Esperion Therapeutics Inc (ESPR) 2014 Q1 法說會逐字稿

Good day, ladies and gentlemen, and thank you for standing by. Welcome to the Esperion Therapeutics first-quarter 2014 conference call.

At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will follow at that time. (Operator Instructions). As a reminder, this conference call is being recorded.

I would now like to turn the conference over to Miss Mindy Lowe from Esperion. Ma'am, please begin.

Thank you Howard. Good day, everyone, and welcome to the Esperion Therapeutics first-quarter 2014 earnings call. I am Mindy Lowe from Esperion, and with me today are Tim Mayleben, our President and CEO; Roger Newton, our Chief Scientific Officer; Marianne Andreach, our Vice President of Strategic Marketing and Product Planning; and Rick Bartram, our Controller.

As a reminder, this conference call is being recorded. To access the playback of this webcast, please visit the Investors section of Esperion's website at Esperion.com.

Before we get started, I would like to remind followers that the information discussed on the call today is covered under this Safe Harbor provisions of the Private Securities Litigation Reform Act. I caution listeners that the Company's management will be making forward-looking statements. Actual results could differ materially from those stated or implied by our forward-looking statements due to risks and uncertainties associated with the Company's business. These forward-looking statements are qualified in their entirety by the cautionary statements contained in today's press release and the Company's SEC filings. The content of this conference call contains time sensitive information that is accurate only as of the date of this live broadcast, May 12, 2014. Esperion undertakes no obligation to revise or update any forward-looking statements to reflect events or circumstances after the date of this conference call.

We issued a press release earlier today detailing the content of today's call. A copy can be found at Esperion.com in the Investors section.

We will begin with prepared comments from our team and then we will open the call to your questions. Now I would like to turn the call over to Esperion's President and CEO, Tim Mayleben. Tim?

Thank you Mindy. I would also like to welcome you all on the call and thank you for joining us today to discuss highlights from Esperion's first quarter. I will start by providing you a brief update on the ETC-1002 development program, review the nonclinical long-term chronic safety results, highlight a few of our scientific and clinical presentations and publications, and then cover key dates for our upcoming clinical and nonclinical results. Rick will then review a summary of the financial results from the first quarter, and we will take questions from you following.

On our conference call in early March, I told you that 2014 would be a data-rich and eventful year. I also said that the Esperion team is focused on delivering a number of important clinical and nonclinical milestones throughout 2014. As I will outline in more detail in a few minutes, I am very pleased to tell you that we are on track to meet these key milestones for 2014.

First, I want to highlight again for you just how unique 1002 really is. It is the only oral once daily small molecule therapy in the world today in mid to late stage clinical development for lowering LDL cholesterol. We say that 1002 is an NCE, or a new chemical entity, and it represents a new class of therapies for lowering LDL cholesterol.

Now, what makes this class so interesting is that it is the first non-statin oral therapy to ever show both 30% to 40% LDL-cholesterol lowering and hsCRP reduction. As you've heard us say, we believe 1002 will be the drug of choice for approximately 2 million to 7 million patients who either cannot tolerate statins or who are unable to achieve their LDL-cholesterol goal on statin therapy.

Let's turn now to the status of our clinical trials. First, I am very pleased to tell you that we completed screening and randomization for the Phase IIb 008 study in patients with hypercholesterolemia with or without statin tolerance. The trial over-enrolled and randomized approximately 350 patients at sites across the US. As you recall, the original plan was to randomize a total of 322 patients.

The primary objective of this study is to assess the LDL-cholesterol lowering efficacy of 1002 monotherapy versus ezetimibe monotherapy in patients with hypercholesterolemia with or without statin intolerance and treatment for 12 weeks.

I'm also pleased to report that in March and on plan, we initiated the Phase IIb 009 add-on to statin study in 132 patients with hypercholesterolemia who are taking a low to moderate dose of one of four different statins. The primary objective of the study is to assess the LDL-cholesterol lowering efficacy of 1002 in patients with hypercholesterolemia already receiving statin therapy.

Let's now turn to our nonclinical long-term chronic safety results. First, both the six-month safety study in rats and the 12-month safety study in monkeys are now complete and the final report will be shared with the FDA later this quarter. We have also completed the two-year carcinogenicity studies in both mice and rats. The reports from these studies will be finalized in Q4 this year and discussed with FDA next year as part of our end of Phase II meeting.

Overall, I can tell you that we are very satisfied with the outcomes of these studies, and I want to highlight the following. First, there were no unexpected findings in these studies. 1002 was well tolerated over the treatment period and at all doses tested in these studies. Final reports and results will be filed and discussed with the agency in the months ahead. As we've said previously, we expect to discuss the partial clinical holds with FDA during our upcoming end of Phase II meeting in Q2 of 2015.

Now let me try to put the nonclinical results in context. And I want you to keep in mind that 1002 continues to demonstrate its efficacy in terms of LDL-cholesterol lowering, and its safety and tolerability in multiple clinical studies and across a very broad dose range.

In terms of the implications of the most recent results on the overall safety of 1002, I want to remind you that, at the 1002 clinical development program, we have not experienced any safety or tolerability concerns. There have not been any treatment related SAE's reported to date. The adverse events with 1002 have been strikingly similar to those observed in placebo and the very modest shift in hemoglobin, uric acid, al-phos and homocysteine have not led to any clinical sequelae. Overall, we continue to be very pleased with both the safety and the tolerability profile of 1002.

So, to summarize, the Phase IIa efficacy data for 1002 have been extremely promising, the tolerability profile has been excellent, and the most recent nonclinical results from the chronic safety studies reinforce our confidence in the safety and tolerability profile. We continue to believe 1002 can play an important role in lowering LDL cholesterol levels in statin intolerant patients, and this is a patient population which we believe has the highest unmet medical need in hypercholesterolemia today. We look forward to sharing with you topline results from the 008 and 009 studies in the fourth quarter of this year.

Now, let me take a few moments just to mention that three posters featuring 1002 Phase IIa data were presented at the 2014 Annual Scientific Successions of the National Lipid Association in Orlando, Florida earlier this month. The posters provided additional detail from previously presented Phase II studies of 1002 and new data regarding blood pressure reduction with 1002.

The first poster details that 1002 has lowered LDL-cholesterol, reduced hsCRP and was well tolerated in all four of our Phase IIa studies. The second poster outlined that 1002 demonstrated a 32% lowering of LDL-cholesterol and a reduction of 42% in hsCRP levels. 1002 was well tolerated and muscle related adverse events were similar for both 1002 and placebo groups. And again, this was in a statin-intolerant patient population.

The third poster showed 1002 significantly reduced systolic blood pressure by almost 7 millimeters of mercury compared to placebo. This was in a pooled subgroup analysis of the four Phase IIa studies involving patients with hypercholesterolemia and with mildly elevated blood pressure.

All three posters are available in their entirety on the Investors section of our website. Abstracts presented at the meeting have been published in the June issue of the Journal of Clinical Lipidology, and these presentations further highlight in detail the characteristic efficacy of this novel drug in patients with hypercholesterolemia and the continued good safety and tolerability of a therapy even at the highest doses.

A manuscript on 1002 was also recently published. It is entitled LDL-cholesterol reduction in patients with hypercholesterolemia by modulation of adenosine triphosphate-citrate lyase, or what you hear us refer to as ATP citrate lyase, and adenosine monophosphate activated protein, or AMPK. This is going to appear in an upcoming issue of a prestigious Journal called the Current Opinion in Lipidology.

Finally, I just want to recap again for you the key dates for our upcoming clinical and nonclinical results. In Q4, we are going to report topline results from the Phase IIb 008 study. Also in Q4, we expect to report topline results from the Phase IIb 009 study. And finally, in Q4, we will provide summary results from the two-year carcinogenicity studies which we completed earlier this month. 2014 is going to be a pivotal year with these clinical and nonclinical results reporting out by year-end.

I want to turn the call over to Rick now to review the summary financial results from the first quarter of 2014. Rick?

Thanks Tim. As Tim mentioned earlier, we are on track to meet our milestones for 2014 and I am pleased to report that we continue to be conservative with our capital resources used in operation.

Our net loss for the quarter ended March 31, 2014 was $7.9 million compared to $4.2 million in the first quarter of 2013, which equates to a loss of $0.51 per share. This is primarily related to increases in R&D costs for the advancement of 1002 in the 008 study, the initiation of the 009 study and increases in public company operating costs.

I also want to make some comments on estimated spend for the rest of the year. We expect our R&D and G&A costs for the remainder of the year to be approximately $24.5 million and $7.5 million respectively, in addition to the first-quarter results. We estimate that our full-year EPS will be a loss of approximately $2.50 per share on 15.4 million shares outstanding.

Now, turning to our balance sheet, we ended the quarter with approximately $68.2 million in cash and investment securities and no debt. As we stated on our last earnings call in March, we continue to expect that our current cash, cash equivalents, and investment securities will be sufficient to fund our operations through the end of 2015. We currently have 15.4 million shares of common stock outstanding with another 1.7 million to be issued upon the exercise of options and warrants.

With that, I'll turn the call back over to Tim.

Thank you Rick. Just before we open the call to your questions, I want to announce that we will be hosting our inaugural investor day in New York City in late July. We will distribute details regarding the event in the coming weeks and hope that you will join us to learn more about Esperion and especially the work done in the two programs.

We will now open the call to your questions. Howard, if you would poll for questions please.

(Operator Instructions). Jonathan Eckard, Citi.

Hi guys. Thanks for taking the call. I guess I was just wondering. I think you're going to present the data from the product tox studies later in the year. And I think you also mentioned about talking with the FDA in the first quarter, is that when you have both the KARK and that data in hand as you have that discussion?

Jon, thanks for the question. This is Tim. I think, just to clarify a couple of things, one, with respect to the nonclinical safety results from the animal studies, we are not planning to present those. We are planning to provide those or submit them to the FDA, which is what we would normally do, what a sponsor would normally do with those drug safety results. So, that's what we plan to do. In fact, we expect to be able to do that this quarter. As I mentioned in our prepared comments, which, again, were brief but we are happy to take any additional questions that you might have on those, we wouldn't have any unexpected findings there. I think, as you've heard us say earlier, we didn't see any fatality that we had seen in that what we are calling an anomaly in the earlier study. And then you are right. We will have the carcinogenicity studies available in the fourth quarter and we plan to provide all of those to that end of -- to the FDA as part of our end of Phase II briefing package.

Okay, great. And then I'm not trying to have you point to a more definitive time, but both Phase IIbs are going to be reading out in the fourth quarter, yet they still started on different timelines. Is there any reason to think that the one that started first could be the one that we're going to see first during that three-month period, or how should we be thinking about those coming out when we see the data?

Thanks, Jon. We have been trying to keep a general focus on Q4, but I think it's reasonable to expect that we'll see the 008 results earlier than the 009 results, before we see the 009 results. I think that is the right way to think about it.

Okay. I'll let other people ask questions and I'll get back in queue. Thank you.

Jason Butler, JMP Securities.

Thanks for taking the question. And acknowledging that you don't want to linger too much on the nonclinical safety studies, could you maybe put into context for us exactly what you could have been looking for in these (technical difficulty) specifically related to the first of the two clinical holds, that those clinical holds -- if you could just put into context why the FDA put that clinical hold in place and what you are looking for potentially from these studies.

So, thanks for that challenging question. I think, just to go back for yours and others benefit, the partial clinical hold that you are referring to related to the upper dosing beyond 240 milligrams. And I think what we had previously indicated was that the partial clinical hold was related to exposure levels or vitality in this 13-week monkey study. And if you recall, that was at the 60 milligram per kilogram per day dose.

As we just summarized or I just summarized in our prepared comments, we did not see any of that in the most recent study, which was consistent with the results that we had seen in prior studies. But I should probably also go back and just remind you, and I know we have not always been clear about this, but keep in mind and that the partial clinical hold that I think you're asking about and which we've commented on has not impacted the development or impeded our clinical development of 1002. We have not intended to go beyond the 240 milligram dose, so it was really more of a theoretical exposure issue that the FDA was addressing than a practical one. And of course, we've been responsive to that, both in terms of our clinical study designs not going above that 240 milligrams, but we fully expect that this data is pretty conclusive, that whatever we saw in the prior study was more of an anomaly, and that these data are more consistent with the prior data and are conclusive at this stage, which, as we said earlier, we will be submitting these to the FDA, and really asking them to look at the relevance of that product program.

Okay, that's helpful. Thanks Tim. And then just again acknowledging these are not the two-year carcinogenicity studies, is there anything that you can say from the study reports from the monkey and rat studies that you have completed that gives you comfort about any signal of carcinogenicity or any signal of dysplasia or anything in that line of thinking?

I'm going to ask Roger to go ahead and tackle that question.

Thanks for the question. I think the long-term tox, as you know, was 52 weeks in monkeys, and six months in rats. The intention of that study was not to in any way look at carcinogenicity. That's separate design study at different doses, and it's done in rats and mice over a two-year period. So, there's really no link or connection that you can make between the long-term tox studies and the carcinogenicity studies. They are two entirely separate objectives and purpose for the safeties in the compound.

Okay, that's great. Thanks a lot for taking the questions.

Brian Klein, Stifel.

Hi guys. Thanks for taking my questions and congrats on a nice progress this quarter. I don't mean to beat a dead horse here, but again, in terms of the carcinogenicity and the partial clinical hold, I guess my question relates to how quickly do you think that partial hold can be removed? I know that it's not impacting your clinical development right now, but it could impact it as you head towards a Phase III program following success in Phase II. So, I just want to get a little bit more clarity on when that could be (technical difficulty)

No, it's a very good question, and don't mind you continuing to query about it. I think, first of all, we can't and don't want to speak for the FDA on this. What we have consistently said is that we expect that the time for FDA to respond or to comment on the partial clinical holds is at the end of Phase II meeting. We continue to believe that, because we don't have any signal from the FDA at this stage, that they are going to be willing to entertain something sooner than that. If they do, we will certainly be out letting you know that. But at this stage, we expect that it's reasonable to expect the FDA to respond at the end of Phase II meeting.

Okay, that's fair. Thank you. And then my next question is in regards to study 09. Obviously, if we look at 08, you've done very successfully. You've completed enrollment of 350 patients. And I'm just wondering in the 09 study, do you feel that you are evaluating ETC-1002 in a sufficient number of patients in each arm, or is there potentially an opportunity to broaden that trial to a greater number of patients?

Again, that's a good question. And in fact, it's interesting that you ask it, because we've pressed on that internally a few times, again, comparing I think probably as you're doing, comparing the size of the two trials and wondering if we need to do something larger. And it turns out that the statistics are just so compelling at the approximately 42 patients in arm, or 44 patients in arm, that we just have not seen a need to increase the size of that trial. And maybe off-line, we can just run through the statistics with you, but it does give us really nice power to lift the 132 patients. So in fact, if you want, I can just run through that. We have 90% power to show a difference of 15% in LDL-cholesterol between the groups, so it's pretty compelling.

Great, thanks. And just the last question here. In terms of looking at the competitive landscape and looking at how in particular PCSK9s are undergoing outcome studies, do you still feel that you will not be required to do an outcome study prior to getting an approval? Thanks.

That's a good question, Brian, and, again, I think it's one that we have been very consistent on. Compared to the PCSK9 sponsors, we have a very focused clinical development program. We are focused on what we call the area of highest unmet need in hypercholesterolemia today, a real specialized population, which are the statin intolerant patients. These are patients that are treated primarily by lipidologists or specialized cardiologists. And in fact, Roger and Marianne were at the National Lipids Association meeting here a couple of weeks ago, and they had an entire session just on statin intolerance, again, because one of the focuses or foci of lipidologists is the statin intolerant patient population. So, the specialized patient population is our area of clinical focus. It's an area of high unmet medical need. There are no other good therapies out there today delivering the kind of LDL-cholesterol lowering that statin and ETC-1002 have demonstrated. And so we continue to believe that a CDL kind of trial is a postapproval event and not a preapproval requirement. And I'd be happy to discuss that off-line with anybody if they'd like.

Great. Thank you for taking my questions.

Jason Kantor, Credit Suisse.

This is Jeremiah filling in for Jason. As in regards to the nonclinical study that you guys have (technical difficulty) is there any nonclinical study that you still have ongoing that the FDA has requested? And then also, as a follow-up to that, when do you expect to present all of the data the FDA has requested this year?

So, good questions, thanks for asking those. So, with respect to the nonclinical, any additional nonclinical studies, I'm happy to tell you that we do not have any other required studies, nonclinical studies. This is -- I think we said that this is the last of the studies that we need to do. We recently completed, as we said in our prepared comments, the two-year carcinogenicity studies, so that really concludes that part of development.

In terms of presenting the data, I think it would be highly unusual for a -- maybe unprecedented -- for a sponsor of a therapy like 1002 to present nonclinical data, at least prior to approval. I think sometimes you see papers written postapproval about nonclinical results or about class results from different classes of drugs.

But this is -- our audience for the nonclinical is really the FDA. So we will be submitting these reports to the FDA. As we like to say, if there were anything unusual in these results, we would be obligated to report those to you as we did, and investors, as we did in the S-1 with respect to some of the unexpected findings that we had seen in some of our earlier results. But that's not the case here. So yes, don't look for anything more from us on that other than our submission, like I said, to FDA.

And in regards to 008, when do you expect to present the full results from that study? Is that this year potentially or is more of a (technical difficulty)

That is a good question as well. It's a little bit early for us to say conclusively, but if you look historically from the time that we report topline results until the time that we have full results, it's generally five to six months. And that's because our goal is to present those data in a peer-reviewed setting. And so there's a pretty long lead time for review of manuscripts and publications -- or sorry, presentations at major meetings. So, we will take the additional time to make sure that we are resenting those in the appropriate period setting.

Thank you for taking the question.

(Operator Instructions). George Zavoico, H.C. Wainwright.

Hi, Tim, thanks for the added information. I have a question regarding the objectives of the two trials, the 008 and the 009 study. One is lowering LDL, and the second seems to be meeting the target. So, in terms of further development, can these be bundled into a single indication, or will they face separate indications? Or in the first trial, in the 08 trial, do you want to reach target or do you just want to show that you can reduce LDL significantly?

This is Tim. I'll start and then maybe ask Marianne to comment. The two trials for 08 and 09 are -- the primary endpoint for both is LDL-cholesterol lowering. So, one is compared to an active comparator, and that's ezetimibe, that's in the 08 study. So it's a LDL lowering ETC-1002 compared to the LDL-cholesterol lowering of ezetimibe, not a placebo. Again, it's an active comparator in the 08 study.

In the 09 study, we are taking patients who are on statin therapy already, and we are comparing the LDL lowering of statins alone with -- or with the statin alone with a statin plus ETC-1002. So it's still LDL cholesterol-lowering as the primary endpoint but it's incremental LDL lowering on top of the statin.

Anything that you would add, Marianne?

The only thing on top of that, George, to say with respect to the percentage of patients who get to the goal, that's prespecified as the secondary endpoint. The most important thing for us and I think for the investigators and for the patients looking at these studies is the degree of LDL-cholesterol lowering that we are going to be able to achieve in 12 weeks.

I think the second piece of it that's incredibly important, as you referenced, was to be able to measure how many patients were able to get to an established treatment goal as a result of what group they were randomized to in the trial.

Okay, so, basically, it sounds like you will be able to bundle, so basically it will be 1002 in combination with the standard ezetimibe to get to goal, or just to get to a much better level?

That's a great comment. This is Marianne again. The key objective of the 08 study is to evaluate the effect of ETC-1002 on LDL cholesterol in comparison with ezetimibe. And as you're noting, we also have the two arms of that trial that are going to allow us to explore what the combined effect of ETC-1002 with ezetimibe might be on LDL cholesterol. So, the primary endpoint is getting to the monotherapy effect. But this enables us to get a first look at what might happen when you put the two together, and that ties into your other comment about is this a way to help patients to better get to goal. So, the only way we can understand that is by conducting the trial. And as we think about what we want to do in future studies, specifically on pivotal trials, this will be extraordinarily important.

Okay, yes, that makes a lot of sense. Great. Thank you very much.

Thank you. Showing no additional participants in the queue, I'll now conclude the Q&A portion of the call. I would like to turn the call back over to Tim Mayleben for closing remarks.

Thank you Howard. I want to thank all of you for joining our call today and for your continued interest in 1002 and Esperion. 2014 continues to be an exciting year and we look forward to continuing to update you on our progress.

Ladies and gentlemen, this concludes today's conference for Esperion Therapeutics. You may now disconnect. Thank you and have a wonderful day.