Esperion Therapeutics (ESPR -6.49%) reported positive results from the last four pivotal phase 3 trials of its cholesterol-lowering drug, bempedoic acid, on Oct. 29. The successful study clears the way for management to file for FDA approval of bempedoic acid next year, putting it on pace to battle for a share in a multibillion-dollar treatment market. Here's what the company's telling investors about its future. 

First, a bit of background

According to the Centers for Disease Control and Prevention (CDC), roughly 735,000 Americans suffer a heart attack and about 610,000 people die every year because of heart disease in the United States alone.

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Many factors can contribute to heart disease, but high cholesterol is one of the key risk factors. Because Western diets that contribute to obesity and diabetes often lead to high bad cholesterol, or LDL-C, levels, tens of millions of Americans take drugs called statins to reduce cholesterol production in the liver, including one-fifth of Americans between the ages 40 and 75.

Statins have become the most commonly prescribed medications in the world because of their ability to lower LDL-C. However, many patients taking statins fail to reach the LDL-C target that's set by their doctor and many others discontinue statins because of side effects, including muscle weakness. Overall, up to 45% of patients discontinue statins within six months, according to a study published in the Annals of Internal Medicine, putting them at increased risk for a major cardiovascular event. 

An advance in treatment

To help patients hit their LDL-C targets, Esperion Therapeutics developed bempedoic acid, a drug that works upstream of statins to reduce cholesterol production. 

Because bempedoic acid has a different mechanism of action than statins, Esperion Therapeutics believes it can be used in combination with statins to help people achieve their LDL-C targets, or as a monotherapy in patients who can't tolerate statins.

To prove bempedoic acid's effectiveness, management conducted five separate phase 3 trials involving thousands of patients. Two trials evaluated its use in patients who couldn't tolerate statins; two trials evaluated its use alongside the highest-tolerated dose of statins; and one trial evaluated a combination pill comprising bempedoic acid and Zetia, a multibillion-dollar cholesterol-lowering drug used in patients with stubbornly high cholesterol.

Bempedoic acid met its primary end points for reducing bad cholesterol more than placebo in each trial, lowering LDL-C by an additional 18% to 31% in patients taking statins. Patients who took the bempedoic acid and Zetia combination pill alongside statins saw a 35% reduction in bad cholesterol levels.

What's on tap next

The company plans to present data from "study 3" of its phase 3 trials at the American Heart Association Scientific Sessions in Chicago, which runs from Nov. 10 to Nov. 12. In that study, bempedoic acid lowered LDL-C by 26% in patients who were considered intolerant to statins. 

The presentation could spark investor interest, but more important is the company's timeline for securing approval of bempedoic acid in the U.S. and Europe, the world's two biggest prescription-drug markets.

Esperion Therapeutics believes it will be able to file bempedoic acid and the combination pill for FDA approval in the first quarter of 2019, and if it delivers on that goal, then the FDA could issue a go/no-go decision on it before the end of 2019 or in early 2020. In Europe, management's plan is to file for approval with European Union regulators in the second quarter of 2019, so it likely won't get a go-ahead in Europe until 2020.

There's the risk that regulators don't approve bempedoic acid, but I think its efficacy favors it. If I'm right, then its peak sales opportunity could be determined by pricing. In addition to statins, doctors can prescribe PCSK9 inhibitors that increase cholesterol receptors in the liver. PCSK9 inhibitors can lower LDL-C by 60% and, similar to statins, studies have proven that they reduce the risk of heart attack and stroke. Bempedoic acid won't have results from a similar cardiovascular outcome study for a few more years, but PCSK9 inhibitors are expensive and injected, rather than taken orally. Therefore, there could be an opportunity to position bempedoic acid in between statins and PCSK9 inhibitors if prices are low enough.

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Could this drug be a top seller?

The potential associated with widespread use in this market is undeniably big. Peak sales for Lipitor, the most widely prescribed statin in history, eclipsed $13 billion per year prior to losing patent exclusivity, and Zetia was bringing in over $2 billion in annual revenue at its peak, too. Despite their limited use because of their cost, PCSK9 inhibitors still generate hundreds of millions of dollars per year in sales. 

Profiting from bempedoic acid's potential, however, is going to require a lot of prep work by Esperion Therapeutics' management, and that means Esperion is going to have to make big investments in manufacturing, sales, and marketing ahead of approval to hit the ground running. The company could lower its costs by licensing bempedoic acid to a larger company, but there's no sign of that happening yet, so investors should model for Esperion Therapeutics' spending to increase in the coming year. 

Having said that, management's sitting on $164.4 million in cash and investment securities, and it says that's "sufficient to fund operations through the expected approvals of the bempedoic acid / ezetimibe combination pill and bempedoic acid in the first quarter of 2020." 

Overall, Esperion Therapeutics has successfully run multiple, large trials proving bempedoic acid's efficacy, but now it has to make the difficult transition from clinical-stage to commercial-stage company. It can be common to see companies suffer bumps and bruises when making that leap, so investors ought to keep that in mind as we head into 2019.