Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What: Following news that it has priced its public offering at $100 per share, shares in Esperion Therapeutics (NASDAQ:ESPR) are soaring by more than 10% today.
So what: Esperion Therapeutics will bulk up its cash war chest by offering 1.75 million shares of its common stock at a price of $100 per share. The company has also approved an over-allotment program consisting of an additional 262,500 shares.
The move will provide the company with valuable financial flexibility to advance its promising cholesterol-busting drug ETC-1002 into late stage clinical trials.
Earlier this week, Esperion Therapeutics reported that ETC-1002 had put up impressive results during phase 2 trials. In those trials, adding a 120 mg dose of ETC-1002 to traditional statins helped patients' bad cholesterol levels drop 17%. Patients taking a 180 mg dose did even better, netting a 24% drop in LDL cholesterol levels.
Now what: Statins are the most widely prescribed medicines in America, and pharmacy benefit manager Express Scripts estimates that as many as 71 million Americans have high cholesterol levels. As a result, there could be a significant market opportunity for ETC-1002.
The market for statins is roughly $20 billion and an increasingly larger and longer-living population could mean that there will be a willing market for ETC-1002 if it can put up similarly strong results in phase 3. Given that the market offers billion dollar blockbuster potential and the fact that Esperion's founder is the co-inventor of Lipitor, the globe's top selling statin, there's a lot to like about this company. That said, Esperion is a clinical stage company without revenue or a product on the market, and that means that it remains best-suited for risk tolerant investors.
Todd Campbell has no position in any stocks mentioned. Todd owns E.B. Capital Markets, LLC. E.B. Capital's clients may or may not have positions in the companies mentioned. The Motley Fool recommends Express Scripts. The Motley Fool owns shares of Express Scripts. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.