Analyst Conference Summary

Biotechnology

conference date: May 5, 2016 @ 5:00 AM Pacific Time
for quarter ending: March 31, 2016 (Q1, first quarter 2016)

Forward-looking statements

Overview: Most advanced product is now in Phase 3 trials. Positive net income due to collaboration revenue.

Basic data (GAAP):

Revenue was $18.2 million, up sequentially from $3.8 million, and up from $4.4 million year-earlier.

Net income was $5.1 million, up sequentially from negative $27.3 million, and up from negative $14.6 million year-earlier.

Earnings per Share (EPS, diluted) were $0.13, down sequentially from negative $0.81, down from negative $0.45 year-earlier.

Guidance:

Not given.

Conference Highlights:

Received a $15 million luspatercept milestone payment from Celgene. Also raised $140 million in cash in the quarter through a public stock offering.

All GAAP revenue was from collaboration partners, and includes the milestone payment. The $9 million "other" income was mainly non-cash and resulted from marking warrants to market.

Given the good data from the luspatercept Phase 2 trials for MDS (myelodysplastic syndromes) and beta-thalassemia, with partners Celgene, the Phase 2 trials have long-term extensions and cohort additions. Phase 3 trials, BELIEVE for beta-thalassemia (300 patients) and MEDALIST for MDS (210 patients) are continuing enrollment. Both indications received fast track designation from the FDA.

ACE-083 Phase 2 trial is scheduled for mid-2016 for FSHD muscular dystrophy.

Preclinical mouse studies of ACE-2494 for muscle mass and strength were positive. Clinical studies could begin before the end of 2016. This is the first molecule from the IntelliTrap platform.

Phase 2, part 2 trial of dalantercept with axitinib for renal cell carcinoma (DART) is enrolling with increased investigator interest due to the part 1 results. Data could be reported in 2016. Granted Fast Track Designation. Acceleron plans to collaborate on dalantercept to fund the Phase 3 program.

Celgene and Acceleron will shift sotatercept from dialysis setting to the pre-dialysis kidney disease setting. Design changes will be discussed with regulators in 2016. The number of pre-dialysis patients is much larger and the reimbursement environment is "preferred."

See also Acceleron pipeline.

Cash and equivalents ended at $279 million, up sequentially from $136 million. Liabilities included $8.5 million in warrants. In the quarter ended Acceleron raised $140 million net through a stock sale.

Acceleron believes its cash should be sufficient into the second half of 2019.

$16.2 million was spent on R&D and $5.9 million on general and administration. Loss from operations was $4.0 million. Other income $9.0 million.

Acceleron's goal is to have FDA approvals in 5 indications by 2020, and at that time to have 8 candidates in clinical trials. Hopes to be cash flow positive in 2020.

Acceleron plans to introduce a new internally discovered compound into clinical trials every 12 to 18 months. There are currently 6 preclinical programs that could enter clinical trials, all targeting diseases with high unmet medical needs. Focus is on muscle diseases and fibrosis. IntelliTrap platform is being used to generate new potential candidates.

Q&A:

Dalantercept, how many patients in data to be reported? Topline Phase 2 news should be out after there are 130 patients randomized between two arms. It is event driven, but results should be out before the end of 2016.

Dalantercept combo studies? There would be wide opportunities, but we won't discuss plans until after the data is released on the current study.

Spend rates going forward? We have cash to get to 2H 2019. We will continue to get reimbursements from Celgene. It is offset by R&D expense, so it is a wash anyway.

Luspatercept? We will be at EHA and ASH. Abstracts accepted will be announced as usual.

Beta-thalassemia patient recruitment competition? We don't expect any other therapeutic approaches to have any effect on our trial recruitment rate.

Dalantercept partner? No guidance on deal structures or partners. But we would want a patner who would share our interest in the therapy, which we see as a combination product more than a single therapy.

The next sotatercept study would be a Phase 2 study.

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