It has been about a month since the last earnings report for Esperion Therapeutics (ESPR - Free Report) . Shares have added about 25.1% 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 Q3 Loss Wider-Than-Expected Loss
Esperion incurred a loss of $2.52 per share in the third quarter of 2019, wider than the Zacks Consensus Estimate of $2.01. The company had incurred loss of $1.86 per share in the year-ago period.
The company generated revenues of $1.01 million, almost in-line with the Zacks Consensus Estimate of $0.93 million. Revenues were mainly attributable to initial recognition of the upfront payment related to the commercial agreement with Daiichi Sankyo Europe.
Quarter in Details
Research and development (R&D) expenses increased 16.2% from the year-ago period to $48.3 million. The rise was primarily due to higher cost needed to support cardiovascular outcomes study on bempedoic acid and manufacture its candidates for commercial supply.
General and administrative (G&A) expenses more than doubled year over year to $18.5 million primarily due to costs related to support pre-commercialization activities for bempedoic acid monotherapy, and the bempedoic acid/Zetia combination regimen.
As of Sep 30, 2019, Esperion had cash, cash equivalents and investment securities of $244.8 million compared with $302.2 million as of Jun 30, 2019.
Esperion maintained its 2019 guidance for collaboration revenues and operating expenses. The company expects income from collaboration and license agreement to be $150 million. The company expects cash funding of $125 million under its revenue interest purchase agreement with Oberland Capital.
The company raised its guidance for R&D expense to the range of $135-$145 million compared with the previous guidance range of $115-$120 million. G&A expense guidance range was maintained in the range of $60-$65 million.
The company lowered its guidance for net increase in cash to the range of approximately $70 to $80 million from $90 to $100 million. The reduction reflects higher cash burn due to higher patient enrollment than targeted in the CLEAR cardiovascular outcomes study on bempedoic acid and accelerated commercial product manufacturing activities in 2019 which were previously planned for 2020.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates revision. The consensus estimate has shifted -22.21% due to these changes.
At this time, Esperion Therapeutics has a poor Growth Score of F, however its Momentum Score is doing a lot better with a B. However, the stock was allocated a grade of F on the value side, putting it in the bottom 20% quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.
Estimates have been broadly trending downward for the stock, and the magnitude of this revision indicates a downward shift. It's no surprise Esperion Therapeutics has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.