Analyst Conference Summary

Biotechnology

conference date: May 11, 2020 @ 2:00 PM Pacific Time
for quarter ending: March 31, 2020 (Q1, first quarter)

Forward-looking statements

Overview: Launching

Basic data (GAAP):

Revenue was $4.3 million, down sequentially from $39.3 million, and up from $2.8 million year-earlier.

Net income was negative $50.9 million, down sequentially from negative $23.6 million, and down from negative $38.1 million year-earlier.

Earnings per Share (EPS, diluted) were negative $0.95, down sequentially from negative $0.44, and down from negative $0.74 year-earlier.

Guidance:

none

Conference Highlights: April approval for Reblozyl for anemias due to MDS.

Habib Dable, CEO of Acceleron said: "The breadth and depth of our hematology program has been on full display, owing to the publication of the MEDALIST and BELIEVE Phase 3 luspatercept trial results in the prestigious New England Journal of Medicine and the recent FDA approval of Reblozyl for the treatment of anemia in a population of patients with lower-risk MDS. We are thrilled that this first-in-class erythroid maturation agent, having received approvals in two distinct indications over a span of just five months, is now available in the U.S. to patients who have long needed a new option for treating their chronic anemias."

All revenue was from collaboration partner Bristol Myers Squibb (BMY), mainly from cost-sharing and milestone payments.

Reblozyl (luspatercept) royalties from BMY will be in the low to mid 20% range. Believes sales in the first two indications could reach $2 billion annually, resulting in about $400 million per year in royalties.

Reblozyl royalty revenue in Q1 2020 was $1.5 million, based on BMY sales of $8 million.

Reblozyl (Luspatercept) received approval from the FDA for beta-thalassemia late in Q4 2019. MDS received approval in April 2020. The EU decision is expected in the second half of 2020. In late April 2020 the CHMP issued a positive opinion for both b-t and MDS anemias. A marketing decision for the EU is expected before year-end 2020. A phase 3 trial for myelofibrosis patients who are being treated with JAK inhibitor will start in 2020. Bristol Myers Squibb expects to initiate the Phase 3 INDEPENDENCE trial in patients with MF on concomitant JAK 2 inhibitor therapy who require RBC transfusions by year-end 2020. Enrollment is ongoing in the COMMANDS Phase 3 trial in patients with treatment-naïve, lower-risk MDS, with topline results expected in 2022.

ACE-083 Phase 2 is enrolling a Phase 2 trial for Charcot-Marie-Tooth disease, topline data was negative in March 2020. The ACE-083 program is being discontinued.

In Q4 2020 Acceleron signed a collaboration and license agreement with Fulcrum Therapeutics to identify small molecules to modulate specific pathways associated with a targeted pulmonary disease indication.

In January 2020 announced sotatercept in PAH (pulmonary arterial hypertension) Phase 2 trial (PULSAR) met its primary and key secondary endpoints. Enrollment is ongoing in the SPECTRA trial in patients with PAH, with preliminary results expected in 2020. In April 2020 the FDA gave in Breakthrough Therapy designation and the EMA gave it Priority Medicines designation. Acceleron has full rights. Acceleron is preparing for a Phase 3 trial.

See also Acceleron pipeline.

Cash and equivalents ended at $415 million, down sequentially from $454 million. No debt. Believes has sufficient cash to operate into 2021.

$38 million was spent on R&D and $18 million on general and administration. Total op ex was $56 million. Loss from operations was $52 million. Other income $0.6 million.

Q&A Summary:

Pandemic impact on trials? Working to continue access to dosing. So far, so good.

Any inventory build in the sales number? We are pleased with Q1 sales, just for the beta-thalessemia indication. It is drop shipping, so not much typical inventory buildup. This is a buy-and-bill Medicare Part B product. We ship when there is an order for a specific patient.

Pandemic impact on sales? The blood supply is a challenge, donor supply has come down. That does create an opportunity for Reblozyl for MDS. But new patients have gone down as people avoid visiting doctors. We think the New England Journal of Medicine publication will help get the message across.

Sotatercept, FDA and filing?

ACS Congress was cancelled, but is moving to a virtual, so we should present when that happens. We should have an update on FDA conversations and study design in Q3. We don't currently plan to file based on Phase 2 data. We will likely need to raise more money to fund the Phase 3 global studies, as we want to keep the global rights.

Pediatric Phase 2 trial update? Multiple cohorts, start with older patients, no timeline yet.

For beta-thalassemia, we believe about 70% of patients will be on commercial insurance, about 30% on government. MDS patients are older, so about 70% of them will be covered by Medicare.

Sotatercept further development? To be determined. Also have another preclinical drug in development.

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