Good afternoon and welcome to Needham's 23rd Annual Healthcare Conference. I'm Serge Belanger, one of the healthcare analysts at Needham, and we're happy to be kicking off the afternoon with Esperion Therapeutics. We have the company's president and CEO, Sheldon Koenig, who's going to tell us about the company and their product. They recently got a label expansion. So I'll hand it over to Sheldon to give us an overview. And before we do that, I just want to remind viewers that they do have the option to submit questions via the portal that they're watching the presentation on. We'll be asking those as they come in. So, Sheldon, I'll hand it over to you if you want to give us a quick overview.
Great. Yeah, thanks, Serge. First of all, on behalf of all the employees at Esperion, we really appreciate this time that Needham has given us to talk about Esperion and our two great products, NEXLIZET and NEXLETOL. We're coming into this meeting fresh off of ACC in Atlanta, so a lot of good information there, a lot of opportunity for us to share our new labels that we just received. This is a result of the CLEAR Outcomes study that was presented last year at ACC. We received our new labels about a week and a half ago, and, you know, both were, both labels, because NEXLIZET and NEXLETOL, received with a lot of enthusiasm, and, we had a lot of activity at ACC. So looking forward to your questions and, discussing all of this with you.
Sure. Well, we'll, I guess let's start with the ACC. So since it's so recent, I think you had some additional data there that you presented. So maybe if you want to talk about that, and then we can talk about the excitement around the new label that from KOLs.
Yeah, excellent. So I'll actually go in chronological order. We actually had a, on the first day, we presented our data on the Latin American population and also women. And as you know, the CLEAR Outcomes study was a very diverse study. 49% of the study were women. And then we had about 17%-18% Latin American population. And essentially what it showed is that, you know, the overall results that you saw in the CLEAR Outcomes study, you saw the same results in these diverse populations. And that's important because a lot of times drugs don't work in diverse populations. And then the following day, we actually had data in obese patients. And again, what we showed is that we had robust efficacy and safety in the obese patient population. This is a patient population that is at very high risk.
Also, women, as we know, the number one cause of death for women is cardiovascular disease. This is also true for, even in the Latin American population. Also on the second day, we actually had a product theater where we had Dr. Manesh Patel. This was actually a marketing program sponsored by Esperion, went over the new label, focusing on NEXLIZET and different patient types. This was well attended. We had a sold-out house, if you will, not that we charged for attendance to get there. But it was important, you know, this is just a off-the-cuff. We always have to be very compliant, right? You have to be balanced around efficacy and safety, and, we take that very seriously at Esperion. One thing we did say to Dr. Patel is, you know, make sure that you, you stick to the label, don't say anything off-label.
And he said, well, you know, what's off-label? This label is so broad. And I think that was the major takeaway from not only that presentation, but the data that we showed. You know, the CLEAR Outcomes study enabled us to receive the broadest of labels that we could ever have hoped for. And, you know, we've got representatives out there now, you know, using it and selling the products based upon that label.
Great. So maybe it's worth reviewing that label, what it used to be, and what kind of limitations that created for physicians who wanted to prescribe it. And then we can talk about what it is now.
Yeah. So going back to around March of 2020, when these two products were approved, it was a very narrow label. This label really focused on the ASCVD population. That's documented atherosclerotic cardiovascular disease. And that was a patient population, or a TAM, of about 10 million patients. What was also very limiting about that label is you also had to be on the maximum tolerated dose of a statin, etc. So there really wasn't a lot of freedom. And that label handicapped us from a utilization management criteria perspective with third-party payers, as you can imagine. The new label really broadens the use of this product. Why? Well, not only are we indicated for secondary prevention, but we're the first non-statin, since statins, to show that we're indicated for primary prevention. And that's very different than primary hyperlipidemia.
Primary prevention is the ability to go out there and say, before your patient has an event, imagine that, us, you know, have the ability to prevent an event before it happens, before you have an event, that's the, that's what primary prevention is. So secondary prevention, primary prevention, which is very differentiated from PCSK9s, as you know, and also the ability to use this drug with or without a statin. That's very different from the previous label. So that expands our patient population, or TAM, from 10 million to 70 million patients. You know, NLA just came out with a statement not too long ago that talked about the fact that 30% of patients out there are not getting to their recommended statin dose and reducing their LDL to goal, which as we know, if you don't do that, it's a high predictor of having an event, etc.
So now again, you know, just thinking about that, for those patients who can take a minimal dose of a statin, they can use our drug. They can't take a statin at all, they can use our drug. We couldn't say that before. It really, again, speaks to the fact that we have a very broad label and allows us to sell that way now.
Would you say this obviously effectively moves you up in the treatment paradigm? It's kind of ahead of the PCSK9s, or are the PCSK9s still, do you still view them as the main competition?
You know, I absolutely believe it moves us up. You know, something that we've always said, and it's a tagline that we actually use at ACC is, you know, we're driving next. After statin, we're next. If you can't take a statin, use us now. You know, PCSK9s have been out there for 7 years, and there's a, there's a place for PCSK9. This is a big market. We've talked about that before. This is the number one killer out there, in the United States and the world. We're not going out there doing a switching campaign. If you're on a drug like Repatha, you should be on our drug. But for that patient who can't take a statin, or can only take a minimal dose of a statin, and the doctor comes to you and says, "Serge, you have 2 choices.
You can take this pill, or you can do this injectable. Nine times out of ten, you're going to take the pill. And the physician wants you to take the pill as well because it's less hassle. You don't have to train a person how to use a pen. You know, we've done the market research. Most patients don't want to use an injectable product unless, you know, you have something like for weight loss. But for a disease like this, which is asymptomatic, it's easy to take that pill once a day.
We've even seen some recent guidance, even by the NHS out in the UK, where they are essentially already, after the CLEAR Outcomes study, they don't have their label yet, but they're positioning bempedoic acid either, you know, with a statin or alone, and you're starting to see this kind of minimizing of the use of a PCSK9.
Great. I remember last year, coming out of the ACC where, I think, safe to say Esperion was the main headliner with the CLEAR Outcomes data. We immediately saw an uptick in prescriptions for the product in the weekly prescription numbers. Curious if you expect a similar uptick, or will it take the change in payer coverage to improve access to really move the needle?
Yeah, you know, it's interesting. I mean, we've gotten a lot of attention after this ACC alone. I just got a report on all the different coverage that we had. Obviously, last year, we had about $200 million-$400 million in paid media for free. I do think we'll, you know, continue to see these, as somebody said to me earlier, kind of green sprouts. As the representatives get out there and there's more information out there. It's interesting, even today, Pharmacy Times actually published a video, and they have a reach of over 30,000 pharmacists across the United States. And it talks about the benefit of this broad label, the benefit of bempedoic acid, and where to position bempedoic acid.
And it covers all the things that we just mentioned, the fact that now you have another tool to use in primary prevention other than statins, that you have another tool to use in secondary prevention with essentially new science. And that's the other thing. I think it's underappreciated sometimes our mechanism of action. I think sometimes people just think, "Oh, it's a pill, you know, big deal." But it's a very intricate science. You know, again, bempedoic acid is a pro-drug. It's not activated in the smooth muscle. It works in the same pipeline or pathway of a statin. And that's, you know, it's, it's an almost a new improved statin without any of those side effects, etc. And that science, even at our ACC meeting, I had a physician walk up to me and said, "I have an underappreciation of the science.
It's really good to go over that MOA again." So I think we'll continue to see steady growth. We've always said that the CLEAR Outcomes label would be our inflection point.
Mm-hmm.
There's no doubt, you know, we'll see accelerated growth throughout the year.
Is being included in treatment guidelines an important aspect for this growth prospect?
Guidelines are always very important. We don't know exactly when the guidelines will be updated. We thought it was going to take place sometime in 2024. It's more likely going to be probably first quarter 2025. What you'll start seeing, though, are consensus statements and positioning papers. We think we'll see that throughout 2024. It's important, but what's most important is a label, you know, having a label that you can go to payers with, physicians with, and really paint a clear picture of why and where you should use this product. And we have that. You know, everything that we thought we would have with the study, that would allow us to have in the label, as you know, we've talked about all last year, having that primary prevention, secondary prevention, not needing a statin, that all came true. And that's what's important.
That's what will really drive utilization.
Okay. In terms of payer coverage, I think in the past you had mentioned that the prior op process could be onerous in some cases. I'm not sure if they cover the product to label. Obviously, that would be updated now, but how does the, you know, coverage change with this updated label and, you know, does this happen overnight or it takes some time to make happen?
Yeah, so, to your point, payers will stick to what the label says, and that's the coverage that they will allow for. You may recall last year after the CLEAR Outcomes study, we had the ability to meet with payers and show them, "This is what our outcomes data demonstrated." And what they said to us is, "Well, we really want to see what the, what the label says because results and label are, are different." And, you know, they've been burned in other past drugs where a study hasn't shown what they thought the label would. The great news for us is what we showed, as I mentioned earlier, is what we got. So that allowed us to have smoother conversations. We now are expanding again from this narrow population to a broader population.
I'm happy to say that we have one very large PBM that represents over 23 million lives. They've already given us a verbal approval that they will be changing their criteria by June 1st. There's another large Medicare provider, one of the largest ones that covers over 9 million lives, that will also be changing the criteria by June 1st, and we expect more within the next 45-60 days. What does that mean? Under the original label, as you can imagine, we were very restricted. One, you had to have documented ASCVD, and you had to show that you're on a statin.
The new criteria, according to the label, would be that we want to allow for physicians, instead of having to go through the onerous job of providing documentation, being allowed to do attestation to say, "Yes, this patient did take a statin. They're on a low dose. They're not getting to goal. Okay, put them on bempedoic acid." This patient tried a statin, can't take it at all. Okay, put them on bempedoic acid. So that removes a lot of the documentation. The second thing is that now, you know, again, you can use the drug on its own, as I mentioned. But the other step edit we want to remove is the ezetimibe step edit.
You know, one of the things that payers said to us, which they will say to any person who's launching a cardiovascular drug, is the fact that I can't lessen your criteria because, you know, you don't have outcomes. Well, now we have outcomes, and now we have a label. So we actually have a diagram that we show payers. You know, this was before. This is after label, just so they understand what we want the criteria to look like. And I have to say those discussions have been very fruitful. There really has not been any pushback, and we're seeing two changes already. So we're, you know, very excited about that.
One last point on that, Serge, I just wanted to mention, you might have seen a few weeks ago, ICER actually gave us a positive approval, talking about the economics of bempedoic acid and felt that our price, along with our outcomes, shows that we're a cost-effective treatment. And that's really important. That goes a long way with payers as well.
Great. So obviously with such a large expansion in the TAM, you needed to expand the sales force to capture that larger TAM. But maybe just talk, you know, give us some details on what you've expanded and how much now you can capture from that new opportunity.
Yeah. So we went from 66 representatives to 150 representatives. They actually started on January the 6th. They had one week of training, and they've been out on the market, for lack of better words, since then. The good news is they've had, for all the new ones, an opportunity to get out there, find all their doctors, set up appointments, etc. We feel really good about the folks that we have. We actually expanded our management from eight folks to 15 people, and that we're broken up, if you will, from a, like an east and west. As it relates to our potential, what does that 150 do for us? That allows us to reach about 85% of our potential. I would go as far as to say if you laid our call list next to anyone else that's selling lipid-lowering drugs, they're probably almost identical.
You know, the one other thing I'd be remiss to say, you know, that's what we're doing from a, if you will, personal promotion perspective. We also have a consumer campaign that we launched. You might have seen it. It's called the Lipid Lurkers. It's basically these little lipid molecules that are wearing sunglasses and hats and really trying to personalize that, "Hey, these are the things lurking around in your bloodstream." And, I'm really proud of the team, you know, in all areas because two days after the label, not only was the healthcare professional website up and running, so was the consumer website. And one thing we learned to your question earlier after ACC last year is consumers went into physicians' offices asking about this product. And, we continue to hear this.
This consumer campaign, I think, will help drive more consumers in and allow them to get the drug much more easier too, based upon the label. So it's not just personal promotion. It's a consumer campaign and things we're doing from a digital perspective.
Okay. So everything seems to be in place for, like, what you've described as kind of a relaunch of the product. Maybe just, you know, what you're expecting and if there's any expectations in terms of the trajectory and maybe if you want to give any comments on where current consensus stands for that trajectory. I'll leave that up to you.
Yeah, no, that's great. Yeah. As you know, we don't give revenue guidance. Current consensus is somewhere between $150 million and $170 million here in the U.S. We're comfortable with that consensus. You know, that's considerable growth. I think that's the easiest way to think about it based upon what we did last year. We feel really good about, you know, these drugs doing well. You know, one thing I want to mention in our payer coverage, because you might be also thinking, "Okay, in the next 45-60 days, you'll have more coverage. What do you do in between then?" We actually have a very nice bridging program. We're going through the Aspen Pharmacy, which allows physicians to use the service to get patients on the drug, and they can be on the drug for six months under the service and the bridging program.
We also signed a contract with GoodRx for those patients who are not insured. So we thought of all these different avenues to make sure that patients get on drug as payers are updating their utilization management criteria so we don't lose anybody from the funnel and are able to ramp up to, you know, the dollars that I mentioned previously. But we feel really good about the growth. Again, we've been very consistent to say growth will accelerate. We'll see an inflection point after this label.
Okay. And just going back to the payer coverage, other than the improvement on the prior auth process that we should expect, where were you in terms of commercial and managed care coverage? And is there any additional work to be done that now with an improved label could potentially be a little easier?
Yeah. So commercial coverage, we had 90% of commercial providers covered. So, you know, that's five stars, a five out of five. Medicare, we were at about a 30% coverage. And so I think there's some more improvement to do from a Medicare perspective. I can tell you where we didn't have contracts for Medicare, and we're still seeing it now. We had about a 65% approval rate. So from a GTM perspective, you know, we were not losing any money there. We're seeing these prescriptions go through. You know, the nice thing about having a contract, though, is you can work with a payer and you can help provide patient education, motivation, etc. I think one other area of opportunity for us that there's more work that needs to be done and we'll know more later is the Veterans Administration.
You know, the Veterans Administration represents about, I think, somewhere near 12 million lives. I know that population very well. You know, it's a high diabetic patient population, smoking, high risk factor, etc. Currently, one of the preferred products there is an older PCSK9. One I worked with, Praluent, needs to be refrigerated. You know, just a real pain, right? So be much easier for a veteran to use this oral pill. And that's something that we're working really hard on. We'll continue to update our progress there, but we think that's a real game changer in the VA system.
Okay. And just looking more long-term, at potential competition for bempedoic acid. You know, we've heard of oral PCSK9s. I think there's other novel mechanisms of actions coming along. Thought gene therapy was also a possibility, but that seems even to be in doubt now. But I guess what's your overall view of that future competition for bempedoic acid?
Yeah, no, two answers. And I spoke to all those people this weekend, actually, who were in those programs. You know, we know each other well. And I have to say all of them were very complimentary of our data and our label. Obviously, we've helped pave the way for them too, of them thinking about what they need to do. First of all, we're available now. Cardiovascular disease is the number one killer. Patients need to be on therapy now. You can't wait two years, three years, or eight years for an outcome study. So that's number one. As we think about the different oral PCSK9s, obviously, Merck has 616. AstraZeneca has their Dogma program. You know, I think the 616 program, didn't hear too much about it at ACC. There's obviously issues. You need to take, possibly eat a fatty meal with it. There's fasting involved, etc.
I know they're thinking about an outcome study. You know, we'll keep an eye on it. But again, you know, we're out there now. We're available now. I think what's interesting, though, about both the oral PCSK9 programs, there's a reason why they want to develop an oral PCSK9 program. It goes back to what you and I talked about earlier. People do not want to take an injection. And then there's New Amsterdam with their CETP inhibitor. And look, we'll have to wait and see. I know they just finished their phase III enrollment. You know, when I think about CETP, I think about torcetrapib, dalcetrapib, anacetrapib. I worked on evacetrapib. None of the cetrapibs made it. I think there's a real question about safety. You know, they're efficacious, no question. CETP remains in your body forever. It's never excreted.
But you'll have to wait to see how those studies read out. The important takeaway there, though, is there's a lot of opportunity for all these products to make a dent into this disease. But we're off to the races now. You know, we have a 14,000 patient outcome study, and there's nothing like that in the near future.
Yeah. All right. I guess for those taking a long-term look at the potential of bempedoic acid here, maybe just give us an overview of the IP and its runway.
Yeah, so, yes, we did get our five-year extension. We know that we did. We have a letter that's out there. We haven't gone out and publicly put it into a press release yet because we're just waiting for the certificate. And that's what you do in the pharmaceutical industry. You wait for that absolute certificate to come in. And that's going to happen probably in the next weeks, if not month or two. Again, this is the federal government. So, you know, you're just waiting for them to issue the certificate. We do have the letter. We're very aware of it. And that gets us to, you know, end of 2030, and with the pediatric extension, gets us to mid-2031.
We're actually working on some strategies that we haven't really divulged or made public where we actually think we can get the IP into the year of 2040. More to come on that in the next several years.
Okay. And product is launched in Europe. Maybe just if you can give us an update on how it's been performing in Europe and, obviously, they expect a label expansion there too and how that could further enhance the growth prospects.
Yeah, so on March 29th, I believe it was, we received the CHMP positive opinion. That's the indicator that we'll have a positive label. And congratulations to the Esperion team because we filed that label. You know, if you think about all the distractions last year, working in conjunction with Daiichi Sankyo Europe. So that will probably happen sometime in June. That will also be, you know, a broad label similar to ours. They're doing great. I mean, their launches have been these very steep, you know, 45-degree angle inflection points. Even in the U.K., which is a very tough market to launch in, they've been very, very successful. In Germany, I've mentioned this before, you actually, AMNOG had actually issued a statement that you need to use bempedoic acid before you can even try somebody on PCSK9. That's even before they have their outcomes data.
So in Europe, they're doing very well. Countries that they're focusing on now are France, which is probably a year or two away, maybe sooner. But they just completed launches in Italy and Spain. We actually have been also launching in the ASEAN markets. These are like the Asia markets. We had our first sale in Asia in Hong Kong, small market, but still a first sale. Just received our label for Taiwan, etc. So, you know, very, very broad. One thing I just want to mention, and we mentioned this in our earnings. Canada is a country that we will be filing in. We're going to file our drug in Canada. There's definitely a need there. We're also working on filing our drug in Australia. That's us, Esperion, doing that. So, you know, just aside from Daiichi Sankyo, but, and the partnership as well.
We started our tech transfer from a manufacturing perspective, and it's been well received.
Okay. Is Daiichi also planning to expand their sales efforts to capture the added opportunity from the label expansion?
Well, they've always had a very broad representation to actually market these drugs under the names Nustendi and Nilemdo. They probably have more people out there doing that than we actually have at our company at Esperion. So they have a pretty good-sized army out there. Partly because they've been selling their drug Savaysa, which is an edoxaban, which is a DOAC. So when they took on these two drugs, Nustendi and Nilemdo, it was an add-on to what already existed in their bag. So they had a very high call target overlap and had that infrastructure already there. So they are well suited with the army that they have, if you will, to take full advantage of the new label.
Okay. And you also have a Japanese partnership. I think they're still under development, still in phase three. But any updates there on when that could read out? And I think there's some nice milestones associated with that readout, or is it maybe the label?
Yeah, no, it's based on a few different things. It's based upon the label. It's based upon price. But milestones in totality are $140 million from Otsuka. You're absolutely correct. They're in the midst of completing their phase III study. It'll probably be sometime by the end of 2024, beginning of 2025. That's when we'll start recognizing those milestones as well. By the way, we have another milestone due to us from Daiichi Sankyo of $25 million that will come after they have their label update. And that will be again sometime in late June or early July. Getting back to Otsuka, we have a great relationship with them. And, things are, you know, progressing very nicely. Japan is a very big market for lipid lowering, especially if you think about a drug like us for non-statin.
You know, I ran ezetimibe for a number of years, as you know, Serge, and the second largest market for ezetimibe was Japan after the United States, followed closely by Germany.
Okay. Just going back to the Dr. Reddy's, I guess, settlement agreement from earlier this year. There's a couple of components beyond the number you settled on. Maybe if you just want to highlight the importance of this, I think they're like, you mentioned earlier the transfer of manufacturing. And I think there's a new, kind of life cycle strategy product part of that too.
Yeah, no, absolutely. So, it was a combination of cash and some other things. So for cash, $125 million. And then there is a tech transfer of manufacturing. And there's also the development of a triple combination therapy, which, you know, we've seen the research that they've done. This will also allow them to have 10 years more of patent exclusivity, which is very important. I think right now what they're thinking of is do they just want to do one triple combination with rosuvastatin, or do they want to also do one with atorvastatin? If you bundle the cash component and the rest of it, tech transfer, triple combination therapy, it gives you a net present value of greater than something than $300 million.
And look, I mean, settling and moving forward allowed both companies not to be distracted and for both of us to work to make this the global blockbuster that it should be. You know, we could have had protracted litigation that could have taken us to the end of 2026. Nobody wanted that. From a financial perspective, that would have been very detrimental to us as Esperion. So this worked out the best for both organizations. I recently just came back from Germany where we met. And I can tell you, you know, they're just as excited as they've always been. And they actually now think of these brands as a global brand, which what that means for Daiichi Sankyo is it gives they're giving it more prominence at the global at the global level than they had before.
Okay, great. I think in the past you've talked a little bit about your your pipeline. Clearly the focus was on investing on the bempedoic acid franchise and in this relaunch. But now that the new label has been secured, do you spend a little more time on on the pipeline and advancing it into the clinic?
Yeah, we're actually doing some really interesting work on the entire ACLY pathway. We think there's a number of indications that, you know, get us out of just being cardiometabolic. But really focused in specific areas such as the kidney, the heart, the liver. There's even some potential oncology-type pathways. So we plan to hopefully talk more about this sometime late in 2024 at a research and development day. Talk about what our strategy is to march to an IND on some of these areas. For us, though, we want to make sure we have all the right intellectual property in line as well before we go out there and divulge this information, but we're really excited about what our pipeline could potentially offer. I think that's something else that really differentiates Esperion.
There's not many, you know, SMID cap companies out there that are not only commercializing two blockbuster products, but have the ability maybe to do something from a pipeline perspective. I want everyone to make sure and know that our focus is on maximizing NEXLIZET and NEXLETOL, you know, high tide, floats all boats. The better we do that, the more we can think about pipeline and what we can do there. But that's our focus right there. And now it's really focused on execution and selling these drugs.
Okay. I think we only have a few minutes left, but if you want to touch on, financials and the cash and operational runway.
Yeah, yeah. So, financials, to use Ben Halladay's words, our Chief Financial Officer, we're in great shape. You know, we received the $100 million from Daiichi Sankyo. We went out and raised another $90 million in early January, and that puts us in a really good cash position. And, you know, we really do think that, you know, we could see profitability, you know, by the end of the year. So we're in a good situation with our cash. And, you know, we did that raise purposely because we really wanted to maximize the launch knowing how big these new labels would be for us.
Okay. Maybe just to wrap it up, any facet of the Esperion story at this point that you think remains underappreciated or misunderstood by investors?
Yeah, I think we covered the majority of it today. But you know, the one thing I will add again is the fact that, you know, the CLEAR Outcomes study was just a monumental study that led to two labels that essentially are even better than what we anticipated. And there's different ways to describe that. We don't have time for it. But the fact that we can get out there and market primary prevention is just such a significant differentiation. And the fact that the patient population that we can address now is 70 million patients. This is like this is a market disturber. This is going to change the way I think physicians treat patients and treat cardiovascular disease.
Okay. Well, I guess we'll wrap it up there. Thanks again for spending time with us this afternoon. It's great to get an overview of the company and the new label for bempedoic acid.
Well, Serge, again, thank you so much. Thank you, Needham, and I look forward to talking to you soon.