Analyst Conference Summary

Biotechnology

conference date: November 3, 2016 @ 2:00 PM Pacific Time
for quarter ending: September 30, 2016 (Q3, third quarter)

Forward-looking statements

Overview: Most advanced product is now in Phase 3 trials.

Basic data (GAAP):

Revenue was $3.0 million, down sequentially from $3.2 million, and down from $4.2 million year-earlier. All revenue is from collaborations.

Net income was negative $20.8 million, up sequentially from negative $22.0 million, and down from negative $11.9 million year-earlier.

Earnings per Share (EPS, diluted) were negative $0.55, up sequentially from negative$0.59, and down from negative $0.36 year-earlier.

Guidance:

Not given.

Conference Highlights:

John Knopf, Ph.D., CEO of Acceleron said: "Enrollment continues to go well in both of the ongoing luspatercept Phase 3 studies in patients with myelodysplastic syndromes and beta-thalassemia. We look forward to providing new and updated preliminary results from several Phase 2 studies at the upcoming American Society of Hematology annual meeting in December. Within our muscle program, we're on track to initiate the ACE-083 Phase 2 study in patients with facioscapulohumeral muscular dystrophy before year-end."

Habib Dable will become President and CEO effective December 1, 2016

All GAAP revenue was from collaboration partners.

Celgene funds 100% of expenses in the partnered luspatercept programs, and royalties will be in the low to mid 20% range, if the programs are successful.

Luspatercept Phase 3 trials continued enrollment: beta-thelassemia study and MDS (myelodysplastic syndromes). A phase 2 trial for first-line MDS patients also continued.

Five abstracts on luspatercept or sotatercept will be presented at ASH in December.

ACE-083 Phase 2 study for facioscapulohumeral muscular dystrophy will start before year end.

The dalantercept (+axitinib) Phase 2 study for advanced renal cell carcinoma continued.

The IntelliTrap platform could advance its first agent into Phase 1 in 2017, ACE-2494.

Sotatercept development plans will be provided before the end of the year.

See also Acceleron pipeline.

Cash and equivalents ended at $251 million, down sequentially from $263 million. Liabilities included $12.2 million in warrants. Believes has sufficient cash to operate through 2019.

$17.1 million was spent on R&D and $6.4 million on general and administration. Loss from operations was $20.5 million. Other expense $0.3 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 in renal cell treatment landscape? We completed Part 1, and reported on 3 different doses, and it was safe combined with axitinib. We also had a 25% response rate. Part 2 is randomize and placebo controlled. It is event-driven, we should have top line results in the first half of 2017. There have been a variety of approvals in RCC, but VEGF inhibition is still the mainstay. Our goal is to be able to combine with VEGF inhibitors.

We are working with Celgene on more settings for luspatercept both alone and in combination.

ACE-2494 is a systemic muscle therapy. The opportunities would be in the rare muscle disease space. The Phase 1 would be in healthy volunteers.

The abstacts released today have the data from EHA, when the presentations are made at ASH the data will be updated.

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