Welcome back, everybody, to our next session, and the H.C. Wainwright's Second A nnual BioConnect Conference here at the Nasdaq site. Very happy that they're hosting us. My name's Joe Pantginis. I'm the Head of Research as well as Managing Director here at the firm. Very happy fireside chat. Esperion, presenting for the company or part of the fireside chat is Sheldon, the Chief Executive Officer. So thank you very much for being here.
Thank you, Joe.
I'm really not sure what we're going to talk about. You've had a pretty quiet last 12 months here, so of course, that's tongue in cheek. We've really entered a new era for Esperion, and you know, we believe, and I would like to start with the latest congratulations for the FDA label expansion for Nexletol and Nexlizet on March 25th, and also, which I know you're going to talk about later, the news today that Otsuka had their positive phase III in hypercholesterolemia. This was after what many would consider a bumpy road up until this point. So we have a bunch to talk about. First off, with the recent approval, you really look like you had a nice aligning of the moons. Even before the approval, first in December 2023, the FDA updated its guidelines for cholesterol lowering.
What happened here, and how does it benefit you?
Yeah, so thank you, Joe, on behalf of all the employees at Esperion as well. Really happy to be here at the H.C. Wainwright Conference. I just asked where you lived, and I feel like I live in New York-
Yeah
... because I'm here so often. The good news is, we always have good news, new news, that we get to present during these conferences. So, the alignment that happened or the change in December was really an alignment that's been going on with harmonizing lipid-lowering labels. We saw the first one with ezetimibe, and then us. The beauty of that is it allowed us to go out again to payers. So we went out to payers back in April of 2023, right after the ACC presentation of the CLEAR Outcomes study, which was a major success, and allowed us to give information on what we thought would be in the label.
In December, what the FDA did is they removed the fact that essentially, they do have outcomes now, so they're recognizing we had outcomes, although at that point in December, we didn't have our label yet. But they also said, "You do not have to use this drug after a maximally tolerated dose of a statin either." That allowed us to go to payers again and say, "Hey, this is just a preview of what's coming when we get our new label in March of 2024," which, as you mentioned, we did. We received that on March the, I believe it was the 25th. We went right out to payers, and we were able to show them, "See?
Here it is." And because of that, and I think we'll get into this a bit later, we've had some really good wins with payers, big payers, most of them coming online June first, one of them coming online right now, and we're excited about that.
No, excellent, excellent. And like I said, that label expansion or the FDA changing the guidelines, that was a nice premonition for the label expansion.
Very much so.
Yeah. So fast-forward to March, as you said, you received FDA approval, as we mentioned, for the NDA label expansion. I think many were pleasantly surprised by the extent of the label you were able to garner for the asset. You know, what can you tell us here about the label? Why is it important versus what was originally potentially expected?
Yeah, and let me summarize that with one sentence, and I'll go a bit deeper into that.
Yes.
That is, Nexlizet and Nexletol are the only lipid-lowering, LDL-lowering non-statins to be indicated for both primary and secondary prevention. That's a big deal. It's a huge differentiation from products like Zetia, products like PCSK9. So essentially, we're like a statin. And as you know, Joe, we work in the same pathway as a statin. It's just that we're not absorbed in the muscle, et cetera. So it allows you to take our drug and not have these muscle pains, et cetera. It's almost why the drug was developed. I think, you know, people are skeptical. We are always out on the road, as you know, saying: "Hey, we're going to get primary and secondary prevention. It's going to be in both labels. We are, as I mentioned earlier, going to be the first non-statin to show this. We're going to expand our patient population because of this.
We are also going to be able to demonstrate that you can use this drug without a statin." And people are: "Oh, really? Are you going to be able to do that?" And guess what? Yes. I think the other big question was: Is this going to be in both labels? And it is. It's in both Nexletol and Nexlizet. Look, this is an efficacy-driven market. Nexlizet reduces LDL cholesterol by 38%. We've actually heard it's more than that out in the field. I take the drug. I have an LDL now, 40 mg/dl . And the fact of the matter is, is that everything we said that would be in the label is in the label, so we feel really good about it. And we had a great relationship with the FDA as we, you know, negotiated this label.
No, that's definitely been a strong point for the company in your iterative discussions with the agency, for sure. I think one of the key aspects here that I think, well, physicians are learning it, but investors also, I think, really need to get their grasp on, is looking at the addressable populations here from both the FDA guidelines and label expansion, and how has this impacted your addressable populations? What are some of your key metrics regarding getting off to an essential relaunch of the drug?
Yeah. So I like to call it a launch of the new label.
That's...
Because I think, as everyone knows, in the cardiovascular world, whether it's LDL lowering, heart failure, et cetera, it's all about an outcome study. Yes, you have the phase III approval, and that sets the stage, but then you really have to show that long-term efficacy and safety. That's what the CLEAR Outcomes study of over 14,000 patients did. So, addressable patient population. When this drug launched in March of 2020, it was a very narrow indication. I would actually call it restrictive. Why? You had to show documented ASCVD, which is atherosclerotic cardiovascular disease. You had to walk through these steps, as I mentioned before, is: Has the patient been on the maximally tolerated dose of a statin? Was that patient step- edited through ezetimibe?
A lot of documentation that had to be shown, which, by the way, with the new label, will go away with payers... So with that said, our addressable patient population was only about 10 million patients. With our new label, our addressable patient population is 70 million patients, and that comprises patients who, one, could benefit from a primary prevention perspective. I mean, imagine, you know, we have a drug now that can actually prevent an event from happening in a disease that is the number one killer in the world for high-risk patients. And it can also go for those patients who suffer from a secondary prevention. So how do we prevent them from having another event? And one thing we emphasize with this new label is the fact that our drug can reduce non-fatal MI by 27%. If you add fatal MI, it's 25%.
We can reduce revascularization, that's a placement of a stent, et cetera, by 19%, almost 20%. So the fact that a physician now can present a patient with options of a pill to say, "Hey, I know you're taking a statin. This pill should be next for you because it will prevent you from having an event. It will prevent you from having revascularization or a stent," that's really important. That's a big message for us, and we can now say that to all those patients that could benefit it. And 70 million, as you know, this is a very large therapeutic area. Unlike the last-- I got to listen to your last discussion. Unlike your last one, this is an ocean of opportunity.
Right, not 500 patients.
Yes, exactly right.
So, I guess I'm going to dovetail off of one of your comments here, that you said, you know, you're giving patients another option. Obviously, they've had statins only, in essence, you know, the PCSK9s, but, you know, that's a much smaller segment there. So I'll sort of fast-forward a little bit and look for a home run type of question.
Okay.
How would you define the potential of patients switching from a statin versus going to Nexlizet, Nexletol, say, primary?
Yeah. So the one thing that we do not want to do, and I'm going to hit a grand slam on this one-
Yeah.
... is that patients, we're not out to look to switch patients from statins. Statins will probably always be the cornerstone of therapy.
Sure.
But with that said, we know that between 15%-30% of patients out there who could take a statin cannot. They cannot tolerate it. They're statin intolerant. They're looking for an option. And as I mentioned previously, with our new label, you can now take Nexletol or Nexlizet with, without a statin. I just happen to be an example of someone who takes rosuvastatin 10 mg, and I take Nexlizet. I can't increase the dose because I can't tolerate it, and even if I could, I only get 6% additional LDL lowering.
Of the rosuvastatin?
Exactly.
Yeah.
Of the rosuvastatin. So this is a way to really hit a home run or a grand slam by using Nexlizet with a statin, or if I can't take a statin at all, I can take Nexlizet. And, you know, we're looking at these different patients who fall into that line. A, a great example is someone who may be diabetic. They can't tolerate a statin. They're at high risk. They're a primary... That's a perfect primary prevention type patient. They could take Nexlizet and reduce their risk.
Got it. Got it. So it's not like, well, repurposing the drug or what have you with the new label, so it's not like you're just getting out there for the first time.
Right.
There has been a lot of education. Physicians have been using the drug. They've been expecting the new label. So how would you define the traction you've been seeing from physicians in helping to define the initial growth curve for the drug?
Yeah, so, maybe to back up a little bit, as I mentioned earlier, we received the new label right before Easter.
Right.
We then took our representatives, of which we have 150 now, to training. We then had an all-company meeting the week after. So we really didn't get started until probably the past 4 weeks as it relates to launching the new label. We've been able to show growth week after week for the last 4 weeks. We feel really good about that. Even where the market, the lipid-lowering market has been declining, we've been growing. But we're early in the game. You know, back to the baseball theme, which I'm a big fan of, you know, we're still taking batting practice. Like, the game hasn't started yet. We're early to the game. I mentioned we have payers that will come online that will make getting this drug easier June 1st.
We have some interesting stop-gap measures now that allows patients to get the drug before June first. But, you know, this is never going to be, you know, an immediate, as we mentioned, a big market, hockey stick. It's just not-
Right
... going to take off. But what I can say is that we will continue to show growth that will become more aggressive, more aggressive as we continue to march through the year. So we feel really confident about the growth and the traction that we've already seen. The fact that these payers have made this change, they see the benefit of this drug as well for their patients.
Got it. I guess, what kind of anecdotes could you share of some of your, you know, your sales team, you know, hitting the offices of these physicians versus saying, you know, "Oh, I've been waiting for this," or, "Hey, this is new information to me?" How would you sort of describe the dynamic?
Yeah, yeah, and we have calls every week to actually ask those questions. Before we had the new label or before we went out with the new label, we had an idea of what it was going to say, and we conducted market research with about 350 physicians, both cardiologists and primary care physicians, and they were all really excited about getting this. They felt it was a game changer, the fact that we would have primary prevention, secondary prevention. But as you know, Joe, with market research, is that going to be a reality? What we have found now, with our representatives getting out there and setting up their lunches, setting up their dinners, et cetera, we have physicians saying, "Wow, I can't believe this data. I mean, primary prevention, this is amazing. We haven't seen this since statins.
I can think of 5-10 patients I could put this on right away." This is the feedback that we're getting from healthcare practitioners, primary care physicians. It's difficult for them to use a PCSK9. I can use this drug. I don't need to get a referral to use a PCSK9 or go to a cardiologist. I only use that because primary care physicians, you know, they're very busy, and the fact of the matter is, the bigger opportunity out there, when you look at LDL lowering, it's not necessarily PCSK9. You know, I get that question all the time. It's ezetimibe.
Mm-hmm.
Ezetimibe is the second most used drug after a statin. What's Nexlizet? It's bempedoic acid plus ezetimibe. So physicians who are already using ezetimibe, it's an easy, "You know, I can use this for these patients, and they're going to get that much more additional LDL lowering." So it's exciting. It's been great feedback so far from out in the field.
No, fantastic, and I guess, you know, if I link your feedback there with the physician saying, "Oh, I can think of 5-10 patients right now I could put this on," would that connect to your comment of those patients might be statin intolerant or sort of, you know, how do you think, what kind of categories they fit in?
It's a mix.
A mix.
There's three patients that we've actually been talking to physicians about. There's the primary prevention patient who's on a statin, but needs additional LDL lowering. There's a patient who cannot take a statin at all, and then there's the patient who's already had an event, and they can either add this to their statin, or if they can't take a statin either, it's the best of both worlds. But those are the three patients we focus on. Primary prevention, someone who is maybe already on a statin but needs additional, secondary prevention, a person who's had an event on a statin, needs additional LDL lowering, and then the patient who can't take a statin at all. So those are the three patient types that we've been talking to physicians about, and that's resonated well.
Got it. Got it. So I, I think my next question really focuses on, you know, it's, it's nice to talk about the past, it's nice to get the past behind you. It's all about looking future now, to the future. So on the partnering front, of course, the news over the last 12 months or what have you, was dominated by your prior lawsuit with Daiichi, regarding the milestone payment from the positive CLEAR Outcomes study, you know, very well known. Can you go, give a quick synopsis that got you to the $125 million and, you know, like you said, it's glad it's behind you, you know, now to focus on the growth of the drug?
Yeah, so first of all, I just want to state that our partners have been great.
Sure.
You know, that was a battle that was fought at a very higher level.
Right.
I've actually been to Munich. I've had dinner with the team there. They're really excited about this drug. We just had first quarter earnings. You saw they grew another 28%.
Sure.
I can't really talk too much about the case-
Right
... but what I can say is the $125 million, of which we've received already $100 million, we should be hopefully receiving another $25 million soon with the impending approval of Europe, which could happen any day now. So that's the cash side of it. Then there's the other side of it, where we're doing a tech transfer from a manufacturing perspective, and we've given Daiichi Sankyo the rights to develop a triple combination, which we know is going to do very well in Europe. And we'll get the same type of royalty tiers from that as we do currently. So when you do it from a, the math, from a net present value perspective, it's actually more than $300 million that we're actually looking for from the beginning. So it's behind us.
It was a huge distraction, you know, I think, for everybody and for the company, and to me, the past is the past, and Esperion is a company more of the future. And, you know, the one thing I always try to reiterate about Esperion is that what we say we're going to do, we do. And that's what we've been showing, you know, since I've been here in my three years, and we're going to continue to do that.
No, it's fantastic-
Yeah
... just to see again, you know, the culmination of that, you know, which added a lot of volatility to the story.
Yeah.
Unnecessary volatility, at least in our view, in that, you know, it's all about looking forward. I guess from a regulatory standpoint, obviously, EU is potentially imminent.
Yes.
Anything else you could talk about, you know, ex U.S. besides Europe? I mean, obviously, you said Otsuka—we've talked about Otsuka, had the positive phase III today, but how else should we view, you know, other regulatory agencies?
Yeah, yeah. I just want to briefly touch on Otsuka.
Please. Yes, yes, yes.
So Otsuka, yes, today we announced, they announced at 2:00 A.M. our time-
Yes
... we announced at 6:00 A.M. our time, that they did achieve their enrollment, showing statistical significance in their phase III study. They will file in the second half of 2024. There's always a lot of questions around the milestones related to Otsuka, so I'm going to be very clear about that. The milestones for Otsuka begin when they actually file and get approval. It's when they get approval of their drug, that will probably take place sometime in the early 2025 timeframe, and from there on, we'll be receiving milestones, from them. So excited about that. This was the gateway to get there. As regarding other regulatory, agencies, so, you know, you hear about all these approvals in different countries.
We do all the regulatory filings for Daiichi Sankyo, and there's different approvals for all the markets. It seems like almost every month. But remember, they're not only selling this drug in Europe, but there's also some Asian regions that they're selling the drug: Hong Kong, Thailand, South Korea, et cetera, where we do have approvals. And we're starting to see some of their sales come in those areas as well. Lastly, I'll say we, at Esperion, will be filing in Canada. We're working on that right now, and also filing in Australia. Those are two territories that we own, if you will. Canada is a very large opportunity for us, and we'll be talking about that more as the time goes.
No, sure.
Yeah.
So, I guess, you know, bigger picture, and also, you know, to the launch. How do we view Esperion, you know, six months to five years from now? First, from a business development standpoint, you know, as you generate a lot more cash flow and potentially look for, you know, new opportunities or what have you. And specifically around the launch, are you right-sized right now with regard to, say, the size of the sales force and the overall commercial team?
Yeah, we believe we have the optimal size right now. The sales force, we did a lot of work at to get to 150 individuals. We also have some scientific liaisons out there. We have about six reimbursement managers out there. So we feel good about our, our size. So, you know, no changes there. As it relates to the business, we have a really interesting pipeline. We're gonna talk more about that probably later in the second half of the year, so stay tuned for that. And right now, what we're doing is just lining up our intellectual property so that we can discuss it. The one thing I will say is there's not many companies our size, to the question of size, that are, one, commercializing, but two, also have a pipeline.
Keeping in mind, our focus really is, though, on maximizing the opportunity for the bempedoic acid franchise. You know, we're partnered, as we mentioned, we've talked about Daiichi Sankyo, we've talked about Otsuka. Daiichi Sankyo has about 21,000 employees. Otsuka has about 7,000 employees. We have about 300 employees. But this is a global footprint.
Sure.
Like, we are working together to make these drugs the blockbuster that they'll be, not only in the United States, but throughout the world.
You mentioned Otsuka, just to wrap up. I mean, I guess I'd just come back here. You know, when we do a market modeling or what have you, we always say, you know, Japan's approximately 10% the size of the United States for a particular indication, but I would still imagine that the cardiovascular impact here is quite large.
When I was on... I managed the Zetia franchise.
Sure
-for about three and a half years at Merck. It was our second to third largest market. It's a big deal.
Yeah, right.
Yeah.
Awesome. Thank you very much for your comments, Sheldon.
Thank you so much. Thank you.
Appreciate all the information.
Yeah, always.
Awesome. Thank you.