Chardan Capital affirms Esperion Therapeutics (Nasdaq: ESPR) at Neutral with a price target of $18 after Eli Lilly & Co. announced that it and the ACCELERATE study's academic leadership have accepted the recommendation of the independent data monitoring committee to terminate the Phase 3 trial of the investigational medicine evacetrapib, due to insufficient efficacy. Lilly will discontinue development of evacetrapib for the treatment of high-risk atherosclerotic cardiovascular disease and will now conclude other studies in the program.

Analyst Gbola Amusa said the news could provide a modest boost to the commercial potential of Esperion's ETC-1002, if the drug ever gets to market, but by increasing the likelihood of regulatory scrutiny on ETC-1002, the evacetrapib failure reduces the chance ETC-1002 gets there due a likely higher required regulatory burden of proof required ahead.

Amusa also noted the following:

• On this news, the bull case for Esperion's ETC-1002 may be that yet another oral CETP inhibitor has failed (after torcetrapib, dalcetrapib), meaning increased potential for ETC-1002, due to less competitive pressure, if it ever gets to market.
• The bear case however to us is more important, namely that yet another product with LDL-lowering capabilities (evacetrapib lowered LDL cholesterol up to roughly 40%, on a placebo-subtracted basis) has failed, showing the regulator was right to require cardiovascular outcomes trials prior to evacetrapib approval.

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