UPDATE: Chardan Upgrades Esperion (ESPR) to Neutral But Maintains Negative Bias

Chardan Capital Markets upgraded Esperion Therapeutics (NASDAQ: ESPR) from Sell to Neutral with a price target of $18.00 (from $29.00). The change follows an 84% drop from its May highs at $115.30.

Although he upgraded the stock, analyst Gbola Amusa said he was maintaining his negative bias on concerns related to ETC-1002.

'... we note firstly that ESPR management has to us missed guidance a number of times, and even in our view produced markedly different press releases (on 17 August and on 28 September) surrounding the same August 2015 end-of-phase II meeting with the FDA. So, the reality of the ultimate regulatory path forward could be worse than has been accepted by the market and by us," said Amusa.

"We are also additionally concerned that the profile of ETC-1002 could be worse than we believe since ETC-1002 datasets to date in our opinion have been presented in an overly-optimistic fashion. For example, we noted in our 7 August 2015 research that ESPR boldly presented add-on data for ETC-1002 that were not placebo-subtracted and that might we think inappropriately give the impression that ETC-1002 had similar efficacy irrespective of starting statin dose, when the opposite signal was seen upon placebo subtraction (the regulatory standard metric). As the market and we do not have access to ETC-1002’s data room to scrutinize other datasets, we worry that clinical datasets we have seen may be worse on regulatory scrutiny than expected," continued the analyst.

Amusa added, "ESPR is catalyst-poor and has swirling questions on ETC-1002’s path forward, including on whether a launch by 2018E-20E is even possible. We continue to await better visibility on the phase II and phase III ETC-1002 program. Visibility could come in 1H2016 or after a renewed attempt by ESPR at generating relevant phase II data, potentially in mid-2016, if new guidance is not missed. We expect that phase III trials if designed based on phase II data would take a year to recruit, and if they are 3 to 6 years in duration (i.e. are pre-approval CVOTs) would suggest an ETC-1002 launch in 2021E-24E."

For an analyst ratings summary and ratings history on Esperion Therapeutics click here. For more ratings news on Esperion Therapeutics click here.

Shares of Esperion Therapeutics closed at $18.33 yesterday.

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