Esperion (ESPR) Q2 Loss Narrower Than Expected, Drug Price Up
Esperion Therapeutics, Inc. ESPR incurred loss per share of $1.67 per share in the second quarter of 2021, narrower than the Zacks Consensus Estimate of a loss of $1.82 per share. The company had recorded earnings of $4.32 per share in the year-ago period.
The company generated revenues of $40.7 million, narrowly missing the Zacks Consensus Estimate of $41.13 million. The company had recorded revenues of $212.2 million in the year-ago quarter. The significant decline was due to lower milestone payments during the reported quarter. However, the company’s drugs — Nexletol and Nexlizet — exhibited strong growth on net price increase and continued demand improvement.
Shares of Esperion declined 4.8% on Aug 3, following the mixed second-quarter earnings. In fact, Esperion’s stock has lost 45% so far this year compared with the industry’s 11.1% decrease.
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Quarter in Details
Esperion launched its first commercial drug — Nexletol — in March 2020 followed by Nexlizet in June in the United States. Please note that while Nexletol is a bempedoic acid monotherapy tablet, Nexlizet is a combination of bempedoic acid and Merck’s MRK Zetia (ezetimibe) that are approved for treating elevated LDL-C (bad cholesterol).
Both these drugs received approval in Europe in April 2020. In Europe, Nexletol is available as Nilemdo and Nexlizet as Nustendi. Daiichi Sankyo, Esperion’s collaboration partner for Europe, launched the drugs in Germany in November 2020. Esperion records royalty on sales of its drugs in Europe.
Product revenues, solely from the United States, were $10.6 million in the second quarter compared with $0.6 million in the year-ago quarter and $6.4 million in the previous quarter. The company stated that prescriptions for its drugs were up 28% year over year. The increase in sales was driven by strong demand as well as improved net price for the drugs.
The company recorded royalty revenues of $1 million during the reported quarter, compared with $0.6 million in the previous quarter. The drugs continued to show strong momentum in Europe. Including this royalty revenues, the company recorded collaboration revenues of $30 million in the second quarter compared with approximately $211.6 million in the year-ago quarter. The company had recorded milestone payments of $60 million and $150 million from Otsuka Pharmaceuticals, its Japanese partner, and Daiichi Sankyo, respectively, in the second-quarter of 2020. In the reported quarter, the company recorded $30 million in upfront cash from Daiichi Sankyo following expansion of their licensing agreement in April, granting rights to Esperion’s drugs to the latter in additional countries.
Research and development (R&D) expenses decreased 28.3% from the year-ago period to $25.1 million due to lower clinical activities.
Selling, general and administrative expenses (SG&A) were down 2.9% year over year to $46.3 million.
As of Jun 30, 2021, Esperion had cash, cash equivalents and investment securities of $219.2 million compared with $217.9 million as of Mar 31, 2021.
2021 Guidance
Esperion maintained its guidance for R&D and SG&A costs in 2021. The company anticipates R&D expense for 2021 to be in the range of $120-$130 million. SG&A expense is expected to be between $200 million and $210 million.
Our Take
Esperion beat expectations for earnings while missing the same for sales. The company’s drugs continued to garner strong demand in the United States. The drugs have been prescribed to nearly 48,000 patients in the country. The company stated on its earnings call that it observed strong growth in prescribing physicians and prescriptions per physician during the quarter.
The drugs were also added to one of the largest health care plan providers in the United States, Humana’s HUM formulary in May. The company is also in discussion with other payers to add the drugs to their lists. Addition to payers’ lists will improve patient access and likely drive demand for the drugs.
Moreover, net price for the drugs increased during the quarter. The company stated on its earnings call that it expects the improvement in net price to continue in the second half of 2021.
The expected rise in volumes and improving net price are likely to drive product sales for the company higher going forward. Although the company remains concerned about rising cases of Delta variant, it observed improving trend in physicians returning to office. Moreover, rising vaccination is likely to aid this improvement.
Esperion Therapeutics, Inc. Price, Consensus and EPS Surprise
Esperion Therapeutics, Inc. price-consensus-eps-surprise-chart | Esperion Therapeutics, Inc. Quote
Zacks Rank & Stock to Consider
Esperion currently carries a Zacks Rank #5 (Strong Sell).
Ironwood Pharmaceuticals, Inc. IRWD is a better-ranked stocks from the same sector carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Ironwood’s earnings per share estimates have moved north from $1.04 to $1.08 for 2021 and from $1.18 to $1.20 for 2022 in the past 30 days. The stock has risen 14.2% so far this year.
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