Could Pfizer Buy Esperion Therapeutics?

By Todd Campbell Markets Fool.com

Pfizer Inc. (NYSE: PFE) is back in growth mode, and it has been acquiring smaller companies as part of its effort to boost revenue and profitability. Given that it shuttered its research into the PCSK9 cholesterol lowering candidate drug bococizumab last November, perhaps the company might now want to set its sights on buying a startup that's working in this indication. If so, it seems to me that Esperion Therapeutics (NASDAQ: ESPR) would be a good choice.

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Pfizer's failure

Following the expiration of patent protection on Lipitor, the most widely used drug on the planet for lowering bad cholesterol levels, Pfizer invested big money in developing bococizumab, a PCSK9 inhibitor that attacks high cholesterol in a novel way.

IMAGE SOURCE: GETTY IMAGES.

Unlike statins such as Lipitor, which target cholesterol production in the liver, PCSK9 inhibitors bind to PCSK9 proteins in the bloodstream to prevent them from binding to, and destroying, bad cholesterol receptors in the liver. By preventing their activity, PCSK9 drugs increase the number of receptors, allowing more bad cholesterol to be cleared from the body.

However, Pfizer wasn't the only one working on PCSK9 inhibitors, and its competitors had gotten ahead of it. Amgen (NASDAQ: AMGN) and a collaboration between Regeneron (NASDAQ: REGN) and Sanofi (NYSE: SNY) both successfully won FDA approval of their own PCSK9 inhibitors in 2015.

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Although Pfizer's program was trailing, management thought it could still capture significant share if a cardiovascular-outcomes trial showed that bococizumab safely lowered the risk of heart attack, stroke, or death in cardiovascular disease patients. Unfortunately, the company announced last fall that a review of the data instead revealed safety risks that were significant enough for Pfizer to shut down the study.

Changing gears

It's anyone's guess what Pfizer's C-suite is thinking its next move will be in this indication, but if past is prelude, it would be no surprise if their thoughts are on an acquisition.

If so, Pfizer ought to be kicking tires over at Esperion Therapeutics, which is developing an entirely different kind of cholesterol-fighter.

Esperion Therapeutics founder is Roger Newton, a researcher (and entrepreneur) who led the development of Lipitor at Warner-Lambert, and who has already sold one company to Pfizer.

After working on Lipitor, Newton left in 1998 to create a biotech focused on developing other cholesterol drugs. By no coincidence (yet, confusingly!) that company was also named Esperion Therapeutics (let's call that one Esperion 1.0). After reporting intriguing results for a drug that boosts good cholesterol levels, Newton sold Esperion 1.0 to Pfizer for $1.3 billion in 2003.

In 2008, Newton reunited many members of the former Esperion 1.0 team to try and catch lightening in a bottle again. Today, it's lead candidate is bempedoic acid, an oral drug that can be taken alongside statins to further lower bad cholesterol levels. In mid-stage studies, adding bempedoic acid to standard care improved bad cholesterol levels by about an additional 20%. Bempedoic acid is now in fully enrolled phase 3 studies, and Esperion Therapeutics expects to have data from them available in 2018.

Esperion Therapeutics is also conducting a cardiovascular outcome trial to see if it can show that bempedoic acid lowers the risk of major cardiac events, or death, and it's conducting another study to see if adding it to a regimen that includes statins and Zetia, another cholesterol lowering medicine, is effective.

Looking ahead

Only Pfizer knows its M&A plans, and Esperion Therapeutics might not be for sale anyways. Nevertheless, Esperion's team has a track record that's M&A-friendly, and bempedoic acid's potential market opportunity is big enough that it could interest a player like Pfizer. Statins are the most commonly prescribed drugs in the world, and ifbempedoic acid's phase 3 study backs up earlier results without revealing any new safety concerns, then the potential for it to be prescribed regularly alongside statins makes this a very intriguing company to buy.

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Todd Campbell owns shares of Esperion Therapeutics and Pfizer.His clients may have positions in the companies mentioned.The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.