We recently compiled a list of the 12 Best Small Cap Pharma Stocks to Buy Now. In this article, we are going to take a look at where Esperion Therapeutics, Inc. (NASDAQ:ESPR) stands against the other small cap pharma stocks.
Impact of US Tariffs and Obesity Drug Performance on the Pharmaceutical Industry
Emily Field, Head of European Pharma Research at Barclays, spoke on CNBC on February 20 about the performance of obesity medications, the effects of US tariffs, and the dynamics of the pharmaceutical industry. According to her, the industry might not perform poorly at least in the first half of this year. The effectiveness of obesity medications is still up for debate, though, as leading companies in the field have shown inconsistent results.
Speaking about the tariffs, she stated that since some businesses assemble their products in the US after producing them overseas, their implementation raises several unanswered questions for the pharmaceutical industry. These businesses therefore have relatively low manufacturing costs, which is an important factor to take into account when assessing the effects of tariffs. She thought that these businesses could easily absorb the higher expense of the tariffs. The topic hasn’t come up much on earnings calls this quarter, and the market is nearing the end of the reporting season.
Eli Lilly’s Chief Scientific Officer spoke with CNBC’s Health and Pharma correspondent Angelica Peebles about the weight reduction industry. The domain presents opportunities for easier-to-use treatments, including tablets, and medications that help individuals lose weight, she noted based on the conversation. How much weight reduction users need to observe on top of what they already have is another topic of discussion about the subject. According to Dan Skovronsky, Chief Scientific Officer of Eli Lilly, the majority of the audience seems to benefit from medications that provide about 20% weight loss. According to him, the market for stronger medications that offer at least 25% is smaller.
He also believed that the potential benefits of these weight reduction medications for a wide range of illnesses were the most fascinating thing he had witnessed in his work as a scientist and doctor. The patterns they have been observing in the answers from patients serve as their current source of knowledge.
Our Methodology
For our methodology, we selected stocks with a market capitalization between $250 million and $2 billion and ranked them based on the highest hedge fund sentiment according to Insider Monkey’s database, as of Q4 2024.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
A laboratory chemist in a white lab coat analyzing samples of a potential new pharmaceutical.
Esperion Therapeutics, Inc. (NASDAQ:ESPR)
Number of Hedge Fund Holders: 22
Esperion Therapeutics, Inc. (NASDAQ:ESPR) is a pharmaceutical company focused on developing treatments for cardiovascular and cardiometabolic diseases. Its main products, Nexletol and Nexlizet, are oral medications that lower LDL cholesterol and reduce cardiovascular risk, providing options for patients who can’t tolerate statins or need additional treatment. What sets the company apart is its development of the first FDA-approved, non-statin oral drugs for LDL-C lowering, targeting a significant patient group with unmet needs in cardiovascular care.
Esperion Therapeutics, Inc. (NASDAQ:ESPR) reported strong growth in its Q3 2024 financial results. Total revenue increased by 52% year-over-year to $51.6 million, with U.S. product revenue rising 53% to $31.1 million, which was driven by a 44% increase in retail prescriptions. Collaboration revenue also grew by 50% to $20.5 million, boosted by higher royalty and product sales. Prescription growth was solid, with a 12% increase in total retail prescription equivalents and an 18% rise in new-to-brand prescriptions. October saw even stronger growth, with a 17% increase in total prescriptions.
Despite a net loss of $29.5 million, an improvement from last year’s $41.3 million loss, Esperion Therapeutics, Inc. (NASDAQ:ESPR)’s financial position strengthened with cash and cash equivalents totaling $144.7 million as of September 30, 2024, compared to $82.2 million at the end of 2023. Operating expenses were mixed, with R&D costs down 30% due to the completion of a major study, while SG&A expenses rose 20% due to increased sales and promotional activities.
Esperion Therapeutics, Inc. (NASDAQ:ESPR) also continues to build strategic partnerships with companies like Daiichi Sankyo and Otsuka Pharmaceutical, which help expand its market reach in Europe and Asia. Strong clinical data supporting the cardiovascular benefits of its products adds to the company’s competitive position.
Overall ESPR ranks 10th on our list of the best small cap pharma stocks to buy now. While we acknowledge the potential of ESPR as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than ESPR but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: 20 Best AI Stocks To Buy Now and Complete List of 59 AI Companies Under $2 Billion in Market Cap
Disclosure: None. This article is originally published at Insider Monkey.