Good morning, ladies and gentlemen. Thank you for standing by. Welcome to Esperion’s Fourth Quarter 2023 Earnings Conference Call. At this time, all participants are in a listen-only mode. [Operator Instructions] Please be advised that today's conference call may be recorded. I would now like to hand the conference over to Alexis Callahan, Head of Investor Relations. Please go ahead.

Thank you, operator. Good morning, and welcome to Esperion's Fourth Quarter and Full Year 2023 Earnings Conference Call. With us today are Sheldon Koenig, President and CEO; and Ben Halladay, CFO. Other members of the executive team will be available for Q&A following our prepared remarks. We issued a press release earlier this morning detailing the content of today's call. A copy can be found on the Investor page of our website, together with a copy of the presentation that we will also be referencing. I want 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 management will be making forward-looking statements. Actual results could differ materially from those stated or implied by our forward-looking statements due to risks and uncertainties associated with the business. These forward-looking statements are qualified in their entirety by the cautionary statements contained in today's press release and in our SEC filings. The content of this conference call contains time-sensitive information that is accurate only as of the date of this live broadcast, February 27, 2024. We undertake no obligation to revise or update any forward-looking statements to reflect events or circumstances after the date of this conference call and webcast. As a reminder, this conference call and webcast are being recorded and archived. We will begin the call with prepared remarks and then open the line for your questions. I'll now turn the call over to Sheldon Koenig, President and Chief Executive Officer.

Thank you, Alexis, and good morning, everyone. Thank you for joining us today to discuss our fourth quarter and full year results and a significant progress we continue to make. We are pleased to report another strong quarter as well as key material events in January that we believe put our company on solid footing and further position us for continued long-term success. Starting with our quarterly performance. Total revenue was $32.3 million, which represents a 72% increase year-over-year. U.S. net revenue came in at $20.8 million, which represents a 39% increase year-over-year driven by a 44% year-over-year increase in retail prescription equivalents. We believe the continued growth seen in both the U.S. and in our global territories is a testament to the strength of our clinical data, the unmet need in the market and our teams and partners' abilities to execute. Listed here are several recent accomplishments worth calling out. We delivered another strong quarter that positions us for continued success in the long-term and significantly transforms our capital position and investment profile. Prescription growth continued at a strong pace, and we're proud of the momentum that we sustained through the end of the year. Additionally, we resolved our pending litigation with DSE and expanded our partnership on mutually beneficial terms. We further strengthened our balance sheet with additional capital, emphasizing our strong cash position and bringing in several new long-term biotech investors. Our label expansion approvals remain on track in both the U.S. and Europe. We published additional important data from our CLEAR Outcomes trial and we remain focused on preparation for our new label, expanding our commercial organization to ensure we're ready to fully capitalize on the opportunity when we receive approval next month. On January 3, we announced the settlement agreement and an amendment to our…

Thank you, Sheldon. Earlier this morning, we issued a press release containing our financial results for the fourth quarter, which is available on the Investor page of our website. Please note that unless otherwise specified, my comments reflect results for the fourth quarter ended December 31, 2023. As Sheldon already mentioned, we posted strong fourth quarter results and ended the year with continued momentum, including in new-to-brand prescriptions. We ended the year on a strong note, which really emphasizes the point that outcomes data matters, and we're excited for that data to be incorporated into our new label next month and for what it means for patient access and our ability to actively promote the data for the first time. We again delivered another quarter of continued growth in retail prescription equivalents, which increased 44% year-over-year and 8% quarter-over-quarter and was accomplished even with our current label and promotional footprint before recently ramping up our in-house sales force. The weekly RPE trend also reflects this momentum and touched the 12,000 RPE mark late in the fourth quarter, a new weekly high. Turning to growth outside the U.S. Our partner, DSE, again, delivered another strong quarter of sales growth in its territories, underscoring the value our approved medicines are bringing to the patients globally. At the end of November, approximately 202,000 patients have now been treated with our therapies in Europe, representing sequential 3-month growth of 28% since August. I will note that most of this growth has been generated from existing territories. That said, DSE commercially launched in three new territories during the fourth quarter, the Netherlands, Slovakia and Spain and gained approval in Czech Republic as well. In addition, Daiichi Sankyo launched in Hong Kong during the fourth quarter, marking the first country in the Asia region to launch.…

Thank you, Ben. I'd like to close by reiterating that we continue to deliver on our commitments and execute on our strategic plan to achieve blockbuster status. Sales are continuing to accelerate following publication of our CLEAR Outcomes data last year, and we anticipate a true inflection to occur after we receive approval of our new and expanded labels in the U.S. and Europe later this year. Our strategic plan also consists of an expansion of our product pipeline as we further develop our next-gen ACLY inhibitors. We will further expand on our pipeline later this year. But in short, we are excited about our next-gen platform and the potential therapeutic areas to which it could be applicable. Further development of these assets could help us expand beyond lipids and enter into new markets with significant unmet need, increase our addressable market, extend our product life cycle and open the door to additional partnering opportunities as well as help us achieve long-term sustainable growth. In summary, I'm excited for what I believe lies in store for us both now and in the future, and our path has never been clear or brighter. And with that, operator, we are now ready for Q&A.

[Operator Instructions] And our first question coming from the line of Serge Belanger with Needham. Your line is open

Hi good morning. Thanks for taking my questions. I guess for Sheldon, we're about 30 days away or so from the PDUFA for the label expansion. Maybe just talk about the cadence of activities that would follow that label extension given that there's DCC and what the plan is to -- in terms of payers and formulary coverage? Thanks.

Great. Yes. Thank you, Serge good morning. So yes, we are about 30 days away from our PDUFA date and just, again, I want to reiterate, I do not see any issues at all of getting there. We've had some very positive interactions with the FDA. So again, feeling really confident about our label and the strategy that we've laid out regarding the label. You heard about our five pillars that we mentioned in our prepared remarks, as we get ready to launch this new label, which we've always said will be an inflection point for us. As it relates to payers, we've been out talking to payers since the last ACC, March 4. I'm happy to say we've made great progress with the payers. We've seen some payers already making changes in anticipation of the new label. I think what's also interesting in our prepared remarks, we mentioned that ICER just recently came out and made reference to NEXLIZET as being a cost-effective therapy and essentially should be made available on all formularies. So that's something we'll also reimburse with payers. So, we feel very confident about our payer strategy and the interactions that we have had with them. To your point for ACC, again, we get the label, the new label end of March. ACC is around the April 5 time frame. And we'll be using ACC as a way to really launch that new label and really make a big splash regarding the new label.

And Serge, it's Eric. If I can add that day one, our sales force will be ready to go. So, April 1, we have a full day of training to ensure that, that team deploys rapidly. As Sheldon mentioned, we have the ACC, where we'll deploy the new campaign as well as we'll have speaker programs and scientific interaction and then we'll transition to middle of April to have a launch meeting and start digital as well as consumer programs. So, we've got a full slate of activities planned, but day one is when we're beginning them.

Great. And maybe just a follow-up. In terms of gross to net, how stable have they been through 2023? And maybe just talk what kind of impact do you expect in the first quarter? And whether they can improve once you have the label update and additional product volumes?

Yes. Serge, it's Ben. Thanks for the question. So, I would say throughout 2023, we saw gross to net that were extremely in line with our expectations in regards to seasonality and where we think a healthy gross to net should be. Going into 2024, we expect that to be mostly the same. We'll see some incremental improvements in certain areas like distribution fees that volume typically helps bring down. But overall, we don't expect any major change, and we should see the same sort of seasonality that we saw this year.

Thank you.

Thank you. And our next question coming from the line of Tom Shrader with BTIG. Your line is open.

Good morning. Thank you for taking my call. About the new label. So, you've already had the maximum statin requirement or language dropped. Has that had any effect on how payers treat the drug? And I guess what I'm -- I think what I'm hearing from you guys is that once you can market the CVOT, the real driver is going to be the pull from physicians that they want the drug which will be the big lever for getting payers to make it available more easily. Is that correct? Or is it at the payer level that you really need to do your work? Thanks.

Yes. Great. Thanks, Tom. Let me start, and then I'll ask BJ also if there's comments to be made. So, as you stated, at the end of December, we saw that the FDA did what I would call harmonization of labels and they removed the maximum tolerated dose of statin, and they essentially acknowledge that we had outcomes very different from the label we'll be getting at the end of March, which will have the CLEAR Outcomes data. Now with that said, there were some accounts. It actually acted as a catalyst for accounts to be prepared for the new label, and some of them went forward and did make changes and removed ezetimibe step edit for instance. But to your point, and one of the reasons why we've always said the new label would be a catalyst inflection point is, keep in mind, we're the only drug besides statins that studied not only secondary prevention, but primary prevention, that's a big differentiation from drugs like ezetimibe and PCSK9. And keep in mind also in part of our strategy for our label is that you can use NEXLIZET on its own or you can use it with a statin. So, a doctor has choices now. And again, for those primary prevention patients, it's extremely important. Now we've talked to payers about this. As mentioned in the last question, they're very receptive to what our new label will look like. We've talked to them. Of course, we won't know what our final label is until we get it, but we've talked to them of what it could look like and what we would need for them to do to change UM criteria. And for the most part, they've been very agreeable and that will really then lessen the barrier of physicians being able to get the drug. That's what the label does. It makes it easier for physicians to get this drug. Our label right now is very narrow and very restrictive. As we mentioned in our prepared remarks, the population goes from 10 million to 30 million plus patients.

I just would say, Tom, improving payer coverage certainly matters as a priority, and we've been streamlining consistency in utilization management. We actually have had UM criteria improve just since CVOT presentations, the interim label with over 16 [Indiscernible] regionally and nationally. We are well poised for the new label, and we're very excited, and those discussions have been continuing since last year's ACC to current day. And all the payers are anticipating the new label. So, we feel very confident in that regard.

Okay, thank you.

Thank you. And our next question coming from Jason Zemansky from Bank of America. Your line is open.

Good morning. Thanks for taking our questions and congrats on the quarter. Two if I may, please. I was hoping, first, you could provide some color on the specific impact of FDA's label revision in December. I appreciate the holidays were right there. But was there any lift or acceleration either in interest or sales at that point with the loosening of restrictions?

Hey Jason, it's Eric. So, we did drive that 8% growth, which is relatively consistent to prior quarters with the exception of second quarter. But as you know, that change that we saw removed the maximally tolerated requirement, but it still kept statins and full payer changes didn't happen with regards to that removal. So, I would say it kept us growing on the cadence that we were growing, but it didn't have a dramatic inflection like we anticipate when we're going to have the updated label in April 1. So as Shelton stated, not only is it a quantity of patient change going from 10 to 30, potentially 70, but it's a quality incorporating that primary prevention and fully removing the statin requirement.

And Jason, I would add that, the thing about the new label that we'll have at the end of March is it will be the first time that our representatives or medical aisons [ph] etcetera, can actually speak to CLEAR Outcomes data. So, the growth that Eric spoke to and the growth that we've demonstrated through 2023 has always been on the, what I would say, again, the very restrictive label that we had. So, we never thought of and we tried to actually take time with folks to explain the label change from December do not confuse that with what the label change will be at the end of March, because that's what really opens the door for us as it relates to new patients and really being able to maximize the value of our products.

Got it. And then -- so obviously, the NCE one day pass last week. So generic companies can technically file for ANDAs of for generic versions of NEXLETOL, NEXLIZET, wanted to ask, have you received any Paragraph IV notifications from generic manufacturers?

We are aware of the data that you mentioned, and it's something that we've been expecting. But no, we have not received anything to date.

Got it.

Thank you. Our next question coming from the line of Na Sun with JPM. Your line is open.

Hi guys. This is Na Sun on for Jessica Fye. Congratulations on the good quarter. Can you talk about how the shift in OUS manufacturing to DSE, like how long that shift will take? And could we maybe see impact from that in 2024? And also, you mentioned there's an update of guidelines that could be on the horizon. I think how soon do you expect to see that potentially happening? And then for OpEx in 4Q, the R&D guideline. Is that a -- like is that as low as the company could go? Or is there some further development cost for the pipeline included in there? Thank you.

Ben, do you want to start with...

Yes. Yes. So, I'll answer the manufacturing and the OpEx question. So, on the manufacturing transition to DSE. It's a tech transfer, which typically takes anywhere 16 to 18 months. We've been in discussions with them about the time frame and moving that along as quickly as possible. I think it's in both parties' interest and both parties are very excited to get it done. But that said, it will take time. We're working through the specifics of the plan, but there is a possibility we'll start seeing some of the working capital benefits towards the end of the year. I wouldn't expect any of the gross margin savings to happen until next year when we're further along in the type transfer though. And then on the OpEx guidance for R&D, we do -- that guidance does include the preclinical pipeline spend. So that's all inclusive. But I will say we have sort of meaningfully manage that OpEx down, and we're pretty lean at this point.

I would just go to further add that. We actually were in Munich about two weeks ago. We met with our manufacturing folks to do a kickoff of the tech transfer. It was a really good meeting, and we're off to a really good start with their team and working together to get this done. Related to guidelines, again, we have no impact on guidelines where some of the mercy of the folks that write the guidelines. There was some thought that guidelines would have come out in 2023. And there's a potential maybe it could be 2024. I do think once our new label comes out, there will be consensus statements, etcetera. But as it relates to when the actual new guidelines come out, we'll have to wait and see. But as you probably have seen, there's been a lot of literature, a lot of things being both on not only the United States, but in Europe, as it relates to the use of bempedoic acid and where to use bempedoic acid has been very favorable. As a matter of fact, in Germany, they actually last year issued through their HTA authorities that you cannot use a PCSK9 until you've actually used the bempedoic acid first. So, stay tuned as we get more updates on U.S. guidelines, et cetera, we will definitely update you on that.

Thank you. And I'm showing no further questions in the queue at this time. I will now turn the call back over to Mr. Sheldon Koenig for any closing remarks.

Thank you so much. Well, thank you, everybody. We really appreciate you taking the time and interest in Esperion Therapeutics. Again, I just want to remind everyone that we have a large catalyst coming in essentially less than a month with our new label. We had a very strong quarter, and that quarter is really going to and has created strong momentum as we enter into the first quarter of 2024. And with that said, we also have a steady stream of catalysts for our long-term continued growth. So thank you again and talk to you soon. Take care.

Ladies and gentlemen, that does conclude our conference for today. Thank you for your participation. You may now disconnect.