ESPR - NASDAQ

Hello, ladies and gentlemen, and thank you for standing by. Welcome to Esperion's Third Quarter 2025 Financial Results. [Operator Instructions] Please be advised that today's conference is being recorded. I would now like to hand the conference over to Alina Venezia, Head of Investor Relations for Esperion Therapeutics. Please go ahead.

Thank you, operator. Good morning, and welcome to Esperion's Third Quarter 2025 Earnings Conference Call. With us on today's call are Sheldon Koenig, President and CEO; and Ben Halladay, CFO. Other members of the executive team will be available for Q&A following our prepared remarks. We issued a press release earlier this morning detailing the content of today's call. A copy can be found on the Investor page of our website, together with a copy of the presentation that we will also be referencing. I want to remind callers that the information discussed on the call today is covered under the safe harbor provisions of the Private Securities Litigation Reform Act. I caution listeners that management will be making forward-looking statements. Actual results could differ materially from those stated or implied by our forward-looking statements due to the risks and uncertainties associated with the business. These forward-looking statements are qualified in their entirety by the cautionary statements contained in today's press release and in our SEC filings. The content of this conference call contains time-sensitive information that is accurate only as of the date of this live broadcast, November 6, 2025. We undertake no obligation to revise or update any forward-looking statements to reflect events or circumstances after the date of this conference call and webcast. As a reminder, this conference call and webcast are being recorded and archived. We will begin the call with prepared remarks and then open up the line for your questions. I'll now turn the call over to Sheldon.

Thank you, Alina. Good morning, everyone, and thank you for joining us. Once again, we are very pleased to be reporting another strong quarter. Total revenue for the third quarter 2025 grew 69% year-over-year to $87.3 million. Looking at our strong U.S. performance, we saw nearly double-digit sequential quarterly prescription growth with U.S. net product revenue growing 31% year-over-year to $40.7 million. During the third quarter, we continued to lay the groundwork for the future by investing in enhanced patient access programs that are intended to drive prescription growth and revenue in the months and years ahead. While this impacted sequential growth this quarter, these were important onetime costs that we are confident will provide significant return on investment. That said, this was also our strongest third quarter of record, a particularly meaningful achievement given that this period has historically delivered more modest growth due to summer months and both patient and physician vacations. This outstanding performance reflects the strength of our execution and the growing recognition of bempedoic acid as a differentiated treatment for patients, especially those who cannot tolerate statins. Our commercial strategy is resonating. Prescriber engagement is up. Patient access is expanding and our creative campaigns are winning industry recognition. In addition to our commercial momentum, we made important strategic progress this quarter. We finalized agreements with 4 generic manufacturers, including Dr. Reddy's, not to market generic versions of NEXLETOL and NEXLI

Thank you, Sheldon. Good morning, everyone, and thank you for joining us today. Our third quarter 2025 financial results can be found in the press release we issued this morning, and more detail will be included in our upcoming 10-Q. Second (sic) [ Third ] quarter 2025 total revenue was $87.3 million, an increase of 69%. U.S. net product revenue was $40.7 million compared to $31.1 million for the comparable period in 2024, an increase of 31%. Collaboration revenue was $46.7 million compared to $20.5 million for the comparable period in 2024, an increase of approximately 128%, driven by increases in royalty sales within our partner territories and product sales to our collaboration partners from our supply agreement. Turning to the rest of the P&L. For the second (sic) [ Third ] quarter of 2025, research and development expenses were $14.1 million compared to $10.4 million for the comparable period in 2024, an increase of 36%. Selling, general and administrative expenses were $41.8 million compared to $40 million for the comparable period in 2024, an increase of 5%. The increase quarter-over-quarter was primarily related to the increased legal costs associated with the ANDA litigation and increased media costs. We are extremely pleased with our third quarter developments and are planning the business differently with a focus on laying the groundwork to significantly increase our sales and marketing efforts to accelerate our revenue growth as we prepare to introduce our Vision 2040. During the quarter, we made meaningful progress to extend our IP runway and now anticipate inclusion in the U.S. guideline recommendations in the first quarter of 2026, which provides substantial opportunity to solidify our position as a premier therapy and build on our blockbuster franchise. In October, we closed on a $75 million follow-on equity offering, which provided net proceeds of approximately $72.6 million. This equity offering was not a result of any changes in our liquidity outlook, but rather a strategic decision to ensure the company is well capitalized in order to make the most of these developments. We are reiterating our full year 2025 operating expense guidance, which is expected to be approximately $215 million to $235 million, including $15 million in noncash expenses related to stock compensation. With that, I will now turn the call back over to Sheldon for closing remarks. Sheldon?

In closing, thank you, Ben. This was a quarter defined by strong execution, strategic progress and growing momentum across every facet of our business. From commercial performance and market access to international expansion and pipeline advancement, we are laying the groundwork for our future growth and delivering on our mission to transform cardiovascular preventative care for patients. We remain focused, energized and confident in our ability to drive sustained growth and long-term shareholder value. We look forward to a strong fourth quarter and to introduce our Vision 2040 in the new year. Thank you for your continued support and belief in our vision. We look forward to updating you on our progress in the quarters ahead. Operator, we are now ready to open the call for questions.

[Operator Instructions] And our first question comes from Jessica Fye of JPMorgan.

This is on [indiscernible] for Jess. Just one question from us. What were the drivers behind the gross margins for this quarter? And how can we expect this to progress moving forward?

Yes. Thanks for the question. So the gross margin drivers were the same dynamic we've seen in previous quarters, right? We have low-margin tablet sales to our partners. And the margin that you see is really reiterates the importance of the tech transfer and moving that manufacturing off of our books, which we still expect to complete by the end of the year and early into next year. So going forward, I would expect the gross margins to get better over the course of 2026 and be much more in line with where you would expect a pharmaceutical company of this type to be.

And our next question comes from [ Dennis Ding ] of Jefferies.

This is Georgia Bank on for Dennis Ding. Can you comment a bit more on achieving sustainable profitability in Q1 of 2026? And should this include any incoming milestones?

So I'll start with the second half. We don't include milestones when we mention profitability. We -- I think last quarter mentioned a lot about sustainable ongoing profitability, and that's where our sort of mantra headset is. When we look at how we're tracking towards some of the statements you made before, candidly, we're tracking right in line with the forecast and outlook that we had used to make those statements. So we are still confident in achieving profitability. I think when you look at some of the expenses incurred in Q3, a lot of them were onetime or nonrecurring, which drove down some of that net income number. And again, we would not expect those to repeat next year, which may affected Q3, but does not affect our outlook on the company.

And our next question comes from Jason

On the progress. Just a question in terms of reimbursement per script. It looks like you said scripts were up 9% quarter-over-quarter, but U.S. revenues were fairly flat. Was there a onetime hit here? Sorry, if I missed it? And I guess, what does it mean moving forward in terms of reimbursement there?

Thank you, Jason. First of all, again, I want to emphasize and you picked it up, our reimbursement rate is -- first of all, is increasing, and it's really due to the strong coverage that we have in both commercial and the Medicare side of the business. There were onetime hits. We actually -- and we mentioned this in our prepared remarks, -- we really want to set that stage for future growth of the organization. And even thinking about the ANDA filing wins, et cetera, we've been talking about how we're planning to 2040 and hence, why we mentioned this Vision 2040, which we'll talk about more in the next couple of months and so forth. But the onetime hits where we actually made some investments with 2 of our larger Medicare plans to get more preferred access, which began on October 1, but we have to do some accounting to account for those adjustments starting in the third quarter. And we decided to do that for the benefit and the future of growth. The other thing that we did is we also introduced a new e-voucher for our 90 count prescriptions. And what we saw there is when we initiated that program, we have seen less abandonment from patients. And basically, what it did is it provided equilibrium on the co-pay amount, whether it's a 30-day fill or a 90-day fill. And that was very important for us. So these were onetime commitments that we've made. And what's really interesting, I'll just put this out here right now. If you look at where we are in the fourth quarter on a like-for-like basis compared to this time last quarter, we're already seeing our gross sales increase by about 30%. So these things are already paying off for us, and we're happy we made these decisions for the future. Thank you.

And our next question comes from Kristen Kluska of Cantor Fitzgerald.

I know it's early days, so this isn't going to be reflected in the revenues. But now that the ESC guidelines have been changed for a little bit over 2 months, I'm curious if your partner has given any feedback about the level of incoming requests that they've gotten or how their reps dialogue has changed and the reception since that's occurred. And just trying to also understand again how this is going to really help give you a preview of what could come in the U.S. early next year.

Yes. Thank you, Kristen. So actually, I just spoke to the CEO of Daiichi Sankyo in Europe. And I was saying this on the call yesterday. I don't know if this is the most professional thing to say, but it's not often that he's very -- German and he said, we are over the moon. This is a very U.S. expression. We are over the moon by the excitement that we've seen with physicians, key opinion leaders, et cetera, related to the guidelines, and they see it as already being very, very meaningful. He actually showed me some of the early trends. And to your point, it is early in some of their leading countries where they continue to show these positive inflections and it's only going to get better because of the guidelines. The guidelines really came across as representing bempedoic acid as a foundational therapy. And as what we've mentioned before, the way the guidelines were presented at ESC, they specifically said they added bempedoic acid based on 2 items, and that is practice-changing and compelling data, which is a result of the CLEAR Outcomes study. We think that's a great indicator for what we're going to see here in the U.S. for our guidelines. As a matter of fact, our U.S. representatives have an approved piece where they're educating physicians on the EU guidelines because maybe many U.S. physicians, especially cardiologists, they look at EU guidelines because they have a goal of 55 milligrams per deciliter for high-risk patients. So it's a great lead-in for us of when the U.S. guidelines come out, which we think is going to be early first quarter, and they're going to use the meeting at ACC as a training ground. So again, some of these onetime investments that we've made, that's why we made them to set us up for that longer sustained pathway of growth.

Okay. And then just as it comes to Otsuka and the opportunity in Japan, now that there's preliminary pricing, what's really the next step for them with the authorities there? And then what is your expectation on the timing of when this could occur?

Yes. So with Otsuka, we -- to your point, we received preliminary pricing and that preliminary pricing, I will know we are very, very happy with it. It's fantastic. It's a great outcome for us. The next steps for them is they're waiting for final pricing and then shortly after the final pricing is when they will launch. And that launch will come, I would say, just a few days after the final approved pricing. We would expect all of that to happen probably in the next 2 to 3 weeks, just pending sort of administrative paperwork on their end. And then from there, it's off to the races for them. As Sheldon mentioned, this is the third largest lipid market in the world. And it's really just this regulatory hurdle is the last step for them to start getting out there and selling this product.

I would just add, we're excited personally because Ben and I will be heading out to Tokyo later this year to celebrate with them and help them and observe the launch. So it's really exciting.

And our next question comes from Paul Choi of Goldman Sachs.

I want to maybe just ask on what you're seeing with regard to 340B utilization of NEXLETOL and NEXLI

Thanks, Paul. Good to hear from you. So on the 340B side, honestly, it's a miniscule unnoticeable portion of the business. And so as far as the dynamics going forward is it would have a non-impact on our outlook or on our revenues. It's not a factor in how we operate.

Thanks, Ben. Paul, regarding PSC, first of all, again, we're super excited about announcing ESP-2001. Just a little color. We actually were at a patient support group that they have. PSC did a symposium in Denver, where we were the highlighted company to speak about this potential drug for patients who they just need something with such an unmet need. And we've talked many times about how our drug is very differentiated, et cetera. As it relates to the amount of centers that we will need, we're still in the planning phase for that. I can tell you right now, we're planning to meet with the FDA just to think about also what are the necessary endpoints, et cetera. So we're in that preliminary aspect. We just had a Board meeting. We went over that plan actually yesterday. So we'll continue to update you and others where we are, but we're trying to move this as quickly as possible because there is such an unmet need. And again, with ESP-2001, we have a drug that not only treats symptoms, et cetera, but repairs injury. And I think that's what's so most important. If we can prolong or even eliminate the fact for a patient to receive a liver transplantation, that's transformational in this disease. So stay tuned, and we'll be giving more information as we continue to receive it ourselves.

And our next question comes from Serge Belanger of Needham.

First question regarding the prescriber base. I think you continue to expand it. It was up 7% this quarter. What's the split between specialists and primary care physicians? And as you keep adding, is that -- are those proportions changing towards one side or another? And then a couple of quick ones for Ben. Any updates on the DSE manufacturing process? And should we expect guidance for 2026?

Serge, thanks for the question. I'll answer your first, turn it over to Ben for the second. So it's pretty steady right now as it relates to the segmentation, if you will, of prescribers. It's 60%, 6-0, primary care and about 40% cardiologists with a very small sliver of endocrinologists. That's exactly where we would have expected it. Even if you go back to the old days and you look at

Yes. So on the tech transfer, it's progressing nicely. We expect that manufacturing to ramp up early next year. And I think I said earlier, I would expect gross margin to dramatically improve over the course of 2026 to be in line with where you'd expect a small molecule oral medication to be. That will -- it won't be an overnight flip, but I do think it will get better and better. We are starting to see some of the working capital benefits associated with it now and into next year. And so we're looking forward to the benefits of that tech transfer. On guidance, we haven't made formal decision or announced anything as of yet. I think we're still batting that around internally. So we'll see is the answer there.

And our next question comes from Joe Pantginis of H.C. Wainwright.

This is Sara on for Joe. Kind of just wanted to follow up a bit on the prescription momentum. You guys have been seeing consistently double-digit script growth. I just wanted to get some maybe granularity on what you're seeing in the field right now that kind of gives you the confidence that the momentum will continue into the new year, especially with that January deductible reset that's historically been a headwind.

Yes. Great. Thank you. So what we're hearing from the field and just to add some color, we actually do business reviews every Friday with all of our field managers. And I think the feedback that we hear the most that really gives us confidence is the fact that I've been doing in this business for 30-some years, and it's the first time that I'm never hearing that it's hard to get the drug. The reimbursement is just so pristine that it's not difficult to get the drug. The message is easy. Talking to a physician and talking to them about the fact that, hey, doctor, if you have a patient who can't take a statin or can only take a low dose of a statin, you have an option now, an oral therapy with NEXLI

Yes. The other thing that I would add is just around the ESC guidelines. So that is something that the cardiologists are really receptive to with the Level 1A recommendation and that will continue into next year because the guidelines for the U.S. will come out. So we have a lot of great tailwinds coming into fourth quarter and definitely expect it to continue next year in 1Q.

I'm showing no further questions at this time. I'd like to turn it back to Sheldon Koenig for closing remarks.

We're all doing the slides today, folks. So in closing, this was a -- thank you. It was a quarter defined by strong execution, strategic progress and growing momentum across every facet of our business. From commercial performance and market access to international expansion and pipeline advancement, we are laying the groundwork for our future growth and delivering on our mission to transform cardiovascular prevention for patients. I want to remind everyone that next week on November 11 at 2:00 p.m. Eastern Time, we'll be hosting a virtual key opinion leader event on the role of bempedoic acid for the treatment of statin-intolerant patients that will feature discussion with a number of lipidology experts. We hope you can join us for that, what we expect will be an interesting and very informative event. We're also looking forward to participating in a number of upcoming conferences, including Jefferies London and the Piper Sandler Healthcare Conferences, where we hope to have the opportunity to connect with many of you then. In the meantime, if you have any questions or would like to have a call with the team, just reach out to our Head of Investor Relations, Alina Venezia, and have a great day. Thank you so much.