Steven Cohen (Trades, Portfolio), the leader of Point72 Asset Management, disclosed earlier this week he boosted his stake in Esperion Therapeutics Inc. (ESPR, Financial) by 58.10%.
With the goal of generating superior risk-adjusted returns, the billionaire guru's Stamford, Connecticut-based firm invests in a wide range of asset classes worldwide. Its long-short strategy is based on bottom-up research processes that focus on fundamentals and macroeconomic conditions.
According to GuruFocus Real-Time Picks, a Premium feature based on 13D, 13G and Form 4 filings, Cohen picked up 1.32 million shares of the Ann Arbor, Michigan-based health care company on April 4, impacting the equity portfolio by 0.01%. The stock traded for an average price of $1.37 per share on the day of the transaction.
He now holds a total of 3.6 million shares, accounting for 0.02% of the equity portfolio. GuruFocus estimates he has lost 17.72% on the investment since the second quarter of 2022.
Investors should be aware 13D, 13G and Form 4 filings do not give a complete picture of a firm’s holdings as the reports only include its positions in U.S. stocks and American depository receipts, but they can still provide valuable information. Further, the reports only reflect trades and holdings as of the most-recent portfolio filing date, which may or may not be held by the reporting firm today or even when this article was published.
About Esperion Therapeutics
Founded in 1998, the pharmaceutical company focuses on developing oral daily medicines to reduce cardiovascular risk. It has two approved products, Nexletol and Nexlizet, which are used to lower low-density lipoprotein cholesterol in adults with an inherited genetic disorder that causes dangerously high cholesterol or have cardiovascular disease as a result of high cholesterol.
The company, which went public in June of 2013, consists of only one segment.
Under pressure
The stock has come under pressure in recent weeks following the presentation of its cardiovascular outcomes trial study on March 4, falling nearly 80% over the past month.
The study, called CLEAR, evaluated the impact of Nexletol on reducing the risk of major cardiovascular events in statin-intolerant patients with or at high risk of cardiovascular disease.
While Esperion noted the CLEAR study achieved its primary endpoints of reducing the risk of major adverse cardiovascular events (Mace-3 and Mace-4) by 15% and 13%, heart attacks by 23% and coronary revascularization by 19% compared to the placebo, investors were still not impressed.
To make matters worse, Esperion is also pursuing a lawsuit against Daiichi Sankyo Co. Ltd. (TSE:4568, Financial) over a $300 million milestone payment related to Nexletol.
The Japanese drugmaker, which is Esperion’s partner in Europe, is refusing to pay up because it says one of the endpoints of the CLEAR study, Mace-4, did not meet the cardiovascular risk reduction target of 15% or greater.
Fierce Pharma reported Esperion’s lawyers noted the dispute has already begun to affect the company’s financial position and say it will suffer further economic harm without the payout.
In February, the company posted revenue of $18.8 million for the fourth quarter of 2022, which was up 22% from the prior-year period. Full-year revenue of $75.5 million was down 4% from 2021, however.
Valuation
Esperion has a $120.74 million market cap; its shares closed at $1.36 on Thursday with a price-sales ratio of 1.19.
Due to the major drop in price, the GF Value Line, which is based on historical ratios, past financial performance and analysts’ future earnings projections, suggests the stock is a potential value trap currently. As such, potential investors should be sure to do thorough research before making a decision.
At 44 out of 100, the GF Score indicates the company has poor future performance potential. It raked in a moderate GF Value rank, but the ratings for momentum, financial strength and profitability were low. Since Esperion not receive a growth rank, however, the score may not reflect the company’s true prospects.
Further, the company has a predictability rank of one out of five stars. According to GuruFocus, companies with this rank return an average of 1.1% annually over a 10-year period.
Guru interest
Cohen is by far the company’s largest guru shareholder with a 4.05% stake.
Other gurus invested in Esperion Therapeutics as of the end of the fourth quarter of 2022 were Jefferies Group (Trades, Portfolio), Paul Tudor Jones (Trades, Portfolio) and Caxton Associates (Trades, Portfolio).
Portfolio composition
Cohen's $28.95 billion equity portfolio, which was composed of 1,423 stocks as of the three months ended Dec. 31, is most heavily invested in the health care and technology sectors.
Other pharmaceutical stocks the guru held as of the end of the fourth quarter included Biogen Inc. (BIIB, Financial), GSK PLC (GSK, Financial), AstraZeneca PLC (AZN, Financial), Novartis AG (NVS, Financial), Takeda Pharmaceutical Co. Ltd. (TAK, Financial), Merck & Co. Inc. (MRK, Financial), Lantheus Holdings Inc. (LNTH, Financial) and Sanofi SA (SNY, Financial).
