Special Commentary: Turbulence for Esperion

By DrKSSMDPhD, February 21, 2016


[Ed. Note: Dr. KSS writes about medicine and biotech stocks for the Irregulars. He choses his own topics, his words and opinions are his own, and he has agreed to our trading restrictions. You can see his Stock Gumshoe page here.]

When I was an undergraduate student, I became a good friend of Michael D., an aging veterinarian with hippie sensibilities who was an obsessive flier of large-wingspan competition kites….the kind that would occasionally jerk you up off the ground and for which you need 300-pound test line. He taught me to fly, and though in time I became adept, especially at stunts, on our first session in the southern California high desert, things sometimes got crazy among the Joshua trees. I was flying one of his most difficult-to-handle fast kites, and a strong gust made it power-dive deep into the sand.

Michael howled in laughter. “Hell man, if you ain’t a-crashin’ it, you ain’t flyin‘ it! Relaunch!” His long white beard swirled about his face in the 35-mph wind; he looked like a madman.

If there’s no competition, surprises, and intrigue, you aren’t discussing biotech. Each time we initiate coverage on a biotech company as a potential long investing idea, part of the pact with you is that we’ll let you know, in short order, when the long thesis is threatened by new events. Thus this Friday afternoon has me hammering out a “just the facts, ma’am” summary of a major development that may affect Esperion ($ESPR). It’s one that I suspect almost no one knows about yet. Today’s prose may be dry and condensed, as I am trying to get it to you as quickly as possible. If you are an $ESPR investor, you need to read this column.

Among the most important ways that biotechnology companies ping the market for data to drive their expectations is by periodic formal surveys of physicians. All such surveys are sponsored by a specific company, though which company is never revealed to the doctor taking the survey. The surveys screen the physician for knowledge about the specific clinical space and the drugs in it, and are conducted in a formal secure manner online. Physicians are expected to complete them at one sitting and have no opportunity to revise their answers. Physicians completing a survey are compensated their time, typically $50-$100 per survey.

A select group of physicians (internists and ...

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