Discovery Lecture Series Purdue University Discovery Park

Thursday, November 8, 2007

“Esperion Therapeutics: A Biotech Success Story in the Midwest” “Esperion Therapeutics: A Biotech Success Story in the Midwest”

Roger S. Newton, Ph.D., FAHA

Former Senior VP and Director,

Pfizer Global R & D

Roger S. Newton, Ph.D., FAHA

Former Senior VP and Director,

Pfizer Global R & D

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Time Frame of 1998-Key Questions

What issues existed within the cardiovascular therapeutic space within the pharmaceutical industry which promoted change?

What critical business factors provided a template for the establishment of Esperion?

What financial conditions fostered the rapid growth and development of Esperion and its product candidates?

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Key Factors Affecting Innovation in CV Franchises

Increased merger and acquisition activity/ reorganizations lead to consolidation

Outcomes:

a. Reduced number of CV R & D groups

b. Company/departmental integration leads to chaos and a lack of focus

c. Loss of continuity and institutional memory

d. Monolith organizations lacking innovation with a “Blockbuster” mentality

e. New innovative opportunities are created outside of Big Pharma as small, high risk, but focused biotech companies

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Key Factors Affecting Innovation in CV Franchises

Every cloud has a silver lining…

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Esperion- From Big Pharma to Biotech

• Big pharma mergers and reorganizations (people and process) can leave researchers with an inability to pursue their science.

• Decision Point:– Stay in stable, low risk, comfortable but

compromised setting

– Start anew with a high risk, uncertain future

• Co-founders combined a common vision, a willingness to embrace risk, access to appropriate levels of financial support, and a proven record of success.

.

Our StoryOur Story

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Esperion TherapeuticsEsperion Therapeutics

Our NameOur Name Esp refers to esprit de corps:the common spirit existing in the members of a group, inspiring enthusiasm, devotion, comradeship

Esper refers to “esperance” – hope

-ion a suffix meaning activity, process, resulting from

Esp refers to esprit de corps:the common spirit existing in the members of a group, inspiring enthusiasm, devotion, comradeship

Esper refers to “esperance” – hope

-ion a suffix meaning activity, process, resulting from

Our MissionOur Mission Esperion Therapeutics is dedicated to discovering new therapies through vibrant teamwork in the hope of treating patients with cardiovascular diseases

Esperion Therapeutics is dedicated to discovering new therapies through vibrant teamwork in the hope of treating patients with cardiovascular diseases

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Esperion TherapeuticsEsperion Therapeutics

Our ValuesOur Values Individual DignityIndividual Dignity

Vibrant TeamworkVibrant Teamwork

Excellence in ScienceExcellence in Science

Individual DignityIndividual Dignity

Vibrant TeamworkVibrant Teamwork

Excellence in ScienceExcellence in Science

Our PurposeOur Purpose To ExploreTo Explore

To CreateTo Create

To BuildTo Build

To ExploreTo Explore

To CreateTo Create

To BuildTo Build

Our VisionOur Vision To treat cardiovascular disorders by To treat cardiovascular disorders by

discovering new therapies using an discovering new therapies using an

approach which integrates traditional and approach which integrates traditional and

cutting edge theories and technologiescutting edge theories and technologies

To treat cardiovascular disorders by To treat cardiovascular disorders by

discovering new therapies using an discovering new therapies using an

approach which integrates traditional and approach which integrates traditional and

cutting edge theories and technologiescutting edge theories and technologies

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Heart Disease and HDLHeart Disease and HDL

• Heart Disease is # 1 Killer- 65M Americans have it

• 20% of all individuals with lipid disorders have low levels of HDL-cholesterol

• 50% of all CHD patients have low HDL- cholesterol

• No drugs indicated only for low HDL-cholesterol

• Heart Disease is # 1 Killer- 65M Americans have it

• 20% of all individuals with lipid disorders have low levels of HDL-cholesterol

• 50% of all CHD patients have low HDL- cholesterol

• No drugs indicated only for low HDL-cholesterol

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The Function of HDL and the Esperion SolutionThe Function of HDL and the Esperion Solution

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The Esperion SolutionThe Esperion Solution

HDL Therapy for promoting Reverse Lipid Transport (RLT)

HDL Therapy for promoting Reverse Lipid Transport (RLT)

The Four-Step RLT PathwayThe Four-Step RLT Pathway

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Elimination

Waste

3

Transport

Liver

2

Conversion

HDL HDL

Cholesterol-loaded

Artery

1

Removal

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HDL Therapy HDL Therapy

The Acute Coronary Syndrome (ACS) Patient

• Usual care: aspirin, clopidogrel, heparin, nitrates, IIb/IIIa inhibitors, beta-blockers, fibrinolytic therapy, statins, ACE inhibitors, revascularization

• Short-term risk for recurrent events: 6.2% - 25%

• Can HDL Therapy target unstable plaques?

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ScienceScience

BusinessBusinessSeries Series A & BA & B$16 $16

millionmillion

2000200019981998

Esperion History

Patent Patent

Small Small

MoleculeMolecule

ss

Phase Phase 1 1

Clinical Clinical TrialsTrials

SIDFSIDF

$6 $6

millionmillion

Series Series

C & DC & D

$27 $27

millionmillion

IPOIPO

$62 $62

millionmillion

In-license HDL Product In-license HDL Product

CandidatesCandidates

19991999

PIPE PIPE

$24 $24

millionmillion

20012001

Phase Phase 2 2

Clinical Clinical TrialsTrials

20022002 20032003

CompanyCompany

DownsizingDownsizing

Secondary Secondary

FinancingFinancing

$67 million$67 million

Phase Phase 1/2 1/2

Clinical Clinical TrialsTrials

Proof Proof of of

concepconceptt

Clinical Clinical TrialsTrials

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HDL Therapies from Esperion

ETC-642 RLT Peptide

ETC-216AIM

ETC-588LUV

ETC-1001

ETC-1002

Next generation

Sub-acute Chronic

Biopharmaceuticals(Infused)

Small Molecules(Oral)

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Limone sul Garda

•Rare R173C mutation in apoA-I

•Circulates as dimers and monomers

•HDL/apoA-I deficiency

•Mild hypertriglyceridemia

•Paradoxical resistance to heart disease

“Gain of Function”Mutation

Characteristics of humanApoA-IMilano Carriers

Discovered in 1979

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Trial Design and Objectives

• We sought to test the potential of recombinantApoA-I Milano to regress human coronary artery disease.

• We employed intravascular ultrasound to assess effect of short term infusions of an ApoA-I Milano/ phospholipid complex (ETC-216, Esperion Therapeutics).

• Primary hypothesis:

– Five weekly infusions of ETC-216 would produce significant regression of coronary atherosclerosis as measured by intravascular ultrasound (IVUS)

Nissen et al. JAMA 2003;290:2292-2300

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SideBranch

SideBranch

EEM areaEEM area14.37 mm14.37 mm22

EEM area EEM area 11.58 mm11.58 mm22

Lumen area6.23 mm2

Lumen area6.27 mm2

AtheromaAtheromaarea - 8.10 mmarea - 8.10 mm22

AtheromaAtheromaarea - 5.35 mmarea - 5.35 mm22

Nissen et al. JAMA 2003;290:2292-2300

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Conclusions

• Five weekly infusions of an ApoA-I Milano/ phospholipid complex produced significant regression of coronary atheroma burden by IVUS.

• There was no detectable difference in efficacy for two different doses of ETC-216 (15 mg/kg and 45 mg/kg).

• Adverse events were similar to placebo.

• Coronary disease is more dynamic than previously realized and can be rapidly affected by agents that augment reverse cholesterol transport.

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• Rapidly eliminates cholesterol and other lipids from the arterial walls and related tissues

• Disease modifying therapy to treat unstable plaques

• May prevent future ischemic events, such as heart attacks and strokes

• Can be used synergistically with established

cardiovascular medications, including statins

• Acute or sub-acute treatment

Key Advantages of HDL TherapyKey Advantages of HDL Therapy

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Pfizer Acquisition of Esperion

• Cash tender offer to acquire shares of common stock at $35 per share (55% premium)

• Announced December 21, 2003

• Deal closed on Feb. 10, 2004

• Operated in Ann Arbor, Michigan as Esperion Therapeutics, A Pfizer Inc. Company

• Esperion closed its doors in May 2007

$1.3B

Pfizer Offer

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• Do the best science you can do and be fiscally conservative

• Don’t eliminate your options, develop competing alternatives, and constantly (re)assess your prospects

• Surround yourself with people who complement your strengths and counteract your weaknesses

• Never burn your bridges no matter how chaotic the situation

• Your colleagues are your teammates, not your adversaries

• Never underestimate the resilience of you and your team- be optimistic that new opportunities abound

Lessons Learned Along the JourneyLessons Learned Along the Journey

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• Never lose your passion!!!Never lose your passion!!!

• Live your mission Live your mission

• Keep your values aliveKeep your values alive

• Focus on your purposeFocus on your purpose

• Avoid unnecessary reorganizationAvoid unnecessary reorganization

• Maintain and grow your visionMaintain and grow your vision

• Make a differenceMake a difference

• Communicate…Communicate…Communicate…Communicate…

CommunicateCommunicate

• Never lose your passion!!!Never lose your passion!!!

• Live your mission Live your mission

• Keep your values aliveKeep your values alive

• Focus on your purposeFocus on your purpose

• Avoid unnecessary reorganizationAvoid unnecessary reorganization

• Maintain and grow your visionMaintain and grow your vision

• Make a differenceMake a difference

• Communicate…Communicate…Communicate…Communicate…

CommunicateCommunicate

Lessons Learned on the Entrepreneurial Road

Lessons Learned on the Entrepreneurial Road

Maximize investor return in a people-first, science-driven organization

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Conclusion

The triumph of innovation lies with the focused franchise players who have numerous “shots on goal” in a specific therapeutic category, in which they can be the best in the world.

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Special Recognition to Esperion Colleagues/Advisors

• Co-Founders: Charlie Bisgaier, Mike Pape and Tom Rea

• Senior Leaders: Tim Mayleben (CFO, COO), Frank Thomas (Finance), Dawn Evans (Administration), Brian Krause (Discovery), Jean-Louis Dasseaux (Chemistry), Marianne Andreach (Medical Affairs), Bill Brinkerhoff (Business Development), Narendra Lalwani (Toxicology) and others

• Business/Bank Advisors: David Scheer, Bob Quinn, Robertson-Stephens, Lehman Brothers

• Venture/Loan Capital: Oak, TL, HealthCap, Alta, Canaan, Domain, Investor, Swedish Industrial Development Fund

• Board Members: David Scheer, Annie Lamont, Ginger More, Seth Rudnick, Anders Wiklund, Susan Bayh, Tony Gotto, Henry Blair, Ronnie Cresswell

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Acknowledgements

Institute of Pharmacological Sciences, Milan, Italy

Giulia ChiesaElena MonteggiaMarta Marchesi

Guido FranceschiniCesare R. Sirtori

Columbus Clinic, Milan,Italy Evangelia Karvouni

Carlo Di Mario

Bracco S.p.A.,Milan, ItalyPaolo Lorenzon

Massimo LaucelloVito Lorusso

Cleveland ClinicSteve Nissen and the ETC-216

InvestigatorsCedars Sinai Medical Center,CAP.K.Shah and his CollaboratorsUniversity of British Columbia,

CanadaInex Corporation, British

Columbia, CanadaTalaria, Boston, MA

Esperion Therapeutics, Inc. Ann Arbor, MI, Kalamazoo, MI

and Stockholm, Sweden