Why Is Esperion Therapeutics (ESPR) Down 1.5% Since Last Earnings Report?
It has been about a month since the last earnings report for Esperion Therapeutics (ESPR). Shares have lost about 1.5% 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 catalysts.
Esperion Q1 Earnings and Revenues Beat Estimates
Esperion incurred a loss of $2.26 per share in the first quarter of 2020, narrower than the Zacks Consensus Estimate of a loss of $3.14. The company had incurred loss of $2.24 per share in the year-ago period.
The company generated revenues of $1.8 million, which beat the Zacks Consensus Estimate of $1 million. The company had recorded revenues of $145.4 million in the year-ago quarter.
Quarter in Details
Revenues in the reported quarter included $0.8 million of net product sales of Nexletol and $1.0 million in collaboration revenues, primarily from Daiichi Sankyo.
Research and development (R&D) expenses decreased 25.1% from the year-ago period to $34.7 million. The decline was mainly driven by lower costs following the completion of enrollment in the ongoing CLEAR CVOT study.
Selling, general and administrative expenses (SG&A) were $41.6 million, compared with $12.2 million in the year-ago period. The significant increase was primarily due to costs to support commercialization activities for Nexletol and Nexlizet.
As of Mar 31, 2020, Esperion had cash, cash equivalents and investment securities of $158.2 million compared with $201.7 million as of Dec 31, 2019.
2020 Guidance Updated
Esperion provided updated guidance for 2020 collaboration revenues and operating expenses. The company continues to expect a milestone payment of $150 million from Daiichi Sankyo, upon first commercial sale in Europe. The company recorded $60 million in upfront payment from Otsuka Pharmaceuticals in April.
The company anticipates R&D expense for 2020 to be lower in the range of $135-$145 million, compared with $145-$155 million expected previously. SG&A expense guidance was also lowered to the range of $200-$210 million from $225-$235 million previously expected. The decline in operating expenses guidance was due to changes in planned operating expenses as result of COVID-19 environment and other adjustments.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in estimates revision. The consensus estimate has shifted -190.49% due to these changes.
VGM Scores
At this time, Esperion Therapeutics has a poor Growth Score of F, however its Momentum Score is doing a lot better with an A. However, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward 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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