Esperion Stock Downgraded by BofA Due to Rising Competition from Merck
BofA Securities has downgraded Esperion's stock due to increased competition from pharmaceutical giant Merck. The price target for Esperion shares has been adjusted to $2.50, down from the previous $2.90.
Merck’s Competitive Edge
Merck has recently announced plans to compare its oral PCSK9 inhibitor, MK-0616, with Esperion's bempedoic acid (BA) in clinical studies. This move by Merck places significant pressure on Esperion's market position.
Analysis from BofA Securities
According to a BofA Securities analyst, 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 poses a challenge for widespread adoption. In contrast, other drugs like oral PCSK9s and CETPs not only share these advantages but also offer greater LDL-C reduction, making them more effective.
Potential Impacts on Esperion
The decision to downgrade Esperion's stock also considers the possibility that Merck could target bempedoic acid early on and make claims that could hurt Esperion's market share. Consequently, BofA Securities has increased the weighted average cost of capital (WACC) for Esperion to 9%, up from 8%, reflecting the increased risk.
Recent Positive News for Esperion
Despite this downgrade, Esperion Therapeutics has reported significant growth and achievements:
- First-Quarter Revenue: Esperion saw robust growth in its first-quarter revenue for 2024, reaching $137.7 million, including $100 million from a litigation-related settlement.
- U.S. Net Revenue: The company's U.S. net revenue increased by 46% compared to the previous year, amounting to $24.8 million.
- FDA Approval: 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.
- European Commission Approval: The European Commission also 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.
Successful Trials in Japan
Esperion, alongside Otsuka Pharmaceutical, announced successful results from a Phase 3 trial of bempedoic acid in Japan, aimed at patients with hypercholesterolemia. The trial showed a statistically significant reduction in LDL cholesterol levels compared to placebo.
Analyst Ratings
Despite the downgrade by BofA Securities, analyst firm H.C. Wainwright has reiterated a Buy rating for Esperion following these positive developments.
Overall Progress for Esperion
These recent developments underscore Esperion's continued efforts in expanding its product offerings and strengthening its market position, amid growing competition.
