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Esperion Therapeutics (NASDAQ:ESPR) continued the post-market selloff on Thursday due to a payment dispute with Daiichi Sankyo (OTCPK:DSNKY) over its cholesterol-lowering agent bempedoic acid, prompting Bank of America to downgrade the stock.
Esperion (ESPR) shares crashed Wednesday after the Ann Arbor, MI company said in a regulatory filing that Daiichi (OTCPK:DSKYF) disagreed with milestone payments for BA, noting that its CLEAR Outcomes trial failed to meet the primary endpoint.
“The news is a major setback for Esperion’s strategic plans, having anticipated using these funds to support the re-launch of its bempedoic acid franchise after the CLEAR Outcomes readout,” BofA analyst Jason Zemansky wrote, downgrading the stock to Underperform from Neutral.
“Admittedly, it remains unclear how, and how quickly, the dispute will play out,” the analyst argued, citing additional uncertainties, including concerns about how the company can convince its skeptical investors to provide additional funding, as reasons for the downgrade.
BofA also slashed the ESPR price target to $1.50 from $8.00 per share to account for the company’s updated cash position.
However, Credit Suisse upgraded Esperion (ESPR) early this month despite the selloff following the CLEAR outcomes readout.