Special Commentary: Turbulence for Esperion

by DrKSSMDPhD | February 21, 2016 4:54 pm

[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[1].]

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 cardiologists who have busy lipid management practices) have by now completed a new lipid management study that presupposes the availability for prescribing of a new drug, Product X. As is the norm in most of these studies, certain parameters about Product X are either known or anticipated, and are presented for side-by-side comparison with existing agents. You’re carefully queried in-depth about how you’d manage certain patient scenarios, what drugs you’d use. You’re then re-queried for how you’d manage the same situations if Product X were available. You are asked to explain in typed-in text your logic and the basis for your drug choices so that study reviewers can compare your reasoning processes to other prescribers.

I cannot reveal my source for today’s information except to say that the source is 100 percent reliable, is not a biotech or pharma company insider, is not an employee of a regulatory agency, and does not work in advertising of drugs. No aspect of the study, which was conducted in a secretive, confidential manner, has been inappropriately shared with me. The data learned from the study about prospective physician prescribing attitudes about Product X will likely be shared in coming weeks with investment analysts IF that data shows physician favoritism for Product X. If the data show something different, they will likely be buried.

In the study circulated this week, here is what was said about Product X:

(1) it has no side effects; cessation rate in trials similar to placebo

(2) on its own, it lowers LDL cholesterol about 30 percent

(3) in combination with statins, it lowers LDL cholesterol about 15 percent

(4) it has no organ toxicity

(5) it’s to be priced around $2000/year

Initially, one could be forgiven for wondering if the study is about ESPR’s bempedoic acid. But the attributes of product X continue:

(6) dose 100 mg daily

(7) it raises HDL cholesterol by at least 100 percent

(8) it lowers cardiovascular event risk by 15 percent

(9) no comment is made about hsCRP reduction

(10) it does have quite bizarre pharmacokinetics. The drug reaches steady state only after a few months of dosing. After a sustained period of dosing, say 1-2 years, cessation of the drug does NOT cause serum drug levels to fall to zero. The level gradually falls to about 7 percent of peak serum level, and stays there for at least 4 years…leeching into the blood from somewhere. These parameters are bizarre enough to remind physicians of amiodarone (an antiarrhythmic that keeps serious cardiac patients alive but at great cost to the organs). The pharmacokinetics cannot be easily explained with notions that the drug is fat-soluble.

A caveat here is that not all of these attributes are absolute. The drug manufacturer running this study may interpolate, make some assumptions, and is trying to present what it anticipates will be true of the drug when it comes to market. This data, however, is incomplete, as Product X is still in development. The attributes given for Product X are accurate in kind, though may be fine-tuned in degree.

A moment’s reflection makes clear to me that Product X is none other than…..anacetrapib, and that the study is being sponsored by Merck ($MRK). Anacetrapib is a cholesteryl ester transfer protein inhibitor (CETPi), and 100 mg daily is the standard dose for it that Merck has settled on based on earlier phase 2 studies.

In our original column[2] on Esperion in August 2014, we purposefully did not cover CETPi’s because I saw no reason to. Various versions of these as drugs—torcetrapib (Pfizer ($PFE)), dalcetrapib (Roche ($RHHBY)), evacetrapib (Eli Lilly ($LLY))—had been around for a decade and their clinical trials had ended in debacles of adverse effects or patients with worsened outcomes. I felt that the whole class was doomed, and based just on these three I was correct. One of my concerns is that the drugs were designed to boost HDL cholesterol, but that there was an is little evidence that this strategy saves lives. HDL is supposed to traffick cholesterol away from atherosclerotic plaque and back to liver, but in fact it’s not nearly that simple. My molecular concern was that CETPi’s generate higher HDL, yes, but that the HDL so made is inert or nonfunctional because it is overloaded with cholesterol.

Merck’s development of anacetrapib has proceeded in fits and starts. In 2007, the company reported good phase 2 results of LDL reduction, HDL boosts, safety, and excellent tolerance. Its niche in a lipid management world consisting at that time of statins, niacin, and bile acid sequestrants, however, seemed uncertain: its ability to lower LDL was milder than that of statins and its ability to limit cardiovascular risk was unknown. The company was pleased, however, than it had incurred none of the train-being-torn-in-half outcomes of its CETPi siblings. Torcetrapib, for example, causes serious elevations in blood pressure.

Merck began DEFINE, a phase 3 trial of anacetrapib, and discussed the study design in this 2009 paper[3]. Preliminary data from DEFINE were presented at the 17 November 2010 American Heart Association meeting. These were the main outcomes:

(1) LDL fell by average 36 percent on 100 mg dose

(2) a similar fall in lipoprotein (a), a blood marker currying serious interest at the time because it was felt to predict MI. That data has since fallen into serious question.

(3) HDL increase by 138 percent

(4) no BP increase

(5) no increase in deaths or cardiovascular events among anacetrapib recipients

The DEFINE study was promising, but had too small a sample size, lacked sufficient power, to show a benefit in risk of death or cardiovascular events. Continued surveillance (see this 2014 paper[4]) showed that HDL and drug levels remained high for 2-4 years after the drug was discontinued. I predicted Merck would cease development, in a sense ceding the space to oncoming PCSK9i’s. Merck was richly aware of the high-profile failures of anacetrapib’s CETPi siblings and the massive costs borne by its rivals in test-driving them. Then Merck Research and Development chief Roger Perlmutter, MD, PhD, sat down and had a rethink about anacetrapib.

In 2011, Merck began enrolling 30,000 patients in the REVEAL trial[5], a massive randomized double-blind placebo controlled trial anchored at Oxford University in the UK. The trial, kept surprisingly low-profile, is now fully enrolled, but will continue collecting data until 2017. It is primarily an outcomes trial assessing whether anacetrapib lowers risk of death, MI, and stroke. When I wrote the original Esperion column, my balanced, non-sneering assumption was, given how bad the other CETPi’s had been, that we’d be hearing news of bad outcomes any day. I felt Merck was really unwise to pursue anacetrapib, and that it would all go away.

You’ll notice that for the physician study of Product X, Product X was listed as having a 15 percent risk benefit. This is startling: it’s enough to move the FDA. Whether Merck is projecting that as the outcome based on early data, arriving at that by mathematical models and smaller sets of investigator-initiated trials that we may not know about, this is unclear to me. Merck, however, would not be proceeding with the physician study of prescribing preferences unless it had a pretty good idea risk reduction would be in the ballpark of 15 percent for Product X (anacetrapib) recipients. Folks, this changes everything.

The physician survey has other wake-up calls for Esperion and bempedoic acid: anacetrapib clearly raises HDL, which bempedoic acid doesn’t, and Merck is herein declaring a price point of $2000 for one year of therapy, identical to what Esperion has conjectured for bempedoic acid. Anacetrapib is thus now clearly in relief as a serious competitive threat for bempedoic acid. As with bempedoic acid, because the cost is so favorable compared with the $10,000 annual price tag of PSCK9i monoclonals (Praluent (Sanofi ($SNY)/Regeneron ($REGN); Repatha (Amgen ($AMGN)), anacetrapib will likely be something a physician can prescribe without the prior authorization paperwork hassles of getting approval for the PCSK9i’s, which are considerable. Physicians prescribing PCSK9i’s spend more time on paperwork than they do seeing the patients who receive them.

As of Merck’s interim analysis[6] of REVEAL in November, 2015, no safety signals had occurred, and outcomes seen to date were consistent with non-futility: in other words, smooth sailing, with every reason to proceed to the end with the trial. It hints at an outcomes trial in which risk reduction is being seen.

That Merck has circulated this Product X physician survey must be a serious wake-up call to Esperion investors, including me. I didn’t foresee this coming. Merck is clearly girding its loins for a marketing war, to fight its way into the purview of prescribing physicians. If anacetrapib brings about risk reduction by 15 percent, that won’t automatically get it to market. The FDA will likely require a second risk phase 3 trial, and Merck and Esperion may end up submitting NDAs around the same time.

Much of the outcome of this race hinges on the LDL hypothesis….armor with many chinks in it. There’s clearly more to the story than LDL, and this is apparent, for example, in the disparate effects of comparable degrees of LDL reductions in patients with and without diabetes. I have tended to argue in these pages that hsCRP reduction is in fact the true reason statins reduce risk, and that LDL is either red herring, or surrogate marker. To the best of my knowledge, Merck has not assessed the effect of anacetrapib on hsCRP. A review of the REVEAL protocol[7] shows no mention of hsCRP. It’s possible that anacetrapib will complete its trial and show risk reduction, though my sense is that we may see greater risk reduction with bempedoic acid because of its known considerable effect on hsCRP.

What’s new here? First, Merck is eyeing the entire lipid drug landscape, trying to get very detailed assessments from people who are most likely to prescribe anacetrapib of the extent to which they would prescribe it, and how, if at all, they will combine it with statins, ezetimibe and PCSK9i’s. Second, Merck clearly anticipates (it may know something though the pivotal trial is not complete) that makes it strongly expect anacetrapib is a risk reducer. Third, it plans make it just as appealing on price point as Esperion’s agent. Merck knows well about Esperion and you can be sure that this physician study it commissioned is a kind of depth charge to see where physicians and the competition stand. It’s the first shot across the bow in a war. No one expected it. I am glad that immediate information came to me so that I can report to you. The study is the best evidence to date of how serious Merck is about anacetrapib’s future.

None of this news warrants a panic sell of $ESPR. But the fact that anacetrapib is closer to outcomes data than bempedoic acid is, that it will be priced on par with bempedoic acid, that it appears to have safety equivalent to bempedoic acid, and that in some quarters it is expected to have approvable efficacy in risk reduction…all of this reshapes the lipid playing field now. Which will prove to matter more: that anacetrapib raises HDL, or that bempedoic acid lowers hsCRP? I will clearly state my preference, my “belief” in the latter. I see little scientific reason to believe that raising HDL via the molecular mechanism a CETPi does matters in vascular disease. But the competitive space is incrementally now heating up.

It’s my opinion that there can easily be room for both bempedoic acid and anacetrapib on the market. Different physicians will have different preferences. Some will be anacetrapib-averse because of its seemingly infinite half-life. Both drugs can still win and be approvable. But the space has grown more complex, more risky, and the immediate effect of the data imparted by Merck’s physician survey this week of Product X is that the slice of the eventual pie for bempedoic acid may be lower. I intend to keep a long position in $ESPR as I believe in its management and its science. I am considering, however, reducing my exposure. I am curious to know what you make of this news and what investment revisions, if any, you plan to make.

Thanks for reading.

Disclosures: Of companies mentioned in today’s column, I have long positions in $ESPR, $LLY, $MRK, $PFE. My investment in Merck is old and long-term, and has nothing to do with its CETPi program. I have no short positions or options, and will not trade in any named company for 72 hours after this column appears. I have neither solicited nor received anything of pecuniary value from any person or company ever depicted by me at Stock Gumshoe or in any other media. Follow me on Twitter @KSSMDPhD.




  1. here: http://www.stockgumshoe.com/author/dr-kss-md-phd/
  2. original column: http://www.stockgumshoe.com/2014/08/microblog-a-non-statin-pill-that-really-lowers-cholesterol-blood-pressure-and-inflammation-without-side-effects-would-be-a-good-investment-right/
  3. this 2009 paper: https://www.ncbi.nlm.nih.gov/pubmed/19781408
  4. this 2014 paper: https://www.ncbi.nlm.nih.gov/pubmed/24188894
  5. the REVEAL trial: https://clinicaltrials.gov/ct2/show/NCT01252953?term=Merck+REVEAL&rank=1
  6. interim analysis: http://www.mercknewsroom.com/news-release/research-and-development-news/merck-provides-update-reveal-outcomes-study
  7. REVEAL protocol: https://clinicaltrials.gov/ct2/show/NCT01252953?term=Merck+REVEAL&rank=1

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