Esperion Therapeutics, Inc.

And ladies and gentlemen, thank you for standing by and welcome. At this time, all participants are in a listen-only mode. Following the presentation, there will be a question and answer session. The advice at today's conference call may be recorded. I would now like to hand the conference over to Tiffany Aldrich, Senior Manager, Corporate Communications at Experian. Please go ahead, Tiffany.

Thank you, Carmen. Good morning, and welcome to Asperion's second quarter 2022 financial results and company update conference call. I'm Tiffany Aldrich, and I'm part of the corporate communications team here at Asperion. 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 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 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 August 2, 2022. 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 issued a press release this morning detailing the contents of today's call. A copy can be found at www.esperion.com within the Investors and Media section. We will begin with prepared comments and then open the call for your questions. Following today's call, the team will be available for follow-up questions. Please email corporateteam at esperion.com to schedule time to speak with the team. With us today are Sheldon Koenig, President and CEO, Dr. Joanne Foody, Chief Medical Officer, Eric Warren, Chief Commercial Officer, BJ Swartz, Chief Strategy Officer, and Ben Halliday from our Finance Department. I'll now turn the call over to Sheldon for some prepared remarks. Sheldon?

Thank you, Tiffany, and good morning, everyone. It's incredibly exciting to speak to you today about our significant progress in the second quarter of this transformational year for Aspirion and highlight our remaining areas of focus for 2022. We are pleased to announce that while continuing to drive consistent growth, We have achieved 100% MACE IV accumulation in our unprecedented Clear Outcomes trial and are rapidly approaching the most significant inflection point for the organization to date. We remain on schedule to report top line results for Clear Outcomes in early first quarter 2023. We continue to execute quality site closeout visits, scrub the database, and ensure accurate and complete data collection and database lock from this large global trial encompassing 1,200 study sites and over 14,000 patients. We plan on releasing a brief top line statement of primary endpoint results early in the first quarter, with comprehensive study results to be presented at a major medical conference in the latter part of the quarter. The upcoming clear outcomes readout represents a significant catalyst for our business and for patients as a positive outcome study and the ensuing label has the potential to make benpidoic acid the only oral LDL lowering therapy since statins to be indicated for CV risk reduction. The entire organization is working in unison to ensure flawless reporting and launch of these data and to deliver on our commitment to driving exponential growth for both NexLatal and NexLisette. A large 300 healthcare provider payer market research project conducted in Q2 validated that positive data would unlock exponential growth through improved market access and expanded market share. At the same time, we have assembled a diverse and prominent group of scientific experts for our Scientific Advisory Board and are preparing to share with you our longer-term plans for our innovative pipeline at our R&D Day in November. Our partner, Daiichi Sankyo, reported strong Nalemdo and Newstendi growth in their European territory and have cumulatively treated at least 70,900 patients. The previously launched markets include Germany, UK, Luxembourg, Austria, and Belgium. Switzerland was launched with reimbursement in second quarter of 2022, and Spain was launched during the second quarter of 2022 for private market sales. Additionally, our partner Otsuka now has results from its phase two dose finding trial of benpidoic acid and plans to advance the program into phase three. I am also pleased to report that this quarter we continue to achieve year over year cost savings of $9.4 million in our operational expenses compared to the second quarter of 2021 as we pull forward our transformative plan announced in the fall and continue to focus on efficiently allocating our resources in advance of the top line readout of the clear outcomes trial. In the first half of 2022, we have spent $47 million less in operating cash compared to the first half of 2021. Earlier today, we issued a press release containing our financial results for the second quarter, which is available on our investor website. U.S. product revenue for the second quarter ended June 30, 2022, was $13.6 million, up 28% year-over-year. and $26.9 million for the six months ended June 30, 2022, up 59% year-over-year. Royalty revenue for the second quarter ended June 30, 2022, was $1.5 million, up 50% year-over-year, and $2.6 million for the six months ended June 30, 2022, up 63% year-over-year, driven by new country launches and continued growth in previously launched territories. We expect our partner to continue launching the LEMDO and NISTENDY to new geographies. Combined royalty and partner revenue was $5.3 million for the second quarter ended June 30th, 2022, a decrease of 82% year over year, and $10.7 million for six months ended June 30th, 2022, a decrease of 66% year-over-year attributed to a large milestone payment of $28.1 million that was booked to revenue in second quarter 2021. When adjusting for this one-time payment, total partner revenue grew 170% in the second quarter ended June 30th, 2022. Finally, total revenue for the second quarter ended June 30th, 2022 was $18.8 million compared to $40.7 million for the second quarter of 2021, an increase of approximately 50% year over year after adjusting for the one-time upfront payment. Turning to expenses, gross margin decreased as a percentage of revenue, largely driven by an increase in the purchase of inventory from our international partners, which has a lower margin than our US sales. We expect this margin to improve over the year as shipments reach a steady state compared to the first half of 2022. R&D expenses for the second quarter ended June 30, 2022, were $32.4 million, an increase of 29% year-over-year, and $56.8 million for the six months ended June 30, 2022, an increase of 7% year-over-year. The increases were primarily driven by the acceleration of expenses related to the rapid closeout of the clear outcome study earlier in the year. SG&A expenses were $29.6 million for the second quarter ended June 30th, 2022, a decrease of 36% year over year, and $60 million for the six months ended June 30th, 2022, a decrease of 44% year over year. These decreases reflect savings from the transformation for long-term success plan implemented Q4 of 2021. As of June 30, 2022, cash, cash equivalents, restricted cash, and investment securities available for sale total $235.8 million, compared with $309.3 million on December 31, 2021. We are well capitalized even without our $50 million of restricted cash and anticipate that our cash runway extends through the anticipated completion and readout of the Clear Outcomes Trial and continues to fund continuing operations for the foreseeable future following those results. Our operating expense guidance for the full year 2022 remains unchanged. We continue to anticipate full-year 2022 R&D expenses to be between $100 to $110 million and SG&A expenses to be between $120 to $130 million. These estimates are inclusive of approximately $25 million of non-cash stock-based compensation expense expected to be incurred during this year. To close, I want to highlight that we are approaching a significant catalyst in our Nexlatol story with the potential to harvest over $1 billion in partner milestones and significantly higher revenues until patent expiry in mid-2031 with a positive readout of our clear outcomes trial. We believe we are part of a paradigm shift in the management of lipids as LDL cholesterol is the foundation of cardiovascular risk reduction. Early upfront combination therapy is an approach for most chronic diseases, including hypertension and diabetes. Our products have the potential opportunity to address LDL cholesterol with early combination therapy in much the same way. Therefore, we are poised to begin an entirely new chapter for our company with opportunities to help even more patients reach their goals. We look forward to updating you on our progress as we near a crucial milestone in our journey to help patients address the leading cause of death worldwide. Thank you all for joining today and for your continued support and interest in Aspirion. Operator, we are now ready for Q&A.