It has been about a month since the last earnings report for Esperion Therapeutics (ESPR - Free Report) . Shares have added about 12.6% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Esperion Therapeutics due for a pullback? 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 drivers.
Esperion Q2 Earnings Top, Drug Sales Hurt by Coronavirus
Esperion recorded earnings per share of $4.32 per share in the second quarter of 2020, significantly higher than the Zacks Consensus Estimate of $2.13 per share. The company had incurred loss of $2.01 per share in the year-ago period.
The company generated revenues of $212.2 million, which were marginally less than the Zacks Consensus Estimate of $213.0 million. The company had recorded revenues of $1.0 million in the year-ago quarter.
Quarter in Details
Revenues in the reported quarter included $0.6 million of net product sales of Nexletol and $211.6 million in collaboration revenues. Product sales were hurt by COVID-19 and wholesaler inventory management and reordering patterns
The drugs were launched virtually amid the COVID-19 pandemic. While Nexletol was launched in March, Nexlizet was launched in June. COVID-19 led to lower new patient starts for both the drugs due to lower accessibility of patients and customer-facing team to doctors. However, the trends improved in July. The company said that prescription volume in July was 97%, higher than June despite rising infection rates in the country.
The collaboration revenues7 were significantly higher in the quarter as it included $60 million of upfront payment from Otsuka and $150.0 million of milestone payment from Daiichi Sankyo.
Research and development (R&D) expenses decreased 18.2% from the year-ago period to $35.0 million. The decline was mainly driven by lower costs following the completion of enrollment in the ongoing cardiovascular outcomes study (CVOT) study on Nexletol.
Selling, general and administrative expenses (SG&A) were $47.7 million, compared with $13.5 million in the year-ago period. The significant increase was primarily due to costs to support commercialization activities for Nexletol and Nexlizet.
As of Jun 30, 2020, Esperion had cash, cash equivalents and investment securities of $300.7 million compared with $158.2 million as of Mar 31, 2020.
2020 Guidance Updated
Esperion maintained its previously issued guidance for R&D and SG&A costs. The company anticipates R&D expense for 2020 to be in the range of $135-$145 million. SG&A expense guidance was also maintained in the range of $200-$210 million.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended upward during the past month.
Currently, Esperion Therapeutics has a strong Growth Score of A, though it is lagging a bit on the Momentum Score front with a B. Charting a somewhat similar path, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Esperion Therapeutics has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.