espr-20200930
0001434868--12-312020Q3false633.3300014348682020-01-012020-09-30xbrli:shares00014348682020-11-01iso4217:USD00014348682020-09-3000014348682019-12-31iso4217:USDxbrli:shares0001434868us-gaap:ProductMember2020-07-012020-09-300001434868us-gaap:ProductMember2019-07-012019-09-300001434868us-gaap:ProductMember2020-01-012020-09-300001434868us-gaap:ProductMember2019-01-012019-09-300001434868espr:CollaborationRevenueMember2020-07-012020-09-300001434868espr:CollaborationRevenueMember2019-07-012019-09-300001434868espr:CollaborationRevenueMember2020-01-012020-09-300001434868espr:CollaborationRevenueMember2019-01-012019-09-3000014348682020-07-012020-09-3000014348682019-07-012019-09-3000014348682019-01-012019-09-300001434868us-gaap:CommonStockMember2018-12-310001434868us-gaap:AdditionalPaidInCapitalMember2018-12-310001434868us-gaap:RetainedEarningsMember2018-12-310001434868us-gaap:AccumulatedOtherComprehensiveIncomeMember2018-12-3100014348682018-12-310001434868us-gaap:CommonStockMember2019-01-012019-03-310001434868us-gaap:AdditionalPaidInCapitalMember2019-01-012019-03-3100014348682019-01-012019-03-310001434868us-gaap:AccumulatedOtherComprehensiveIncomeMember2019-01-012019-03-310001434868us-gaap:RetainedEarningsMember2019-01-012019-03-310001434868us-gaap:CommonStockMember2019-03-310001434868us-gaap:AdditionalPaidInCapitalMember2019-03-310001434868us-gaap:RetainedEarningsMember2019-03-310001434868us-gaap:AccumulatedOtherComprehensiveIncomeMember2019-03-3100014348682019-03-310001434868us-gaap:CommonStockMember2019-04-012019-06-300001434868us-gaap:AdditionalPaidInCapitalMember2019-04-012019-06-3000014348682019-04-012019-06-300001434868us-gaap:AccumulatedOtherComprehensiveIncomeMember2019-04-012019-06-300001434868us-gaap:RetainedEarningsMember2019-04-012019-06-300001434868us-gaap:CommonStockMember2019-06-300001434868us-gaap:AdditionalPaidInCapitalMember2019-06-300001434868us-gaap:RetainedEarningsMember2019-06-300001434868us-gaap:AccumulatedOtherComprehensiveIncomeMember2019-06-3000014348682019-06-300001434868us-gaap:CommonStockMember2019-07-012019-09-300001434868us-gaap:AdditionalPaidInCapitalMember2019-07-012019-09-300001434868us-gaap:AccumulatedOtherComprehensiveIncomeMember2019-07-012019-09-300001434868us-gaap:RetainedEarningsMember2019-07-012019-09-300001434868us-gaap:CommonStockMember2019-09-300001434868us-gaap:AdditionalPaidInCapitalMember2019-09-300001434868us-gaap:RetainedEarningsMember2019-09-300001434868us-gaap:AccumulatedOtherComprehensiveIncomeMember2019-09-3000014348682019-09-300001434868us-gaap:CommonStockMember2019-12-310001434868us-gaap:AdditionalPaidInCapitalMember2019-12-310001434868us-gaap:RetainedEarningsMember2019-12-310001434868us-gaap:AccumulatedOtherComprehensiveIncomeMember2019-12-310001434868us-gaap:CommonStockMember2020-01-012020-03-310001434868us-gaap:AdditionalPaidInCapitalMember2020-01-012020-03-3100014348682020-01-012020-03-310001434868us-gaap:AccumulatedOtherComprehensiveIncomeMember2020-01-012020-03-310001434868us-gaap:RetainedEarningsMember2020-01-012020-03-310001434868us-gaap:CommonStockMember2020-03-310001434868us-gaap:AdditionalPaidInCapitalMember2020-03-310001434868us-gaap:RetainedEarningsMember2020-03-310001434868us-gaap:AccumulatedOtherComprehensiveIncomeMember2020-03-3100014348682020-03-310001434868us-gaap:CommonStockMember2020-04-012020-06-300001434868us-gaap:AdditionalPaidInCapitalMember2020-04-012020-06-3000014348682020-04-012020-06-300001434868us-gaap:AccumulatedOtherComprehensiveIncomeMember2020-04-012020-06-300001434868us-gaap:RetainedEarningsMember2020-04-012020-06-300001434868us-gaap:CommonStockMember2020-06-300001434868us-gaap:AdditionalPaidInCapitalMember2020-06-300001434868us-gaap:RetainedEarningsMember2020-06-300001434868us-gaap:AccumulatedOtherComprehensiveIncomeMember2020-06-3000014348682020-06-300001434868us-gaap:CommonStockMember2020-07-012020-09-300001434868us-gaap:AdditionalPaidInCapitalMember2020-07-012020-09-300001434868us-gaap:RetainedEarningsMember2020-07-012020-09-300001434868us-gaap:CommonStockMember2020-09-300001434868us-gaap:AdditionalPaidInCapitalMember2020-09-300001434868us-gaap:RetainedEarningsMember2020-09-300001434868us-gaap:AccumulatedOtherComprehensiveIncomeMember2020-09-300001434868espr:ExclusiveDevelopmentAndCommercializationRightsToNexletolAndNexlizetTabletsMemberespr:OtsukaPharmaceuticalCoLtdMember2020-04-172020-04-170001434868espr:ExclusiveDevelopmentAndCommercializationRightsToNexletolAndNexlizetTabletsMemberespr:OtsukaPharmaceuticalCoLtdMember2020-04-17xbrli:pure0001434868espr:ExclusiveDevelopmentAndCommercializationRightsToNexletolAndNexlizetTabletsMembersrt:MinimumMemberespr:OtsukaPharmaceuticalCoLtdMember2020-04-172020-04-170001434868espr:ExclusiveDevelopmentAndCommercializationRightsToNexletolAndNexlizetTabletsMembersrt:MaximumMemberespr:OtsukaPharmaceuticalCoLtdMember2020-04-172020-04-170001434868espr:DaiichiSankyoEuropeGmbhMemberespr:AmendedLicenseAndCollaborationAgreementMember2020-06-012020-06-30espr:customer0001434868us-gaap:CustomerConcentrationRiskMemberus-gaap:TradeAccountsReceivableMember2020-01-012020-09-30espr:revenue_source0001434868espr:DaiichiSankyoEuropeGmbhMemberus-gaap:CollaborativeArrangementMember2019-01-022019-01-020001434868srt:MinimumMemberespr:DaiichiSankyoEuropeGmbhMemberus-gaap:CollaborativeArrangementMember2019-01-022019-01-020001434868srt:MaximumMemberespr:DaiichiSankyoEuropeGmbhMemberus-gaap:CollaborativeArrangementMember2019-01-022019-01-020001434868espr:DaiichiSankyoEuropeGmbhMemberespr:RegulatoryPerformanceObligationsMember2019-07-012019-09-300001434868espr:DaiichiSankyoEuropeGmbhMemberespr:RegulatoryPerformanceObligationsMember2019-01-012019-09-300001434868espr:DaiichiSankyoEuropeGmbhMemberespr:RegulatoryPerformanceObligationsMember2020-01-012020-09-300001434868espr:MilestoneMarketingAuthorizationApprovalNustendiMemberespr:DaiichiSankyoEuropeGmbhMember2020-01-012020-09-300001434868espr:DaiichiSankyoEuropeGmbhMemberespr:ProductSalesBulkTabletsNilemdoAndNustendiMember2020-07-012020-09-300001434868espr:DaiichiSankyoEuropeGmbhMemberespr:ProductSalesBulkTabletsNilemdoAndNustendiMember2020-01-012020-09-300001434868espr:ExclusiveDevelopmentAndCommercializationRightsToNexletolAndNexlizetTabletsMembersrt:MaximumMemberespr:OtsukaPharmaceuticalCoLtdMember2020-04-170001434868espr:ExclusiveDevelopmentAndCommercializationRightsToNexletolAndNexlizetTabletsMemberespr:OtsukaPharmaceuticalCoLtdMemberespr:CollaborationRevenueMember2020-01-012020-09-300001434868espr:ExclusiveDevelopmentAndCommercializationRightsToNexletolAndNexlizetTabletsMemberespr:OtsukaPharmaceuticalCoLtdMemberespr:CollaborationRevenueMember2020-07-012020-09-300001434868us-gaap:InventoriesMember2020-01-012020-09-300001434868us-gaap:CashEquivalentsMemberus-gaap:MoneyMarketFundsMember2020-09-300001434868us-gaap:CashEquivalentsMemberus-gaap:MoneyMarketFundsMember2019-12-310001434868us-gaap:CashEquivalentsMemberus-gaap:USTreasuryNotesSecuritiesMember2019-12-310001434868us-gaap:CashEquivalentsMemberus-gaap:CommercialPaperMember2019-12-310001434868us-gaap:ShortTermInvestmentsMemberus-gaap:CertificatesOfDepositMember2019-12-310001434868us-gaap:USTreasuryNotesSecuritiesMemberus-gaap:ShortTermInvestmentsMember2019-12-310001434868us-gaap:ShortTermInvestmentsMemberus-gaap:CommercialPaperMember2019-12-310001434868srt:MaximumMemberus-gaap:OtherNonoperatingIncomeExpenseMember2020-07-012020-09-300001434868us-gaap:OtherNonoperatingIncomeExpenseMember2020-01-012020-09-300001434868us-gaap:OtherNonoperatingIncomeExpenseMember2019-07-012019-09-300001434868us-gaap:OtherNonoperatingIncomeExpenseMember2019-01-012019-09-300001434868us-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMember2020-01-012020-09-300001434868us-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMember2019-01-012019-09-300001434868us-gaap:FairValueMeasurementsRecurringMemberus-gaap:MoneyMarketFundsMember2020-09-300001434868us-gaap:FairValueMeasurementsRecurringMemberus-gaap:MoneyMarketFundsMemberus-gaap:FairValueInputsLevel1Member2020-09-300001434868us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:MoneyMarketFundsMember2020-09-300001434868us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:MoneyMarketFundsMember2020-09-300001434868us-gaap:FairValueMeasurementsRecurringMember2020-09-300001434868us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel1Member2020-09-300001434868us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMember2020-09-300001434868us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMember2020-09-300001434868us-gaap:FairValueMeasurementsRecurringMemberus-gaap:MoneyMarketFundsMember2019-12-310001434868us-gaap:FairValueMeasurementsRecurringMemberus-gaap:MoneyMarketFundsMemberus-gaap:FairValueInputsLevel1Member2019-12-310001434868us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:MoneyMarketFundsMember2019-12-310001434868us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:MoneyMarketFundsMember2019-12-310001434868us-gaap:FairValueMeasurementsRecurringMemberus-gaap:CertificatesOfDepositMember2019-12-310001434868us-gaap:FairValueMeasurementsRecurringMemberus-gaap:CertificatesOfDepositMemberus-gaap:FairValueInputsLevel1Member2019-12-310001434868us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:CertificatesOfDepositMember2019-12-310001434868us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:CertificatesOfDepositMember2019-12-310001434868us-gaap:FairValueMeasurementsRecurringMemberus-gaap:USTreasuryNotesSecuritiesMember2019-12-310001434868us-gaap:FairValueMeasurementsRecurringMemberus-gaap:USTreasuryNotesSecuritiesMemberus-gaap:FairValueInputsLevel1Member2019-12-310001434868us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:USTreasuryNotesSecuritiesMember2019-12-310001434868us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:USTreasuryNotesSecuritiesMember2019-12-310001434868us-gaap:FairValueMeasurementsRecurringMemberus-gaap:CommercialPaperMember2019-12-310001434868us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel1Memberus-gaap:CommercialPaperMember2019-12-310001434868us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:CommercialPaperMember2019-12-310001434868us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:CommercialPaperMember2019-12-310001434868us-gaap:FairValueMeasurementsRecurringMember2019-12-310001434868us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel1Member2019-12-310001434868us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMember2019-12-310001434868us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMember2019-12-310001434868espr:RevenueInterestPurchaseAgreementMemberespr:EigerIiiSaLlcMember2019-06-262019-06-260001434868espr:RevenueInterestPurchaseAgreementMemberespr:EigerIiiSaLlcMember2020-03-012020-03-310001434868espr:RevenueInterestPurchaseAgreementMember2020-09-300001434868espr:RevenueInterestPurchaseAgreementMember2020-01-012020-09-300001434868espr:RevenueInterestPurchaseAgreementMember2020-07-012020-09-300001434868espr:RevenueInterestPurchaseAgreementMemberespr:EigerIiiSaLlcMemberespr:NetSalesThresholdOneMember2019-06-262019-06-260001434868espr:RevenueInterestPurchaseAgreementMemberespr:EigerIiiSaLlcMemberespr:NetSalesThresholdOneMember2019-06-260001434868espr:NetSalesThresholdTwoMemberespr:RevenueInterestPurchaseAgreementMemberespr:EigerIiiSaLlcMember2019-06-262019-06-260001434868espr:NetSalesThresholdTwoMemberespr:RevenueInterestPurchaseAgreementMemberespr:EigerIiiSaLlcMember2019-06-260001434868espr:RevenueInterestPurchaseAgreementMemberespr:NetSalesThresholdThreeMemberespr:EigerIiiSaLlcMember2019-06-262019-06-260001434868espr:RevenueInterestPurchaseAgreementMemberespr:NetSalesThresholdThreeMemberespr:EigerIiiSaLlcMember2019-06-260001434868espr:RevenueInterestPurchaseAgreementMemberespr:EigerIiiSaLlcMember2020-09-300001434868espr:RevenueInterestPurchaseAgreementMemberespr:EigerIiiSaLlcMember2020-01-012020-09-300001434868espr:RevenueInterestPurchaseAgreementMemberespr:EigerIiiSaLlcMember2019-06-012019-06-300001434868us-gaap:EmployeeStockMember2020-04-012020-04-300001434868us-gaap:EmployeeStockMember2020-07-012020-09-300001434868us-gaap:EmployeeStockMember2020-01-012020-09-300001434868us-gaap:EmployeeStockMember2020-09-3000014348682019-01-012019-12-310001434868us-gaap:EmployeeStockOptionMember2020-07-012020-09-300001434868us-gaap:EmployeeStockOptionMember2020-01-012020-09-300001434868us-gaap:EmployeeStockOptionMembersrt:MaximumMember2020-07-012020-09-300001434868us-gaap:EmployeeStockOptionMember2019-07-012019-09-300001434868us-gaap:EmployeeStockOptionMember2019-01-012019-09-300001434868us-gaap:EmployeeStockOptionMember2020-09-300001434868us-gaap:RestrictedStockUnitsRSUMember2019-12-310001434868us-gaap:RestrictedStockUnitsRSUMember2020-01-012020-09-300001434868us-gaap:RestrictedStockUnitsRSUMember2020-09-300001434868us-gaap:RestrictedStockUnitsRSUMember2020-07-012020-09-300001434868srt:MaximumMemberus-gaap:RestrictedStockUnitsRSUMember2020-07-012020-09-300001434868us-gaap:RestrictedStockUnitsRSUMember2019-07-012019-09-300001434868us-gaap:RestrictedStockUnitsRSUMember2019-01-012019-09-300001434868us-gaap:BuildingMember2020-09-300001434868espr:OperatingLeasesITEquipmentLeasesAndAutomobileLeasesMember2020-09-300001434868us-gaap:EmployeeStockOptionMember2020-07-012020-09-300001434868us-gaap:EmployeeStockOptionMember2020-01-012020-09-300001434868us-gaap:EmployeeStockOptionMember2019-01-012019-09-300001434868us-gaap:EmployeeStockOptionMember2019-07-012019-09-300001434868espr:UnvestedRestrictedStockAndRestrictedStockUnitsMember2020-07-012020-09-300001434868espr:UnvestedRestrictedStockAndRestrictedStockUnitsMember2020-01-012020-09-300001434868espr:UnvestedRestrictedStockAndRestrictedStockUnitsMember2019-07-012019-09-300001434868espr:UnvestedRestrictedStockAndRestrictedStockUnitsMember2019-01-012019-09-30

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2020
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from                      to       
         
Commission file number: 001-35986
Esperion Therapeutics, Inc.
(Exact name of registrant as specified in its charter)
Delaware    26-1870780
(State or other jurisdiction of
incorporation or organization)
(I.R.S. Employer
Identification No.)
3891 Ranchero Drive, Suite 150
Ann Arbor, MI 48108
(Address of principal executive office) (Zip Code)
Registrant’s telephone number, including area code:
(734) 887-3903
Securities registered pursuant to Section 12(b) of the Act:
Title of each class Trading Symbol(s) Name of each exchange on which registered
Common Stock, par value $0.001 per share ESPR 
NASDAQ Stock Market LLC
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes x  No o
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).  Yes x  No o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filerx    
Accelerated filer o
Non-accelerated filer oSmaller reporting company 
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes   No x
As of November 1, 2020, there were 27,876,626 shares of the registrant’s Common Stock, $0.001 par value per share, outstanding.


Table of Contents
Esperion Therapeutics, Inc.
INDEX
Page
PART I — FINANCIAL INFORMATION
Item 1. Financial Statements

2

Table of Contents


Esperion Therapeutics, Inc.
Condensed Balance Sheets
(in thousands, except share data)
September 30,
2020
December 31,
2019
(unaudited)
Assets
Current assets:
Cash and cash equivalents$215,748 $166,130 
Restricted cash 928 
Short-term investments 34,651 
Prepaid clinical development costs1,110 6,081 
Inventories9,061  
Other prepaid and current assets16,884 3,924 
Total current assets242,803 211,714 
Property and equipment, net1,408 1,145 
Right of use operating lease assets6,702 1,532 
Other long-term assets56 56 
Total assets$250,969 $214,447 
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable$17,584 $28,856 
Accrued clinical development costs21,686 17,511 
Other accrued liabilities21,458 11,871 
Revenue interest liability10,926 5,236 
Deferred revenue from collaborations1,662 2,152 
Operating lease liabilities2,631 454 
Total current liabilities75,947 66,080 
Revenue interest liability160,247 127,308 
Operating lease liabilities4,105 1,109 
Other long-term liabilities1,710  
Total liabilities242,009 194,497 
Commitments and contingencies (Note 5)
Stockholders’ equity:
Preferred stock, $0.001 par value; 5,000,000 shares authorized and no shares issued or outstanding as of September 30, 2020 and December 31, 2019
  
Common stock, $0.001 par value; 120,000,000 shares authorized as of September 30, 2020 and December 31, 2019; 27,856,298 shares issued and outstanding at September 30, 2020 and 27,497,911 shares issued and outstanding at December 31, 2019
28 27 
Additional paid-in capital743,273 715,166 
Accumulated other comprehensive income 23 
Accumulated deficit(734,341)(695,266)
Total stockholders’ equity8,960 19,950 
Total liabilities and stockholders’ equity$250,969 $214,447 
See accompanying notes to the condensed financial statements.
3

Table of Contents
Esperion Therapeutics, Inc.
Condensed Statements of Operations and Comprehensive Loss
(in thousands, except share and per share data)
(unaudited)

Three Months Ended
September 30,
Nine Months Ended
September 30,
2020201920202019
Revenues:
Product sales, net$3,331 $ $4,798 $ 
Collaboration revenue502 981 213,111 147,382 
Total Revenues3,833 981 217,909 147,382 
Operating expenses:
Cost of goods sold275  704  
Research and development35,283 48,281 104,972 137,377 
Selling, general and administrative48,826 18,468 138,060 44,142 
Total operating expenses84,384 66,749 243,736 181,519 
Loss from operations$(80,551)$(65,768)$(25,827)$(34,137)
Interest expense(4,928)(3,996)(13,739)(3,996)
Other income, net42 1,387 491 2,914 
Net loss(85,437)(68,377)(39,075)(35,219)
Net loss per common share - basic and diluted$(3.07)$(2.52)$(1.41)$(1.30)
Weighted-average shares outstanding - basic and diluted27,830,281 27,171,769 27,672,325 26,995,661 
Other comprehensive loss:
Unrealized gain (loss) on investments$ $27 $(23)$330 
Comprehensive loss$(85,437)$(68,350)$(39,098)$(34,889)
See accompanying notes to the condensed financial statements.

4

Table of Contents
Esperion Therapeutics, Inc.
Condensed Statements of Stockholders’ Equity
(in thousands, except share data)
(unaudited)
Common StockAdditional Paid-In CapitalAccumulated DeficitAccumulated Other Comprehensive Income (Loss)Total Stockholders' Equity
SharesAmount
Balance at December 31, 201826,824,859 $27 $677,511 $(598,101)$(319)$79,118 
Exercise of stock options80,218 — 1,669 — — 1,669 
Vesting of restricted stock units3,125 — — — —  
Stock-based compensation— — 6,636 — — 6,636 
Other comprehensive gain— — — — 208 208 
Net income— — — 87,379 — 87,379 
Balance March 31, 201926,908,202 $27 $685,816 $(510,722)$(111)$175,010 
Exercise of stock options115,612 — 1,887 — — 1,887 
Exercise of warrants5,813 — — — —  
Vesting of restricted stock units7,025 — — — —  
Stock-based compensation— — 6,563 — — 6,563 
Other comprehensive gain— — — — 95 95 
Net loss— — — (54,221)— (54,221)
Balance at June 30, 201927,036,652 $27 $694,266 $(564,943)$(16)$129,334 
Exercise of stock options137,878 — 1,201 — — 1,201 
Vesting of restricted stock units3,700 — — — —  
Stock-based compensation— — 6,327 — — 6,327 
Other comprehensive gain— — — — 27 27 
Net loss— — — (68,377)— (68,377)
Balance at September 30, 201927,178,230 $27 $701,794 $(633,320)$11 $68,512 
5

Table of Contents
Common StockAdditional Paid-In CapitalAccumulated DeficitAccumulated Other Comprehensive Income (Loss)Total Stockholders' Equity
SharesAmount
Balance at December 31, 201927,497,911 $27 $715,166 $(695,266)$23 $19,950 
Exercise of stock options40,133 1 1,013 — — 1,014 
Vesting of restricted stock units10,089 — — — —  
Stock-based compensation— — 7,053 — — 7,053 
Other comprehensive loss— — — — (14)(14)
Net loss— — — (78,249)— (78,249)
Balance March 31, 202027,548,133 $28 $723,232 $(773,515)$9 $(50,246)
Exercise of stock options160,024 — 3,738 — — 3,738 
Vesting of restricted stock units43,498 — — — —  
Stock-based compensation— — 7,395 — — 7,395 
Other comprehensive loss— — — — (9)(9)
Net income— — — 124,611 — 124,611 
Balance June 30, 202027,751,655 $28 $734,365 $(648,904)$ $85,489 
Exercise of stock options70,578 — 1,644 — — 1,644 
Vesting of restricted stock units34,065 — — — —  
Stock-based compensation— — 7,264 — — 7,264 
Net income— — — (85,437)— (85,437)
Balance at September 30, 202027,856,298 $28 $743,273 $(734,341)$ $8,960 
See accompanying notes to the condensed financial statements.
6

Table of Contents
Esperion Therapeutics, Inc.
Condensed Statements of Cash Flows
(in thousands)
(unaudited)
Nine Months Ended September 30,
20202019
Operating activities
Net loss$(39,075)$(35,219)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation expense387 218 
Accretion of premiums and discounts on investments(97)(140)
Non-cash interest expense related to the revenue interest liability13,739 3,996 
Stock-based compensation expense21,712 19,526 
Changes in assets and liabilities:
Prepaids and other assets(7,989)(1,802)
Deferred revenue(490)2,618 
Inventories(9,061) 
Other long-term liabilities1,710  
Accounts payable(11,326)(21,158)
Other accrued liabilities13,863 11,614 
Net cash used in operating activities(16,627)(20,347)
Investing activities
Purchases of investments(4,420)(26,630)
Proceeds from sales/maturities of investments39,145 94,510 
Purchase of property and equipment(693)(781)
Net cash provided by investing activities34,032 67,099 
Financing activities
Proceeds from revenue interest liability25,000 124,424 
Proceeds from exercise of common stock options6,395 4,757 
Payments on revenue interest liability(110) 
Net cash provided by financing activities31,285 129,181 
Net increase in cash and cash equivalents48,690 175,933 
Cash, cash equivalents and restricted cash at beginning of period167,058 36,973 
Cash, cash equivalents and restricted cash at end of period$215,748 $212,906 
Supplemental disclosure of cash flow information:
Purchase of property and equipment not yet paid148 74 
Non cash right of use asset3 31 
See accompanying notes to the condensed financial statements.

7

Table of Contents
Esperion Therapeutics, Inc.
Notes to the Condensed Financial Statements
(unaudited)
1. The Company and Basis of Presentation
Esperion Therapeutics, Inc. ("the Company”) is the Lipid Management Company, a pharmaceutical company focused on developing and commercializing affordable, oral, once-daily, non-statin medicines for the treatment of patients with elevated low density lipoprotein cholesterol ("LDL-C"). Through scientific and clinical excellence, and a deep understanding of cholesterol biology, the experienced Lipid Management Team at Esperion is committed to developing new LDL-C lowering medicines that will make a substantial impact on reducing global cardiovascular disease ("CVD"); the leading cause of death around the world. NEXLETOL® (bempedoic acid) and NEXLIZET® (bempedoic acid and ezetimibe) tablets are the first, oral, once-daily, non-statin LDL-C lowering medicines approved in the U.S. in nearly 20 years for patients with atherosclerotic cardiovascular disease (“ASCVD”) or heterozygous familial hypercholesterolemia (“HeFH”).
On February 21, 2020, the Company announced that the U.S. Food and Drug Administration (“FDA”) approved NEXLETOL as an adjunct to diet and maximally tolerated statin therapy for the treatment of adults with HeFH or established ASCVD who require additional lowering of LDL-C. The effect of NEXLETOL on cardiovascular morbidity and mortality has not been determined. NEXLETOL is the first oral, once-daily, non-statin LDL-C lowering medicine approved since 2002 for indicated patients. NEXLETOL became commercially available on March 30, 2020.
On February 26, 2020, the Company announced that the FDA approved NEXLIZET as an adjunct to diet and maximally tolerated statin therapy for the treatment of adults with HeFH or established ASCVD who require additional lowering of LDL-C. The effect of NEXLIZET on cardiovascular morbidity and mortality has not been determined. NEXLIZET is the first non-statin, LDL-C lowering fixed combination drug product ever approved. NEXLIZET became commercially available on June 4, 2020.
On January 31, 2020, the Committee for Medicinal Products for Human Use ("CHMP") of the European Medicines Agency ("EMA") adopted a positive opinion for the Marketing Authorisation Applications ("MAAs") of both bempedoic acid and the bempedoic acid / ezetimibe combination tablets, recommending approval for the treatment of hypercholesterolemia and mixed dyslipidemia. On April 6, 2020, the Company announced that the European Commission (“EC”) approved the NILEMDO™ (bempedoic acid) and NUSTENDI™ (bempedoic acid and ezetimibe) tablets for the treatment of hypercholesterolemia and mixed dyslipidemia. The decision is applicable to all 27 European Union member states plus the United Kingdom, Iceland, Norway and Liechtenstein. NILEMDO (bempedoic acid) and NUSTENDI (bempedoic acid and ezetimibe) are the branded products names for bempedoic acid and the bempedoic acid / ezetimibe combination tablets in Europe. NILEMDO is the first, oral, non-statin, LDL-C lowering medicine approved in Europe in almost two decades for indicated patients, and NUSTENDI is the first non-statin, LDL-C lowering combination medicine ever approved in Europe.
On April 17, 2020, the Company entered into a license and collaboration agreement (the "Otsuka Agreement") with Otsuka Pharmaceutical Co., Ltd. ("Otsuka"). Pursuant to the Otsuka Agreement, the Company granted Otsuka exclusive development and commercialization rights to NEXLETOL and NEXLIZET in Japan. Otsuka will be responsible for all development, regulatory, and commercialization activities in Japan. In addition, Otsuka will fund all clinical development costs associated with the program in Japan. The Company received an upfront cash payment of $60 million in April 2020 and will receive up to an additional $450 million in total development and sales milestones. The Company will also receive tiered royalties ranging from 15 percent to 30 percent on net sales in Japan.
On June 18, 2020, the Company entered into an amendment to the license and collaboration agreement ("LCA Amendment") with Daiichi Sankyo Europe GmbH ("DSE") dated as of January 2, 2019. In June 2020, the Company completed the transfer of the MAAs for NILEMDO and NUSTENDI. Pursuant to the terms of the amendment, DSE paid the Company the second $150 million milestone based on completion of the NUSTENDI MAA transfer rather than the first product sale in the EU. Prior to the execution of the LCA Amendment, the milestone payment was due upon the first commercial sale in Europe, which is anticipated later this year. Additionally, the Company and DSE have agreed to expand the territory in which DSE has exclusive commercialization rights to NILEMDO and NUSTENDI to include Turkey. DSE's designated affiliate in Turkey will be solely responsible, at its sole cost and expense, for all regulatory matters relating to such products in Turkey, including obtaining Regulatory Approval for such product in Turkey.
The Company's primary activities since incorporation have been conducting research and development activities, including nonclinical, preclinical and clinical testing, performing business and financial planning, recruiting personnel, and raising capital. The Company received approval by the FDA in February 2020 to commercialize NEXLETOL and NEXLIZET in the U.S., and accordingly commenced principal operations on March 30, 2020 with the commercialization of NEXLETOL.
8

Table of Contents
The Company is subject to risks and uncertainties which include the need to successfully commercialize its products, research, develop, and clinically test therapeutic products; obtain regulatory approvals for its products; expand its management, commercial and scientific staff; and finance its operations with an ultimate goal of achieving profitable operations.
The Company has sustained annual operating losses since inception and expects such losses to continue over the foreseeable future. While management believes current cash resources and future cash received from the Company's net product sales, collaboration agreements with DSE and Otsuka, entered into on January 2, 2019 and April 17, 2020, respectively, and from the Revenue Interest Purchase Agreement (“RIPA”) with Eiger III SA LLC (“Oberland”), an affiliate of Oberland Capital LLC, and the Purchasers named therein, entered into on June 26, 2019, will fund operations for the foreseeable future, management may continue to fund operations and advance the development of the Company's products and product candidates through a combination of collaborations with third parties, strategic alliances, licensing arrangements, permitted debt financings, permitted royalty-based financings, and permitted private and public equity offerings or through other sources. The impact of COVID-19 and the uncertainty around the global pandemic could further impact the commercial launch of NEXLETOL and NEXLIZET and the Company’s research and development programs and could result in lower cash flows or higher costs that could further impact the Company’s overall operations and cash needs in the future.
If adequate funds are not available, the Company may not be able to continue the development of its current products or future product candidates, or to commercialize its current or future product candidates, if approved.
Basis of Presentation
The accompanying condensed interim financial statements are unaudited and were prepared by the Company in accordance with generally accepted accounting principles in the United States of America (“GAAP”). In the opinion of management, the Company has made all adjustments, which include only normal recurring adjustments necessary for a fair presentation of the Company’s financial position and results of operations for the interim periods presented. Certain prior year amounts have been reclassified to conform with current year presentation. Certain information and disclosures normally included in the annual financial statements prepared in accordance with GAAP, but that is not required for interim reporting purposes, have been condensed or omitted. These condensed interim financial statements should be read in conjunction with the audited financial statements as of and for the year ended December 31, 2019, and the notes thereto, which are included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019. The results of operations for the interim periods are not necessarily indicative of the results to be expected for a full year, any other interim periods or any future year or period.
2. Summary of Significant Accounting Policies
Use of Estimates
The preparation of financial statements in accordance with generally accepted accounting principles in the United States requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, net revenues, expenses and related disclosures. Actual results could differ from those estimates.
Concentration of Risk
The Company enters into a limited number of distribution agreements with distributors and specialty pharmacies. The Company's net product sales are with these customers. As of September 30, 2020, ten customers accounted for all of the Company's net trade receivables.
Inventories
Inventories are stated at the lower of cost or net realizable value and recognized on a first-in, first-out ("FIFO") method. The Company uses standard cost to determine the cost basis for inventory. Inventory is capitalized based on when future economic benefit is expected to be realized. The Company began capitalizing inventory upon receiving FDA approval for NEXLETOL and NEXLIZET on February 21, 2020 and February 26, 2020, respectively. Prior to the FDA approval of NEXLETOL and NEXLIZET, expenses associated with the manufacturing of the Company's products were recorded as research and development expense.
The Company analyzes its inventory levels on a periodic basis to determine if any inventory is at risk for expiration prior to sale or has a cost basis that is greater than its estimated future net realizable value. Any adjustments are recognized through cost of sales in the period in which they are incurred.
9

Table of Contents
Revenue Recognition
In accordance with ASC 606, Revenue from Contracts with Customers, the Company recognizes revenue when a customer obtains control of promised goods or services, in an amount that reflects the consideration the Company expects to receive in exchange for the goods or services provided. To determine revenue recognition for arrangements within the scope of ASC 606, the Company performs the following five steps: identify the contracts with a customer; identify the performance obligations in the contract; determine the transaction price; allocate the transaction price to the performance obligations in the contract; and recognize revenue when or as the entity satisfies a performance obligation. At contract inception the Company assesses the goods or services promised within each contract and determines those that are performance obligations and assesses whether each promised good or service is distinct. The Company then recognizes as revenue the amount of the transaction price that is allocated to the respective performance obligation when or as the performance obligation is satisfied. The Company derives revenue through two primary sources: collaboration revenue and product sales. Collaboration revenue consists of the collaboration payments to the Company for collaboration arrangements outside of the United States for the development, manufacturing and commercialization of the Company's product candidates by the Company's partners and product sales consists of sales of NEXLETOL and NEXLIZET.
a.Collaboration Revenue
The Company has entered into agreements related to its activities to develop, manufacture, and commercialize its product candidates. The Company earns collaboration revenue in connection with a collaboration agreement to develop and/or commercialize product candidates where the Company deems the collaborator to be the customer. Revenue is recognized when (or as) the Company satisfies performance obligations under the terms of a contract. Depending on the terms of the arrangement, the Company may defer the recognition of all or a portion of the consideration received as the performance obligations are satisfied.
The collaboration agreements may require the Company to deliver various rights, services, and/or goods across the entire life cycle of a product or product candidate. In an agreement involving multiple goods or services promised to be transferred to a customer, the Company must assess, at the inception of the contract, whether each promise represents a separate performance obligation (i.e., is "distinct"), or whether such promises should be combined as a single performance obligation.
The terms of the agreement typically include consideration to be provided to the Company in the form of non-refundable up-front payments, development milestones, sales milestones, and royalties on sales of products within a respective territory. The Company recognizes regulatory and approval milestones consideration when it is probable that a future reversal is unlikely to occur. For sales based milestones and royalties based on sales of product in a territory, the Company applies the sales-based royalty exception in ASC 606-10-55-65 to all of these milestones and royalties.
At the inception of the contract, the transaction price reflects the amount of consideration the Company expects to be entitled to in exchange for transferring promised goods or services to its customer. In the arrangement where the Company satisfies performance obligation(s) during the regulatory phase over time, the Company recognizes collaboration revenue typically using an input method on the basis of regulatory costs incurred relative to the total expected cost which determines the extent of progress toward completion. The Company reviews the estimate of the transaction price and the total expected cost each period and makes revisions to such estimates as necessary. Under contracted supply agreements with collaborators, the Company may manufacture and supply quantities of active pharmaceutical ingredient (“API”) or bulk tablets reasonably required by collaboration partners for the development or sale of licensed products in their respective territory. The Company recognizes revenue when the collaboration partner has obtained control of the API or bulk tablets. The Company records the costs related to the supply agreement in cost of goods sold on the condensed statements of operations and comprehensive income (loss).
Under the Company's collaboration agreements, product sales and cost of sales may be recorded by the Company's collaborators as they are deemed to be the principal in the transaction. The Company receives royalties from the commercialization of such products, and records its share of the variable consideration, representing a percentage of net product sales, as collaboration revenue in the period in which such underlying sales occur and costs are incurred by the collaborator. The collaborator will provide the Company with estimates of its royalties for such quarter; these estimates are reconciled to actual results in the subsequent quarter, and the royalty is adjusted accordingly, as necessary.
10

Table of Contents
b.Product Sales, Net
On February 21, 2020, the Company announced that the FDA approved NEXLETOL as an adjunct to diet and maximally tolerated statin therapy for the treatment of adults with HeFH or established ASCVD who require additional lowering of LDL-C. On February 26, 2020, the Company announced that the FDA approved NEXLIZET as an adjunct to diet and maximally tolerated statin therapy for the treatment of adults with HeFH or established ASCVD who require additional lowering of LDL-C. On March 30, 2020, NEXLETOL was commercially available in the U.S. through prescription and on June 4, 2020, NEXLIZET was commercially available in the U.S. through prescription. Net product sales totaled $3.3 million and $4.8 million for the three and nine months ended September 30, 2020, respectively.
The Company sells NEXLETOL and NEXLIZET to wholesalers in the U.S and, in accordance with ASC 606, recognizes revenue at the point in time when the customer is deemed to have obtained control of the product. The customer is deemed to have obtained control of the product at the time of physical receipt of the product at the customers’ distribution facilities, or free on board (“FOB”) destination, the terms of which are designated in the contract.
Product sales are recorded at the net selling price, which includes estimates of variable consideration for which reserves are established for (a) rebates and chargebacks, (b) co-pay assistance programs, (c) distribution fees, (d) product returns, and (e) other discounts. Where appropriate, these estimates take into consideration a range of possible outcomes which are probability-weighted for relevant factors such as current contractual and statutory requirements, and forecasted customer buying and payment patterns. Overall, these reserves reflect the Company's best estimates of the amount of consideration to which it is entitled based on the terms of the applicable contract. The amount of variable consideration may be constrained and is included in the net sales price only to the extent that it is probable that a significant reversal in the amount of the cumulative revenue recognized will not occur in a future period. Given the early stage of the Company’s commercial operations it has provided constraint of its variable consideration due to its potential consumption trends. Actual amounts of consideration ultimately received may differ from the Company's estimates. If actual results in the future vary from estimates, the Company adjusts these estimates, which would affect net product revenue and earnings in the period such variances become known.
Liabilities for co-pay assistance, expected product returns, rebates, and distributor fees are classified as “Other accrued liabilities” in the condensed balance sheets. Discounts, such as prompt pay discounts, and chargebacks are recorded as a reduction to trade accounts receivable, which is included in “Other prepaid and current assets” in the condensed balance sheets.
Forms of Variable Consideration
Rebates and Chargebacks: The Company estimates reductions to product sales for Public Health Service Institutions, such as Medicaid, Medicare and Veterans' Administration ("VA") programs, as well as certain other qualifying federal and state government programs, and other group purchasing organizations. The Company estimates these reductions based upon the Company's contracts with government agencies and other organizations, statutorily defined discounts and estimated payor mix. These organizations purchase directly from the Company's wholesalers at a discount and the wholesalers charge the Company back the difference between the wholesaler price and the discounted price. The Company's liability for Medicaid rebates consists of estimates for claims that a state will make for a current quarter. The Company's reserve for this discounted pricing is based on expected sales to qualified healthcare providers and the chargebacks that customers have already claimed.
Co-pay assistance: Eligible patients who have commercial insurance may receive assistance from the Company to reduce the patient's out of pocket costs. The Company will buy down the difference between the amount of the eligible patient's co-pay when the drug is purchased at the pharmacy at a determined price. Liabilities for co-pay assistance are calculated by actual program participation from third-party administrators.
Distribution Fees: The Company has written contracts with its customers that include terms for distribution fees and costs for inventory management. The Company estimates and records distribution fees due to its customers based on gross sales.
Product Returns: The Company generally offers a right of return based on the product’s expiration date and certain spoilage and damaged instances. The Company estimates the amount of product sales that may be returned and records the estimate as a reduction of product sales in the period the related product sales is recognized. The Company’s estimates for expected returns are based primarily on an ongoing analysis of sales information and visibility into the inventory remaining in the distribution channel.
11

Table of Contents
    Discounts: The Company provides product discounts, such as prompt pay discounts, to its customers. The Company estimates cash discounts based on terms in negotiated contracts and the Company’s expectations regarding future payment patterns.
Recently Implemented Accounting Pronouncements
In June 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update (“ASU”) 2016-13 which requires financial instruments to be recognized at an estimate of current expected credit losses. As part of the ASU, financial assets measured at amortized cost will be presented at the net amount expected to be collected. In addition, companies will recognize an allowance for credit losses on available-for-sale investments rather than reducing the amortized cost in an other-than-temporary impairment. The Company has chosen the practical expedient to exclude accrued interest from both the fair value and the amortized cost basis of available-for-sale debt securities in identifying and measuring an impairment. The Company adopted the standard on January 1, 2020. The adoption of this standard did not have a material impact on the Company's balance sheets, statements of operations or statements of cash flows.
In August 2018, the FASB issued ASU 2018-15 which includes provisions to clarify customer's accounting for implementation costs incurred in a cloud computing arrangement. Under the updated guidance, a customer in a cloud computing arrangement that is a service contract should follow the internal-use software guidance to determine how to account for costs incurred in implementation. The updated guidance also requires certain classification on the balance sheets, statements of operations and statements of cash flows as well as additional quantitative and qualitative disclosures. The Company adopted the standard effective January 1, 2020 and has chosen to adopt the standard prospectively. Implementation costs for cloud computing arrangements are capitalized in "Other prepaid and current assets" on the Company's balance sheets. The adoption of this standard did not have a material impact to the Company's balance sheets, statements of operations or statements of cash flows.
There have been no other material changes to the significant accounting policies previously disclosed in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2019.
3. Collaborations with Third Parties
DSE Agreement Terms
On January 2, 2019, the Company entered into a license and collaboration agreement with DSE. Pursuant to the agreement, the Company granted DSE exclusive commercialization rights to bempedoic acid and the bempedoic acid / ezetimibe combination tablets in the European Economic Area and Switzerland (“DSE Territory”). DSE will be responsible for commercialization in the DSE Territory. The Company remains responsible for clinical development, regulatory and manufacturing activities for the licensed products globally, including in the DSE Territory.
Pursuant to the agreement, the consideration consists of a $150.0 million upfront cash payment as well as $150.0 million cash payment to the Company upon first commercial sales in the DSE Territory. The Company also is responsible to supply DSE with certain manufacturing supply of the API or bulk tablets. The Company is also eligible to receive a substantial additional regulatory milestone payment upon the grant of the marketing authorisation in the European Union for the CV risk reduction label, depending on the range of relative risk reduction in the CLEAR Outcomes study. In addition, the Company is eligible to receive additional sales milestone payments related to total net sales achievements for DSE in the DSE Territory. Finally, the Company will receive tiered fifteen percent (15%) to twenty-five percent (25%) royalties on net DSE Territory sales.
The agreement calls for both parties to participate in a Joint Collaboration Committee (the “DSE JCC”). The DSE JCC is comprised of executive management from each company and the Company will lead in all aspects related to development and DSE will lead in all aspects related to commercialization in the DSE Territory.
Agreement Terms Amendment
On June 18, 2020, the Company entered into an amendment to the license and collaboration agreement with DSE, dated as of January 2, 2019. In June, the Company completed the transfer of the MAAs for NILEMDO and NUSTENDI. Pursuant to the terms of the amendment, DSE paid the Company the second $150.0 million milestone based on completion of the NUSTENDI MAA transfer rather than the first product sale in the EU, as previously agreed. Additionally, the Company and DSE have agreed to expand the DSE Territory, or the territory in which DSE has exclusive commercialization rights to NILEMDO and NUSTENDI to include Turkey. DSE's designated affiliate in Turkey will be solely responsible, at its sole cost
12

Table of Contents
and expense, for all regulatory matters relating to such products in Turkey, including obtaining regulatory approval for such products in Turkey.
Collaboration Revenue
The Company considered the guidance under ASC 606 and concluded that the agreement was in the scope of ASC 606. The Company concluded that the upfront payment of $150.0 million should be included in the transaction price and related to the following performance obligations under the agreement: 1) the license to the Company’s intellectual property and 2) the obligation to provide ongoing regulatory and development activities. The Company used the adjusted market assessment approach in determining the standalone selling price of the Company’s intellectual property and the expected cost plus margin approach in determining the standalone selling price of the Company’s obligation to provide ongoing regulatory and development activities. In the three and nine months ended September 30, 2019, the Company recognized $1.0 million and $147.4 million of collaboration revenue, respectively. In the nine months ended September 30, 2020, the Company recognized $1.6 million related to the on-going performance obligation for the ongoing regulatory efforts related to the MAA in the DSE Territory, which was transferred to DSE in June 2020.
In addition, in the nine months ended September 30, 2020, the Company recognized the $150.0 million milestone as collaboration revenue based on the successful transfer of the NUSTENDI MAA. In the three and nine months ended September 30, 2020, the Company recognized collaboration revenue of $0.5 million and $1.5 million, respectively, related to the sales of bulk tablets of NILEMDO and NUSTENDI to DSE pursuant to the Supply Agreement that was executed with DSE.
All remaining future potential milestone amounts were not included in the transaction price, as they were all determined to be fully constrained following the concepts of ASC 606 due to the fact that such amounts hinge on development activities, regulatory approvals and sales-based milestones. Additionally, the Company expects that any consideration related to royalties and sales-based milestones will be recognized when the subsequent sales occur.
Otsuka Agreement Terms
On April 17, 2020, the Company entered into the Otsuka Agreement with Otsuka. Pursuant to the Otsuka Agreement, the Company granted Otsuka exclusive development and commercialization rights to NEXLETOL and NEXLIZET in Japan. Otsuka will be responsible for all development, regulatory, and commercialization activities in Japan. In addition, Otsuka will fund all clinical development costs associated with the program in Japan.
Pursuant to the agreement, the consideration consists of a $60.0 million upfront cash payment and the Company will be eligible to receive additional payments of up to $450.0 million if certain regulatory and commercial milestones are achieved by Otsuka. The potential future milestone payments include up to $20.0 million upon first JNDA submissions in the Otsuka Territory, up to $70.0 million upon the first NHI Price Listing for NEXLETOL in the Otsuka Territory, and up to $50.0 million upon the achievement of the primary major adverse cardiovascular events (“MACE”) in the CLEAR Outcomes study and the CV risk reduction rate on the U.S. label, depending on the range of relative risk reduction in the CLEAR Outcomes study. In addition, the Company is eligible to receive additional sales milestone payments up to $310.0 million related to total net sales achievements for Otsuka in Japan. Finally, the Company will receive tiered fifteen percent (15%) to thirty percent (30%) royalties on net sales in Japan.
The agreement calls for both parties to participate in a Joint Collaboration Committee (the "Otsuka JCC"). The Otsuka JCC is comprised of executive management from each company and Otsuka will lead in all aspects related to development and commercialization in the Otsuka Territory.
Collaboration Revenue
The Company considered the guidance under ASC 606 and concluded that the agreement was in the scope of ASC 606. The Company concluded that the upfront payment of $60.0 million should be included in the transaction price and related to the performance obligation under the agreement to the license to the Company's intellectual property. In the nine months ended September 30, 2020, the Company recognized $60.0 million of collaboration revenue related to the $60.0 million upfront payment. The Company did not have any collaboration revenue from the Otsuka Agreement during the three months ended September 30, 2020.
All future potential milestone amounts were not included in the transaction price, as they were all determined to be fully constrained following the concepts of ASC 606 due to the fact that such amounts hinge on development activities,
13

Table of Contents
regulatory approvals and sales-based milestones. Additionally, the Company expects that any consideration related to royalties and sales-based milestones will be recognized when the subsequent sales occur.
The Company has not yet recognized any revenue for milestone payments as the related regulatory and commercial milestones have not yet been achieved.
4. Inventories
Inventories as of September 30, 2020 and December 31, 2019 consist of the following (in thousands):
September 30, 2020December 31, 2019
Raw materials$4,103 
Work in process4,541 
Finished goods417 
$9,061 $ 
The Company has entered into a contract manufacturing agreement with a third party commercial manufacturing organization for the production of certain inventory supplies of NEXLETOL and NEXLIZET. The agreement has an initial term of three years and will renew automatically for successive periods of one year each unless otherwise terminated by either party. Under the agreement the Company is obligated to purchase minimum order commitments on a rolling twelve months period for the batches of inventory supplies produced.
5. Commitments and Contingencies
On January 12, 2016, a purported stockholder of the Company filed a putative class action lawsuit in the United States District Court for the Eastern District of Michigan, against the Company and Tim Mayleben, captioned Kevin L. Dougherty v. Esperion Therapeutics, Inc., et al. (No. 16-cv-10089). The lawsuit alleges that the Company and Mr. Mayleben violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and SEC Rule 10b-5 by allegedly failing to disclose in an August 17, 2015, public statement that the FDA would require a cardiovascular outcomes trial before approving the Company’s lead product candidate. The lawsuit seeks, among other things, compensatory damages in connection with an allegedly inflated stock price between August 18, 2015, and September 28, 2015, as well as attorneys’ fees and costs. On May 20, 2016, an amended complaint was filed in the lawsuit and on July 5, 2016, the Company filed a motion to dismiss the amended complaint. On December 27, 2016, the court granted the Company’s motion to dismiss with prejudice and entered judgment in the Company’s favor. On January 24, 2017, the plaintiffs in this lawsuit filed a motion to alter or amend the judgment. In May 2017, the court denied the plaintiff’s motion to alter or amend the judgment. On June 19, 2017, the plaintiffs filed a notice of appeal to the Sixth Circuit Court of Appeals and on September 14, 2017, they filed their opening brief in support of the appeal. The appeal was fully briefed on December 7, 2017, and it was argued before the Sixth Circuit on March 15, 2018. On September 27, 2018, the Sixth Circuit issued an opinion in which it reversed the district court’s dismissal and remanded for further proceedings. On October 11, 2018, the Company filed a petition for rehearing en banc and, on October 23, 2018, the Sixth Circuit Court of Appeals directed plaintiffs to respond to that petition. On December 3, 2018, the Sixth Circuit denied the Company’s petition for en banc rehearing, and on December 11, 2018, the case was returned to the federal district court by mandate from the Sixth Circuit. On December 26, 2018, the Company filed an answer to the amended complaint, and on March 28, 2019, the Company filed its amended answer to the amended complaint. On September 15, 2020, the Company filed a motion for summary judgment, and the plaintiffs filed a motion for partial summary judgment, and on October 23, 2020, the parties filed oppositions to both motions for summary judgment. The Company is unable to predict the outcome of this matter and is unable to make a meaningful estimate of the amount or range of loss, if any, that could result from an unfavorable outcome.
On December 15, 2016, a purported stockholder of the Company filed a derivative lawsuit in the Court of Chancery of the State of Delaware against Tim Mayleben, Roger Newton, Mary McGowan, Nicole Vitullo, Dov Goldstein, Daniel Janney, Antonio Gotto Jr., Mark McGovern, Gilbert Omenn, Scott Braunstein, and Patrick Enright. The Company is named as a nominal defendant. The lawsuit alleges that the defendants breached their fiduciary duties to the Company when they made or approved improper statements on August 17, 2015, regarding the Company’s lead product candidate’s path to FDA approval, and failed to ensure that reliable systems of internal controls were in place at the Company. On February 8, 2019, the Company and defendants filed a motion to dismiss the derivative lawsuit. On April 23, 2019, the plaintiff filed an opposition to the motion to dismiss the derivative lawsuit, and the Company filed a reply brief on May 15, 2019. On November 6, 2019, the court held a hearing on the motion to dismiss. On February 13, 2020, the court granted the motion to dismiss with prejudice and entered judgment in the Company’s favor. On March 16, 2020, the plaintiff filed a notice of appeal to the Supreme Court of Delaware. On June 1, 2020, the plaintiff filed his opening brief on appeal to the Supreme Court of Delaware. On July 1, 2020, the Company and the defendants filed an answering brief, and on July 16, 2020, the plaintiff filed a reply brief. On October 14,
14

Table of Contents
2020, the Supreme Court of Delaware held oral arguments on the appeal. On October 29, 2020, the Supreme Court of Delaware issued an order affirming the judgment of the Court of Chancery. The lawsuit seeks, among other things, any damages sustained by the Company as a result of the defendants’ alleged breaches of fiduciary duties, including damages related to the above-referenced securities class action, an order directing the Company to take all necessary actions to reform and improve its corporate governance and internal procedures, restitution from the defendants, and attorneys’ fees and costs. The Company is unable to predict the outcome of this matter and is unable to make a meaningful estimate of the amount or range of loss, if any, that could result from an unfavorable outcome.
There have been no other material changes to the Company’s contractual obligations and commitments and contingencies outside the ordinary course of business from those previously disclosed in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2019 other than the Revenue Interest Purchase Agreement disclosed in Note 8 “Liability Related to the Revenue Interest Purchase Agreement.”
6. Investments
The following table summarizes the Company’s cash equivalents and short-term investments:
September 30, 2020
Amortized
Cost
Gross Unrealized GainsGross Unrealized LossesEstimated
Fair
Value
(in thousand)
Cash equivalents:
Money market funds$206,147 $ $ $206,147 
Total$206,147 $ $ $206,147 

December 31, 2019
Amortized
Cost
Gross Unrealized GainsGross Unrealized LossesEstimated
Fair
Value
(in thousands)
Cash equivalents:
Money market funds$20,970 $ $ $20,970 
U.S. treasury notes2,497   2,497 
Commercial paper4,494   4,494 
Short-term investments:
Certificates of deposit245   245 
U.S treasury notes29,155 23  29,178 
Commercial paper5,228   5,228 
Total$62,589 $23 $ $62,612 
At September 30, 2020, remaining contractual maturities of investments classified as current on the balance sheets were less than 12 months.
During the three and nine months ended September 30, 2020, other income, net in the statements of operations includes interest income on investments of less than $0.1 million and $0.5 million, respectively, and income for the accretion of premiums and discounts on investments of less than $0.1 million and $0.1 million, respectively. During the three and nine months ended September 30, 2019, other income, net in the statements of operations includes interest income on investments of $1.2 million and $2.6 million, respectively, and income for the accretion of premiums and discounts on investments of $0.2 million and $0.3 million, respectively.
There were no unrealized gains or losses on investments reclassified from accumulated other comprehensive income (loss) to other income in the statements of operations during the three and nine months ended September 30, 2020 and 2019.
15

Table of Contents
In the three and nine months ended September 30, 2020, there were no allowances for credit losses and all unrealized gains (losses) for available-for-sale securities were recognized in accumulated other comprehensive income (loss). As of September 30, 2020, the Company had no accrued interest receivables.​

7. Fair Value Measurements
The Company follows accounting guidance that emphasizes that fair value is a market-based measurement, not an entity-specific measurement. Fair value is defined as “the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.” Fair value measurements are defined on a three level hierarchy:
Level 1 inputs:    Quoted prices for identical assets or liabilities in active markets;
Level 2 inputs:Observable inputs other than Level 1 prices, such as quoted market prices for similar assets or liabilities or other inputs that are observable or can be corroborated by market data; and
Level 3 inputs:Unobservable inputs that are supported by little or no market activity and require the reporting entity to develop assumptions that market participants would use when pricing the asset or liability.
The following table presents the Company’s financial assets that have been measured at fair value on a recurring basis:
DescriptionTotalLevel 1Level 2Level 3
September 30, 2020
Assets:
Money market funds$206,147 $206,147 $ $ 
Total assets at fair value$206,147 $206,147 $ $ 
December 31, 2019
Assets:
Money market funds$20,970 $20,970 $ $ 
Investments:
Certificates of deposit245 245   
U.S. treasury notes31,675 31,675   
Commercial paper9,722  9,722  
Total assets at fair value$62,612 $52,890 $9,722 $ 
There were no transfers between Levels 1, 2 or 3 during the three and nine months ended September 30, 2020 and 2019.​

8. Liability Related to the Revenue Interest Purchase Agreement
On June 26, 2019, the Company entered into a RIPA with Oberland, as agent for purchasers party thereto (the “Purchasers”), and the Purchasers named therein, to obtain financing in respect to the commercialization and further development of bempedoic acid and the bempedoic acid / ezetimibe combination tablets and other working capital needs. Pursuant to the RIPA, the Company received $125.0 million at closing, less certain issuance costs. The Company is also entitled to receive up to approximately $75.0 million in subsequent installments subject to the terms and conditions set forth in the RIPA: (i) $25.0 million upon certain regulatory approval of its product candidates and (ii) $50.0 million, at the Company’s option, upon reaching $100.0 million trailing worldwide six-month net sales any time prior to December 31, 2021 (the “Third Payment”). In March 2020, the Company received $25.0 million from Oberland upon receiving regulatory approval of NEXLETOL.
As consideration for such payments, the Purchasers have a right to receive certain revenue interests (the “Revenue Interests”) from the Company based upon net sales of the Company’s certain products which will be tiered payments initially ranging from 2.5% to 7.5% of the Company’s net sales in the covered territory (the “Covered Territory”); provided that (a) if
16

Table of Contents
annual net sales equal or exceed $350.0 million by December 31, 2021 (the “Sales Threshold”), the initially tiered revenue interest rate will be decreased to a single rate of 2.5% of the Company’s net sales in the Covered Territory, beginning on January 1, 2022, and (b) if annual net sales equal or exceed the Sales Threshold and if the Purchasers receive 100% of their invested capital by December 31, 2024, the revenue interest rate will be decreased to a single rate of 0.4% of the Company’s net sales in the Covered Territory beginning on January 1, 2025. If the Third Payment is drawn down by the Company, the applicable royalty rates will increase by one-third. The Covered Territory is the United States, but is subject to expand to include the world-wide net sales if the Company’s annual U.S. net sales are less than $350.0 million for the year ended December 31, 2021. The U.S. net sales milestone thresholds are not to be taken as financial guidance. The Purchasers’ rights to receive the Revenue Interests shall terminate on the date on which the Purchasers have received Revenue Interests payments of 195% of the then aggregate purchase price (the “Cumulative Purchaser Payments”) paid to the Company, unless the RIPA is terminated earlier.
Under the RIPA, the Company has an option (the “Call Option”) to terminate the RIPA and repurchase future Revenue Interests at any time upon advance written notice. Additionally, the Purchasers have an option (the “Put Option”) to terminate the RIPA and to require the Company to repurchase future Revenue Interests upon enumerated events such as a bankruptcy event, an uncured material breach, a material adverse effect or a change of control. If the Put Option is exercised prior to the first anniversary of the closing date by the Purchasers (except pursuant to a change of control), the required repurchase price will be 120% of the Cumulative Purchaser Payments (minus all payments Company has made to the Purchasers in connection with the Revenue Interests). In all other cases, if the Put Option or the Call Option are exercised, the required repurchase price will be 175% of the Cumulative Purchaser Payments (minus all payments Company has made to the Purchasers in connection with the Revenue Interests), if such option is exercised prior to the third anniversary of the closing date, and 195% of the Cumulative Purchaser Payments (minus all payments Company has made to the Purchasers in connection with the Revenue Interests), if such option is exercised thereafter.
In addition, the RIPA contains various representations and warranties, information rights, non-financial covenants, indemnification obligations and other provisions that are customary for a transaction of this nature.
In connection with the arrangement, as of September 30, 2020, the Company has recorded a liability, referred to as the “Revenue interest liability” in the condensed balance sheets, of $171.2 million, net of $0.5 million of capitalized issuance costs in connection with the RIPA. The Company imputes interest expense associated with this liability using the effective interest rate method. The effective interest rate is calculated based on the rate that would enable the debt to be repaid in full over the anticipated life of the arrangement. The interest rate on this liability may vary during the term of the agreement depending on a number of factors, including the level of forecasted net sales. The Company evaluates the interest rate quarterly based on its current net sales forecasts utilizing the prospective method.
A significant increase or decrease in net sales will materially impact the revenue interest liability, interest expense and the time period for repayment. The Company recorded approximately $4.9 million and $13.7 million in interest expense related to this arrangement for the three and nine months ended September 30, 2020, respectively.

The repayment of the RIPA to Oberland does not have a fixed repayment schedule, rather it will be completely repaid and extinguished when the Company has repaid 195% of the aggregate purchase price unless the RIPA is terminated earlier. Since there is not a fixed repayment schedule, the Company does not project its future repayments by year. Each period, the Company estimates the future expected sales of its products in the covered territory and determines the effective annual imputed interest rate, which updates and changes the timing of the Company’s payments. Under the terms of the agreement, every $100 million of net sales generated, less than or equal to $250 million in an annual aggregate year, would result in a repayment obligation of approximately $7.5 million or 7.5% at the stated repayment rate in the first year. Annual Net Sales for a calendar year exceeding $250 million would result in a repayment obligation of approximately $2.5 million or 2.5% for every $100 million of sales above the threshold. If the Company equals or exceeds $350 million of sales in the U.S. in 2021, then the repayment amount would drop to $2.5 million for every $100 million of net sales starting in 2022. If the US net sales are less than $350 million for the year ended December 31, 2021, then the Covered Territory is expanded to include worldwide sales beginning in 2022. The Company’s repayments of the RIPA are directly tied to the growth of its net sales, and as the Company’s net sales grow, the Company expects the related repayments of the RIPA to grow as well. The Company currently expects to repay $10.9 million in the next twelve months.
The Company received $125.0 million in exchange for entering into the RIPA and $25.0 million in March 2020 upon receiving regulatory approval of NEXLETOL. The effective annual imputed interest rate is 14.8% as of September 30, 2020. The Company incurred $0.6 million of issuance costs in connection with the RIPA, which will be amortized to interest expense over the estimated term of the RIPA. Payments made to Oberland as a result of the Company’s net sales will reduce the revenue interest liability.
17

Table of Contents
The following table summarizes the revenue interest liability activity during the nine months ended September 30, 2020:
(in thousands)
Revenue interest liability at December 31, 2019$132,544 
Oberland funding for regulatory approval of NEXLETOL25,000 
Interest expense recognized13,739 
Revenue Interests payments(110)
Revenue interest liability at September 30, 2020$171,173 
9. Other Accrued Liabilities
Other accrued liabilities consist of the following:
September 30,
2020
December 31,
2019
(in thousands)
Accrued compensation12,156 7,818 
Accrued professional fees5,958 3,842 
Accrued other3,344 211 
Total other accrued liabilities21,458 11,871 
10. Stock Compensation
Employee Stock Purchase Plan
In April 2020, the board of directors approved the Esperion Therapeutics, Inc. 2020 Employee Stock Purchase Plan (the "ESPP") which was approved by the Company's shareholders on May 28, 2020. The ESPP allows eligible employees to authorize payroll deductions of up to 10% of their base salary or wages up to $25,000 annually to be applied toward the purchase of shares of the Company's common stock on the last trading day of the offering period. Participating employees will purchase shares of the Company's common stock at a discount of up to 15% on the lesser of the closing price of the Company's common stock on the NASDAQ Global Select Market (i) on the first trading day of the offering period or (ii) the last day of any offering period. Offering periods under the ESPP will generally be in six months increments, commencing on September 1 and March 1 of each calendar year with the administrator having the right to establish different offering periods. In the three and nine months ended September 30, 2020, the Company recognized $0.1 million of stock compensation expense related to the ESPP. As of September 30, 2020, there have been no shares issued and 825,000 shares reserved for future issuance under the ESPP.

Stock Options
The following table summarizes the activity relating to the Company’s options to purchase common stock for the nine months ended September 30, 2020:
Number of OptionsWeighted-Average Exercise Price Per ShareWeighted-Average Remaining Contractual Term (Years)Aggregate Intrinsic Value
(in thousands)​
Outstanding at December 31, 20194,677,929 $39.31 6.82$109,054 
Granted234,940 $61.14 
Forfeited or expired(213,484)$55.55 
Exercised(270,735)$23.62 
Outstanding at September 30, 20204,428,650 $40.65 5.84$38,247 
18

Table of Contents
The following table summarizes information about the Company’s stock option plan as of September 30, 2020:

Number of OptionsWeighted-Average Exercise Price Per ShareWeighted-Average Remaining Contractual Term (Years)Aggregate Intrinsic Value
(in thousands)​
Vested and expected to vest at September 30, 20204,428,650 $40.65 5.84$38,247 
Exercisable at September 30, 20203,274,100 $36.40 5.01$36,798 
Stock-based compensation related to stock options was $5.1 million and $16.2 million for the three and nine months ended September 30, 2020, respectively, including less than $0.1 million and $0.5 million for the three and nine months ended September 30, 2020, respectively, that were capitalized into inventory, and $5.5 million and $18.1 million for the three and nine months ended September 30, 2019, respectively. As of September 30, 2020, there was $37.5 million of unrecognized stock-based compensation expense related to unvested options, which will be recognized over a weighted-average period of 2.2 years.
Restricted Stock Units (or RSUs)

The following table summarizes the activity relating to the Company’s RSUs for the nine months ended September 30, 2020:
Number of
RSUs
Weighted-Average
Fair Value Per
Share
Outstanding and unvested December 31, 2019245,966 $44.45 
Granted347,733 $51.42 
Forfeited(48,437)$45.07 
Vested(87,652)$48.78 
Outstanding and unvested September 30, 2020457,610 $48.85 
Stock-based compensation related to RSUs was approximately $2.1 million and $5.4 million for the three and nine months ended September 30, 2020, respectively, including less than $0.1 million and $0.1 million for the three and nine months ended September 30, 2020, respectively, that were capitalized into inventory, and $0.8 million and $1.4 million for the three and nine months ended September 30, 2019, respectively. As of September 30, 2020, there was $19.5 million of unrecognized stock-based compensation expense related to unvested RSUs, which will be recognized over a weighted-average period of 3.0 years.
11. Leases
The Company has operating leases primarily related to the Company’s principal executive office, automobile leases and other IT related equipment. The lease for the principal executive office has a lease term of 5 years and the automobile leases and IT equipment leases primarily have a term of 3 years. During the nine months ended September 30, 2020, the right of use operating lease assets and operating lease liabilities recognized on the condensed balance sheet increased by $5.2 million and $5.2 million from December 31, 2019, respectively, due to the addition of automobile leases and IT equipment associated with the onboarding of the Company’s commercial sales force to support the commercialization of NEXLETOL and NEXLIZET. During the three and nine months ended September 30, 2020, the Company recognized $0.7 million and $1.5 million, respectively, of operating lease costs, recognized on the condensed statements of operations, and paid cash for the amounts included in the measurement of lease liabilities of $0.7 million and $1.5 million, respectively, which were included in operating cash flows on the condensed statements of cash flows. During the three and nine months ended September 30, 2019, the Company recognized $0.1 million and $0.2 million, respectively, of operating lease costs, recognized on the condensed statements of operations, and paid cash for the amounts included in the measurement of lease liabilities of $0.1 million and $0.2 million, respectively, which were included in operating cash flows on the condensed statements of cash flows. At September 30, 2020, the weighted-average remaining lease term of operating leases was 2.6 years and the weighted average discount rate was 3.5%. There were no right-of-use assets obtained in exchange for lease obligations in the nine months ended September 30, 2020 or 2019. The Company had no additional operating and finance leases that have not yet commenced as of September 30, 2020 or 2019.
19

Table of Contents
The following table summarizes the Company’s future maturities of operating lease liabilities as of September 30, 2020:
(in thousands)
2020 (remaining)$719 
20212,772 
20222,725 
2023820 
2024 
Total lease payments7,036 
Less imputed interest300 
Total$6,736 
12. Income Taxes
There was no provision for income taxes for the three and nine months ended September 30, 2020 and 2019, because the Company has incurred annual operating losses since inception. At September 30, 2020, the Company continues to conclude that it is not more likely than not that the Company will realize the benefit of its deferred tax assets due to its history of losses. Accordingly, a full valuation allowance has been applied against the net deferred tax assets.
13. Net Loss Per Common Share
Basic net income (loss) per share is calculated by dividing net income (loss) by the weighted-average number of common shares outstanding during the period, without consideration for common stock equivalents. Diluted net income (loss) per share is computed by dividing net income (loss) by the weighted-average number of common stock equivalents outstanding for the period, including shares that potentially could be dilutive if they were exercised during the period, determined using the treasury-stock method. For purposes of this calculation, stock options and unvested RSUs are considered to be common stock equivalents and are only included in the calculation of diluted net loss per share when their effect is dilutive.
The shares outstanding at the end of the respective periods presented below were excluded from the calculation of diluted net loss per share due to their anti-dilutive effect:
Three and Nine Months Ended
September 30,
20202019
Common shares under option4,428,650 5,093,262 
Unvested RSUs457,610 192,204 
Total potential dilutive shares4,886,260 5,285,466 
14. Statements of Cash Flows
The following table provides a reconciliation of cash and cash equivalents and restricted cash presented on the condensed balance sheets to the same amounts presented on the condensed statements of cash flows on September 30, 2020 and 2019 and December 31, 2019 and 2018 (in thousands):
September 30,
2020
September 30,
2019
December 31,
2019
December 31,
2018
Cash and cash equivalents$215,748 $211,978 $166,130 $36,973 
Restricted cash 928 928  
Total cash and cash equivalents and restricted cash shown on the condensed statements of cash flows$215,748 $212,906 $167,058 $36,973 
20

Table of Contents
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our condensed financial statements and related notes appearing elsewhere in this Quarterly Report on Form 10-Q and our annual report on Form 10-K for the fiscal year ended December 31, 2019 and other filings that we make with the Securities and Exchange Commission.
Forward-Looking Statements
This Quarterly Report on Form 10-Q contains “forward-looking statements” within the meaning of Section 27A of the Securities Act and Section 21E of the Securities Exchange Act of 1934, as amended (the Exchange Act). These forward-looking statements are based on our management’s belief and assumptions and on information currently available to management. Although we believe that the expectations reflected in these forward-looking statements are reasonable, these statements relate to future events, including our clinical development and commercialization plans, or our future financial performance and involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements, including in relation to the clinical development, commercialization plans, or approval of expanded indications for bempedoic acid and the bempedoic acid / ezetimibe combination tablets to be materially different from any future results, performance or achievements, including in relation to the clinical development, commercialization plans, or approval of expanded indications for bempedoic acid and the bempedoic acid / ezetimibe combination tablets, and the impact of COVID-19 on our business, clinical activities and commercial development plans, expressed or implied by these forward-looking statements.
Forward-looking statements are often identified by the use of words such as, but not limited to, “may,” “will,” “should,” “expects,” “intends,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” “potential,” “continue” or the negative of these terms or other similar terminology. These statements are only predictions. You should not place undue reliance on forward-looking statements because they involve known and unknown risks, uncertainties and other factors, which are, in some cases, beyond our control and that could materially affect results. Factors that may cause actual results to differ materially from current expectations include, among other things, those referred to or discussed in or incorporated by reference into the section titled “Risk Factors” included in Item 1A of Part II of this Quarterly Report on Form 10-Q. If one or more of these risks or uncertainties occur, or if our underlying assumptions prove to be incorrect, actual events or results may vary significantly from those implied or projected by the forward-looking statements. No forward-looking statement is a guarantee of future performance.
The forward-looking statements in this report represent our views as of the date of this quarterly report. Except as required by law, we undertake no obligation to update any forward-looking statements to reflect events or circumstances after the date of such statements.
We use the terms “we,” “us,” “our,” or the "Company” in this report to refer to Esperion Therapeutics, Inc.
Overview
Corporate Overview
We are the Lipid Management Company, a pharmaceutical company focused on developing and commercializing affordable, oral, once-daily, non-statin medicines for the treatment of patients with elevated low density lipoprotein cholesterol, or LDL-C. Through scientific and clinical excellence, and a deep understanding of cholesterol biology, the experienced Lipid Management Team at Esperion is committed to developing new LDL-C lowering medicines that will make a substantial impact on reducing global cardiovascular disease, or CVD; the leading cause of death around the world. NEXLETOL® (bempedoic acid) and NEXLIZET® (bempedoic acid and ezetimibe) tablets are the first, oral, once-daily, non-statin LDL-C lowering medicines approved in the U.S. in nearly 20 years for patients with atherosclerotic cardiovascular disease, or ASCVD, or heterozygous familial hypercholesterolemia, or HeFH.
On February 21, 2020, we announced that the U.S. Food and Drug Administration, or FDA, approved NEXLETOL as an adjunct to diet and maximally tolerated statin therapy for the treatment of adults with HeFH or established ASCVD who require additional lowering of LDL-C. The effect of NEXLETOL on cardiovascular morbidity and mortality has not been determined. NEXLETOL is the first oral, once-daily, non-statin LDL-C lowering medicine approved since 2002 for indicated patients. NEXLETOL became commercially available on March 30, 2020.
21

Table of Contents
On February 26, 2020, we announced that the FDA approved NEXLIZET as an adjunct to diet and maximally tolerated statin therapy for the treatment of adults with HeFH or established ASCVD who require additional lowering of LDL-C. The effect of NEXLIZET on cardiovascular morbidity and mortality has not been determined. NEXLIZET is the first non-statin, LDL-C lowering fixed combination drug product ever approved. NEXLIZET became commercially available on June 4, 2020.
On January 31, 2020, the Committee for Medicinal Products for Human Use, or CHMP, of the European Medicines Agency, or EMA, adopted a positive opinion for the Marketing Authorisation Applications, or MAAs, of both bempedoic acid and the bempedoic acid / ezetimibe combination tablets, recommending approval for the treatment of hypercholesterolemia and mixed dyslipidemia. On April 6, 2020, we announced that the European Commission, or EC, approved NILEMDO™ (bempedoic acid) and NUSTENDI™ (bempedoic acid and ezetimibe) tablets for the treatment of hypercholesterolemia and mixed dyslipidemia. The decision is applicable to all 27 European Union member states plus the United Kingdom, Iceland, Norway and Liechtenstein. NILEMDO (bempedoic acid) and NUSTENDI (bempedoic acid and ezetimibe) are the branded products names for bempedoic acid and the bempedoic acid / ezetimibe combination tablets in Europe. NILEMDO is the first, oral, non-statin, LDL-C lowering medicines approved in Europe in almost two decades for indicated patients, and NUSTENDI is the first non-statin, LDL-C lowering combination medicine ever approved in Europe.
On April 17, 2020, we entered into a license and collaboration agreement, or the Otsuka Agreement, with Otsuka Pharmaceutical Co., Ltd., or Otsuka. Pursuant to the Otsuka Agreement, we granted Otsuka exclusive development and commercialization rights to NEXLETOL and NEXLIZET in Japan. Otsuka will be responsible for all development, regulatory, and commercialization activities in Japan. In addition, Otsuka will fund all clinical development costs associated with the program in Japan. We estimate this amount to total up to $100 million over the next few years. We received an upfront cash payment of $60 million in April 2020 and will receive up to an additional $450 million in total development and sales milestones. We will also receive tiered royalties ranging from 15 percent to 30 percent on net sales in Japan.
On June 18, 2020, we entered into an amendment to the license and collaboration agreement, or LCA Amendment, with Daiichi Sankyo Europe GmbH, or DSE, dated as of January 2, 2019. In June 2020, we completed the transfer of the MAAs for NILEMDO and NUSTENDI. Pursuant to the terms of the amendment, DSE paid us the second $150 million milestone based on completion of the NUSTENDI MAA transfer rather than the first product sale in the EU. Prior to the execution of the LCA Amendment, the milestone payment was due upon the first commercial sale in Europe, which is anticipated later this year. Additionally, we and DSE have agreed to expand the territory in which DSE has exclusive commercialization rights to NILEMDO and NUSTENDI to include Turkey. DSE’s designated affiliate in Turkey will be solely responsible, at its sole cost and expense, for all regulatory matters relating to such products in Turkey, including obtaining Regulatory Approval for such product in Turkey.
We were incorporated in Delaware in January 2008 and commenced our operations in April 2008. Since our inception, we have focused substantially all of our efforts and financial resources on developing bempedoic acid and the bempedoic acid / ezetimibe combination tablets. In February 2020, the FDA approved NEXLETOL and NEXLIZET. NEXLETOL was commercially available in the U.S. on March 30, 2020 and NEXLIZET was commercially available in the U.S. on June 4, 2020. We have funded our operations to date primarily through proceeds from sales of preferred stock, convertible promissory notes and warrants, public offerings of common stock, the incurrence of indebtedness, through collaborations with third parties and revenue interest purchase agreements, and we have incurred losses in each year since our inception.
During the three and nine months ended September 30, 2020, our net losses were $85.4 million and $39.1 million, respectively. In the three and nine months ended September 30, 2019, we recorded net losses of $68.4 million and $35.2 million, respectively. All of our prior net losses resulted from costs incurred in connection with research and development programs and selling, general and administrative costs associated with our operations. We expect to incur significant expenses and operating losses for the foreseeable future. We expect our expenses to increase in connection with our ongoing activities, including, among others:
commercializing NEXLETOL and NEXLIZET tablets in the U.S.; and

completing the clinical development activities for the CLEAR global cardiovascular outcomes trial, or CVOT.​
Accordingly, we may need additional financing to support our continuing operations and further the development of our products. We may seek to fund our operations and further development activities through collaborations with third parties, strategic alliances, licensing arrangements, permitted debt financings, permitted royalty-based financings, permitted public or private equity offerings or through other sources. Adequate additional financing may not be available to us on acceptable terms,
22

Table of Contents
or at all. Our failure to raise capital as and when needed would have a material adverse effect on our financial condition and our ability to pursue our business strategy or continue operations. We will need to generate significant revenues to achieve profitability, and we may never do so.
Product Overview
NEXLETOL is a first-in-class ATP Citrate Lyase, or ACL, inhibitor that lowers LDL-C by reducing cholesterol biosynthesis and up-regulating the LDL receptors. Completed Phase 3 studies conducted in more than 3,000 patients, with over 2,000 patients treated with NEXLETOL, demonstrated an average 18 percent placebo corrected LDL-C lowering when used in patients on moderate or high-intensity statins. NEXLETOL was approved by the FDA in February 2020 as an adjunct to diet and maximally tolerated statin therapy for the treatment of adults with HeFH or established ASCVD who require additional lowering of LDL-C.
NEXLIZET contains bempedoic acid and ezetimibe and lowers elevated LDL-C through complementary mechanisms of action by inhibiting cholesterol synthesis in the liver and absorption in the intestine. Phase 3 data demonstrated NEXLIZET lowered LDL-C by a mean of 38 percent compared to placebo when added on to maximally tolerated statins. NEXLIZET was approved by the FDA in February 2020 as an adjunct to diet and maximally tolerated statin therapy for the treatment of adults with HeFH or established ASCVD who require additional lowering of LDL-C.
NILEMDO is a first-in-class ACL inhibitor that lowers LDL-C by reducing cholesterol biosynthesis and up-regulating the LDL receptors. NILEMDO was approved by the EC in March 2020 for use in adults with primary hypercholesterolemia (heterozygous familial and non-familial) or mixed dyslipidemia, as an adjunct to diet in combination with a statin or statin with other lipid-lowering therapies in adult patients unable to reach LDL-C goals with the maximum tolerated dose of a statin, or alone or in combination with other lipid-lowering therapies as an adjunct to diet in adult patients who are statin-intolerant, or for whom a statin is contraindicated.
NUSTENDI contains bempedoic acid and ezetimibe and lowers elevated LDL-C through complementary mechanisms of action by inhibiting cholesterol synthesis in the liver and absorption in the intestine. NUSTENDI was approved by the EC in March 2020 for use in adults with primary hypercholesterolemia (heterozygous familial and non-familial) or mixed dyslipidemia, as an adjunct to diet in combination with a statin in adult patients unable to reach LDL-C goals with the maximum tolerated dose of a statin in addition to ezetimibe, alone in patients who are either statin-intolerant or for whom a statin is contraindicated, and are unable to reach LDL-C goals with ezetimibe alone, or as an adjunct to diet in adult patients already being treated with the combination of bempedoic acid and ezetimibe as separate tablets with or without statin.
During the nine months ended September 30, 2020, we incurred $52.8 million in expenses related to our CLEAR Outcomes CVOT and other ongoing clinical studies.
During the nine months ended September 30, 2019, we incurred $86.9 million in expenses related to our CLEAR Outcomes CVOT, our open-label extension study, and our 1002FDC-058 study.
Ongoing Clinical Studies
Global Cardiovascular Outcomes Trial—CLEAR Outcomes
CLEAR Outcomes is a Phase 3, event driven, randomized, multicenter, double-blind, placebo-controlled clinical study designed to evaluate whether treatment of bempedoic acid reduces the risk of cardiovascular events in patients with statin intolerance who have cardiovascular disease or are at high risk for cardiovascular disease. The primary endpoint of the study is the effect of bempedoic acid on major adverse cardiovascular events (cardiovascular death, non-fatal myocardial infarction, non-fatal stroke, or coronary revascularization; also referred to as "four-component MACE"). CLEAR Outcomes is designed to provide 90 percent power to detect an approximately 15 percent relative risk reduction in the primary endpoint in the bempedoic acid treatment group as compared to the placebo group and is expected to complete with a minimum of 1,620 patients experiencing the primary endpoint.

The study over-enrolled with 14,032 patients with hypercholesterolemia and high cardiovascular disease risk at over 1,400 sites in 32 countries. Eligible patients at high risk (LDL-C >100 mg/dL in primary prevention) for cardiovascular disease or with cardiovascular disease (LDL-C between 100 mg/dL to 190 mg/dL in secondary prevention) and who are only able to tolerate less than the lowest approved daily starting dose of a statin and considered statin averse, were randomized to receive bempedoic acid 180 mg once-daily or placebo. The expected average baseline LDL-C level in all patients is between 135 mg/dL and 140 mg/dL.
23

Table of Contents
CLEAR Outcomes will conclude once the predetermined number of MACE endpoints occur. We initiated CLEAR Outcomes in December 2016 and completed enrollment in August 2019. The expected average treatment duration will be 3.75 years with a minimum treatment duration of approximately 2.25 years. Based on estimated cardiovascular event rates, we expect to meet the target number of events in the second half of 2022. The study is intended to support our submissions for a CV risk reduction indication in the U.S., Europe and other territories.
The COVID-19 Pandemic
In March 2020, the World Health Organization declared the outbreak of a novel strain of coronavirus, or COVID-19, as a pandemic, which continues to spread throughout the United States and worldwide. We could be materially and adversely affected by the risks, or the public perception of the risks, related to an epidemic, pandemic, outbreak, or other public health crisis, such as the recent outbreak of COVID-19. We are monitoring the global outbreak and spread of COVID-19 and have taken steps to identify and mitigate the adverse impacts on, and risks to, our business posed by its spread and actions taken by governmental and health authorities to address the COVID-19 pandemic. The spread of COVID-19 has caused us to modify our business practices, including implementing a work-from-home policy for all employees who are able to perform their duties remotely and restricting all nonessential travel, and we expect to continue to take actions as may be required or recommended by government authorities or as we determine are in the best interests of our employees, the patients we serve and other business partners in light of COVID-19. Given the fluidity of the COVID-19 pandemic however, we do not yet know the full extent of the potential impact of COVID-19 on our business operations. The ultimate extent of the impact of any epidemic, pandemic, outbreak, or other public health crisis on our business, financial condition and results of operations will depend on future developments, which are highly uncertain and cannot be predicted, including new information that may emerge concerning the severity of such epidemic, pandemic, outbreak, or other public health crisis and actions taken to contain or prevent the further spread, among others. Accordingly, we are unable to reliably estimate the extent to which our business, financial condition and results of operations will or has been affected, including any impacts on product sales or research and development expense. To date, we have not experienced any interruption of our supply of drug products needed to support our ongoing clinical study and product sales. We remain focused on maintaining a strong balance sheet, liquidity and financial flexibility and continue to monitor developments as we deal with the disruptions and uncertainties from a business and financial perspective relating to COVID-19. We will continue to work diligently with our partners and stakeholders to continue supporting patient access to our approved medicines, advancing our product under regulatory review as well as in our clinical studies to the extent safe to do so for patients, caregivers and healthcare practitioners, and ensuring the continuity of our manufacturing and supply chain. For additional information related to the potential impact of COVID-19 on our business, please read Part II-Item 1A, “Risk Factors” of this Quarterly Report on Form 10-Q.

Financial Operations Overview
Product sales, net
Product sales, net is related to our sales of NEXLETOL and NEXLIZET. NEXLETOL was commercially available in the U.S. on March 30, 2020 and NEXLIZET was commercially available in the U.S. on June 4, 2020
Collaboration revenue
Collaboration revenue is related to our collaboration agreements with DSE and Otsuka. Collaboration revenue in the nine months ended September 30, 2020, was primarily related to the $150.0 million milestone from the MAA transfer to DSE and the $60.0 million from the upfront payment with Otsuka. In the nine months ended September 30, 2019, collaboration revenue was primarily related to the initial recognition of the $150.0 million upfront payment from our collaboration agreement with DSE.
Cost of goods sold
Cost of goods sold is related to our net product sales of NEXLETOL and NEXLIZET and the cost of goods sold from our supply agreements with collaboration partners. Prior to the FDA approval of NEXLETOL and NEXLIZET, expenses associated with the manufacturing of our products were recorded as research and development expense.
24

Table of Contents
Research and Development Expenses
Our research and development expenses consist primarily of costs incurred in connection with the development of bempedoic acid and the bempedoic acid / ezetimibe combination tablets, which include:

expenses incurred under agreements with consultants, contract research organizations, or CROs, and investigative sites that conduct our preclinical and clinical studies;

the cost of acquiring, developing and manufacturing clinical study materials and commercial product manufacturing supply prior to product approval, including the procurement of ezetimibe in our continued development of our bempedoic acid / ezetimibe combination tablet;

employee-related expenses, including salaries, benefits, stock-based compensation and travel expenses;

allocated expenses for rent and maintenance of facilities, insurance and other supplies; and

costs related to compliance with regulatory requirements.
We expense research and development costs as incurred. To date, substantially all of our research and development work has been related to bempedoic acid and the bempedoic acid / ezetimibe combination tablets. Costs for certain development activities, such as clinical studies, are recognized based on an evaluation of the progress to completion of specific tasks using data such as patient enrollment, clinical site activations or information provided to us by our vendors. Our direct research and development expenses consist principally of external costs, such as fees paid to investigators, consultants, central laboratories and CROs in connection with our clinical studies. We do not allocate acquiring and manufacturing clinical study materials, salaries, stock-based compensation, employee benefits or other indirect costs related to our research and development function to specific programs.
We will continue to incur research and development expenses in the foreseeable future as they relate to our ongoing CLEAR Outcomes CVOT and any other development programs or additional indications we choose to pursue. We cannot determine with certainty the duration and completion costs associated with the ongoing or future clinical studies of bempedoic acid and the bempedoic acid / ezetimibe combination tablets. The duration, costs and timing associated with the development of bempedoic acid and the bempedoic acid / ezetimibe combination tablets will depend on a variety of factors, including uncertainties associated with the results of our clinical studies and our ability to obtain regulatory approval outside the U.S. and Europe. For example, if a regulatory authority were to require us to conduct clinical studies beyond those that we currently anticipate will be required for the completion of clinical development or post-commercialization clinical studies of bempedoic acid or the bempedoic acid / ezetimibe combination tablets, we could be required to expend significant additional financial resources and time on the completion of clinical development or post-commercialization clinical studies of bempedoic acid and the bempedoic acid / ezetimibe combination tablets.
Selling, General and Administrative Expenses
Selling, general and administrative expenses primarily consist of salaries and related costs for personnel, including stock-based compensation, associated with our sales, executive, accounting and finance, commercial, operational and other administrative functions. Other general and administrative expenses include selling expenses, facility-related costs, communication expenses and professional fees for legal, patent prosecution, protection and review, consulting and accounting services.
We anticipate that our selling, general and administrative expenses will increase in the future in connection with the commercialization of NEXLETOL and NEXLIZET, increases in our headcount, expansion of our information technology infrastructure, and increased expenses associated with being a public company and complying with exchange listing and Securities and Exchange Commission, or SEC, requirements. These increases will likely include higher legal, compliance, accounting and investor and public relations expenses.
Interest Expense
Interest expense is related to our Revenue Interest Purchase Agreement, or RIPA, with Eiger III SA LLC, or Oberland, an affiliate of Oberland Capital.
Other Income, Net
25

Table of Contents
Other income, net, primarily relates to interest income and the accretion or amortization of premiums and discounts earned on our cash, cash equivalents and investment securities.

Critical Accounting Policies and Significant Judgments and Estimates
Our discussion and analysis of our financial condition and results of operations is based on our financial statements, which have been prepared in accordance with generally accepted accounting principles in the United States of America. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities and expenses and the disclosure of contingent assets and liabilities in our financial statements. We evaluate our estimates and judgments on an ongoing basis, including those related to our collaboration agreements and revenue interest liability. We base our estimates on historical experience, known trends and events, contractual milestones and other various factors that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Our actual results may differ from these estimates under different assumptions or conditions.
There have been no other material changes to the significant accounting policies previously disclosed in our Annual Report on Form 10-K for the fiscal year ended December 31, 2019. As we continue through fiscal year 2020, we expect that net product sales will become a critical accounting estimate.

Results of Operations
Comparison of the Three Months Ended September 30, 2020 and 2019
The following table summarizes our results of operations for the three months ended September 30, 2020 and 2019:
Three Months Ended September 30,
20202019Change
(unaudited, in thousands)
Revenue:
Product sales, net$3,331 $— $3,331 
Collaboration revenue502 981 (479)