with high LDL, excuse me, with high LDL, I mean, the bempedoic acid is obviously not the only LDL-lowering medication that's approved. Can you help walk us through their decision-making, given, you know, PCSK9s are out there and highly effective, and where does bempedoic acid fit in?
Yeah, so where bempedoic acid fits in is after a statin, we're next. Use NEXLIZET. We're actually pushing NEXLIZET. This is an efficacy-driven market. Now, of course, if physicians want to use NEXLETOL as well, they can, but the message is simple: After a statin, NEXLIZET is next, and it's essentially an add-on strategy. You know, many patients, you know, don't want to use an injectable. This market, this industry, and I've been in cardiovascular medicine, not a physician, but from a commercialization operations perspective, since 2004, I turned the lights off on Zocor at Merck, then I managed Zetia Vytorin for a number of years, and I managed Praluent when I was at Sanofi for about three years.
One thing that I can tell you is that physicians or physicians and patients prefer a small pill, and there's something to be said for that, and a small pill that offers 38% LDL lowering. So pretty significant. If you think about the LDL lowering of a PCSK9, it can be anywhere between 40%-55%. So we're three-quarters of the way there. And then from a price perspective, we're also cheaper from a weighted average cost perspective. We have 90% coverage in commercial reimbursement, about 35% in Medicare.
There's no question, and part of this is propagated off of the CLEAR Outcomes study, and most physicians reading the New England Journal of Medicine that, you know, if I can give a patient a small molecule that I don't have to explain how to use an auto-injector, et cetera, that's what they're gonna do.
How does, you know, the statin-intolerant dynamic play into this? Do you see... You know, currently, do you see the majority of your prescriptions in those populations, and what has utilization been in the non-statin intolerant population?
Yeah. So the majority of utilization has actually still been in patients who are taking the statin. And keep in mind, statin intolerance can be explained in two different ways. As an example, I can't take more than rosuvastatin 10 milligrams. I was on atorvastatin 10 milligrams, but I had leg pain, I was achy, so I switched. I don't have that anymore. So you can take a minimal amount of statin and still be statin intolerant. Some patients can't take a statin at all, they're purely statin intolerant. You know, right now, that's not in our label, and we can't promote that. We do know there are physicians that are using these, you know, using for patients who can't take a statin at all, they're using this drug.
We know that from consumers contacting us, speaking to consumers, doing consumer research, they crave an alternative to a statin. Statin intolerance is language we will have in our new label come April 1st. I think a great bellwether of how does it play out once it's in the label is Europe, and many of you have probably seen during our earnings release, our partners, Daiichi Sankyo, they've done an amazing job in selling this drug in Europe. And they are able to speak to statin intolerance. They actually have the label we aspire to. The only thing they're missing right now is the outcomes evidence, and that will be included the first half of 2024 in their new label with CLEAR Outcomes. So no question about it, there's millions of patients out there who are statin intolerant that could benefit from this therapy.
They know they want to reduce their LDL cholesterol. They can't take a statin. You know, we'll be here to help them do that once we have our new label.
So then, you know, Europe is obviously ramping, I think, pretty significantly and pretty well, and you guys receive around 10% royalties, or, you know, remind us?
Yeah, we actually receive 15% royalty.
Yeah, approximately 15%.
I think Europe may be annualizing at, like, a $100 million run rate in terms of product revenue, which is actually pretty, pretty impressive, given, you know, some of the, you know, pricing and reimbursement dynamics here. So if we kind of focus back on U.S., you know, talk about the launch. You guys reported third quarter, you guys did around $20 million. You know, talk about your outlook for the fourth quarter and how you expect revenue to sort of, you know, look like. Because you guys were sort of flattish quarter-over-quarter.
And, you know, how confident are you in terms of returning that back to growth?
Sure. So, and just maybe one other additional aspect, total revenue was $35 million, so we're happy about that. It was... Again, shows, you know, how well things are going in Europe and the U.S. together, and I don't think we've given ourselves enough credit that we're essentially a global company in working with Daiichi Sankyo. So, as it relates to fourth quarter, the first thing is promise growth. We're really focused on growing prescriptions and growing awareness. Medicare coverage gap is what affected us in the third quarter. We'll probably see that same type of effect in the fourth quarter. It's expected. This is something that happens in the industry.
But needless to say, you know, in some of the questions I know you're gonna ask me later, with other distractions that we've had, you know, the company's been focused on the business and driving the business, and we're gonna continue to do that. It's all about prescription growth, and that's what we're gonna continue to do, and really, you know, driving the awareness of the product that we have and building the anticipation of the March 31st label. By the way, March 31st is, I believe, Easter, so I've gotten the question of, "Well, will you get your label then?" It probably would come on Friday, so the 29th.
Okay, helpful. So, you know, in terms of scripts, you know, if you look over the last couple of months, it has been generally flattish to slightly up. And that was a little bit different than, you know, coming out of ACC, right? Where you have double-digit script growth, really strong. So talk about what has changed over the last, let's call it, six months, and, you know, how do you expect that, that, that script trajectory to change?
Well, actually, third quarter is the first quarter where we haven't post ACC, haven't talked about double-digit growth, 8%. So we're close to 10, and that's actually exceeding our expectations, because a lot of times when you present outcomes data, you will see it wane after a month or two. We haven't seen that. We've been building upon what we've been growing, and that's really because we can't speak about the CLEAR Outcomes study. So we've been really happy about just what we've been able to do in the field, the surround sound I talked about, for instance, what we presented at AHA. You know, that's all been planned to keep the noise level up there.
So, I'm actually quite pleased with the script growth that we've shown and, you know, fourth quarter, again, I think we're gonna continue to show that growth, and, that's more important than if you weren't growing. So we'll take it, and, again, it's really all about getting to the label. We've always said you won't see the true inflection point until we have the label.
And then you mentioned, you know, you had some comments previously about hiring more reps going into that label update in the U.S. You know, one of the questions that we get a lot from investors is: How do you manage OpEx? How do you manage your cash runway? And talk about your comfort in, you know, ramping that while having visibility that, you know, you guys would be okay from a cash perspective.
Yeah. So, as we mentioned last week, first of all, we're very happy about our cash position. We ended the second quarter with $120 million, and we ended the third quarter with about $115 million. So, our ability to manage cash is something that we stated we would do, even going back to October 2021. We believe that we have what's necessary to get us through the launch of the label. We have a lot of alternatives that we're thinking about once we need additional cash. As you know, we're hoping for a favorable result of our litigation as well, which the trial date is April 15, and that's exactly when we would have expected the milestone payment anyhow.
It's a nice trade-off for us because most of our spend was going to the CLEAR Outcomes study, which was over a $500 million study. So now what you're seeing is more of this transitioning over to the SG&A, and this is something that we've always planned for. We always knew what these toggles were going to be. We're actually hiring an additional, I think I said earlier, 62 representatives, and we have 82 that are out there right now. We think that's well optimized to cover the country, and it actually covers 90% of our potential. The days of having, you know, when I managed Zetia Vytorin, 1,000 representatives, 350 representatives, those days are over, right? So we're also balancing.
Something else we'll be turning on with the cash that we have is a digital consumer campaign, because we see that consumers push this drug. We saw it after ACC, we still see it now, and we'll also be doing a digital campaign to physicians who we won't have personal promotion to.
So do you think the majority of the SG&A spend or uptick would happen in the first quarter, right before the launch, or not, not the launch, but the PDUFA in the US?
I think, you'll see it, right before and slightly maybe a bit after, but most of it would be right before the PDUFA. Yes.
Okay. One of the, you know, interesting things the company has done is your partnership with Currax, right? And that was a way that you guys initially tried to leverage a greater sales force. They primarily marketed to, you know, towards PCPs, while not really incurring that large organic SG&A spend. So talk about how that partnership is going in the US?
Yeah, the Currax partnership is going quite well. What we've learned by doing this partnership is actually what they've done is helped us create a ton of awareness with primary care physicians, which was an area that we just did not have the ability to capture. How have they done that? They've been actually able to go out, speak to primary care physicians, and talk to them about the CLEAR Outcomes study. What they've also found, though, and it goes back to what I said earlier, because of our narrow label, it's still difficult for primary care physicians to actually get the drug. You know, many of them are not seeing patients with ASCVD. That's typically a cardiologist-type patient.
So, what it's really done is created a market development for us that it's somewhat of an unintended consequence, and I would say has warehoused demand, so that when we do get the label, we'll really be able to contribute more to the growth.
Great. I think, you know, one of the number one topics these days, you know, around Esperion is obviously the Daiichi milestone case. I'm not sure how much you can speak to it-
Sure.
But you know, there's been a lot of updates over the last few months. Maybe talk about where you guys are right now.
Sure. So about three weeks ago, two and a half weeks ago, we filed what's called the 12(c) motion. The 12(c) motion allowed us for the actual 12(c) motion to actually be heard. So you have to file a motion to get approval of a motion. That's all publicly available. You can see it. It's about a 32-page document. It's essentially looking for a summary judgment earlier, and the whole purpose being that we don't believe this needs to go any further. There's enough evidence and documentation to show that we're owed that milestone right now. I mean, we're really talking about Section 9.2 of the contract, and essentially three sentences. The judge, Judge Ramos, accepted that motion, and where we are at now is Daiichi Sankyo had two weeks to actually respond.
That will be Wednesday of this week, they'll respond, and then we have until November 22 to respond to their response. And then from that point, the judge will decide... could decide the next day, but our thought is maybe it could take a couple of weeks. Again, we don't want to hypothesize or think of when the judge. We just wanna let it work through the system in the way that it should. But we could have a decision by mid-December, as it relates to this case and not have to wait until April. Now, the biggest question that we get is, well, if the judge says, "Well, you know, I need more information," then we're right back on the same timeline, for the April 15 trial date. So this isn't a, oh, Daiichi Sankyo, you win.
It could be a Esperion, you win, but it won't be a Daiichi Sankyo, you win. And, if nobody wins at that time, then we continue marching on to the April fifteenth trial date.
Right. Right, right. And to sort of clarify, it's more of a potential upside scenario since the judge could rule in favor of Esperion, and that would be great.
Yeah.
If the judge does not rule in favor of Esperion, it's not like it's good for Daiichi. It just means that you guys would go to the April trial regardless, and that was-
That's correct.
- the base case expectation.
Correct.
Okay. And then, you know, you know, in case of a positive ruling, either on the Rule 12(c) or on the trial in April, you know, how do you think about what happens after... what are the paths there for Daiichi to appeal? And given the size of the large $300 million milestone that's coming, you know, how much visibility do you have on getting that onto your balance sheet-
versus going through that whole appeals process? It could take many months or maybe years sometimes. So talk a little bit about that.
Yeah. A few things. So, I think back in May, Dennis, your team actually had written a note where, you know, we were given a 40% or 50% chance of, you know, winning the case, you know. Here we are now today, you know, 8 months, almost 8 to 9 months later, after the case actually started, and we're talking about winning. And that's all we care about, is winning. And it really speaks to the underpinnings of the case, the evidence that's already been shown, and the fact that we just had a 12(c) motion that was accepted. I think all of us in this room would agree that whether we win in a few weeks or win in April, that's a pretty good indicator that we are going to have money in the bank.
As it relates to the appeal process, honestly, it would be irresponsible for me to speak to what Daiichi Sankyo is going to do or not going to do. The only thing I can say is what we've been told is that in cases like this, when it's ruled in your favor, the odds of an appeal or granting of appeal or someone winning on appeal are low. I'm confident that we will get this money one way or another. Right now, I'm focused on winning this case, and we have strong litigators. We have a strong case. I think everybody knows that. This isn't a matter of if, this is a matter of when.
Okay, got it. Very good. And then lastly, just remind us of your, you know, of your burn. When do you have, you know, runway until?
Yeah. So, we have burn into 2024. Something that we stated back in our earnings release, so it's consistent. We feel really good about where we are from a cash perspective and how we're managing it. Again, I think everyone can see how prudent we've been in managing our cash, and I'm really gonna give credit to all the employees at Esperion for doing that, because they've taken charge. You know, we all know what's happening in the biotech industry right now. We all know that cash is king as well, and that's something that, you know, again, we look at every single day.
As it relates to future funds, again, we have litigation that we believe we have that coming to us, next year, second half of next year, and there's also some other levers that we're looking at if necessary, but right now we feel really good about our cash position and where we're at.
Can you refine that runway a little bit? You said into 2024. Is there any-
Through the launch of our label.
Through the launch of your label, through March 31st-
Yes
... 2024.
Okay, got it. All right, great. Well, thank you so much, Sheldon, for taking the time, you know, to be here. It's great seeing you in person. Hope you have a great, great, you know, great day.
Yeah. Thank you so much. I really appreciate it. And just so, just one thing, by the way, it's into the second half of 2024.
Into second half.
Yeah, yeah.
Okay.
Got this.
All right. Very helpful.
But, yeah, no, really appreciate it. Thank you, everyone, and really appreciate your interest in Esperion.
All right. Thank you.
Thank you. Awesome. Thank you so much.