SENTIMENT: Calm Amidst the Chaos
Rising interest rates. Trade wars. Chaos in the White House. Presidential hush money. You name it, we got it. Taken together, a panicked rush to "risk off" has led to technical breakdowns in both individual names and indices, all of which lead to hyper-volatility in the biotechs, which have outperformed of late. The majority of the positive fundamentals of biotech have not changed, but clearly the near-term market sentiment has. The FDA is still extraordinarily accommodative, but it ain't giving stuff that ain't working the green light. Activists are back, but no activist-related biotech M&A has been announced. Blockbusters are being launched, but not yet at blockbuster status. The cash from the tax reform is in the bank and the Big Boys are ready to spend. Some deals are getting done, although more large collaborations than takeovers. That money goes into the companies, not necessarily the shareholders pockets. But overall these are good things.
Esperion: Delivers Excellent Phase II Combo Data for BA+PCSK9
Esperion Therapeutics (ESPR:NASDAQ) has reported excellent top-line results from a Phase II trial (n=58) evaluating 180mg bempedoic acid (BA) added to PCSK9 antibodies compared to placebo and a PCSK9 Mab with a placebo adjusted 30% LDL lowering, consistent with that seen from prior non-statin studies (-27% vs. +3% placebo) at eight weeks. The drug candidate also significantly reduced hsCRP by 34% (marker of inflammation), and significantly lowered total cholesterol and apoB.
While a small, short-term study, we are encouraged that bempedoic acid (BA) continues to show both excellent efficacy and safety. The drug candidate was well-tolerated with no significant differences in AEs (32.1% vs. 23.3% pbo), SAEs (3.6% vs. 0% placebo), or muscle-related AEs (3.6% vs. 3.3% placebo). There were no differences in the rate of discontinuations due to AEs or muscle-related AEs. There were no reported elevations in LFTs.
The next big catalyst for ESPR will be the top-line data from the largest BA Phase III, the 52-week safety study on top of max tolerated statin in May.This trial completed enrollment in early 2017 and will be an important de-risking for BA's safety profile.
This recent trial was an eight-week randomized, double-blind, placebo-controlled, multicenter Phase II evaluating 180mg bempedoic acid on top of 420mg evolocumab (AMGN's Repatha) every four weeks in patients with hypercholesterolemia (LDL-C ≥ 160 mg/dL). Following a six-week screening and washout period, there was a 12-week evolocumab run-in period before patients were randomized 1:1 either to placebo or bempedoic acid. While we are encouraged by the additional LDL-C lowering on top of PCSK9 antibodies and clean safety profile, we do not expect much real-world use as ESPR is not planning any additional combo work with PCSK9s.
ESPR is poised for a busy 2018 with multiple Phase III BA data readouts expected over the next six months. The next Phase III studies to readout will be the data from the 24-week study with low or no background statin therapy and the key 52-week long-term safety and efficacy on top of max tolerated statin, both in May (Study 3 and 1, respectively). In addition, the bridging study to support bempedoic acid/Zetia combo pill is expected in August. Finally, the 52-week study in ASCVD and/or HeFH on background of max tolerated statin (Study 2) is expected in September. In our view, Phase III will be positive, which will position ESPR to file for BA approval in 2019.
Esperion is a BUY under $75 with a TARGET PRICE of $100. Shares are currently trading around $69.66.
John McCamant is the editor of the Medical Technology Stock Letter, a leading investment newsletter. McCamant has spent more than 25 years on the front lines of biotechnology investing. He has established an extensive network that includes contacts throughout the investment banking and venture capital communities. His expertise in biotechnology investments is a subject of media interest. He is frequently consulted and quoted by The Washington Post, Reuters, Bloomberg, CBS and Marketwatch.
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