On Thursday, BofA Securities revised its stance on Esperion (NASDAQ:) Therapeutics (NASDAQ:ESPR) stock, shifting from a Neutral to an Underperform rating and adjusting the price target to $2.50 from the previous $2.90.
This change reflects concerns about escalating competition from pharmaceutical giant Merck. Last week, Merck announced its intention to compare its oral PCSK9 inhibitor, MK-0616, with Esperion’s bempedoic acid (BA) in clinical studies.
The analyst from BofA Securities noted that while bempedoic acid has several positive aspects, such as being well-tolerated, orally administered, cost-effective, and useful for pre/diabetes patients, its relatively low efficacy has made it challenging to envision widespread adoption. In contrast, other drugs in the same class, like oral PCSK9s and CETPs, not only share these advantages but also show significantly greater LDL-C reduction, which is a key measure of effectiveness.
The decision to downgrade Esperion’s stock is also influenced by the potential for Merck to target bempedoic acid early on and possibly make label claims that could affect Esperion’s market position.
Consequently, BofA Securities has updated its forecasts for Esperion and increased the weighted average cost of capital (WACC) to 9%, up from 8%, to reflect the heightened risk. This adjustment has led to the new price objective of $2.50 for Esperion’s shares.
In other recent news, Esperion Therapeutics has been making significant strides in various aspects of its operations. The company reported robust growth in its first-quarter revenue for 2024, reaching a total of $137.7 million, which included a substantial $100 million from a litigation-related settlement. The company’s U.S. net revenue also saw a 46% increase compared to the previous year, amounting to $24.8 million.
Furthermore, the FDA approved expanded labels for Esperion’s drugs, NEXLETOL and NEXLIZET, positioning them as the only non-statins approved for cardiovascular risk reduction in patients. In addition, the European Commission approved expanded indications for Esperion’s drugs, NILEMDO and NUSTENDI, for cardiovascular risk reduction and LDL-C lowering in patients, with or without statin use.
In a separate development, Esperion and Otsuka Pharmaceutical announced successful results from a Phase 3 trial of bempedoic acid in Japan, aimed at patients with hypercholesterolemia. The trial demonstrated a statistically significant reduction in LDL cholesterol levels compared to placebo. Analyst firm H.C. Wainwright reiterated a Buy rating for Esperion following these developments.
These recent developments highlight Esperion’s continued progress in expanding its product offerings and strengthening its market position.
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