Esperion Therapeutics, Inc. Q4 FY2024 earnings call

• 2024 was transformational with expanded labels for bempedoic acid products in the U.S., global expansion with partners, and strengthened financial structure.
• In March 2024, U.S. FDA approved expanded labels for NEXLETOL and NEXLIZET. Fourth quarter 2024 saw 12% sequential quarterly growth in TRPEs, over 173 million lives covered in the U.S., prescriber base increased by 10% to over 25,000 health care providers.
• Internationally, Japanese partner Otsuka submitted a new drug application for bempedoic acid in Japan, European partner DSE had strong revenue growth, partnered with CSL Seqirus for Australia and New Zealand, and entered licensing agreements for Israel and Canada.
• R&D efforts include exploring new therapeutic opportunities in cardiometabolic diseases and planning to share clinical development plans at R&D Day on April 24, 2025.

Fourth quarter 2024 total revenue was $69.1 million, an increase of 114% compared to the fourth quarter of 2023. U.S. net product revenue was $31.6 million compared to $20.8 million for the comparable period in 2023, an increase of approximately 52%. Collaboration revenue was $37.6 million compared to $11.5 million for the comparable period in 2023, an increase of approximately 227%. Royalty revenue from DSE increased 9% sequentially to $9.7 million in the fourth quarter of 2024, and for the full year of 2024, royalty revenue increased 116% year-over-year to $32.6 million. As of the end of December, approximately 453,000 patients have been treated with therapies in Europe, representing 19% sequential growth over the past 3 months since September.

• Expect to continue building on momentum in 2025 with TRPEs and revenues supported by clinical benefits, awareness, and patient access.
• Full year 2025 operating expense guidance is approximately $215 million to $235 million, including $15 million of noncash expenses related to stock compensation.
• Confident of stronger cash position by end of 2025 with expected milestones from global partners.

Q: Congrats on all the progress. I have one question on the triple combo in the U.S. Have you agreed with the FDA on the regulatory path forward here and we need to have to run a CVOT? And then does the triple combo impact to 2031 LOE, which I think is based off of composition matter plans?

A: Yes. So right now, we're not going to provide any additional details related to our discussions with the FDA. We'll be sharing more of that probably in the fall time frame. What I can tell you is it does not necessitate a CVOT and does not necessitate any heavy lift as it relates to doing any type of clinical studies. So stay tuned. We're very excited about it. I'll ask Ben Halladay to comment as it relates to impact on LOE. Ben?

Q: A couple of questions if you don't mind. So first, with regard to U.S. sales. How should we view your efforts to build efficiencies into COGS?

A: So I can take that one. From the U.S. side, our COGS have been very consistent. To put some numbers behind it, our price per tablet hasn't really changed since beginning of 2024. When you look at COGS, really the biggest driver is some of that gross to net deterioration in the second half as well as the, I would say, proportion of DSE tablet sales. We are constantly evaluating how we can drive our per tablet cost down. That's a longer-term discussion as we start validating some of these cheaper and lower cost suppliers. However, that, again, is a longer-term discussion. And I think once we've completed the tech transfer, that's when you really will see that gross margin benefit as we remove most of these low-margin sales off our books.

Q: I wanted to make sure what I think I just heard that you think it's attractive to help sell somebody else's product. Is that a big opportunity given there is such a dearth of cardiovascular sales forces right now? And then I have a second question for Sheldon that I think you were close to. When Merck added a statin to ZETIA, did that drive ZETIA sales? And can you give us a sense of how much so we can think about what the growth opportunity of your next combination is?

A: Tom, it's Eric. I'll take the first part of that. So the answer is yes, whether that's us commercializing someone's compound or whether we're actually acquiring an asset. The key is we've built a really compelling commercial infrastructure, as Sheldon mentioned, in addition to other elements of the company. We've got a team that's proven their ability to generate 50% year-over-year growth, a team that covers about 20,000 HCPs, including cardiologists and primary care and has a digital footprint that goes to not only clinicians, but patients. So when you think about these companies that have assets in late-stage development or under regulatory review, maybe just starting to be commercialized, that's a pretty compelling value proposition for those organizations and for us to be able to infuse additional assets that complement the existing portfolio enables us to be really efficient with that. So hopefully, that answers your question.

Q: This is [indiscernible] on for Jess. I have a bunch of questions on these triples. So first of all, why are you starting to pursue these triples just now? And you mentioned in the PR that triple combination products may offer LDL lowering in excess of 60%. So what I'm trying to get at is are there any other ways to differentiate these triples from other products other than the LDL metric?

A: Sure. First, let me start with your first question. We view the triple combination as complementary to our existing portfolio and it definitely supports our path to achieving blockbuster status with the products that we are already commercializing. As it relates to what further differentiates versus just lowering LDL. First of all, I would say, it's all about lowering LDL. If you look at the guidelines, it's about essentially getting patients in Europe. As you know, the guidelines show who are at high risk to at least 55 milligrams per deciliter. Now in the U.S., there really isn't a goal and guidelines aren't coming out we have heard until 2026. But most cardiologists and primary care physicians you speak to, they want to get patients down to that 55 milligram per deciliter, especially if they're at high risk. But I think the other differentiating factor with our product that drugs like PCSK9 and future competition do not have is we also lower hsCRP. And there's a lot of information out there regarding lowering hsCRP, which, as you know, is a key marker of inflammation. Also as you know, we have, at least with bempedoic acid, no effect on glucose. So I think that's also important, and we think that will also play a role as we move forward in the development of this asset. You might have seen also that we submitted a paper recently regarding our effect on those patients who are obese and our efficacy there. So there's a lot of effects that bempedoic acid, in combination with other products, in this case a statin, that we think will be very favorable. And I can tell you that this is something payers are looking for as well. It helps them with their NCQA and HEDIS quality measures. So there's a lot of aspects of what this product would bring and why we're developing it now.

Q: Congratulations on the progress. I wanted to ask a follow-up on some of your earlier comments, Sheldon, appreciating the momentary from the KOL back in January who mentioned that awareness may be an issue. And I was curious what you're hearing from your sales force from prescribers. How familiar are they with bempedoic acid? Do you expect this to inflect anytime soon if it hasn't? And basically, what you're hearing from boots on the ground there?

A: Yes, I'll take this one, Jason. It's Eric. Yes, so every quarter or two, we do something called an ATU where we look at the awareness, we look at the trial, we look at utilization. We do it with hundreds of HCPs to keep score and how we're doing from a progress perspective. And we look at awareness on 2 levels. We look at unaided awareness and then we look at aided awareness. And I think the bottom line is we've progressively seen improvements in our unaided awareness. This is, if you just ask an HCP, what they're aware of without giving them any prompt. We're roughly where one would expect, and we asked the ZS Associates for those benchmarks. When you look at the aided awareness, we're in the 95% range. So the bottom line is the word is getting out on our products. The team is doing a great job at reaching the universe that we have. Our HCP digital is allowing us to broaden that net. The efficacy is really what's resonating for us. And as I mentioned earlier in the Q&A, the opportunity for us not only is to communicate that efficacy, but also that expanded coverage that we have.

Q: I had a question regarding the triple development. And is this something that both you and your partner in Europe will be doing concurrently? Or is this a separate development program for Esperion proprietary triple? And then my second question is for Ben. Can you just give us maybe the net interest impact change based on all the recent financings and just sort of what that annualizes at?

A: Thanks, Paul. I think it's safe to say, we've talked about this before, and it's been in our 10-K that Daiichi Sankyo Europe is also developing a triple combination. Also in the past and also at JPMorgan more recently, I talked about the fact that I think when people think about bempedoic acid, they think about just Esperion. We have 2 other large companies that are also heavily invested in this product. To your point, Daiichi Sankyo and Otsuka. And we've always talked about that it's important for all of us to work together to make this product as big as possible and to achieve the blockbuster status. We talked about and you see in the corporate deck in how well Daiichi Sankyo continues to do as well as we do. So not to make it a long answer, but the answer is yes. They're doing it. We're doing it. We're doing it together. And you'll hear more about this as we go into the third quarter. Ben?

Q: For the triple combination studies, I know you cite literature in terms of your expectations of effect. But I'm curious, now that there have been a lot of patients treated in the real world with these therapies, if you're hearing any anecdotes about this being utilized in combination and/or if any physicians have ever approached you about the potential to study such a combination?

A: Kristen, it's Eric. Yes, we do have a fair amount of utilization in combination with statins. And as you know, one of the key challenges with statins is either the inability to titrate any or tolerate any or to tolerate higher doses. So we're hearing clinicians that employ lower doses of these high-intensity statins, atorvastatin and rosuvastatin, and they add in NEXLIZET to enhance that efficacy. And I think that 60% number that we put forth is conservative. So the numbers tend to typically be higher from what we hear. But it positions us incredibly well. When we think about what clinicians want, they want efficacy, they want complementary mechanisms. And as Sheldon said, triple combination employs 3 mechanisms that work together, 2 of them that have proven cardiovascular outcomes in statins and bempedoic acid. So it's a really compelling value proposition, which positions us not only well for patients and our customers, but positions us against the potential competition in the future.