Brief Thoughts on Esperion Therapeutics

Esperion Therapeutics is a company based out of Ann Arbor, Michigan. Esperion was (re)launched by biotech mastermind Roger Newton in May 2008. The company was launched with the intent to treat cardiovascular diseases after it had secured a molecule, bempedoic acid, from Pfizer. Esperion sets itself apart from its competitors with a first-rate science team; a strong cash position; and a drug that is in late stage clinical trials. Bempedoic acid is now in a phase III program.

On January 25, 2017, Esperion Therapeutics announced that it had completed enrollment of ~2000 patients in its pivotal phase III long-term safety and tolerability study of bempedoic acid, CLEAR Harmony. The study was recently expanded to include high cholesterol patients already on the maximum tolerated dose of a statin of any kind. Esperion’s management explained that they expect the expansion of the study to support the company’s regulatory submission for the LDL-C lowering indication. Esperion now anticipates top-line results from the study in the second quarter of 2018 (previously projected as mid-2018). Furthermore, Esperion outlined a number of major milestones for 2017.  

Complete Phase III Trial Recruitment

The completion of recruitment in CLEAR Harmony now moves our milestone focus to the recruitment efforts of Esperion for CLEAR Serenity, CLEAR Tranquility, CLEAR Wisdom, and the CLEAR Outcomes trials. Esperion announced that it plans to have all phase III trials fully enrolled by the end of 2017.I suspect that CLEAR Wisdom is next on Esperion’s list to meet patient recruitment goals. HoIver, due to the shorter timelines and smaller patient populations of CLEAR Serenity and CLEAR Tranquility, I wouldn’t be surprised if these two studies met their recruitment targets earlier than anticipated. Below is a table that briefly summarizes the CLEAR Program.

Esperion Therapeutics - CLEAR Program
Phase III Program	Study Duration	Total Patients	Est. Completion
CLEAR Outcomes	5 Years	~12,600	2022
CLEAR Harmony	52 weeks	1,950	1Q-2018
CLEAR Wisdom	52 weeks	750	Mid-2018
CLEAR Serenity	24 weeks	300	Mid-2018
CLEAR Tranquility	12 weeks	225	Mid-2018

Launch of Phase II Trials

At the recent JP Morgan Healthcare Conference, Esperion Therapeutics outlined two phase II studies that it will initiate in the first half of 2017. One study will explore the benefit of combination therapy with bempedoic acid a PCSK9 inhibitor. The second study will explore the benefits derived from a triple combination therapy: bempedoic acid, a statin, and ezetimibe. Both of these studies will help bolster bempedoic acid and its potential to acquire a broad label. This is likely to make Esperion and bempedoic acid a much more palatable acquisition target for a large pharma that is interested in entering and/or maintaining its position in the cardiovascular space.

Combination with Ezetimibe

In its recent discussion at the JP Morgan Healthcare Conference, Esperion announced that it planned to deliver to investors a clinical and regulatory development plan for a combination of bempedoic acid and Ezetimibe (BA+EZ) in the first half of 2017. Esperion has been talking about doing a fixed dose combination since October, 2016, and I are now beginning to see the program take shape. Esperion plans to approach the FDA with an NDA for a fixed dose combination therapy in the second half of 2019. This timeline closely mirrors what Alan, a cardiovascular expert from BioWatch News, stated back in March of 2015 when discussing the 008 study.

“Unless the FDA has given guidance that it can indeed simultaneously approve both therapies, I think it's best to conservatively estimate that the combo tablet gets its approval decision within 90 days of the PDUFA for the monotherapy.”

I have not seen any specific guidance from the FDA regarding bempedoic acid as a combination therapy.

BA+EZ Efficacy & Safety

It has been some time since I last reported on BA+EZ efficacy and safety. Thus, I thought it wise to bring it back to the forefront for our readers. As evidenced in the chart provided below (courtesy of Esperion Therapeutics), the BA+EZ combination reduces LDL-C by almost 50% in statin intolerant patients.

This is comparable to receiving a maximum dose of Rosuvastatin (taken once daily as a monotherapy) or evolocumab (given as a subcutaneous injection once every two Ieks). The combination has potential, but I will need to see follow-up studies that revalidate the efficacy and safety of the combo. A revalidation would be significant because it would provide Esperion with several unique options for bempedoic acid, including:

• An extended patent life
• The ezetimibe US patent expires in April, 2017
• A combo patent extends the protection to bempedoic acid. Especially

because the combo therapy is much more efficient than bempedoic acid as a mono-therapy.

• Potential for becoming standard of care?

The Lone CETP inhibitor and PCSK9i’s

The Lone CETPi

Recently, a number of CETP inhibitors have fallen off the lipid loIring rails due to an increase in cardiovascular events for those undergoing CETP therapy. There is currently only one remaining CETP inhibitor that is conducting phase III trials: Merck’s anacetrapib. Unlike torcetrapib, anacetrapib doesn’t appear to raise the levels of aldosterone or cortisol, which can lead to higher cardiovascular events due to a raise in blood pressure. Anacetrapib may appear to be gentler than torcetrapib, but I’m not convinced that it will significantly reduce cardiovascular events over a long period of time. A 2010 study of anacetrapib shoId higher levels of deaths due to cardiovascular causes than placebo. Further, death from any cause occurred in 11 patients in the anacetrapib treatment group vs. 8 in the placebo group. The results may appear grim, but I have leave the door of possibility open because  anacetrapib does have some positive characteristics. In the 2010  trial, anacetrapib treated patients saw significantly less revascularization than placebo treated patients. Thus, it is possible that anacetrapib helps the body clear plaque buildup in arteries. Whether that will translate to significant, long-term reduction of cardiovascular events remains questionable. I anticipate results will become available sometime in 1Q-2017.

PCSK9i - The Injuncted

PCSK9i therapy is considered invasive and not cost-effective. A recent study that was published in JAMA concluded, “for PCSK9 inhibitors to be cost-effective at $100,000 per QALY, the annual drug costs would need to be reduced from $14,350 to $4,536 per patient or less.” Bempedoic acid is a small molecule and is therefore much cheaper to produce per unit than it is for PCSK9i. This is a considerable strength for Esperion because, assuming it’s approved, bempedoic acid will be able to compete on price right from the start. If bempedoic acid is paired with a generic statin and/or ezetimibe, the PCSK9 drugs will lose the cost and convenience argument. HoIver, PCSK9i drugs have the potential to reduce LDL-C levels quickly and drastically. In order for bempedoic acid to compete in this space, it will have to get close to the efficacy that has been exhibited by PCSK9i’s.

The PCSK9i space has gotten very interesting lately. On January 3rd, 2017, a federal judge denied Regeneron and Sanofi’s attempt to toss out a previous court ruling that concluded that Praluent violated Amgen’s patents of Repatha, Amgen’s PCSK9i. The new ruling prohibits Regeneron and Sanofi from selling Praluent in the United States. If this ruling Ire to be upheld on appeal, Amgen’s potential to take over the cardiovascular space will grow substantially. Regeneron and Sanofi still have the option to fight on through a federal appeals court or reach a settlement agreement with Amgen. Whatever the case, there will surely be further drama in the coming months as both companies have plans to release CVOT data soon.

Recently, the Glagov study, a study of Amgen’s Repatha, shoId that a PCSK9i paired with a statin has the potential for remarkable results . Glagov was not intended to be a cardiovascular outcomes study, but nevertheless measured cardiovascular events of patients. Results of Glagov shoId that a combination of evolocumab and a statin result in loIr cardiovascular events than placebo (these included nonfatal myocardial infarction, nonfatal stroke, hospitalization for unstable angina, and coronary revascularization). Of all the treated patients with Repatha, only one patient exhibited signs of anti-Repatha antibodies, which suggests that Repatha might not face the same problems that plagued Pfizers bocicizumab .

Repatha CVOT Results

Today, Amgen announced that the FOURIER trial, a cardiovascular outcomes analysis of Repatha when paired with a statin, met its primary and secondary endpoints. The announcement stated that “Repatha significantly reduced the risk of cardiovascular events.” Amgen also announced that the EBBINGHAUS Study also met its primary endpoint, showing that Repatha has no effect on cognitive function. Amgen had a lot riding on this CVOT’s success. Amgen’s recent injunction against Regeneron and Sanofi’s sale of Praluent in the USA has helped to drive the sales of Repatha upward. I suspect February sales will continue to grow.

Amgen did not release specific data regarding the study, but plans to do so at the American College of Cardiology conference on March 17th, 2017. Strong CVOT results will likely eliminate doctor’s concerns about the PCSK9 drug class thereby causing them to prescribe treatment more frequently. Further, strong results will likely also open up the purse of insurance companies who are waiting to see if there are any long-term benefits from the treatment. Weak results would likely hinder Repatha sales. Support for the PCSK9i drug class would likely evaporate. However, previous data from the GLAGOV study suggests that this will not be the likely scenario. I expect overly positive results. Further, I suspect that Repatha’s FOURIER study will encourage the FDA to give its position on the LDL hypothesis - something crucial to the development of bempedoic acid.

The LDL Hypothesis

Esperion management claims bempedoic acid is not a replacement for statins or ezetimibe. Instead, management has stated that bempedoic acid is being positioned to complement these therapies. I think bempedoic acid is being positioned as the leading drug for reducing LDL-C. If Esperion can prove strong efficacy and safety in a double or triple combo, it will place a deep footprint in the cardiovascular space.

LDL reduction, alone, may not be the holy grail I once thought it was. In seeing the rise and fall of competitors in this space, I am convinced that LDL reduction is just a part of the story. In September, 2016, Alan (from BioWatch News) stated:

“The spirit of the law is crucial, not just the letter – How LDL reduction is achieved may be more important than the actual reduction. Are the especially pathogenic LDL subsets lowered?”

It is important to point out that the combination of bempedoic acid and ezetimibe reduces measures involving disease associated lipids, lipoproteins, and inflammation (LDL-C, LDL Particle Number, apolipoprotein B, total cholesterol, Non-HDL-C, HsCRP, Triglycerides). Furthermore, the combination of the two saw a modest increase in HDL particles, which are considered a predictor of reduced risk of coronary heart disease. The combination of ezetimibe and bemepedoic acid resembles that of PCSK9i therapy. However, PCSK9i treatment lacks one component that I consider to be a crucial piece of the puzzle, the reduction of inflammation (hsCRP).

“Statins reduce inflammation, PCSK9 drugs don’t. It’s no coincidence that the GLAGOV and FOURIER trials involves patients taking statins too.”

I believe Alan is dead on. PCSK9i’s are great at what they do, but they need help. Furthermore, I anticipate that we will see a greater number of patients that developed antibodies for the PCSK9 treatment over the course of the trial. Thus, the presentation to the FDA will be of great importance to Esperion investors.

Final Thoughts

The Esperion team still has a great deal of work ahead. Investors should remain vigilant in regards to future outcomes data being released as these data could have a profound impact on bempedoic acid’s future requirements with the FDA. I expect to hear more from Esperion when it delivers its 2016 earnings call in late February.

A Brief Look at Albireo Pharma

Albireo pharma is a biopharmaceutical company with a focus in liver disease and other gastrointestinal disorders. Albireo currently has three investigational compounds on hand with two in phase 2 development and a third that is in phase 3 development.  Albireo’s compounds have the potential to treat Progressive Familial Intrahepatic Cholestasis (PFIC), biliary atresia, Non-alcoholic Steatohepatitis (NASH), Primary Biliary Cholangitis (PBC), chronic idiopathic constipation, and bile acid malabsorption. Currently, Albireo is doing clinical research in pediatric cholestasis within the US, but also has a number of clinical trials going on abroad.

Recent News

On Novemeber 3^rd, 2016, Albireo Pharma completed a reverse stock-for-stock merger with Biodel Inc. This allowed Albireo to bypass the costly, and at times risky, IPO process within the United States. After the merger, Biodel Inc. management chose to cease all activity related to its previous R&D pipeline - including any clinical studies that were still ongoing. As of November 3^rd, 2016, Albireo’s cash on hand was approximately $39.4M (although Biodel’s was listed as $28.7M), which I believe will be sufficient to carry Albireo into early 2018.

Pipeline

Albireo’s lead candidate is a compound that is currently named A4250. The compound, A4250, inhibits ileal bile acid transport. Ileal bile acid transport is where most (~95%) bile acids are picked up by your body.  Bile acids are made from cholesterol in the liver and are then secreted into the small intestine to help absorb fats, fat-soluble vitamins, and cholesterol (think of bile acid as being dish soap and digested food being hard to remove grease stuck on a pan – bile acid helps the body remove that grease). 

When the bile acids are reabsorbed in the ileum they head straight back to the liver, through the portal vein, to be reprocessed with new bile salts and then had back to the gall bladder to repeat the process.   Like anything in life, too much of something can sometimes begin to cause problems. When bile acid flow out of the liver slows, or stops, the body experiences an uptake in conjugated bilirubin and other waste products. Instead of being processed out, this waste then gets into the blood stream and begins to wreak havoc. A4250 can stop this process by (theoretically) stopping the flow of bile acids back into the liver. This has implications for a number of different diseases including cholestasis, primary biliary cirrhosis, primary sclerosing cholangitis, etc. Causing the flow of bile acids back to the liver to slow has an added bonus: it forces the body to utilize cholesterol stores to make more bile acid. That is precisely what early stage NASH is made up of – dietary cholesterol exacerbates hepatic steatosis and inflammation.

Safety

I suspect that this drug is likely to have a similar safety profile as a bile acid sequestrant as it acts in a very similar manner: both prevent bile acid from being taken back up again by the body.

Recent Efficacy

In a recent presentation to the American Association for the Study of Liver Diseases (AASLD), Albireo was able to show that its product performed much better than placebo in stopping bile acid uptake from the ileum. No serious adverse events occurred in this trial.

A4250	placebo	1 mg/dag	3 mg/day	1.5 mg x2/day
	Per cent change from baseline
Plasma bile acids	+ 28 (±13)	- 6 (±31)*	- 47 (±8)**	- 15 (±23)*
Fecal bile acids	18 (±37)	+ 338 (±10)	+ 421 (±19) **	+ 420 (±23) **
FGF19	- 6 (±20)	-28 (±25)	- 76 (±16) **	- 16 (±26)
C4	+ 9 (±27)	+ 555 (±19)*	+ 664 (±25)**	+ 292 (±31)*
Compared with placebo		*p<0.05	**p<0.01

Albireo has a number of ongoing trials in US, Denmark, Sweden, and Germany. I am unsure when we will hear a data readout from these trials, but I suspect that safety will not be a major question (even though a recent study was terminated due to expected side effects). I suspect that efficacy will be the major question of this drug. Does it stop/slow/ reverse NASH?

Forward Looking Thoughts

Albiero plans to initiate a Phase 3 clinical trial of A4250 in PFIC that will also evaluate long-term outcomes. I expect the planned PFIC trial to commence in 2Q-2017. Albireo claims that it has sufficient cash resources to fund a pivotal trial for PFIC, but I believe they will be in need of cash soon after.

“Current cash resources will be sufficient to enable us to fund a planned pivotal clinical trial of A4250 for the treatment of PFIC. Based on current plans for completing our ongoing Phase 2 clinical trial in children with chronic cholestasis, we expect to complete the planned pivotal PFIC trial in mid-2018.”

Immediately following this line, Albireo outlines that this claim is based on the assumption that EA Pharma will begin paying out milestone payments. Considering that Albireo expects EA Pharma to file for regulatory approval in the first quarter of 2017, this may be likely, but we cannot count our chickens before the eggs have hatched. Thus, barring any major milestone payments for 2017, I suspect Albireo will be in need of cash at some point by the end of 2017. Albireo might be able to secure some capital by either licensing or selling the rights to elobixibat for the for the US, the EU, and other areas not currently licensed to EA Pharma. Albireo has made it clear that it will not conduct future trials independently. Thus, it has a pocket ace to fall back on should it need to. However, it is too early to tell whether Albireo will have clinical success in NASH. The preclinical science seems promising, but we need to see some form of major clinical success.

A Brief Look at Intercept Pharmaceuticals

Today, I decided to take another look at Intercept’s farnesosoid X-receptor agonist, Ocaliva. If you are unfamiliar with the term FXR-Agonist, I suggest you catch up by reading this article that illustrates the potential of farnesoid x-receptor agonists for therapeutic use.  A quick summary of the article:

• FXR activation has an effect on liver growth and regeneration
• “FXR activation has been shown to prevent and resolve liver fibrosis in rodents.“
• “FXR has been shown to be important in preventing gallstone formation in susceptible mice.”
• “FXRs play a key role in the pathogenesis of HCC, and that FXR activation could prevent or treat HCC.”
• “Preclinical studies have shown that FXR activation improves insulin sensitivity.”
• “FXR activation lowers plasma glucose, free fatty acids, triglycerides, and total cholesterol.”

These statements and/or conclusions of studies all sound promising for Ocaliva, but the conclusions must also be reached in human clinical trials. Intercept Pharmaceuticals is the current front runner of the NASH space and is dominating the PBC space with its recently approved product, Ocaliva. Intercept has completed a number of studies using Ocaliva for conditions in bile acid malabsorption, non-alcoholic fatty liver disease (NAFLD - NASH), bariatric and gallstone disease, primary biliary cirrhosis (AKA primary biliary cholangitis - PBC), hepatic impairment, and  type 2 diabetes. Intercept’s human data has shown promising results, but has also raised a number of questions about efficacy and safety. Here’s what we know Ocaliva can do in humans so far:

• Ocaliva increases insulin sensitivity by ~28% from baseline in a group treated with 25 mg and 20.1% in a group treated with 50 mg. In combined groups that equals ~24.5%, whereas the placebo group dropped by ~5.5%. Both patient groups saw weight loss when compared to placebo. Markers of liver fibrosis saw a marked decrease in the 25mg treated group. Modest, but significant changes in LDL-C were seen in both treatment groups.

• Ocaliva did better than placebo in treating PBC. Levels of ALP dropped greater than placebo (21-35% vs. 3%). 68.68% of patients showed an ALP reduction of 20% or more vs. 8.10% of placebo. “The incidence of pruritus in the OCA 10-mg, 25-mg, and 50-mg groups were 47% (not significant), 85% (  P  < .0003), and 80% (  P  < .006) vs 50% in the placebo … Severe pruritus was reported in 16% (6 of 38) of the patients in the 10-mg group, 24% (9 of 37) of the patients in the 25-mg group, and 37% (15 of 41) of the patients in the 50-mg group of patients, respectively.”

• Patients with bile acid diarrhea experience improvements in median stool frequency. This makes sense because in other trials Ocaliva had a higher prevalence of constipation. Common adverse event was a headache.

• Ocaliva reduces liver stiffness as measured by a non-invasive measure (fibroscan).

• 45% of patients in an Ocaliva treated group who were meantto have biopsies at baseline and 72 weeks had improved liver histology comparedto 21% of patients in the placebo group. 23% of patients in the Ocaliva treatedgroup developed pruritus compared with 6% in the placebo group. Serumcholesterol concentrations increased more in the Ocaliva-treated patients thanin the placebo-treated patients. “Becauseof concerns about persisting changes in cholesterol concentrations in patientsreceiving obeticholic acid, the DSMB also recommended discontinuing treatment,but continuing the study to the final 24-week post-treatment assessment and thepatients were managed accordingly.”

• Top-line results of NASH study expected sometime in 2017.

Of course, these results are promising for Intercept and its investors. Ocaliva is currently approved for treatment of PBC in both the United States and Europe.  Many believe that Ocaliva will dominate the PBC market, which may be true – at least initially. Many also believe that Ocaliva will be the market leader in treating NASH. But I have my doubts that the latter will ever happen. This is because of the cost of the drug to the end user. A call to a specialty CVS pharmacy showed that both the 5 mg and 10 mg dose costs the end user $199.24 per dose (assuming that the end user doesn’t have insurance). That amounts to an annual price tag of $72,722.60 for the uninsured. However, the cost is drastically reduced when the end user has insurance (cost varies by insurance coverage). Usually I wouldn’t be too concerned about the price tag, but in this case the competition plans to charge ~4-10 times less the cost of Ocaliva. That should concern some investors. The long-term implications are not great. Especially for a market that will have very stiff competition as soon as new entrants get past their phase II trials.

Now that I have properly admonished Intercept and its Ocaliva pricing model, I would like to point out to readers that Intercept has a program that helps all patients afford Ocaliva treatment. With that being said, I still have doubts that Ocaliva will be highly accepted by care providers. Intercept’s 2016 earnings call will help us (investors) gauge how care providers view Ocaliva as a therapy option. We aren’t expecting ground breaking sales because PBC has a very small patient population. However, if sales fall far below estimates, it may signal that Ocaliva is either overpriced and/or not being accepted by the medical community or insurance companies. Poor sales could also signify that Intercept has invested poorly in its sales network (highly doubtful of this). Credit Suisse believes that Intercept will only pull in $7M in sales for 4Q-2016; I believe it might fall below that metric. Whatever the case, Intercept AND its product Ocaliva still have a lot of potential. Intercept has a substantial amount of cash that it can use to either repurchase shares, reinvest in the Ocaliva supply chain, and/or acquire and test other NASH products. Ocaliva is efficacious for both PBC and NASH, but it does have its drawbacks (pruritus, constipation, and headaches), which drew concerns from a number of potential investors who were itching for strong returns with minimal downside risk. Does Intercept’s stock have room to grow? Absolutely. Intercept has a drug that is generating revenue in both the US and European markets. Its stock is down 36% since 3Q-2016 and has enough capital on hand to quickly pivot should the need arise. An acquisition is possible in the near-term, but I suspect that Intercept will attempt to build a strong foundation for its NASH pipeline before an acquisition occurs.