Esperion Therapeutics, Inc.

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. Please be advised that today's conference call by me recorded. I would now like to hand the conference over to Tiffany Aldrich, Associate Director, Corporate Communications at Experian. Please go ahead.

Good morning, and welcome to Asperion's third 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, November 1st, 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 content 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 a 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, CJ 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. Thank you for joining us today to review our recent progress in the third quarter of 2022 and reaffirm our goals for the remainder of the year. This is an exciting time for Experian as we focus on clear outcomes. The entire organization is working diligently on executing quality site closeouts and ensuring accurate data collection. In October of 2022, we completed the last patient last visit in the study, which is another important milestone, and we are on track to report a brief top line announcement in January 2023. We are targeting to present full comprehensive results with Dr. Steve Nissen, the lead investigator of clear outcomes at the American College of Cardiology 72nd Annual Scientific Sessions in March 2023. While we await the results of clear outcomes, we have delivered on our promise to drive consistent growth while maintaining organizational efficiencies. U.S. net product revenue grew 28% year over year to $14 million in Q3 2022, while selling, general, and administrative expenses were lower by 36% year over year. Additionally, we have reduced spend by $74 million in operating cash thus far in 2022 compared to the same period in 2021. Experion continues to operate with a limited commercial footprint following last year's reorganization as we anticipate our commercial spend having a greater impact after the full data readout. This quarter, we are also pleased to announce that benpidoic acid was recommended as an important oral non-statin therapy for LDL cholesterol lowering by the American College of Cardiology. This ACC recommendation reflects an important management strategy for individuals with ASCVD and underscores the value of using Nexplatol and Nexplazet to achieve LDL cholesterol goals in high-risk patients. The CLEARPATH-1 pediatric clinical trial began activating sites in August 2022. CLEARPATH-1 is a phase two clinical trial investigating benpidoic acid in patients six to 17 years of age with heterozygous familial hypercholesterolemia. Our partner, Daiichi Sankyo, continues to report strong Nalendo and Yusendi growth in their European territory and have treated over 64,400 patients in August. Daichi Sankyo also presented new data at the European Society of Cardiology Congress in August from its multinational prospective observational study, Santorini, demonstrating a persistent need among eligible patient populations to attain guideline-recommended LDL cholesterol levels. Simulation study results further indicate that the addition of benpidoic acid on top of the Zetamide could result in significantly more patients achieving recommended LDL cholesterol goals potentially reducing their risk of cardiovascular events. Finally, we are pleased to invite you to our upcoming R&D Day on November 9th, 2022. We have two world-renowned scientific experts joining us for the event, Dr. Peter Libby and Dr. Michael Gibson. We're excited to hear their insights on clear outcomes and our pipeline. The upcoming clear outcomes readout represents the beginning of a significant inflection point in our growth trajectory. A successful study has the potential to expand our current labeled indication, making benfatoic acid the only oral LDL-lowering therapy since statins to be indicated for cardiovascular risk reduction. Importantly, a positive outcome study has the potential to transform cardiovascular disease management for millions of patients around the world who are struggling to meet their LDL cholesterol goals. Earlier today, we issued a press release containing our financial results for the third quarter, which is available on our investor website. U.S. product revenue for the third quarter ended September 30, 2022, was $14 million, up 28% year over year, and $40.9 million for the nine months ended September 30, 2022, up 47% year over year. Retail prescription equivalents for the third quarter were in line with our expectations, growing 2.4% quarter over quarter. Royalty revenue for the third quarter ended September 30th, 2022 was $1.6 million, up 33% year over year, and $4.2 million for the nine months ended September 30th, 2022, up 50% year over year. We expect our partner to continue launching the LEMDO and New Stendi to new markets in the next year. Combined royalty and partner revenue was $5 million for the third quarter ended September 30th, 2022, an increase of 43% year over year, and $15.8 million for the nine months ended September 30th, 2022, a decrease of 55% year over year. The decrease for the nine months ended September 30th, 2022, is due to a one-time milestone payment from our collaboration partners in the second quarter of 2021. Finally, total revenue for the third quarter ended September 30, 2022, was $19 million, an increase of 32% year-over-year, and $56.7 million for the nine months ended September 30, 2022, a decrease of 10% year-over-year. The decrease for the nine months ended September 30th, 2022 was due to the aforementioned one-time milestone payment. Turning to expenses, R&D expenses for the third quarter ended September 30th, 2022 were $29.1 million, an increase of 50% year-over-year, and $85.9 million for the nine months ended September 30th, 2022, an increase of 10% year-over-year. The increase is primarily related to an increase in CVOT costs as we achieved 100% MACE accumulation and continued closed-out activity. SG&A expenses were $25 million for the third quarter ended September 30, 2022, a decrease of 36% year-over-year, and $84.9 million for the nine months ended September 30, 2022, a decrease of 42% year-over-year. These decreases reflect savings from the transformation for long-term success plan implemented in Q4 of 2021. As of September 30, 2022, cash, cash equivalents, restricted cash, and investment securities available for sale totaled $239.3 million, compared with $309.3 million on December 31, 2021. We currently anticipate that our cash runway extends beyond the anticipated completion and readout of clear outcomes. 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, as an organization, we are committed to helping providers and patients reach their goals, not only today with our approved products, but in the future with clear outcomes and additional pipeline programs. We look forward to updating you on our progress as we near a critical milestone in our journey and continue to help address the leading cause of death worldwide. You will see the longer-term vision for our pipeline at R&D Day on November 9th, and we will be making a presentation at Jefferies London on November 16th. Thank you all for joining today and for your continued support and interest in Experian. Operator, we are now ready for Q&A.