Esperion (ESPR) Q2 Earnings Top, Drug Sales Hurt by Coronavirus
Esperion Therapeutics, Inc. ESPR recorded earnings per share of $4.32 per share in the second quarter of 2020, significantly higher than the Zacks Consensus Estimate of $2.13 per share. The company had incurred loss of $2.01 per share in the year-ago period.
The company generated revenues of $212.2 million, which were marginally less than the Zacks Consensus Estimate of $213.0 million. The company had recorded revenues of $1.0 million in the year-ago quarter.
Esperion’s stock has declined 38% so far this year compared with the industry’s 5% decrease.
Quarter in Details
In February, the FDA approved the company’s two drugs — Nexletol and Nexlizet — as a treatment for elevated LDL-C (bad cholesterol) in patients with hypercholesterolemia or mixed dyslipidemia. Please note that while Nexletol is bempedoic acid monotherapy tablet, Nexlizet is a combination of bempedoic acid and Merck’s MRK Zetia (ezetimibe).
The drugs were launched virtually amid the COVID-19 pandemic. While Nexletol was launched in March, Nexlizet was launched in June. COVID-19 led to lower new patient starts for both the drugs due to lower accessibility of patients and customer-facing team to doctors. However, the trends improved in July. The company said that prescription volume in July was 97% higher than June despite rising infection rates in the country.
Meanwhile, the company has achieved high-quality and broad managed care coverage with more than 80% commercial coverage and more than 50% Medicare Part D coverage for both drugs in the United States
Both these drugs received approval in Europe in April. In Europe, Nexletol will be available as Nilemdo and Nexlizet as Nustendi. Please note that the company has an agreement with Daiichi Sankyo to commercialize Nilemdo and Nustendi in Europe. Daiichi will initiate commercial rollout of the drugs in Europe in the fourth quarter.
Revenues in the reported quarter included $0.6 million of net product sales of Nexletol and $211.6 million in collaboration revenues. Product sales were hurt by COVID-19 (as discussed above) and more measured wholesaler inventory management and reordering patterns
The collaboration revenue was significantly higher in the quarter as it included $60 million of upfront payment from Japanese company Otsuka Pharmaceutical and $150.0 million of milestone payment from Daiichi Sankyo. In April, Esperion signed a development and commercialization deal for Nexletol and Nexlizet tablets in Japan with Otsuka.
Research and development (R&D) expenses decreased 18.2% from the year-ago period to $35.0 million. The decline was mainly driven by lower costs following the completion of enrollment in the ongoing cardiovascular outcomes study (CVOT) study on Nexletol. The study is evaluating the medicine’s impact on occurrence of major cardiovascular events in statin-intolerant patients with, or at high risk for, cardiovascular disease.
Selling, general and administrative expenses (SG&A) were $47.7 million, compared with $13.5 million in the year-ago period. The significant increase was primarily due to costs to support commercialization activities for Nexletol and Nexlizet.
As of Jun 30, 2020, Esperion had cash, cash equivalents and investment securities of $300.7 million compared with $158.2 million as of Mar 31, 2020.
2020 Guidance Updated
Esperion maintained its previously issued guidance for R&D and SG&A costs. The company anticipates R&D expense for 2020 to be in the range of $135-$145 million. SG&A expense guidance was also maintained in the range of $200-$210 million.
Zacks Rank & Stocks to Consider
Esperion currently carries a Zacks Rank #3 (Hold).
Esperion Therapeutics, Inc. Price, Consensus and EPS Surprise
Esperion Therapeutics, Inc. price-consensus-eps-surprise-chart | Esperion Therapeutics, Inc. Quote
Some better-ranked stocks from the biotech sector include Emergent Biosolutions EBS and Horizon Therapeutics HZNP, both sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Emergent Biosolutions’ earnings per share estimates have moved up from $3.45 to $5.60 for 2020 in the past 30 days. The company delivered an earnings surprise of 127.41%, on average, in the last four quarters. The stock has risen 141.3% so far this year.
Horizon Therapeutics’ earnings per share estimates have increased from $1.78 to $2.16 for 2020 in the past 30 days. The company delivered an earnings surprise of 38.63%, on average, in the last four quarters. The stock has surged 109.5% so far this year.
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