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Esperion Positioned to Capitalize on Phase III Trials

- By Joshua Rodriguez

Esperion Therapeutics Inc. (ESPR) has made it to the CNA Finance focus list, based on its significant market opportunity and well capitalized business structure that should offer little resistance to progressing through its stated initiatives.

The company is committed to applying its scientific expertise in cholesterol biology to transform the lives of millions of patients suffering with elevated LDL-cholesterol levels with targeted focus on those patients considered statin intolerant.

Esperion initiatives

Esperion has two Phase III products in trial with an established regulatory pathway for approval.

Esperion 's first product is Bempedoic acid, an innovative, complimentary, nonstatin LDL-C lowering therapy. Significant benefits include its convenient, once-daily oral dose and its ability to inhibit ACL. It has shown a 30% LDL-C lowering and up to 40% lowering for hs-CRP (high sensitivity C-reactive protein). The therapy has been shown to be safe and well tolerated with no serious or unexpected adverse events.

The company's second product is BA+EZ, an innovative, complimentary, nonstatin LDL-C lowering therapy combining bempedoic acid and ezetimibe. Like BA, the therapy offers a convenient, once-daily dosing and is orally delivered. The therapeutic effect has shown up to a 50% LDL-C lowering and up to 26^ hs-CRP lowering. Similar to BA, BA+EZ has demonstrated no serious or unexpected side effects, and the drug has been well tolerated.

Both therapies are targeting unmet medical needs of patients with hypercholesterolemia at high CVD risk.

Benefit of Esperion therapy

An approved Esperion therapy will address a significant global health problem, cardiovascular disease. It's the No. 1 cause of death globally and accounts for one of every three deaths in the U.S.

Esperion is taking advantage of a market that has already acknowledged the benefit of lowering LDL-C levels and its association to the reduction in cardiovascular disease risk. In fact, it is recognized that elevated LDL-C is the top modifiable lipid risk factor in cardiovascular outcome studies.

The BA therapy is a prodrug that requires activation by a liver-specific enzyme, acyl-CoA synthetase, to form the active ETC-1002-coenzyme A. This enzyme inhibits cholesterol synthesis, promotes LDL receptor up-regulation and lowers plasma LDL-C. This enzyme is not present in skeletal muscle, resulting in far less potential for muscle-related side effects.

In the BA+EZ study, efficacy has been shown to be comparable to current injectables and has shown reduction in hs-CRP. An IND (Investigational New Drug) was accepted for this therapy in June 2016, and specific patent filings are in process to protect the proprietary features. Additionally, this therapy has successfully completed a bioavailability study in the fourth quarter of 2016 with tablet formulation selected for development and commercialization.

Pivotal Phase III studies and 2017 milestones

Esperion has four pivotal Phase III studies in action related to these enzymes with top-line results expected to be announced in mid-2018. While the results are far off for nearsighted investors to appreciate, the data already released is encouraging; coupled with the financial strength of Esperion , it is likely the stock will continue on its upward trajectory.

In the first half of 2017, Esperion expects to further define its regulatory pathway for both BA and BA+EZ, initiate a Phase II Triplet Oral Therapy study and present and publish top line data results from its 1002-035 trial. Additionally, Esperion is expected to initiate a Phase II PCSK9i trial.

The second half of 2017 should provide additional milestone activity with the expected completion of patient enrollment for all of its pivotal global Phase III, LDL-C lowering efficacy studies and is further expecting to release top-line results from its Phase II Triplet Oral Therapy study.

Capital position

Esperion is well funded with approximately $260 million in cash on hand, allowing for the ability to fund all operations through the anticipated completion of the BA Phase III program in 2018. The current financial position will further facilitate the expected NDA global regulatory submissions expected to take place in 2019.

The company has approximately 22.55 million shares outstanding and of that number, roughly 13.5 million trade in the public float. The company enjoys significant insider ownership with more than 31% of the stock owned by insiders as of the latest filing. Additionally, institutional ownership is strong with approximately 76% of the outstanding shares being owned by institutional based investors.

The stock has a short interest of roughly 2.75 million shares, or 22.7% of the float, which may provide fuel to the current uptrend in the stock.

Esperion outlook

Based on its strong clinical and financial position, Esperion is a stock worthy of investor attention. To date, the clinical trial data has been extremely encouraging, and with a regulatory pathway already in place, getting in front of this trade may prove to be a wise consideration. Buoyed by a strong balance sheet, Esperion eliminates much of the near-term headline risk, and as 2017 milestones are announced, share prices have the potential to appreciate further.

At just over $22 per share, and with a market cap of only $474 million, Esperion is not unreasonably priced by any measure, and with the multibillion-dollar market potential, the company may prove to be a value at current levels.

Disclosure: This article expresses my own opinions. I do not hold, nor do I plan to hold any position in any stock mentioned within this article within the next 72 hours.

This article was originally featured on CNA Finance.

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