Why Esperion Therapeutics Stock Is Tanking Thursday

Esperion Therapeutics Inc ESPR shares are plummeting Thursday after the company reported a disagreement with one of its partners over certain milestone payments. 

What Happened: Based on CLEAR Outcomes data, Esperion said it believes it's entitled to receive $300 million in partner milestone payments upon inclusion of cardiovascular risk reduction data in the EU label in which payment is based on the magnitude of the risk percentage reduction included in the label.

"The Company has had communications with Daiichi Sankyo Europe (DSE) regarding potential milestone payments in which DSE has conveyed that it disagrees with the Company’s assessment that the CLEAR Outcomes data would support the Company’s right to receive any milestone payments upon inclusion of certain required cardiovascular risk reduction data in the EU label," Esperion said in a regulatory filing.

DSE highlighted that the CLEAR Outcomes study showed only a 12.98% reduction in MACE-4, the primary endpoint of the trial.

"The Company strongly disagrees and continues to believe that, pursuant to Section 9.2 of the Company's license and collaboration agreement with DSE, which refers only to cardiovascular risk reduction and not to any primary endpoint, it would be entitled to receive such payment upon inclusion of cardiovascular risk reduction in the EU label," Esperion said.

Esperion said it intends to enforce contractual rights if needed, but noted that there could be a delay in receipt of payments, which could "significantly impact the Company’s future capital needs."

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Following the announcement, several analysts weighed in on the stock:

• HC Wainwright & Co. analyst Joseph Pantginis reiterated Esperion with a Buy and maintained a $22 price target.
• Needham analyst Serge Belanger maintained Esperion with a Buy and lowered the price target from $16 to $12.
• BofA Securities analyst Jason Zemansky downgraded Esperion from Neutral to Underperform and lowered the price target from $8 to $1.50.

ESPR Price Action: Esperion shares were down 59.8% at $1.60 at time of publication, according to Benzinga Pro.

Photo: David Schwarzenberg from Pixabay.