What happened

Shares of Esperion Therapeutics (NASDAQ:ESPR) fell nearly 37% today, after the biopharma announced mixed top-line results for its lead drug candidate in a pivotal phase 3 study. Bempedoic acid was evaluated as a treatment for lowering low-density lipoprotein (LDL), otherwise known as "bad cholesterol," in patients already taking statins. While it met its primary endpoint for efficacy compared to placebo, more patients taking the drug candidate died compared to those taking placebo.

The safety data could thwart the drug candidate's ability to gain marketing approval from the U.S. Food and Drug Administration, which is under no pressure to approve drugs in a crowded cholesterol-therapy market.

As of 2:30 p.m. EDT, the stock had settled to a 31.5% loss.

A graph drawn on a chalkboard showing steady gains followed by abrupt losses

Image source: Getty Images.

So what

The phase 3 trial evaluated 2,230 patients taking statins to control LDL cholesterol levels; they were given either bempedoic acid or placebo in addition to their normal medication. After 12 weeks, patients receiving the drug candidate saw an additional 20% drop in blood lipid levels compared to those taking placebo; the benefit was 16% after one year of the study. Both met the primary endpoint.

However, 1% of patients taking bempedoic acid died over the course of the study, compared to just 0.3% of patients taking placebo. It may not seem like much, but considering that tens of millions of Americans take cholesterol-lowering drugs, even a 1% risk of death could become a sticking point at the FDA.

The safety data could complicate Esperion Therapeutics' strategy in the lipid management market, which hinged on offering a low-cost alternative to PCSK9 drugs from Amgen and Regeneron. While that class of drugs can reduce bad cholesterol up to 60%, they also cost up to $14,000 per year, according to STAT. Bempedoic acid is projected to cost just a fraction of that -- $4,000 per year -- if it hits the market. But that became much less certain after the latest data.

Now what

The next step for Esperion Therapeutics is to complete a follow-up phase 3 trial by September 2018, after which it plans to submit a new drug application to the FDA sometime in early 2019. Wall Street analysts will be eagerly watching developments in the clinic and the cholesterol-drug market more broadly, including any plans by Amgen and Regeneron to lower prices for their own drugs. Either way, the latest events have severely dampened this development-stage company's future prospects.

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