Little Esperion eyes big rivals as its cholesterol drug clears mid-stage hurdle

Esperion Therapeutics has taken another big stride along the clinical path for its cholesterol drug. The biotech reports that its drug ETC-1002 slashed levels of the bad cholesterol LDL, particularly when it was combined with Merck's ($MRK) Zetia, in a Phase IIb trial. And now that the mid-stage program is complete, the Ann Arbor, MI-based biotech finds itself at the threshold of a late-stage program with a drug the company feels can thread the market needle between cheap generics and a looming wave of rival biologics.

Investors were in a cheerful mood after they saw the data, sending the company's stock ($ESPR) up 27% in premarket trading. They were responding to some impressive numbers. ETC-1002 by itself cut LDL levels by up to 30%. Two doses combined with Zetia spurred a 43% and 48% plunge in LDL, with the response typically seen in the first two weeks of treatment. And investigators tracked a reduction in C-reactive protein, a biomarker for inflammation in coronary disease.

It's been mostly clear sailing for Esperion ever since its top executives managed to regain control of a portfolio of molecules that had been sold to Pfizer ($PFE) in 2004 for $1.3 billion. It pulled off a successful IPO last year and now has reported on two promising mid-stage studies.

Cholesterol drugs, though, have had a long and troubled history complicated by the fact that late-stage programs require huge patient populations to prove to regulators that the drugs not only work, but that they're safe for the huge markets they hope to cater to--making Phase III trials enormously expensive to complete. One possible red flag: Esperion's drug has also been tapped as a potential PPAR inhibitor, prompting the FDA to limit the dose allowed in trials and require rodent carcinogenicity studies ahead of Phase III, according to the biotech's filings with the SEC.

While Esperion has been steadily completing a round of mid-stage efforts, rival teams from Sanofi/Regeneron and Amgen have been racing to the FDA with positive late-stage data on their impressive PCSK9 programs. And all of them have been touting the potential of these drugs for treatment-resistant patients suffering from hypercholesterolemia.

That can be a tough position for a small biotech with a market cap of $376 million.

Esperion's strategy appears to be to position their drug as a better alternative to statins for patients who are resistant to drugs like generic Lipitor, with a price that will be more attractive to payers than the biologics, which are generally far more effective at reducing LDL. But if it is successful, Esperion will also be coming into a market in which the PCSK9 drugs will presumably have a big head start in grabbing market share.

In response to a query from FierceBiotech, Esperion CEO Tim Mayleben says that the company expects to enroll about 4,000 patients in Phase III, with a plan to start the effort by the end of next year, after it meets with the FDA. And while Mayleben says Esperion can foot the bill, there's also been some interest from potential partners on a deal.

"There has been significant inbound interest from potential partners who could offer another funding option in a deal," he said in an email. And he's not intimidated by the PCSK9 competition, either:

"Because ETC-1002 is an oral, once daily small molecule, we will price 1002 comparable to other branded small molecules from the lipid lowering space. Based on that, we believe that we will always be able to be priced at an advantage to a PCSK9 inhibitor."

- here's the release

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