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Esperion (ESPR) Stock Positioned To Capitalize On LDL-C Trials

|Includes: Esperion Therapeutics (ESPR)

Esperion (NASDAQ:ESPR) has made it to the Investor Initiative focus list, based on its significant market opportunity and well capitalized business structure that should offer little resistance to progressing through their stated initiatives.

The company is committed to applying its scientific expertise in cholesterol biology to transform the lives of millions of patients suffering with elevated LDL-cholesterol levels, with targeted focus on those patients considered statin intolerant.

Esperion Initiatives

Currently, ESPR has two phase III products in trial, with an established regulatory pathway for approval.

ESPR's first product is Bempedoic acid, an innovative, complimentary, non-statin LDL-C lowering therapy. Significant benefits include its convenient, once-daily oral dose, its ability to inhibit ACL, and has shown a 30% LDL-C lowering, and up to 40% lowering for hsCRP. The therapy has been shown to be safe and well tolerated, with no serious or unexpected adverse events.

The company's second product is BA+EZ, an innovative, complimentary, non-statin LDL-C lowering therapy combining bempedoic acid and ezetimibe. Like BA, the therapy offers a convenient, once-daily dosing and is orally delivered. The therapeutic affect has shown up to a 50% LDL-C lowering and up to 26^ hsCRP lowering. Similar to BA, BA+EZ has demonstrated no serious or unexpected side effects and the drug has been well tolerated.

Both therapies are targeting unmet medical needs of patients with hypercholesterolemia at high CVD risk.

Benefit Of ESPR Therapy

An approved ESPR therapy will address a significant global health problem, cardiovascular disease. It's the number one cause of death globally, and accounts for one of every three deaths in the United States.

ESPR is taking advantage of a market that has already acknowledged the benefit of lowering LDL-C levels and its association to the reduction in cardiovascular disease risk. In fact, it is recognized that elevated LDL-C is the top modifiable lipid risk factor in cardiovascular outcome studies.

The BA therapy is a prodrug that requires activation by a liver-specific enzyme, acyl-CoA synthetase, to form the active ETC-1002-coenzyme A. This enzyme inhibits cholesterol synthesis, promotes LDL receptor up-regulation, and lowers plasma LDL-C. This enzyme is not present in skeletal muscle, resulting in far less potential for muscle related side effects.

In the BA+EZ study, efficacy has been shown to be comparable to current injectables, and in addition has shown reduction in hsCRP. An IND was accepted for this therapy in June of 2016, and specific patent filings are in process to protect the proprietary features. Additionally, this therapy has successfully completed a bioavailability study in the fourth quarter of 2016 with tablet formulation selected for development and commercialization.

Pivotal Phase III Studies And 2017 Milestones

ESPR has four pivotal phase III studies in action related to these enzymes, with top line results expected to be announced in mid 2018. While the results are far off for near sighted investors to appreciate, the data already released is encouraging, and coupled with the financial strength of ESPR, the possibility for the stock to continue on its upward trajectory is likely to continue.

In the first half of 2017, ESPR expects to further define its regulatory pathway for both BA and BA+EZ, initiate a phase II Triplet Oral Therapy study, and to present and publish top line data results from its 1002-035 trial. Additionally, ESPR is expected to initiate a phase II PCSK9i trial.

The second half of 2017 should provide additional milestone activity, with the expected completion of patient enrollment for all of its pivotal global phase III, LDL-C lowering efficacy studies, and is further expecting to release top line results from its phase II Triplet Oral Therapy study.

Capital Position

ESPR is well funded, with approximately $260 million in cash on hand, allowing for the ability to fund all operations through the anticipated completion of the BA phase III program in 2018. The current financial position will further facilitate the expected NDA global regulatory submissions expected to take place in 2019.

The company has approximately 22.55 million shares outstanding and of that number, roughly 13.5 million trade in the public float. The company enjoys significant insider ownership, with over 31% of the stock owned by insiders as of the latest filing. Additionally, institutional ownership is strong, with approximately 76% of the outstanding shares being owned by institutional based investors.

The stock has a short interest of roughly 2.75 million shares, or 22.7% of the float, which may provide fuel to the current uptrend in the stock.

ESPR Outlook

Based on its strong clinical and financial position, ESPR is a stock worthy of investor attention. To date, the clinical trial data has been extremely encouraging, and with a regulatory pathway already in place, getting in front of this trade may prove to be a wise consideration. Buoyed by a strong balance sheet, ESPR eliminates much of the near term headline risk, and as 2017 milestones are announced, share prices have the potential to appreciate further.

At just over $22 a share, and with a market cap of only $474 million, ESPR is not unreasonably priced by any measure, and with the multi billion dollar market potential, the company may prove to be a value at current levels.

As always, your CNA Finance team will provide breaking news updates and provide additional relevant data as it becomes available.

This article first appeared on CNA Finance

Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.