Esperion Therapeutics Inc. shares surged 52.0% in morning trade Monday after the company said the Food and Drug Administration gave it positive feedback on a cholesterol-lowering drug, saying that the late-stage program is enough to support approval. The company plans to apply for approval by the first half of 2019, with results from the phase 3 trial expected by the second quarter of 2018. The drug is intended for patients with elevated low density lipoprotein cholesterol, specifically as a supplementary treatment to statin therapy in patients with high cardiovascular disease risk, according to Esperion's proposed product label. The area is one that drugmakers have been targeting lately, with disappointing results, as seen with the pricey PCSK9 inhibitors made by Amgen and Regeneron . Esperion's Monday statement about the FDA's feedback "surprised" RBC Capital Markets analyst Michael Yee, who rates the company sector perform and raised its price target from $30 to $45 (shares were trading at $35 as of Monday morning). "Indeed, the caveat and risk is FDA can say anything but ultimately a decision is based on the totality of risk/benefit after all the Phase III data including safety is in hand and the regulatory environment at that time," he said. "Nonetheless, this is a fundamental big positive and a big de-risking event." Shares will likely continue to rise after Monday's announcement because it answers investors' biggest question and thus could attract a new pharmaceutical partner, since drugmakers "need billion-dollar potential drugs," Yee said. However, risks continue, he noted, including the possibility of the FDA changing its mind, the lack of outcomes data - which became a problem for PCSK9 inhibitors - and the possibility of the drug having safety risks. Plus, Yee noted, Esperion is a single-product company. Esperion shares have risen 160.4% over the last three months, compared with a 4.7% rise in the S&P 500 .
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