Esperion Therapeutics, inc (ESPR) Q3 2021 Earnings Call Transcript

Image source: The Motley Fool.

Esperion Therapeutics, inc (ESPR 1.91%)
Q3 2021 Earnings Call
Nov 2, 2021, 8:00 a.m. ET

Contents:

• Prepared Remarks
• Questions and Answers
• Call Participants

Prepared Remarks:

Operator

Ladies and gentlemen, thank you for standing by, and welcome. At this time, all participants are in a listen-only. Following the presentation, there will be a question-and-answer session. Please be advised that today's conference call may be recorded.

I would now like to hand the conference call over to Ben Church, Investor Relations and Corporate Communications at Esperion. Please go ahead, sir.

Ben Church -- Investor Relations & Corporate Communications

Thank you, operator. Good morning, and welcome to Esperion's Third Quarter 2021 Financial Results and Company Update Conference Call. I'm Ben Church, and I'm responsible for Investor Relations and Corporate Communications here at Esperion.

I want to remind callers that the information discussed on the call today is covered under the safe harbor provisions of the Private Securities Litigation Reform Act. I caution listeners that management will be making forward-looking statements. Actual results could differ materially from those stated or implied by our forward-looking statements due to risks and uncertainties associated with the business. These forward-looking statements are qualified in their entirety by the cautionary statements contained in today's press release and SEC filings. The content of this conference call contains time-sensitive information that is accurate only as of the date of this live broadcast, November 2, 2021. We undertake no obligation to revise or update any forward-looking statements to reflect events or circumstances after the date of this conference call and webcast. As a reminder, this conference call and webcast are being recorded and archived. We issued a press release this morning detailing the content of today's call. A copy can be found at www.esperion.com within the Investors and Media section. We will begin with prepared comments and then open the call for your questions. Following today's call, the team will be available for follow-up questions. Please email [email protected] to schedule time to speak with our team.

With us today are Sheldon Koenig, President and CEO of Esperion; Rick Bartram, Chief Financial Officer of Esperion; Dr. Joanne Foody, our Chief Medical Officer; and Eric Warren, our Head of Sales and Marketing.

I'll now turn the call over to Sheldon for prepared remarks. Sheldon?

Sheldon Koenig -- President & Chief Executive Officer

Thanks, Ben, and good morning, everyone. Thank you for joining us today to review our progress and recent business updates at Esperion. I am pleased to share all the significant strides taken by our team over these past months to position ourselves for long-term success as a nimble and innovative organization dedicated to addressing cardiovascular disease, which remains the number one killer in the United States and worldwide. As a reminder, we recently announced a transformative long-term growth plan to strengthen the organizational structure and internal processes of the Company to facilitate better alignment with the current healthcare environment and the constraints driven by the ongoing COVID-19 pandemic. We believe that the changes we are implementing will enhance our ability to more efficiently deliver consistent growth in the near term and prepare us to scale up opportunistically in the future.

Looking ahead, we anticipate steady consistent growth leading up to the top line readout of our CLEAR Outcome study during the first quarter of 2023, which, if successful, we believe will be a key inflection point in the demand for our commercial products, NEXLETOL and NEXLIZET. I am also thrilled to announce that last week we reached 80% of the required major adverse cardiac events accumulation, signifying that the study is tracking in line with expectations. We recently held an investor-facing fireside chat with the renowned Dr. Steven Nissen, who is the lead investigator in the CLEAR Outcomes trial, who affirmed his confidence in the quality of the trial that our team has kept on target all throughout the pandemic. By optimizing the organizational structure, we are also able to dramatically reduce our expense base, which Rick will touch upon shortly, to ensure the appropriate allocation of resources to successfully complete the CLEAR Outcome study and advance the launch of our approved products.

Given the concentrated nature of our existing customers, we expect to retain the vast majority of our current prescription volume with this new plan focused on the 80 core territories that drive 90% of our prescription volume supported by increased utilization of non-personal promotion. With these additive tools, we will look to; one, target integrated delivery networks that partner with key opinion leaders at the top institutions recognized for their comprehensive cardiac care centers; two, drive interactions with the top 10,000 accessible providers most likely to prescribe our medicines; and three, support peer-to-peer education and scientific exchange through proven virtual forums and medical meetings.

In the weeks ahead, we will continue to implement and execute these strategies, along with those complementary initiatives we put in place during the third quarter. As we stated on October 18, there are two headwinds that led to NEXLETOL and NEXLIZET prescription growth of 10% during the third quarter, inadequate access to HCPs and prior authorizations. We believe the sales force efforts to focus on only the most effective territories and ramp and utilization of supplementary non-personal promotion tactics already underway are intended to address this first factor, while our prescription support program with Asembia, that was introduced in August, will help alleviate the prior authorization burden physicians previously avoided with a full buy-down co-pay card. This prescription support program will allow physicians to e-prescribe NEXLETOL and NEXLIZET to a centralized pharmacy that processes prior authorizations, eases patient access and mails medicine directly to the patient within a few days. On the Medicare side, we continue to see payor covered prescription volumes increase as pull-through of our contracts improved, especially given the Humana win earlier this year.

Even with shifts in patient volume mix, third quarter net price remained stable quarter-over-quarter, and we continue to expect additional positive impact to net pricing over time as our plans fully implement coverage of NEXLETOL and NEXLIZET and volumes scale up. With our new strategic framework in place to more efficiently grow our commercial products and the groundbreaking CLEAR Outcome study underway, we believe we are poised to emerge as a leader in lipid management therapeutics with a keen focus on delivering benefits to patients.

Now, I will turn it over to Rick to provide comments on the quarterly financial performance.

Rick Bartram -- Chief Financial Officer

Thanks, Sheldon. Earlier today, we issued a press release containing our financial results for the third quarter, which is available on our investor website. U.S. net product revenue was $10.9 million for the third quarter compared to $3.3 million generated in the third quarter of 2020, and $10.6 million in the second quarter of this year. Total revenue for the third quarter was $14.4 million, which included $1.2 million in royalty revenue from our partner, Daiichi Sankyo. As Sheldon mentioned, net price for our medicine remained consistent quarter-over-quarter as the commercial team finalized the last planned changes to the co-pay card program and rolled out our new prescription support program. Over time, we expect our net price to continue to improve as plans fully implement coverage and volume scale up.

On expenses, R&D expense for the third quarter totaled approximately $25.3 million, flat compared to the second quarter. SG&A expense was approximately $39.3 million for the third quarter, down 15% from the second quarter. The sequential decline in SG&A expense was driven predominantly by cost reduction initiatives as we optimize the organizational structure. Again, through our announced organizational restructuring, we expect $80 million in annualized cost savings next year that will further extend the cash runway of the business and support the ongoing CLEAR Outcomes trial and commercialization of NEXLETOL and NEXLIZET. As such, we revised down our expected full year 2021 R&D expenses to be between $110 million to $115 million and SG&A expenses to be between $195 million to $200 million.

Looking ahead to next year, we expect 2022 R&D expenses to be between $100 million to $110 million and SG&A expenses to be between $120 million to $130 million. As you can see, we plan to maintain our R&D spend levels into next year as we continue to support the CLEAR Outcomes trial. These estimates are inclusive of approximately $25 million of non-cash stock-based compensation expense expected to be incurred next year. Our cash balance as of September 30 was approximately $154 million. Last week, we took the first step in creating a more advantageous capital structure by announcing a debt-to-equity exchange on our convertible notes. We are confident that this decision provides the Company with additional flexibility for potential future financing opportunities.

As you can see, we remain steadfast on diligently managing our cash needs to support the crucial CLEAR Outcomes trial and the continued commercial launch of NEXLETOL and NEXLIZET, and by maintaining this focus, we're confident our financial position will continue to strengthen throughout the remainder of the year.

With that, I'll turn it back to Sheldon for closing remarks.

Sheldon Koenig -- President & Chief Executive Officer

Thank you, Rick. I want to reiterate my excitement for this new era at Esperion and everything we have planned for the future of this company. We believe our new organizational model optimizes and transforms the business for the current and future environment allowing us to maximize both the near-term and long-term opportunities ahead. We are committed to bringing additional funding into the organization to support our unprecedented CLEAR Outcomes study, which we believe when successful, will drive an inflection in awareness and adoption of NEXLETOL and NEXLIZET.

Last week, we took the first steps in better positioning our capital structure for this next step. In all, our actions will enable Esperion to effectively compete in the attractive cardiovascular market and position itself as a long-term leader in cardiovascular disease prevention. This is why you should be excited too. We remain committed to our mission of making lipid management accessible and convenient for all patients and driving greater public awareness to monitor lipids and talk to their doctors about lipid management.

Lastly, I would like to thank our colleagues and partners for their continued hard work and unwavering dedication to our mission. And again, thank you for joining today and for your continued support and interest in Esperion.

Operator, we are now ready for Q&A.

Questions and Answers:

Operator

[Operator Instructions] Our first question comes from Michael Yee with Jefferies. Your line is open.

Michael Yee -- Jefferies -- Analyst

Thank you guys for the update and for all the color, particularly on the new guidance to reduce costs. I had a two-part question. One was maybe for Sheldon. Just trajectory-wise, do you expect that the franchise will be a modestly growing franchise until we get to the Outcomes result and presumably possibly even until a formal label change? Can you maybe just describe how you expect the trajectory over the next one to two years and how the shape of that curve looks like? And then secondly, maybe for the team. Related to that, then, again, I think I'll just use some simple math, but looking at where the cash is now, looking at the new guidance, can you describe how you're thinking about various capital access opportunities and what those might look like? Maybe describe some of the different things you could look at to help the balance sheet.

Sheldon Koenig -- President & Chief Executive Officer

Great. So first of all, thank you, Mike, for your question. I will start off and then turn it over to Rick. So as it relates to growth, of course, we've not given any type of formal guidance as it relates to growth. But we do know that we showed a 10% growth from second quarter to third quarter, and we know that we can do better. And we know we can do better based upon the way that we're moving forward. We know that these 80 representatives that we've retained still cover about 90% of our existing business. And we think with the addition of our non-personal promotion and also with the fact that we're also using a bit of CRO assistance as well, that we can definitely continue to exhibit growth. And I think it's beyond the 10% that we showed for this quarter. I do think that the growth will be a moderate growth.

And I think that growth will continue to lead up to the CVOT. I think as we gain more awareness as well, of these products, which is something we've been struggling with since the launch. We have plans in place to make sure that there is more awareness generated. We've seen some weekly highs even in October as it relates to prescribing. So we're confident there. And I think as there's more attention around the anticipation of the CLEAR Outcome study as we mentioned in our prepared remarks, the conversation that Dr. Foody had with Dr. Steve Nissen that brought a lot of attention to what that study means for these two products.

To the second part of your first question, we know that we'll have some type of top line result in the first quarter of 2023. And I think that's going to bring, again, a tremendous amount of awareness, and I do believe that will also create an inflection for us at that time. Of course, we will not be able to promote any of that information with our sales representatives, but that would be out in the public. And I do think that would be an unprecedented event once we actually publish that. So with that, I'll turn it over to Rick for the second part of the question.

Rick Bartram -- Chief Financial Officer

Thanks, Mike. Yes, so we acknowledge the need to raise additional capital. I think everyone's doing the math. We've a plan that we're moving forward on. The first piece, obviously, was two weeks ago, aggressively managing our cash burn structure. We've put that in place. We're going to continue to evaluate costs over the next quarters, over the quarters ahead as we approach the CLEAR Outcome study and pull out additional costs within the system, if possible, to further extend the runway. In terms of bringing capital into the organization, we're evaluating all options that are ahead for the organization, traditional measures as well as some of past transactions. As we mentioned last week entered into a debt for equity exchange. So, we're focused on opportunistically approaching transactions, evaluating transactions, ones that may reduce debt and further improve our balance sheet. So we're cognizant of the cash need, and we'll address that ahead.

Operator

Our next question comes from Joseph Thome with Cowen. Your line is open.

Joseph Thome -- Cowen & Company -- Analyst

Good morning and thank you for taking my question. The first one, just on sort of the impact of the Outcomes data. I guess right now in your conversations, are you encountering physicians that maybe won't use the drug until they see Outcomes data? Or are there certain centers that won't use the drug until they see Outcomes data? Or is it really just sort of awareness that was for adoption? And then second point, maybe just as you compare, I don't know if you have this information, but with what Daiichi Sankyo was doing in Europe, is it the same type of patients that's seeing uptake in Europe and the U.S.? Are there any differences in sort of when they're getting Mexico NEXLETOL and NEXLIZET?

Sheldon Koenig -- President & Chief Executive Officer

Joanne, do you want to comment?

Joanne Foody -- Chief Medical Officer

Yes. So thank you for the question. With respect to the outcome study or resistance to utilizing NEXLETOL and NEXLIZET, prior to that, there are general physicians do use the drug currently based on just an LDL indication. I think our biggest resistance to not having outcomes data actually comes from the payors themselves. And that has been a challenge as they await the Outcomes data. I think there are probably some clinicians who also are awaiting outcomes and looking at other alternatives as well. Now, the second -- to your second question with respect to differences on Daiichi Sankyo and how they're looking at patients, the label outside the U.S. is a bit broader than our label and does include in the label statin-intolerant patients. So in -- outside the U.S., there is a broader label. But in general, as we look to utilization in the U.S. as well as outside the U.S., beyond that, the patients are generally similar, high-risk ASCVD patients who need additional LDL lowering.

Sheldon Koenig -- President & Chief Executive Officer

And Eric, if you want to add as well, we have Eric Warren online.

Eric Warren -- Head of Sales and Marketing

Wonderful. Yes. Joanne, yes, and thanks for your question, Joseph. With regards to CVOT, so Joanne's absolutely right. I think there's four things that CVOT does for us. It expands the size of the population. It helps reduce the burden associated with prior authorizations. Obviously, it would be really helpful from a guideline inclusion perspective. And to your point, there are some clinicians still that until we have a hard outcome benefit, aren't willing to use the product. So, it will unlock four important doors for us.

Operator

Our next question comes from Serge Belanger with Needham & Company. Your line is open.

Serge Belanger -- Needham & Company -- Analyst

A couple of questions for me. The first one on payor coverage. Can you tell us if you're expecting changes in 2022 in terms of the level of coverage related to step-throughs and prior as -- and also whether we should expect any new coverage? I know Humana was a big win earlier this year. Should we expect anything similar to that in 2022?

Sheldon Koenig -- President & Chief Executive Officer

Serge, thank you so much for your question. So, as it relates to coverage, we're always working with payors to better enhance our coverage. We're always looking at our contracts. We're looking at ways to continually negotiate, etcetera. But with that said, in summary, we actually have terrific coverage. We have 95% commercial coverage for both of these products. And from a Medicare perspective, we have 60% of our coverage. And as you mentioned, the biggest driver of that Medicare coverage was a win that we had in May with Humana, which is about 8.9 million eligible Medicare lives. As we move into next year, currently, all of, if you will, larger Medicare providers, we do have contracts with all of them. It's just a matter of them actually utilizing our contracts.

And typically, what we hear is they want to see greater pull-through or greater awareness of our products and utilization of our products. So what we're doing right now is really focusing on those Medicare providers, who have not yet engaged in the contracts that we have with them and really driving demand in those areas where they are, and we do have a plan to do that. So, it's really more of continuing the work that we're doing to generate uptake and awareness of these products. But from an overall coverage perspective, we do have favorable coverage, and again, looking forward to further utilization of our products through these contracts.

Serge Belanger -- Needham & Company -- Analyst

Okay. Let me squeeze in one more. Just in terms of COVID-related impacts, obviously, it's been a significant headwind since you launched. Can you -- do you have any measure of what the current level of recovery is right now? And when do you think we could get back to normal, if we ever get back to normal?

Sheldon Koenig -- President & Chief Executive Officer

Yes. No, I think that's a question everybody asks related to every business probably. I do think that -- and this is more -- I think what I read in the news and probably what you hear as well, Serge, I think more and more, what we're seeing is that COVID cases are decreasing throughout the United States. Children are going to be vaccinated soon. I think that's going to be helpful as well. And I think we're confident that patients will continue to return back to their physician offices and essentially address their cardiovascular health. Something we've been doing that maybe some of you have noticed or not noticed, but I'll say it now, so you will know this, is we're putting it out there of have you had your cholesterol numbers checked, do you know what your numbers are. And we think this is important. We're hoping this will gain traction, so that people really understand what this means. We did this the other day checking into for a meeting. Our CFO here, Rick Bartram asked the two people checking us in, do you know your cholesterol numbers. And neither of them had, had their cholesterol checked in two years, and we talked about the importance of that, etcetera. And I do think that it's just not top of mind because of COVID, but -- and I'll ask Joanne to comment as well as it relates to the environment for COVID. But I will say this, and one of the reasons why we made the changes that we announced two weeks ago is that, the new normal is the environment that we live in today, and that's what we are adapting for, because that's going to be the long-term environment that we'll have to operate from a business perspective. Because COVID is not going to go away and these will be the dynamics that we'll face in the pharmaceutical industry. Joanne, I don't know if you want to add anything.

Joanne Foody -- Chief Medical Officer

And I think for the last 18 months, people have put their cardiovascular health on the back burner relative to COVID, but we're seeing now that people are beginning to come back. Patients' providers refocusing on the preventive management, the non-COVID-related medical conditions. And we, as an organization, as Sheldon mentioned, are continuing to increase awareness, not only about our compounds, but also about the disease state and the importance of all of us knowing our cholesterol levels and having that urgency to treat it. I think also we recognize that things may not return entirely to normal and that the new normal does incorporate a lot of digital approaches, outreach. And so we are leveraging novel digital technologies across our entire field-facing organizations, including our medical organization to ensure that both patients and providers are aware of the importance of our therapies, as well as the importance of modifying cholesterol.

Operator

Our next question comes from Jason Butler with JMP Securities. Your line is open.

Jason Butler -- JMP Securities -- Analyst

A couple from us. So first one, just on the strategic and financing options. To what extent is a U.S. partnership or some kind of co-promote relationship a realistic scenario here or priority for you, as you evaluate the alternatives? And then on Europe, can you just give us an update on where Daiichi is from a reimbursement perspective and what countries we could see expansion of the launch in 2022?

Sheldon Koenig -- President & Chief Executive Officer

Yes. Great. So, hi, Jason, thank you for your question. So related to strategic partner, and we've been very consistent about this. So we're always open to anyone that would be willing to help us get medicines quicker to physicians and therefore, patients. And this is a matter of folks approaching us and asking us if we'd be interested, etcetera. So we're always open to listening as it relates to strategic partnerships, whether that be from a co-promote perspective or an investment, etcetera, so just to state that. As it relates to reimbursement in Europe, so again, just as a reminder, Daiichi Sankyo launched both NILEMDO and NUSTENDI in October. And they're currently, as we mentioned today in our press release, 28,000 patients now on therapy and not part of your question, but just want to state this is that when you look at the use of PCSK9, which were launched almost about six years ago, in total accumulation, there's 28,000 patients on PCSK9. So they essentially now have the same amount of patients on the bempedoic acid franchise as PCSK9. So really proud of their performance, I know they're really happy about it as well.

They were in a free market environment up until about just recently in Germany. And as you know, through Germany, you have to go through the AMNOG process in order to gain pricing and they have been able to do that. So it's a different type of reimbursement. They're not actually going through payors like we do here in the United States. They're going through this centralized health technology assessment and they're through that. And they're also through that in the UK with NICE where they actually had somewhat of a favorable review. As far as launching in other markets, I'll turn that over to Eric, who sits on the joint commercialization sub team to talk about any additional items that I may have missed.

Eric Warren -- Head of Sales and Marketing

Yes. Thanks, Sheldon. No, I think you've covered it well. I mean, obviously, Germany, UK is the latest endeavor and then obviously completing the ranks through the EU will be critical for our colleagues. But I just want to reinforce how excellent they've been doing from a patient uptake perspective, and that is the strategy that we are following in the U.S. with regards to the appropriate sequence of therapy.

Sheldon Koenig -- President & Chief Executive Officer

And just one last aspect -- sorry, Jason, I missed this as far as expansion in other markets. So this is typically what you see when you launch products in Europe, you go through that more defined HCA process, of which Germany and the UK are the two most defined and now they'll move to Italy, Spain and France. Those are a little bit more drawn out, but they're in the two biggest markets right now, and we can continue to update you over the next quarters.

Operator

Our next question comes from Judah Frommer with Credit Suisse. Your line is open.

Judah Frommer -- Credit Suisse -- Analyst

First just a follow-up on kind of the time lines and marketability around the CVOT. So, in terms of maybe kind of unlocking those four doors that you mentioned, do you need to wait for full results to kind of market the results to doctors? And how and when can you start the conversation with payors and maybe with the industry about changing prescription guidelines?

Joanne Foody -- Chief Medical Officer

So Judah, thank you for the question. So with respect to unlocking the four points that Eric raised, we can do a fair amount of work with payors prior to, in fact, even publication of the results. So they're in a privileged space that we can have those scientific exchanges, present the data well before, in fact, the publication. Certainly, from a promotional perspective, we -- the commercial team cannot promote until the label; however, our medical affairs team can leverage the science well before that and be proactive. We would anticipate also with a variety of publications planned, everything we would have a very robust campaign that would through the medical and scientific exchange to do that prior to the actual label.

Judah Frommer -- Credit Suisse -- Analyst

That makes sense.

Sheldon Koenig -- President & Chief Executive Officer

And maybe I could just -- maybe I could just add a couple of bullets as well. And that is post the top line result -- and again, we don't know anything about the study, but we have to operate and assume as though the study is robustly positive. There'll be eventually a presentation of the data, as Joanne has mentioned previously. And I want to remind everyone that Dr. Steven Nissen is the primary investigator of the CLEAR Outcomes trial. And I think you've seen in the past that Dr. Nissen is someone who's very passionate, etcetera, and that will give us awareness, again, of the study and the result of the study even before it's within our label, and that's very important as well. So, this will be a very big opportunity for us to disseminate as much data as we can.

But again, to Joanne's point, our representatives will not be able to promote it, but there's other ways that the information will be available to the public.

Judah Frommer -- Credit Suisse -- Analyst

Got it. And kind of on that topic, I think you press released a few presentations at AHA that are coming up. So kind of -- is that a new message? Is it more just an opportunity to see people, I think, in person again? Is the message changing in any way as you kind of get back out there at medical meetings?

Joanne Foody -- Chief Medical Officer

Yes. So Judah, thank you. So we do have three sponsored abstracts at the American Heart Association, which is one of the largest cardiovascular congresses globally. In addition, there's a very significant amount of non-sponsored work regarding bempedoic acid, NEXLETOL and NEXLIZET. I think the nice thing about all of these is that the science actually reinforces the utility of the therapies. It also highlights that there are unique individuals and responses that are actually well above where our current label is. So scientifically, I think this helps clinicians figure out, which patients they should be focusing on and the efficacy and safety of the compound in other populations. We'll continue to do that. Not only are we presenting at the American Heart, we're presenting in multiple other congresses, including diabetes congresses, cardiovascular outcome congresses.

So, continue to have a very robust publication and scientific platform to continue to support these compounds.

Operator

Our next question comes from Jessica Fye with JPMorgan. Your line is open.

Jessica Fye -- JPMorgan -- Analyst

Hey guys, good morning. Thanks for taking my question. Three for me. First, do you say that you continue to observe positive momentum and growth in key commercial metrics? Can you just elaborate on which commercial metrics you view as the key ones at this stage in the launch and go into a little more detail on how they're looking? Second, you alluded to potentially pulling out further costs going forward beyond what you already outlined a big update a few weeks back. Can you provide a little more color there on what you're thinking of? And third, the gross to net discount, at least what we calculated this year has been running at north of 50% all year. So with the low buy down now removed from the COVID card program, I know you talked about improvement. But can you talk about how you're envisioning gross to net, it's not long term, but rather in 2022 as we think about the revenue that might line up with that opex guidance you provided for next year? Thank you.

Sheldon Koenig -- President & Chief Executive Officer

Let me -- to address your first question as it relates to metrics and positive metrics and how we're measuring, etcetera. I'm going to turn it over to Eric to have comments.

Eric Warren -- Head of Sales and Marketing

Wonderful. Thanks, Jessica. And yes, there's a few key metrics that we're looking at. Well, there's a lot of metrics that we're looking at, but a few that pop out. The number of weekly prescriptions, new Rx as well as TRx are critical for us. Looking at the number of prescribers that we have is also a critical metric, looking at the depth of prescribing. So as we migrate into this new focus with an 80% personal promotion footprint, we've really increased our focus on those prescribers. So depth of prescribing is going to be really critical to us. Obviously, reach and frequency metrics are important to us as well. We're somewhere in the seven to eight calls per day, and we were able to achieve somewhere in the neighborhood of 60% to 65% reach on our targets. So these are metrics that jump off as being critical and ones that I'm monitoring on a regular basis.

Sheldon Koenig -- President & Chief Executive Officer

Thanks, Eric. Yes. So Jess, thanks for the questions. So in terms of the cost, as I mentioned, I think how you should think about that is, one, we aggressively manage the cost, two weeks ago with rightsizing the organization, which we do believe is right for the environment. We have a historical mentality of interrogating all the costs that we have in our budgeted plan. And if there is opportunity to further optimize costs without hurting the business or the trajectory of the brands, we're definitely going to do that. In terms of gross to net discounts, we're pleased with the improvements that we've made this year in net price. A couple of factors for next year. A key piece is volume growth, as we highlighted in our prepared remarks.

As volumes increase, we do expect that there's going to be improvement in net price. But we're obviously aggressively evaluating and managing our gross to net costs. And to the extent that we can improve those, we'll continue to do so.

Operator

Our next question comes from Tom Shrader with BTIG. Your line is open.

Tom Shrader -- BTIG -- Analyst

Good morning. A related question, maybe a little more pointed. Can you give us a sense of how much it will cost to finish CLEAR Outcomes? Is that the majority of R&D?

Sheldon Koenig -- President & Chief Executive Officer

Yes. Thanks, Tom. Yes, so it is. If you look at the income statement for this year, the costs associated in the R&D line are predominantly costs associated with CLEAR Outcomes, either direct or indirect costs associated with the completion of that study. And then the opex guidance for next year, which we put out that is the same sort of case. That is principally for the completion of CLEAR Outcomes. And obviously, as that study closes out and we approach top line results, the R&D expense for the organization is going to dramatically decline.

Tom Shrader -- BTIG -- Analyst

Okay. And then, the prior of comments surprised me a little bit. I thought based on your negotiated price, you didn't have a big issue with prior auth. Has something changed? Or were you simply stepping through the easier payors first? Just what's going on to make prior auth an issue [Phonetic] where you have to address it like this?

Sheldon Koenig -- President & Chief Executive Officer

Eric, you want to --

Eric Warren -- Head of Sales and Marketing

Yes. So prior auth are pretty common for branded products that are in an otherwise generic category, so prior authorizations have been a regular player for us. You'll recall in the past, though, that we had that co-pay card that was providing that full buy down for commercial patients and potentially circumventing the whole prior authorization process is negatively impacting our net price. So that's probably why you didn't hear as much about it in the past. But prior authorizations are definitely a common thread for branded products in our categories. I do fully anticipate that the prescription support program will go a long way. We're already seeing some momentum. And then ultimately, CVOT will help us ease the burden.

Operator

Our next question comes from Jeff Hung with Morgan Stanley. Your line is open.

Jeff Hung -- Morgan Stanley -- Analyst

Thanks for taking the question. Any update on negotiations with Oberland on waiving the 3Q requirements for the $15 million? And then are there specified net revenue requirements in the upcoming quarters for any of the remaining $104 million in cash and equivalents?

Sheldon Koenig -- President & Chief Executive Officer

Yes. So let me start with this, and I'll turn it over to Rick. So Overland is a partner of ours, and we work very actively with them. We're always in discussions with them, and we'll continue to work with them. But I think it's important to know that, all of us want the same thing. We want continued success of the organization. We want to reach to the conclusion of the CLEAR Outcomes trial. And therefore, the partnership just continues to work on what we need to do in order to be successful and satisfy requirements of the agreement.

Rick Bartram -- Chief Financial Officer

Yes. And Jeff, this is Rick. The $15 million net U.S. threshold that is the revenue covenant that we are related to the agreement, and we're looking forward to satisfying our obligations under that agreement and in growing net sales.

Jeff Hung -- Morgan Stanley -- Analyst

So then are there specified net revenue requirements for upcoming quarters? Or was it just -- that wasn't just a onetime thing, was it?

Rick Bartram -- Chief Financial Officer

It was the $15 million for quarters ahead.

Jeff Hung -- Morgan Stanley -- Analyst

I see. Okay. And then what is the size of the milestone that you owe Otsuka when you achieve the primary MACE in the outcome study? And can you talk about the timing of that payment and whether there's any flexibility around that?

Rick Bartram -- Chief Financial Officer

Well, for the Otsuka agreement, we don't owe Otsuka any funds. They would have a milestone payment to Esperion upon the achievement of the cardiovascular outcomes trial and incorporation into the U.S. label. That one is similar to the Daiichi agreement where we have up to $50 million payable to Esperion.

Jeff Hung -- Morgan Stanley -- Analyst

Okay. So, there's no milestones that you have to pay anyone when the Outcomes study is completed.

Rick Bartram -- Chief Financial Officer

No. No, all of the milestones that we have tied to the Outcomes study are payable milestones to Esperion from our partners.

Jeff Hung -- Morgan Stanley -- Analyst

Okay. Great. If I could get one last question in. COGS came in a little bit higher in 3Q than before. What do you attribute this to? And should we view the higher COGS as the new run rate or more of a onetime thing?

Rick Bartram -- Chief Financial Officer

Well, we also have -- thanks, Jeff. So we also have supply revenue to our partners. That has an appropriate COGS associated with that. So if you're looking at a pure net comparison to U.S. net revenue, you do have to factor in supply cost related to our partners there.

Operator

Our next question comes from Paul Choi with Goldman Sachs. Your line is open.

Paul Choi -- Goldman Sachs -- Analyst

Thank you. Good morning and thanks for taking our questions. One modeling question for us as we think about our near-term forecast, which is that I think the third-party data sources like IQVIA suggested that your prescription volumes grew low single-digit percentage versus the 10% you've reported here for the quarter. So can you maybe just clarify, if with the sales force changes or if there's been any changes with regard to third-party data reporting just as we think about our models on the forward here? And then I had a follow-up question.

Sheldon Koenig -- President & Chief Executive Officer

Hi, Paul, yes, I'm not aware of any changes as it relates to our third-party data. I think that's the best I can answer that. So, we haven't been alerted to anything. So what we're seeing is what we're seeing. So -- and it's been consistent.

Paul Choi -- Goldman Sachs -- Analyst

Okay. And then one for Joanne, which is with the 80% of events now accrued for the outcomes trial. I would suspect you're in a pretty good position if you were to take an interim look to have a sense of what bempedoic acid is doing here versus the control arm. So, I want to just ask you and the team, what your thoughts are of potentially un-blinding the study earlier, just given this high event accrual rate versus the 2023, first quarter plan and to potentially accelerate a time line for the Outcomes data release and potentially applying it to the label?

Joanne Foody -- Chief Medical Officer

Yes. So thank you for the question. At this time, we would not be looking for an interim look as we would have to spend alpha for that and potential power of the study. We are quite pleased, however, that with where we are tracking for events. In fact, its 80% was achieved earlier than the anticipated December. So right now, we are letting the study run its course to maintain the full integrity and power of the study and no intention of un-blinding. However, we are quite pleased with this tracking a bit ahead and we're doing everything in our power to pull this study in as early as possible, which includes really pushing time lines accelerating those time lines to the best of our ability.

Operator

[Operator Closing Remarks]

Duration: 46 minutes

Call participants:

Ben Church -- Investor Relations & Corporate Communications

Sheldon Koenig -- President & Chief Executive Officer

Rick Bartram -- Chief Financial Officer

Joanne Foody -- Chief Medical Officer

Eric Warren -- Head of Sales and Marketing

Michael Yee -- Jefferies -- Analyst

Joseph Thome -- Cowen & Company -- Analyst

Serge Belanger -- Needham & Company -- Analyst

Jason Butler -- JMP Securities -- Analyst

Judah Frommer -- Credit Suisse -- Analyst

Jessica Fye -- JPMorgan -- Analyst

Tom Shrader -- BTIG -- Analyst

Jeff Hung -- Morgan Stanley -- Analyst

Paul Choi -- Goldman Sachs -- Analyst

More ESPR analysis

All earnings call transcripts