Shares of Esperion Therapeutics (ESPR) tumbled almost 48% today after the company provided an update of its end-of-phase 2 meeting with the FDA. Esperion is a biotechnology company focused on generating treatments for patients with hypercholesterolemia, or high levels of LDL-C — bad cholesterol. 

The reason for the meeting with the FDA was so that the company could advance its clinical compound ECT-1002 into a phase 3 clinical trial program. The company has stated that it will run two phase 3 late-stage clinical trials that will possibly be used to eventually file for an NDA of the company’s drug. One phase 3 trial will recruit patients who have a statin intolerance, meaning they are unable to take statins to lower their LDL-C. The other phase 3 trial will focus on those patients who can tolerate statin therapy but where the drug has no effect on helping these patients with their LDL-C. 

The stock tanked today probably because investors didn’t like what they heard from the FDA. The FDA wants Esperion to conduct a cardiovascular outcomes trial which will be used to determine the health effect on patients taking ETC-1002, and to determine if there are any added benefits for patients switching from statin therapy to the ETC-1002 drug. 

The problem with this is that a cardiovascular outcomes trial like that could take many years. In addition it will cost the company a lot of money to run two phase 3 trials along with a cardiovascular safety outcomes trial. This puts the company way behind as many investors were hoping for a fast path forward for approval in the LDL-C market. 

Now it will be approximately three years or more before the company can finally seek approval for ETC-1002 and it seems many investors don’t want to wait that long. The current competitors such as Regeneron (REGN)/Sanofi (SNY) Praluent drug and Amgen’s (AMGN) Repatha drug will continue to gain in market share until then. Maybe investors are thinking it will be difficult for ETC-1002 to gain any traction after those competitor drugs have established a big foothold in their respective markets. 

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