The Unresolved Dispute Between Esperion and Daiichi Sankyo: Who Will Pay Up?

Daiichi Sankyo was unimpressed with the results of the Phase III CLEAR trial of Esperion Therapeutic’s cholesterol-lowering candidate Nexletol (bempedoic acid), as the results were not enough to trigger a milestone payment, Esperion reported in an SEC filing on Wednesday. This could be a major setback for the company, as Nexletol is a promising drug for treating high cholesterol.

In 2019, Daiichi Sankyo made a game-changing move to acquire exclusive European rights to bempedoic acid. Unfortunately, their bold move sent shockwaves through the market, with Esperion’s shares plummeting a staggering 55% in after-hours trading Wednesday.

Esperion’s drug Nexletol has been shown to reduce the risk of major adverse cardiovascular events (MACE) by 13%, heart attack risk by 23%, and the need for coronary revascularization by 19%, according to data from the CLEAR study released in early March. This has sparked a payment dispute between the two companies.

Esperion’s President and CEO Sheldon Koenig was optimistic about the CLEAR results, calling them “practice changing” and exceeding expectations. However, the market had a different reaction, as Esperion’s shares dropped 20% in response.

Daiichi Sankyo was less than impressed with the results. They had hoped for something better, but unfortunately it wasn’t to be.

Esperion has asserted its right to receive a total of $300 million in milestone payments, once the cardiovascular risk reduction data of Nexletol is officially included in its European label. This was made clear in their recent SEC filing.

The SEC document revealed that this milestone payment was linked to the degree of risk reduction included in the label. The more risk that was eliminated, the greater the reward.

Esperion stands to gain a staggering $200 million if it can demonstrate that Nexletol can deliver a risk reduction of between 15-20%. But the reward gets even greater if it can exceed that 20% threshold – an additional $100 million!

Daiichi Sankyo strongly disputed Esperion’s interpretation of their agreement, insisting that the agreement applied solely to CLEAR’s primary endpoint. Consequently, Esperion failed to meet the specified milestone as Nexletol only managed to reduce MACE risk by a mere 13%.

Esperion was quick to refute what many had interpreted its 2019 agreement to be, stating that the agreement “refers only to cardiovascular risk reduction and not to any primary endpoint.” This was made clear in its SEC filing.

Esperion announced that Nexletol has achieved a staggering 23% risk reduction for heart attack, making it eligible for a milestone payment.

Esperion is prepared to take action to ensure it receives the milestone payments it believes it is owed, should the payment dispute continue. According to a SEC document, the company is prepared to exercise its contractual rights and pursue the payments it believes it is entitled to.

Although the company may claim to have achieved a milestone, the payment dispute could be a major setback, potentially causing delays in payment that could significantly impede the company’s future capital needs.

Nexletol, a revolutionary new non-statin medication, has been approved by the FDA for adults with atherosclerotic disease or heterozygous familial hypercholesterolemia. This groundbreaking drug is set to revolutionize the way cholesterol levels are managed, allowing users to reduce their risk of cardiovascular disease without relying on statins. With its approval in February 2020, Nexletol is sure to become an invaluable part of managing cholesterol levels.

Esperion has been struggling to gain traction in the market, resulting in a devastating 40% cut in staff in October 2021. This setback has hindered the progress of their desired candidate, making the road to success a lengthy and challenging one.

In 2022, Esperion’s total revenue fell by 4% to $75.5 million, compared to the previous year’s earnings of $78.4 million. Despite the decline, the company remains focused on continuing to grow its business and expanding its customer base.

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