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Esperion Therapeutics (ESPR) Down 5.6% Since Last Earnings Report: Can It Rebound?

Zacks Equity Research

It has been about a month since the last earnings report for Esperion Therapeutics (ESPR). Shares have lost about 5.6% in that time frame, underperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is Esperion Therapeutics due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.

Esperion Beats on Earnings and Revenues in Q1

Esperion reported earnings of $3.07 per share in the first quarter of 2019, beating the Zacks Consensus Estimate of $1.32. The company had incurred a loss of $1.73 per share in the year-ago period. The significant difference was due to one-time payment from Daiichi Sankyo Europe.

The company recorded revenues of $145.4 million in the first quarter, solely from the upfront payment from Daiichi Sankyo Europe. The company did not generate any revenues in the year-ago quarter.

Quarter in Details

Research and development (R&D) expenses increased 13.2% from the year-ago period to $46.3 million. The rise was primarily due to higher cost to support development of bempedoic acid monotherapy and combination therapy, including cardiovascular outcomes study and regulatory submissions.

General and administrative (G&A) expenses surged 103.3% year over year to $12.2 million primarily driven by costs related to support pre-commercialization activities for both the candidates and higher stock-based compensation expense.

As of Mar 31, 2019, Esperion had cash, cash equivalents and investment securities of $229.7 million compared with $136.3 million as of Dec 31, 2018.

2019 Guidance

Esperion maintained its previous guidance for collaborations revenues and operating expenses. The company expects income from collaboration and license agreement to be $150 million in 2019. R&D expense is estimated between $115 million and $120 million while G&A expense is expected in the range of $60-$65 million.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed a downward trend in fresh estimates. The consensus estimate has shifted -12.53% due to these changes.

VGM Scores

Currently, Esperion Therapeutics has a strong Growth Score of A, a grade with the same score on the momentum front. However, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.

Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Esperion Therapeutics has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.



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