Esperion Therapeutics (NASDAQ:ESPR) recently reported their Q1 earnings that revealed a solid beat on EPS and revenue. In addition, the company was successful in recording significant growth while reducing operational expenses. It looks as if their 2021’s efforts have set up 2022 to be a transformational year for Esperion as they work to ensure the long-term growth of NEXLETOL and NEXLIZET. I believe investors should be applauding Esperion’s recent success and ought to be enthusiastic about the company’s long-term potential.
I intend to review the company’s Q1 earnings and recent success. In addition, I provide my opinion on the company’s long-term outlook. Finally, I discuss how I plan on managing my ESPR position for the remainder of 2022.
Esperion recently reported their Q1 earnings that showed they pulled in $13.4M in U.S. product revenue for Q1, which was up around 109% year-over-year. Their combined royalty and partner revenue came in at $5.5M for the quarter, which was up about 244% year-over-year as a result of the launches in Belgium, Switzerland, and the Netherlands. Together, the company's total revenue for Q1 was $18.8M, up approximately 135% year-over-year.
The company announced that NEXLETOL and NEXLIZET showed a 56.7% year-over-year increase in demand, which they believe is due to improved product positioning and utilization of their patient support programs. The company’s European partner, Daiichi Sankyo (OTCPK:DSKYF), continues to report growth from NILEMDO and NUSTENDI (European brand names for NEXLETOL and NEXLIZET) and have treated no less than 52K patients through Q1 of this year. NILEMDO and NUSTENDI have revealed traction in European with a “stronger launch trajectory than PCSK9 inhibitors.”
Looking at expenses, Esperion had a 32% year-over-year cost savings in the company's operating expenses compared to the first quarter of 2021. In fact, R&D expenses came in at $24.3M, which was a 13% decrease from Q1 of 2021. SG&A expenses dropped by 50% year-over-year to $30.4M. These reductions reveal savings from the company’s cost-cutting initiative that was employed in Q4 of 2021.
In terms of cash, the company finished Q1 with $268.5M in cash, cash equivalents, restricted cash, and investment securities. Esperion is still convinced that they are “financed through the readout of the CLEAR Outcomes trial and for the foreseeable future beyond that.”
Indeed, it is nice to see NEXLETOL and NEXLIZET gaining some traction in the U.S. and Europe, however, I believe investors need to consider the company’s long-term prospects when managing their thesis and time horizon. Esperion has set the foundation for success starting back in 2021 when they streamlined their operations to focus their funds to facilitate consistent growth of NEXLETOL and NEXLIZET while maintaining pipeline programs.
Now, the company is advancing forward with their CLEAR Outcomes trial, which is expected to reach 100% of MACE by year-end, with top-line data in Q1 of 2023. If approved, NEXLETOL and NEXLIZET are expected to be a new class of medicine for CVD in patients who have a statin intolerance. The company is expecting the data to reveal NEXLETOL's and NEXLIZET's impact on LDL-C reduction on CV risk, as well as anti-inflammatory and glucose-lowering effects. What is more, NEXLETOL’s and NEXLIZET’s label expansion would dramatically improve the population size from roughly 8M to 19M people.
The company is also hopeful the CLEAR data will help modify NEXLETOL's and NEXLIZET's labels by removing “maximally tolerated stating therapy” and adding “primary and secondary prevention.” These modifications should help Esperion promote NEXLETOL and NEXLIZET in a global lipid market that is projected to surpass $11B by 2026.
What is more, the company has other pipeline programs moving forward including an oral PCSK9 inhibitor and a next-gen ACL inhibitor that has prospects in cardiology, lipid management, oncology, NAFL/NASH, kidney disease, and neurological disorders.
Moreover, the company’s finances are quite healthy, with In terms of cash, the company finished Q1 with $268.5M in cash, cash equivalents, restricted cash, and investment securities, along with a renewed ATM at $400M.
To recap, the company is starting to gain traction in their current indication with the possibility of a massive label expansion in the coming years. Furthermore, Esperion has an intriguing pipeline with products that could ultimately outperform NEXLETOL and NEXLIZET. Moreover, the company has a strong cash position that is expected to last past the data readout. If the data is positive, NEXLETOL and NEXLIZET should experience a significant bump in sales ahead of potential a CV label approval. Considering the points above, one cannot deny that Esperion has incredible upside prospects in the coming years.
Despite my bullish long-term outlook on the company, I recently booked some profits on ESPR's recent move over $7 after the ticker hit our “Sell 1 Target.”
Now, I am looking for the stock to make its next move either towards our Sell 2 Target to book more profits, or a potential retest of the lows where I can reapply some of our Sell 1 profits at near our original Buy Target of $4.50. Honestly, I believe both scenarios are likely thanks to the recent volatility in the biotech sector. In addition, we aren’t expecting any major catalysts until the CLEAR Outcomes data in the first half of next year.
Therefore, I anticipate ESPR to end up trading in a fairly tight range for the remainder of 2022. Consequently, I believe investors need to remain nimble with their positions until we have 100% MACE accumulation and narrowed timeframe for the data readout. At that point, we should expect to see a “run-up” in the share price as investors manage their position ahead of an incredibly potent catalyst.
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This article was written by
After years of working in the medical field, I have developed a passion for biotech and lifesaving therapies. Now, I am a full-time healthcare investor who is in search of the next breakthrough therapy, device, or pharmaceutical. My trade focus is around catalysts and potential acquisitions. In addition, I provide a marketplace service, Compounding Healthcare through Seeking Alpha.
Disclosure: I/we have a beneficial long position in the shares of ESPR either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.