Shares of Esperion Therapeutics Inc (NASDAQ:ESPR), a clinical-stage biotech focused on cholesterol-lowering treatments, popped late in Wednesday's session. As of 3:50 p.m. EST, it was still up about 17.2% following an analyst upgrade. Over the past five days, the small-cap biotech stock has risen about 36% under the assumption that, under President Trump, the Food and Drug Administration (FDA) is more likely to award an approval for its lead drug.
This little company out of Ann Arbor, Michigan has placed all its chips on its lead candidate, bempedoic acid, for the treatment of high LDL cholesterol for people who can't keep their levels under control with statins. If it earns approval, the orally available drug would become the first of its type to find its way to pharmacy shelves.
Cardiovascular disease remains the leading cause of death in the U.S. and much of the developed world. While statins are a relatively inexpensive and effective way to control cholesterol, there's a huge demand for additional therapies to keep it under control. While Esperion's candidate has largely flown under the radar, injectable therapies, such as Amgen's Repatha, are expected to generate peak annual sales as high as $5 billion.
With a recent market cap of around $693 million, Esperion appears well poised for much higher gains if its candidate earns approval.
President Trump's recent comments about what he considers an overly stringent regulatory process just ahead of a new FDA Commissioner appointment bodes well for Esperion and its candidate. Although high levels of LDL cholesterol are widely believed to lead to increased risk of heart attack and stroke, it's what regulators consider a surrogate endpoint.
It's long been assumed that Esperion will need to conduct a long-term outcome study to actually measure the rate of cardiovascular events in patients taking its drug versus those who aren't. If the FDA were to become more lenient on the use of surrogate endpoints, though, it stands to reason that bempedoic acid would have a much better chance of earning a thumbs up from the Agency without the long-term data. Esperion is running four registrational studies that should produce data around the middle of next year, although its outcome trial isn't expected to be ready for a few more years.
If the company could bump its timeline up by a few years, it would be a terrific development, but investors should remain braced for a fairly cold reception should the drug earn approval. Recent commercial launches for expensive, next-generation cholesterol therapies have been a big disappointment.
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