Good day ladies and gentlemen and welcome to the Esperion Therapeutics fourth quarter 2014 earnings conference call and webcast. At this time, all participants are in a listen-only mode. Later we will conduct a question-and-answer session and instructions will follow at that time. I would now like to introduce your host for today's conference, Ms. Mindy Lowe with Esperion. Please begin.

Thank you, Jonathan. Hello everyone and welcome to the Esperion Therapeutics ETC-1002 program update, fourth quarter and 2014 year-end financial results call. I am Mindy Lowe from Esperion and with me today are Tim Mayleben, our President and CEO, Marianne Andreach, Senior Vice President of Strategic Marketing & Product Planning and Rick Bartram, our Vice President of Finance. As a reminder, this conference call and webcast is being recorded. To access the playback, please go to Investors section of the Esperion's website at esperion.com. I would like to remind callers that the information discussed on the call today is covered under the Safe Harbor provisions of the Private Securities Litigation Reform Act. I caution listeners that the company's management will be making forward-looking statements. Actual results could differ materially from those stated or implied by our forward-looking statements due to the risks and uncertainties associated with the company's business. These forward-looking statements are qualified in their entirety by the cautionary statements contained in today's press release and the company's SEC filings. The content of this conference call contains time sensitive information that is accurate only as of the date of this live broadcast, March 5, 2015. Esperion undertakes no obligation to revise or update any forward-looking statements to reflect events or circumstances after the date of this conference call. We issued a press release earlier today detailing the content of today's call. A copy can be found at esperion.com within the Investors section. We will begin with prepared comments from our team and then we will open the call for your questions. Following today's call, the management team will be available for any follow-up question. Please e-mail me directly at mlowe@esperion.com so that I can schedule 15 minutes for you to speak with the team. Now I would like to turn the call over to Esperion's President and CEO, Tim Mayleben. Tim?

Thank you, Mindy. Good afternoon everyone. I would also like to welcome you to our call and thank you for joining us today as we provide you with an update on the ETC-1002 clinical development program and our fourth quarter and full-year 2014 financial results. I am going to start with a few initial comments. Marianne will then discuss the unmet need in statin tolerance. Rick will review a summary of our financial results from the fourth quarter and full year ended December 31, 2014 and I will wrap up with a summary of the key upcoming milestones for 2015. And then, of course, we will open the call to your questions. Now 2014 has been or was the most successful year in our history and the Esperion team performed at a very high level. In particular I want to highlight three milestones. First, on October 1, ahead of plan, we reported positive topline results from the Phase 2b 008 clinical study in 349 patients with hypercholesterolemia with or without statin intolerance and the results that exceeded even our own high expectations. As a reminder, 1002 treated patients achieved LDL cholesterol lowering of up to 30% with monotherapy and almost 50% when 1002 was added to Ezetimibe. Second, two weeks later we completed a follow-on equity offering totaling almost $100 million which was priced at a 50% premium to the IPO. As a result, Esperion is now sufficiently funded to complete development of the 1002 program and the company through 2018. This was huge for us. Our momentum has continued into early 2015. We were enormously pleased when the FDA notified us in late January less than three weeks after we submitted our complete response that they have removed the PPAR partial clinical hold for 1002. We are now able…

Thank you, Tim. As Tim just said, I have been working in the lipids and atherosclerosis area for about 30 years. I am not exaggerating when I say I have been fortunate enough to have had a front row seat to just about all of the advancements and innovations in the therapeutic area over that time. Statins have been life-saving drugs for millions of patients around the world. But as you have heard Roger, me and others at Esperion say, because we know so much about statins and realize all the good that they have done, we also know firsthand who they can't help and what they can't do. That is the primary reason for the existence of the new Esperion to go beyond statins for the many patients who need new options. Statins have been, are now and for as long as I can see into the future, will be first line therapies. They are inexpensive, efficacious, reasonably well tolerated and conveniently dosed and pilled. Esperion is not looking to displace statins. Esperion and 1002 will go beyond statins. I believe that 1002 will help two patient populations. First, patients with high levels of LDL-cholesterol who can't tolerate statins and second, patients with high levels of LDL-cholesterol who are taking statins but are not getting sufficient LDL-cholesterol lowering. I want to spend the next few minutes talking about statin intolerant patients since we have found this is the least understood patient population. The vast majority of patients, 90%, do just fine on their statins. But that leaves 10% of patients that try a statin and can't tolerate it. How will statin intolerant patient be managed in the future? We hope to see 1002 as both monotherapy or in combination with Ezetimibe as the future standard of care for statin…

Thank you, Marianne. Before I ask Rick to update you on our financial results, I want to briefly address the question about a fixed dose combination of 1002 and Ezetimibe that many of you have asked us about. As I highlighted earlier, 1002 plus Ezetimibe lowers LDL-cholesterol by almost 50% in statin intolerant patients, which is a level of LDL-cholesterol lowering comparable to PCSK9 monotherapy in this patient population. Of course, 1002 comes in a convenient oral dosing form and we expect will be priced at what we are calling a traditional price point for this therapeutic area. First I want to confirm that we are ramping up development of a fixed dose combination or FDC of 1002 and Ezetimibe. We have done a preliminary evaluation of the intellectual property landscape and don't see any impediments there. We are also conducting a pharmaceutics or CMC evaluation of the fixed dose combination and don't see any challenges yet in the formulation of a convenient once-daily oral pill combining 1002 and Ezetimibe. Currently, we are finalizing our development plans for the fixed dose combination of 1002 and Ezetimibe. At this stage, we believe that the fixed dose combination will be developed in parallel with 1002. Our goal will be to seek approval for both 1002 and the fixed dose combination at about the same time. We will continue to provide you regular updates on our development plans for the fixed dose combination. With that, let me turn the call over to Rick for a review of the financial highlights from the fourth quarter and 2014. Rick?

Thank you Tim. As of December 31, 2014 Esperion had approximately $142 million in cash and investment securities and approximately $5 million in debt outstanding under our existing credit facility. We expect that our current cash and investment securities will be sufficient to fund the Phase 3 development program for 1002 and our operations into 2018. Our net loss for the year ended December 31, 2014 was $36.4 million compared to $26.1 million in the prior year. This was primarily related to increases in R&D cost for the advancement of 1002 and the completion of the 008 study and our ongoing 009 and 014 studies as well as increases in public company operating costs. As of December 31, 2014, we had 20.4 million shares of common stock outstanding with another two million issuable upon the exercise of options and warrants. Looking forward, we estimate operating expenses for the full-year 2015 to be approximately $42 million which is exclusive of non-cash expenses primarily consisting of stock-based compensation of approximately $5 million. We expect to end 2015 with approximately $100 million in cash and investment securities. As I mentioned earlier, we expect our current cash and investment securities will be sufficient to fund 1002 through the completion of the Phase 3 program and our operations into 2018. With that, I will turn the call back over to Tim.

Thank you Rick. Before we open the call to your questions, I want to highlight the key upcoming milestones for 1002. So, first on Saturday, March 14, Dr. Paul Thompson will present full results from the 008 Phase 2b study in statin intolerant and statin tolerant patients at the American College of Cardiology Scientific Session in San Diego, California. We plan to host and webcast a reception later that evening to present the full 008 results and provide an update on the statin intolerant market. Details regarding the event will be announced next week. Later this month in the second half of March, we expect to report topline results from the Phase 2b 009 add-on to statin clinical study. And just to settle expectations, I want to emphasizes that as is our usual practice, this will be topline information only. We do this to preserve our ability to publish in the most prestigious journals and present at the most well recognized medical meetings. Topline will include the primary endpoint, of course and various secondary endpoints. By mid-year we plan to conduct our end of Phase 2 meeting with FDA and announce topline results from the Phase 2 014 clinical study in patients with both hypercholesterolemia and hypertension. Interestingly later this year, we plan to publish on our deepening scientific and mechanistic understanding of 1002, in particular the inhibition of ATP citrate lyase, which lowers LDL-cholesterol like a statin but with reduced potential for muscle related side effects. And finally by year-end, we expect to initiate our Phase 3 program for 1002, including our long-term safety study. I just want to note, joining us for the Q&A is Dr. Narendra Lalwani, Executive Vice President of R&D and Chief Operating Officer. We will now open the call to your questions. Jonathan, if you would please poll for questions.

[Operator Instructions]. Our first question comes from the line of Jason Butler from JMP Securities. Your question, please.

Hi. Thanks for taking the questions and congrats on the progress. Just first question on 009. Just wanted to clarify on the expectations for data release. Will you be releasing the same kind of safety information that you released for 008, specifically things like liver enzymes and uric acid and any unexpected safety findings?

Absolutely, Jason, I think a fair and balanced release of results will include and I am sorry I didn't highlight in our prepared comments, but will include the safety parameters that you highlighted, similar to what we did with the 008 results.

Great. Thanks. And then, on the fixed dose combination program with Ezetimibe, I guess two questions. First, can you give us a little bit more color on what the news for anticipated milestones we might see out of that program would be this year in terms of formulation as well as trial plans? And then the second question is on budget. The previous cost of the Phase 3 program you talked about, does this fixed dose combination alter your budget for Phase 3 and your anticipated spend?

Let me comment perhaps comment on that rather than answer perhaps all of the questions that you asked and not to dodge the questions that you are asking, Jason, but maybe just hold and reserve that when we have more certainty about those questions that you are asking, we will definitely be out talking about them. So in terms of specific clinical trials that we will be running or future announcements, we are not prepared today to talk about those. We are still in the process of finalizing what I call our development plans and the related budget. So if you could hold those questions until our next call, we will be in a much better position to provide you more granularity on that, understanding that you and others who want that and we are definitely leaning into providing it to you. But we want to make sure that we are providing you solid information and solid plans rather than speculation at this stage.

Okay. Great. Thanks for taking the questions. I will jump back in the queue.

You bet.

Thank you. Our next question comes from the line of Jason Kantor from Credit Suisse. Your question, please.

Hi. Good afternoon. This is Jeremiah, in for Jason. Thank you for taking the questions. Generally speaking, what aspects of the 008 study from the efficacy and safety might we expect to see at ACC that we have not already seen? Because you had a pretty good amount of data in that prior release, but I was kind of curious if you could just provide more color on what we could see there?

Yes. I will definitely answer that. Marianne will take that question for you, Jeremiah.

Yes. Hi, Jeremiah. What we are going to be presenting, actually what Paul Thompson will present, in addition to the data that we have already seen as part of topline, will be some more detail with respect to the baseline patient characteristics, especially looking at patients who are statin tolerant versus patients who are statin intolerant. With respect to the LDL-cholesterol data, there also will be a breakout of statin tolerant patient response and statin intolerant patient response. We also measured atherogenic lipids and lipoproteins like total cholesterol, ApoB level, non-HDL cholesterol and other lipids and lipoproteins such as triglycerides and HDL cholesterol and particle numbers. Those information, those data will be included as part of this and a little more color on the tolerability and safety data, as well as some general comments about effects on things like weight, blood pressure and glucose.

And now that it has been about a month since you have had your partial clinical hold lifted, have you scheduled your end of Phase 2 meeting with FDA already? And at that meeting, would you expect that the FDA will provide you some guidance at the meeting or will that come in meetings sometime thereafter?

Very good questions, Jeremiah. So our plan has been and still remains to finally meeting request with the FDA in the second quarter and the reason for that is, we want to include our 009 results in the briefing book that we are going to put together and of course the 009 results, as we talked about a few moments ago, will not be available until later this month. In terms of the meeting itself, we expect to hold that meeting in the middle part of the year. So we have been saying June or July. The reason we have been saying June or July is that meeting actually is at the discretion of FDA from a timing standpoint. We will request the meeting and then it will be up to FDA to schedule that. And in terms of feedback from that meeting and guidance for the Phase 3 development program or actually confirmation of the Phase 3 development program, we do expect that the actual confirmation of that will take anywhere between 30 and 45 days post the meeting for us to get the minutes back. We wouldn't want to front run FDA with conclusions from that meeting without having the official minutes from those meetings.

Okay and then just a last question. Now that you are going to look at a fixed dose with Zetia and hope to start that work pretty soon here, but assuming that there is a positive results in 009, would you be looking at a fixed dose with a statin in parallel? Or would you be committed to prioritizing one or the other?

Jeremiah, I would have loved it if you would ask that question on the 009 results call rather than us speculate because I think we will be able to provide a bit more guidance on that, a better response, if you will, once we actually have the 009 results and you guys have had a chance to digest them as well.

Okay. Well, thank you for taking the questions.

You bet. Thank you, Jeremiah.

Thank you. Our next question comes from the line of Brian Klein from Stifel. Your question, please.

Hi guys. Thank you for taking my questions. First, just wanted to ask, have you done any co-formulation work internally and does it make a difference which statin you would combine ETC-1002 with?

We have not done any co-formulation work with the statins yet. Again, I don't think there is nothing obvious there. But until we actually do the work, you can't conclude that for certain. So again, I think, once we have the 009 results, we see what those look like, we will do some additional market research to look at the interest in a fixed dose combination with a statin. We will have more to say on that as we get those results and not only obviously the results from 009, but also the additional market research that we are going to be doing there.

Great. Thanks. Second question is in regards to the data that you previously showed a while back on the impact of glucose with 1002. Just wondering if you are planning on pursuing 1002, specifically in diabetic patients? And if that might be a future Phase 2 program that you would pursue?

I am going to let Marianne respond to that. Brian, it's one, we may have spoken with you about, it certainly top of mind for us but I will let Marianne provide a bit more commentary on it.

Hi, Brian. One of the things that is important for us as we think about our Phase 3 program is that we want to ensure that as part of the patient group we consider to be those with primary hypercholesterolemia that we are able to include patients who are already being treated with metformin and to pave the way from that we have conducted a clinical pharmacology study looking at ETC-1002 with metformin. So in answer to your question, our first focus will be on lowering LDL-cholesterol in patients who also in addition to hypercholesterolemia have diabetes because we recognize that actually controlling their LDL-cholesterol is absolutely essential for reducing their risk of future cardiovascular event. As far as thinking about development in diabetic patients to specifically look at diabetes endpoint is one of the things of our Phase 3 program because of the size and scope of the program, it will actually be able to tell us more about those patients and how they perform on ETC-1002 within Phase 3 and will give us more insights as we think about this going forward.

Hi, Brian. Just one other comment there. I don't know if you saw the paper that was out today talking again about patients with both diabetes and hypercholesterolemia being at a greater risk of developing glucose worsening on high-dose statins which is again, I think, something that we have been highlighting and we will continue to have some focus on. But it certainly appears to us to be an area of unmet need and perhaps not as high as we define the statin intolerant patients, but certainly a very high area of unmet medical need for which there are no good options today and so from that standpoint, it certainly looks like something that we should spend more time on them. And like I said, it is top of mind for us.

Great. Thank you for taking my question.

Thank you. Our next question comes from the line of Chad Messer from Needham & Co. Your question, please.

Great. Thanks for taking my question and I appreciated the prepared comments, how you kind of focused us on your commercial and regulatory strategy for a broad cholesterol lowering label with primary commercial focus in statin intolerance. I absolutely believe that that's a great market, but at risk of going to a couple of more speculative path like a couple of my colleagues have, I just wanted to ask about a couple of other sort of larger picture opportunities just to see what comments you may be able to provide about them at this time. I know we are waiting on data from a low dose statin trial. Is there any thought to studying 1002 with higher dose statins to try to see how far an oral regimen can be pushed or any concerns or reasons to not do that in the future? And then just to throw the other one out there and that would be the blood pressure study reading in the second quarter and how you say positive data might affect how you would think market opportunity there?

Thanks for the questions, Chad. I will answer the second question first here and then I will ask Narendra to comment on your first question. With respect to the 014 study, which I think as you highlighted, is the study in patients with both hypercholesterolemia and hypertension or high blood pressure. I think from our standpoint, it's a study that is a very interesting and intriguing because of the retrospective analysis that we had done in our Phase 2a program where we saw this modest but significant reduction in systolic blood pressure in patients with slightly elevated levels of blood pressure. So for the 014 study, we think that either a neutral or a positive benefit and a positive benefit, of course would be a reduction in systolic or diastolic blood pressure would be just a phenomenal success because it would reconfirm what we said about ETC-1002 which is that on all of the important biomarkers, we have or 1002 has, either a neutral or positive effect on them. Of course, LDL-cholesterol lowering is the most dramatic but we have neutral effects on triglycerides and 1002 has neutral effects on HDL, but dramatically lowers hsCRP. Seems to have this positive effect on glucose and seems to have this slightly positive effect on blood pressure. So I think from our standpoint, it would be a great confirmation of the safety profile of ETC-1002 and that's how we have been positioning that 014 study. And so neutral to positive benefits there in that study are going to be just very nicely reassuring. Now I will just ask Narendra to respond to your first question.

Yes. So in terms of combination with the statins, in the 009 study we have evaluated four major statins at low dose and mid dose at two different dose strengths of ETC-1002. In the next few weeks when we look at the data depending upon the safety and efficacy of Zetia, ETC-1002 combination with statins as well as efficacy, we will decide that whether there is an advantage of including one or both doses in combination with statins and also based on the safety, we will think about including all prescribed doses of statins of various kinds in other future clinical studies.

Great. Thanks for answering my questions.

Thank you, Chad.

Thank you. [Operator Instructions]. Our next question comes from the line of Joe [indiscernible] from Citi. Your question, please.

Hi. Thanks a lot for taking the questions and congratulations on the development over the last quarter.

Hi, Joe. Thank you.

Firs question, how does Zetia, how could that play a role in the Phase 3 trial design? Would we see a trial design similar to what we saw in 008 or 009? Have you guys figured that out?

Yes. Narendra, would you comment?

So on Phase 3 study, we will be looking at monotherapy for a variety of patient population as we have talked before. But we will be also looking at an evaluation of efficacy in combination with Ezetimibe as well as various statins, including a combination Ezetimibe and ETC-1002 in statin intolerant population and a couple of those study. I think we would like to see the broad market label and claims with our drug and primary focus on statin intolerant population.

Great. Thanks and then just a last question. What's the status of the second partial hold? Is there any more info on the timing for that?

Sure, Joe. So for everybody else's benefit, the partial clinical hold that Joe is offering to is the 240 milligram partial clinical hold, which prevents us from going to doses higher than 240. As you heard us say before, we don't think that partial clinical hold is relevant to our development plans because the doses that we are using in our Phase 2b and Phase 3 studies will be 120 and 180. Having said that, it's a dialogue that we have ongoing with FDA over whether they have any lingering concerns and if so then we are certainly positioning ourselves to address them and resolve by the end of the second quarter here or more specifically before the end of Phase 2 meeting. So we think we are on the right trajectory for that, given the dialogue that we have ongoing there but, Joe, we will continue to keep you and others posted as we make progress there. But it's certainly on our radar screen more as something we want to address and close the loop on as opposed to anything that would affect further or future development of ETC-1002.

Thank you.

Thanks, Joe.

Our next question comes from the line of Steve Byrne from Bank of America. Your question, please.

I just want to make sure I heard correctly in the discussion there on the Phase 3 design that there would be a triple combo in that Phase 3 program, i.e., a statin, 1002 along with Ezetimibe?

No. Just to clarify, we will be evaluating ETC-1002 as a monotherapy. But we will be also looking at ETC-1002 in combination with Ezetimibe. And we will also evaluate ETC-1002 as an add-on to various statins.

What do you think of the idea of a triple combo?

There is no triple combo at this time. At some point in the future, if we decide that there will be an opportunity to evaluate such a combination, we will definitely consider. We do agree that statins are first line therapy and they will remain as background therapy in various patients.

Okay and then, Marianne, following your remarks about the statin intolerant patients and the unmet need there, do you have the baseline LDL level data from the 008 study in the two buckets of patients, the statin intolerant and the statin intolerant? And was the baseline level higher in the statin intolerant patients?

Thanks a lot for the question, Steve. Actually we will be going into that. That will be when we talk about the comparative baseline information. We will be talking about that and look forward to discussing the data once we put them out on the public domain as part of the procedure.

Okay and then just one other one on the combination with Ezetimibe. Do you have any PK/PD data that you collected in any prior study that would give you some ability to assess any drug/drug interaction from the combination?

We do have PK/PD data from 1002 studies. We do have anecdotal PK/PD data in combination with Ezetimibe from our 008 study. There is no reason to believe that there is any risk or reason of outside interaction. The mechanism of the two drugs and the clearance profiles of these two drugs are completely separate from each other. So we do not anticipate any high dose in terms of PK/PD interactions in the future. However, once we have designed the combination, we will be evaluating all these criteria as our Phase 1 is to plan before launch of Phase 3 study with the combinations.

Okay. Thank you.

Thank you, Steve.

Thank you. We have a follow up question from the line of Jason Butler from JMP Securities.

Thanks for taking my follow-up. Just wanted to ask another question on the Ezetimibe fixed dose combination. When you think about clinical trial plans ahead of the current patent expiring for Zetia, how do you think about sourcing drug? Is this something that you have consider or spoken to Merck about and what is your thoughts on sourcing drugs?

It's a great question, Jason. Have not gotten to the point where we are thinking about any issues with sourcing and of course we included Ezetimibe in pill form in a prior study but have not thought about API or anything else at this stage. But certainly on our list of things to do for our CMC team. But like I said, don't anticipate big issues there.

Okay. Great. Thanks for taking the follow-up.

You bet.

Thank you. We will now conclude the Q&A portion of the call. As mentioned earlier, please email Mindy Lowe at mlowe@esperion.com to schedule a follow-up call with management if there are any questions from today's discussion. Now I would like to turn the call back over to Tim Mayleben for closing comments.

Thank you Jonathon. I just want to thank everybody for joining the call today and for your continued interest in 1002 and also your support of Esperion. We look forward to continuing to update you on our progress throughout what will be a very exciting 2015.

Thank you. This does conclude today's conference for Esperion Therapeutics. You may now disconnect. Good day.