Chardan's Gbola Amusa Reiterates Sell On Esperion, Cites 'Lack Of Visibility' And 'Possibility OF Declining Efficacy'

In a report published Tuesday, Chardan Capital Markets analyst Gbola Amusa reiterated a Sell rating on shares of

with a $40 price target following the release of a phase II results from Study 014 which tested ETC-1002 over six weeks in patients with hypercholesterolemia and hypertension. Esperion's management reported the results of the Study as "positive" as it showed 180 mg of ETC-1002 (the highest dose being moved into phase III) achieved a 24 percent reduction in LDL-cholesterol, as compared to placebo (p < 0.0001). The company also stated: "ETC-1002 produced no muscle-related AEs or LFT elevations. There were four reported serious adverse event (SAEs) in the ETC-1002 treatment arm, none of which were drug-related, with two discontinuations." Amusa argued that the Study is not "positive" due to: four serious adverse events and diminishing ETC-1002 efficacy relative to prior studies. "Listening to the conference call, we grew concerned hearing that ETC-1002 was associated with 4 serious adverse events (SAEs) after only 6 weeks of treatment: one case of atrial flutter, one case of craniocerebral injury, and two cases of non-cardiac chest pain (musculoskeletal)," Amusa wrote. "That there were two cases of musculoskeletal chest pain, rather than just one, in a single trial, suggests the possibility of causation and to us raises a number of safety questions." Amusa continued: "We note that the LDL-lowering power for monotherapy of 180mg of ETC-1002 has gone from 30% in Study -008 to 24% in Study -014, which along with earlier studies, to us raises the question of a pattern of declining LDL-lowering capability for ETC-1002." Bottom line, Amusa argued that Esperion's market cap "discounts too high a probability" of success for ETC-1002 and too high of a revenue potential.