What happened
The company's progress in developing bempedoic acid, a cholesterol-fighting drug, sparked a massive 425.9% rally in Esperion Therapeutics (ESPR +4.71%) in 2017, according to S&P Global Market Intelligence.
So what
Statins are the most prescribed drugs in the world. However, statins don't work for everyone, and that means there's an unmet need for new treatment options that help patients reach their cholesterol targets. There are approximately 40 million patients in the U.S. taking cholesterol-lowering drugs, 13 million patients of whom haven't achieved their goal.
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In 2015, a new class of drugs called PCSK9 inhibitors came to market to try to fill the need for new treatment options, however, those complex biologics hit the market with sky-high price tags. As a result, their sales have fallen far shy of expectations. Total PCSK9 prescriptions were still less than 10,000 two years after the drug was launched
Rather than creating a complex biologic, Esperion Therapeutics is taking a different approach that it believes will allow it to come to market at a lower cost and get more widely used.
The company's drug is bempedoic acid, a drug that works upstream of statins to reduce cholesterol production in the liver. Unlike statins, bempedoic acid only becomes active in the liver, which may reduce the risk of muscle weakness that can sometimes be associated with taking statins. Because bempedoic acid has a unique mechanism of action, it can be used alongside statins to enhance cholesterol lowering. It may also prove to be effective when used alongside Zetia, another common cholesterol-lowering drug that reduces reabsorption of cholesterol in the gastrointestinal tract.
Phase 3 trials evaluating bempedoic acid's use alongside both statins and Zetia are ongoing, and data is expected later this year. In phase 2, adding bempedoic acid to statins provided an additional 20% of bad cholesterol lowering, and adding it to Zetia lowered cholesterol by 48%.
Now what
At their peak, the best-selling statin Lipitor was hauling in about $13 billion annually in sales, while Zetia was raking in about $4 billion per year in sales. Clearly, Esperion Therapeutics is trying to tap into a very big market opportunity.
In 2018, we'll find out if investors were right to chase Esperion Therapeutics shares higher last year. If phase 3 studies confirm phase 2 efficacy and safety, then an FDA filing for approval is planned for early in 2019. That timeline suggests the possibility of approval late in 2019 or early in 2020.
Overall, there's no guarantee that bempedoic acid's trials will pan out, but given the size of the market opportunity, my plan is to hold onto my Esperion Therapeutics shares and accept that risk of failure.
