Okay, let's get started. Welcome to day three of the 36th Annual Piper Sandler Healthcare Conference. This is David Amsellem from the biopharma team, and with us is Esperion Therapeutics, CEO Sheldon Koenig, and CFO Ben Halladay. Thanks, gentlemen, for joining us. Certainly lots to talk about, so I'll dive right into questions if you'll indulge me.
Sounds great.
So I think to sort of set the stage, it'd be helpful to briefly walk through the commercial journey for bempedoic acid. So, you know, Esperion initially launched with a much narrower label, but now you've got that wider label. So I guess, you know, without maybe this isn't the best way to say it, but maybe talk to the early commercial journey, your missteps, and talk about how the CLEAR Outcomes changed the landscape for bempedoic acid.
Sounds great. So first of all, thank you, thank you and Piper for having us at this conference. I think this is our first conference that we've been at with you, and we really appreciate the opportunity. So yeah, starting from the beginning, I think, well, not from the very beginning, but I won't go through and use all of our 30 minutes. But initially, it was a tough journey, and I think the reason for that is these drugs were launched back in March of 2020. That was right in the heart of COVID. There really wasn't. We didn't have the outcome study yet, et cetera. There really wasn't a solid strategy. And so I'll fast forward to October of 2021, where it was then we right-sized the organization. We focused on a couple of pillars.
That was completing the CLEAR Outcomes, which is really the ticket into the game for cardiovascular medicine. We focused on controlling our spend, and what we also said is that we would still show growth quarter over quarter, year over year. And, you know, fast forward that even again until April of 2023 at ACC, we actually presented the results of the CLEAR Outcomes, and we went to overnight success. I mean, we went from nobody knowing bempedoic acid, Esperion, if you will, to everybody knowing. We actually had over 1 billion impressions in the United States alone. It was almost $200 million in paid media. And that really started to, I mean, get the juices flowing around the drug, really built up the anticipation for our label, our outcomes label, which we received at the end of March of this year.
Again, this is a short story, but going back to what I talked about earlier, we've controlled our spend. We've, and Ben can go into this later, we addressed our capital structure. We were able to demonstrate growth, significant growth, double digit, not only from a prescription perspective, but also a net revenue perspective. We've gained amazing coverage in both commercial and Medicare, and we've really created a strong momentum. That just gives you a quick flavor of where we were and where we are today.
No, that's perfect. And, you know, we only have 25 minutes. So that's perfect. So you've often talked of Nexletol and Nexlizet as filling a gap in the LDL-lowering treatment landscape. So I guess with that in mind, where do you see the role of the franchise, these are the statins, and then also on the other end of the spectrum, the PCSK9s?
Yeah, so statins will always be the cornerstone of therapy. There's no question about that. The beauty of our drug and our label is you can use us with a statin, but if there's patients who are statin intolerant, you can actually also use us as a standalone therapy. We know from advisory boards, key opinion leaders, et cetera, that physicians could only go so far. Matter of fact, we did some psychological behavioral research around that. Physicians felt that all they could do was give a statin and a ezetimibe, and they were kind of stuck, especially primary care physicians, because it's hard for them to get injectable PCSK9s. Now, with a drug like Nexlizet, you can do more, and that's the message to physicians, and we're really seeing with our label, which also includes primary prevention.
As a matter of fact, we're the only oral non-statin, and actually non-statin, drug that has primary prevention and also secondary prevention. We're seeing primary care physicians write more and more of this drug. When you look at the adjunct market, adjunct defined as add-on therapy, that's ezetimibe and injectable PCSK9. The majority of that market is ezetimibe, almost 70%. And that's really what we're going after. There's a place for injectable PCSK9s. I think the best way to think about it, though, is after a statin, we're next. Use us.
Okay. With that in mind, let's talk about the payer landscape for Nexletol and Nexlizet. Obviously, that's evolved given the label expansion. Talk about the payer landscape where it stands now, and particularly utilization management and how that has changed with this fundamentally different label.
Yeah. I think to understand where it is now, you have to look at the past. And where it was in the past is that we had a very restrictive label. We had a TAM of only 10 million patients. With the new label, our TAM expanded to 70 million patients. And a lot of the burdensome PA, the prior authorizations where the physician had to do, are gone. Now it's just physician attestation. It's electronically looking back to see if a patient's been on a statin for the past six months. It's interesting. With Aetna, there's no prior authorization. CVS SilverScript, no prior authorization. You can just write the drug. So we've evolved in two ways. The TAM has become seven times larger than what it was, and we went from being highly restrictive to really a very easy PA process to get these drugs.
Yeah. And you kind of touched on what access is like, but maybe diving a little more deeply, what does Medicare Part D access look like these days in terms of covered lives? And then same question for covered commercial lives. And, you know, I'm sure you get this question a lot, but how should we think about, you know, the direction of net pricing, gross to net, as we move through next year?
I'll do the first part, then turn over to Ben for net pricing.
Sure.
So we have 92% coverage in commercial. That's exactly where we need to be. We have 65% coverage in Medicare, and we have the four largest Medicare providers. We don't see any more work that needs to be done. So we have the coverage we need. We're preferred with all. We're not disadvantaged to any product. And then recently, we just announced one other segment. We just won the Department of Defense. So that's 8 million uniformed military personnel and their family members. That will be effective January 29th of next year. So from a payer perspective, you know, that's what the CLEAR Outcomes gave us as well. It gave us that ability to get that type of status and reimbursement. Ben, I'll turn it over to you.
Yeah. On gross to nets, I think we see the changes next year largely as a tailwind for the company. I know that there's some, a lot of people are keeping a close eye on what the IRA does for gross to nets, but for us, our biggest headwind over the course of the year from Q1 to Q4 is the Medicare coverage gap.
Yep.
Q1 is always our best gross to net quarter. Q4 is always our worst. And I keep using the analogy of if you go from Q3 to Q4 and you show a 20% prescription growth, that does not flow down to 20% net revenue growth because of that. Next year, with the Medicare coverage gap going away, that at a bare minimum smooths that gross to net out, and you don't have that seasonal headwind coming at you. But at the same time, we currently believe and are seeing that the LIS and non-LIS coverage as a part of Medicare will actually go down in cost for us. So we see it as a net benefit overall on gross to net.
Yep. That's helpful. Switching gears just a little bit, you know, I want to bring the PCSK9s into the discussion. And can you talk to, you know, pricing of, you know, bempedoic acid, you know, oral solid, small molecule versus, you know, PCSK9s, biologic, big molecule, injectable? And I guess how important is that, you know, cost differential, you know, in the eyes of payers? You see in other therapeutic verticals, you know, these expensive biologics, and the goal of payers is to try to get patients into cheaper modalities before going there. So how should we think about it as it relates to this particular market and bempedoic acid?
Yeah. I'll look at it two ways. I mean, from payers and then from a patient perspective. But, you know, the simple answer is we're cheaper.
Yeah.
We're definitely cheaper, and you know, but it's important to look at it also from a perspective of what about patients who have to pick up their prescriptions, et cetera. That's the beauty of our coverage because we have affordable copays. You know, patients in commercial are only paying between $25 or $35 for their copay, so we have no issues with abandonment, and actually, if you take a look at prescription refills, et cetera, that's also, it's exactly where you see commonly used drugs like Xarelto, Eliquis, et cetera. PCSK9, you know, they're not disadvantaged to us either, so their copays are similar to ours. Medicare, it's standard at $45, but I think, you know, the nice thing about us is that, you know, we are cheaper.
I think payers look at that from a perspective of, you know, this, and we're easier to use as well because we're, you know, small, you know, molecule to your point, less training of a patient, et cetera. I think the best way to sum this up is I look at Medicare. You know, Medicare usually when they make a decision, they make a decision today for next year.
Yep.
They made decisions today for tomorrow. That never really happens, and that really shows the benefit of the clinical profile of what we showed with the CLEAR Outcomes study.
Yep. So let's talk about the growth in prescriptions and new-to-brand Rx. I think you talked recently, you know, on your Q3 call about new-to-brand growth. So can you talk to that and also the drivers of that growth? I mean, is it a function of just the more favorable payer landscape? Is it greater practitioner awareness given the revised labels? Is it both? Is it other considerations? Maybe help us better understand, you know, what's powering this growth?
Absolutely. I think, well, first of all, just, you know, building on Q3. Q3, we showed double-digit growth in scripts versus second quarter, we showed 12% growth. We showed an increase in those physicians that were prescribing from 21,000 to 24,000. What we also showed in Q3, though, was just a little highlight of how that momentum in Q3 has carried over into fourth quarter. We showed an 18% increase in TRx and a 20% increase in NBRx. And why that's so important is NBRx is a great indicator of future business. We see this continued strong momentum. And I think what's driven it, it's a combination of not only the access. Keep in mind, two of the bigger ones, United and CVS, they came in late September, early October.
So, we were even showing this growth in third quarter and going into fourth quarter, you know, before those really moving. I think it's really the primary prevention. The fact that you have primary care physicians and get their hands on a drug where you can actually prevent an event is important for these patients at risk. And that's what we're seeing that's really fueling our growth.
We look at the growth between cardiologists and primary care, and let's be clear, both of them are growing, but the primary care side of it is growing much faster.
Yep.
That's a good indicator for how the primary prevention is doing.
That's helpful, Caller. And actually, that sort of leads me to my next question, which is on the sales organization. And so you have these two different audiences, but they're both important. So help us, you know, understand not just what the current headcount looks like and your target audience, but also, you know, the extent to which the salesforce is right-sized.
Yeah, so we have 150 representatives. Back earlier in, believe it or not, January of this year, which seems like two years ago, we had about 77 representatives, and we always said we would expand to 150.
Yeah.
So we're at 150 representatives. We have five key account managers that overlay key SMAs. We believe that's the optimal count. That's what's going to get us the majority of our potential. We supplement that with what we're doing from a digital perspective. And we've actually shown a seven-to-one return on what we're doing digitally, not only to physicians, but also to consumers. I'll give credit to our market access people. We have two account executives out there that had all those wins, and we have folks supporting them in-house, another one or two. So we're happy with our potential. And how we target is we're targeting those physicians who are essentially writing statins and also writing ezetimibe. And I don't think our call deck, or if you lay that next to competitors, et cetera, would be too different.
Yeah, and any plans for any significant expansion of the sales organization?
No, not at this time.
Okay.
Yeah.
I may have missed this, but how many doctors, how many cardiologists, and how many GPs are you calling on in your target audience?
Yeah. It's about 45,000 in totality, the majority of which is more focused, I would say 60% on PCPs, 40% on cardiologists. If you use drugs like ezetimibe, which was the old brand name for Zetia.
Yep.
As an analog, when you look at prescribing, it's 60% primary care, 40% cardiology. We're seeing those same percentages as of now.
Okay. Let's switch gears and talk about the product ex-US. So just talk to commercial dynamics in Europe and just remind us of your economics in Europe.
Yeah, in Europe, we have a partner with Daiichi Sankyo. They market the drug in Europe. The economics of that agreement is it's a royalty-based agreement. They have royalties that scale 15%-25%. To put very bluntly, they are absolutely killing it over in Europe. The growth that they've put up there has been spectacular. They continue and routinely show that growth every single quarter, quarter after quarter, which is why I think leading it, we monetized that royalty stream back in June to help deal with some of the capital structure issues. It spoke to the value that not only we saw on that, but that, you know, a lot of people in the investment community also saw in order to be able to make that deal happen.
Okay. And then similar question regarding your partnership with Otsuka and the opportunity for bempedoic acid in Japan. So maybe talk to that.
Yeah. We're very excited about Japan. We can finally have some concrete things to point to with the J-NDA filing last week.
Yeah.
They're on the path for a launch in the very near term future, probably in the next year or so as they go through that regulatory process. Economically, I mean, we see that market as probably the third largest market for bempedoic acid. It's a population that shows a very good response with this drug and is, again, a much-needed therapy in the market. Economically, it's very similar to Daiichi Sankyo. It's a royalty-based agreement, and we're looking forward to that launch.
Okay. And I wanted to switch gears now and talk about exclusivity runway. Just give us a quick refresher on the exclusivity runway in the U.S. and also Europe, Japan.
Yeah. We are, so in the U.S., we have composition of matter and a pediatric extension to mid-2031. We're very, you know, we think that that is very strong patent protection, and we're not too concerned about generic entrants before then.
Yep.
Europe is a similar timeframe, and I think they also go to 2030. However, I will point out that they're working on developing a triple combination product, which will give them some patent extension past that when that comes to market, which is a huge opportunity, and one of the things I like most about that royalty deal, the sale that we entered into, is we get to retain the upside of that patent extension on the European royalty side.
Yep.
So for Japan, that I think we're looking at six years after they file. We'll know kind of what that looks like as we go through the regulatory process. But again, there's a long runway for bempedoic acid, both in the U.S. and outside it, that we can very much capitalize on this opportunity.
Just to be clear, the triple combination incorporates a statin? Is it?
Yes. It is bempedoic acid, ezetimibe, and a statin.
Okay. Got it. Is that something that you guys are contemplating for the US market in terms of life cycle management?
No. We looked at it. It's a very different path to market in the U.S. than it is in Europe. It's much more expensive. We also did the market research to say it just didn't, the business case did not make sense.
Yep. Okay. Well, that sort of leads me to just broader questions on life cycle management and what you can do to extend the life of the franchise in the United States. Maybe talk to that.
Yeah. So we actually have an active life cycle management plan. And, you know, I think many times people think about Esperion, and they think, "Oh, Esperion is, you know, just, you know, in the United States." But we just talked about stakeholders that we have with Daiichi Sankyo and Otsuka.
Okay.
And with them come also more brainpower to think about what studies can be done, et cetera. So we're actively working with them. Matter of fact, we had a meeting at European Society of Cardiology, thinking about several different studies to expand our publication presence in science as it relates to bempedoic acid. We have a very long runway of publications we'll be putting out over the next one to two years as it is. But as you know, you always want more and new information flowing. And I think we have some really interesting studies that we're thinking about and moving those forward.
I guess one question is, is there any additional info or anything about the product that's patentable that you can, in other words, is there anything else that you can stick in the Orange Book? Yeah.
Yeah. Stay tuned. I think that there are strategies around potentially doing that. Yes.
Okay. Fair enough. So you have talked about other ACL inhibitors and maybe just broadly, and this is probably something we could spend a ton of time on, but just talk about the potential applicability of the mechanism to a range of disease settings.
Yeah. So, you know, the one thing about the ACLY pathway is very interesting from a platform perspective. I mean, even in the CLEAR Outcomes study, we showed reduction of hsCRP. We showed no effect on glucose. We actually showed a little bit of reduction in blood pressure. We showed a little bit of reduction in weight, which it's interesting. In Switzerland, they just got their label, and they can actually make some of those claims. We actually have also been studying in just different therapeutic areas: cancer, kidney, liver. And we see promising signals in all of these areas. We're not experts in cancers, but we are experts in cardiometabolic. And so with that said, we definitely will be having an R&D day in the first half of 2025. Stay tuned. We'll announce when the date is.
But we're going to go deeper into what we have, what our molecule is, and how we potentially have first-in-class, best-in-class in some of these different areas that I mentioned.
I think in the past, correct me if I'm wrong, that you've talked about potentially focusing your next-generation molecule, whichever one you've nominated to move forward on a rare disease category, which is a, you know, by, and I'm thinking about this commercially, that that's a leaner commercial model. And so, potentially with orphan protections, et cetera, et cetera. I mean, is that something that you're still thinking about? I mean, is that the focus, a rare disease category for the next-generation product?
Yeah. We're actually in the indication selection mode, for lack of better words.
Yep.
We're looking at orphan and rare disease. Also, the supplement, what we're doing from a broader cardiometabolic perspective.
Yep.
Our first priority is always going to be to maximize the bempedoic acid franchise with Nexlizet and Nexletol. The assets that we're talking about now would come to market maybe sometime in the 2030 time period. And then, as Ben mentioned with the IP, you know, there's the potential for us to extend the IP for Nexlizet and Nexletol. So it'd be a nice complementary, if you will, franchise as it relates to broad indications, but this orphan and potentially these rare indications.
Okay. So we'll have to stay tuned for.
Yeah. I'm always told, like, you know, to control my excitement, but I'm excited about it. So, and we're, you know, back to one of your questions earlier. We would have come out sooner, but we have to make sure we have all of the right IP.
Yep.
You know, we don't want to come out, you know, before then.
For sure. For sure. Okay. Going back to the sales organization, you know, I look at that as a leverageable asset. And so I guess with that in mind, can you talk to your appetite for bringing in another asset or assets where you can leverage that infrastructure? And, you know, does it have to be cardiovascular medicine or, given your focus on general practitioners, going to be, you know, another therapeutic category?
Yeah. No, this is something we're very interested in. I think we heard a lot of noise, especially in the second quarter. We had a lot of folks coming to us and saying, "Hey, you guys have a real company. You know, you have a sales group. You have marketing. You have medical affairs." I can go on and on.
Yep.
This would be great for you, but a lot of them are early stage, and we don't want that. We do have an appetite for things that are in phase three, late stage, potentially already approved, about to be approved. We're in the process of doing a landscape analysis. I always say anything good is not cheap. But nonetheless, you know, we have the engine that's necessary to, you know, potentially bring a product in, into our bag, and supplement what we're doing. It's something we're thinking about, we're looking into, and we'll definitely update you as we move forward.
It sounds like, if I'm hearing you correctly, it sounds like you have appetite for adding something that's commercially available or market-ready, but less appetite for taking on additional development risk.
Correct.
Is that fair?
Yeah. Yeah. Yeah. That's right. Yeah.
Yeah. Okay. So I guess in the next, you know, sort of minute we have, I wanted to drill down more on the spend, the commercial spend in particular, and the cash burn. So, you know, a couple of questions here. One on the cash burn, two, you know, commercial spend in 2025. And I guess also, you know, with a next-gen product going into the clinic, how should we think about the cost around that program too?
Yeah. So we actually just finished our budget process, so I'm fairly equipped to talk about this. And, you know, spoiler alert, it's going to look a lot like 2024.
Yep.
You know, our commercial organization, we staffed up in January. So it's not like we need to do additional incremental step-ups to fuel the growth that we expect. There's, you know, the R&D spend we think will remain largely consistent because what we just talked about, these aren't 14,000 patient outcomes trials.
Right.
You know, these are small state diseases, and we're very much in the pre-IND phase at this point.
Yep.
So I think we're in very good shape to keep spending the level we are. As long as I'm CFO, it won't go up much higher. I think we're in a very good place where we can accomplish our goals, but not completely empty the coffers.
Yeah. I mean, and just the, you know, tie a bow around it. I mean, what level of sales, you know, for the franchise ultimately gets you to break even and then profitability?
I think on U.S., we need somewhere between $200 million and $225 million because remember, we also have Japanese royalties. We have partner tablet sales. So it's, we're close, is the way to think about it.
Okay. Great. Well, I'll leave it there. Thanks so much, Sheldon.
Thank you.
Thanks to everyone in the audience.
Great. Thank you so much.