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Esperion Therapeutics (ESPR) Down 5.9% Since Last Earnings Report: Can It Rebound?

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A month has gone by since the last earnings report for Esperion Therapeutics (ESPR). Shares have lost about 5.9% in that time frame, underperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is Esperion Therapeutics due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.

Esperion Q2 Earnings Top Estimates, Revenues Miss

Esperion incurred loss per share of $1.67 per share in the second quarter of 2021, narrower than the Zacks Consensus Estimate of a loss of $1.82 per share. The company had recorded earnings of $4.32 per share in the year-ago period.

The company generated revenues of $40.7 million, narrowly missing the Zacks Consensus Estimate of $41.13 million. The company had recorded revenues of $212.2 million in the year-ago quarter. The significant decline was due to lower milestone payments during the second quarter 2021.

 However, the company’s drugs — Nexletol and Nexlizet — exhibited strong growth on net price increase and continued demand improvement.

Quarter in Details

Product revenues, solely from the United States, were $10.6 million in the second quarter compared with $0.6 million in the year-ago quarter and $6.4 million in the previous quarter. The company stated that prescriptions for its drugs were up 28% year over year. The increase in sales was driven by strong demand as well as improved net price for the drugs.

The company recorded royalty revenues of $1 million during the reported quarter, compared with $0.6 million in the previous quarter. The drugs continued to show strong momentum in Europe. Including this royalty revenues, the company recorded collaboration revenues of $30 million in the second quarter compared with approximately $211.6 million in the year-ago quarter. The company had recorded milestone payments of $60 million and $150 million from Otsuka Pharmaceuticals, its Japanese partner, and Daiichi Sankyo, respectively, in the second-quarter of 2020. In the reported quarter, the company recorded $30 million in upfront cash from Daiichi Sankyo, following expansion of their licensing agreement in April, granting rights to Esperion’s drugs to the latter in additional countries.

Research and development (R&D) expenses decreased 28.3% from the year-ago period to $25.1 million due to lower clinical activities.

Selling, general and administrative expenses (SG&A) were down 2.9% year over year to $46.3 million.

As of Jun 30, 2021, Esperion had cash, cash equivalents and investment securities of $219.2 million compared with $217.9 million as of Mar 31, 2021.

2021 Guidance

Esperion maintained its guidance for R&D and SG&A costs in 2021. The company anticipates R&D expense for 2021 to be in the range of $120-$130 million. SG&A expense is expected to be between $200 million and $210 million.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed an upward trend in estimates review.

VGM Scores

At this time, Esperion Therapeutics has an average Growth Score of C, however its Momentum Score is doing a bit better with a B. However, the stock was allocated a grade of F on the value side, putting it in the lowest quintile for this investment strategy.

Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending upward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Esperion Therapeutics has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.


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