Analyst Conference Summary

Biotechnology

conference date: February 27, 2019 @ 2:00 PM Pacific Time
for quarter ending: December 31, 2019 (Q4, fourth quarter)

Forward-looking statements

Overview: Luspatercept data looks good, now waiting for Celgene to submit the BLA and FDA to grant approval.

Basic data (GAAP):

Revenue was $3.8 million, up sequentially from $3.3 million, and up from $3.7 million year-earlier. All revenue is from collaborations.

Net income was negative $34.7 million, down sequentially from negative $29.0 million, and up from negative $27.9 million year-earlier.

Earnings per Share (EPS, diluted) were negative $0.75, down sequentially from negative $0.63, and down from negative $0.62 year-earlier.

Guidance:

Believes cash is sufficient to support the company until significant luspatercept royalties come in.

Conference Highlights:

Habib Dable, CEO of Acceleron said: "We and our global collaboration partner, Celgene, plan to submit marketing applications in the U.S. and E.U. for our lead product candidate, luspatercept, in lower-risk myelodysplastic syndromes and transfusion-dependent beta-thalassemia in the first half of the year. At the same time, we’re continuing to evaluate luspatercept’s potential to treat a range of anemias, from first-line therapy in MDS via the ongoing COMMANDS Phase 3 trial, to non-transfusion-dependent beta-thalassemia, myelofibrosis and beyond. In addition, our wholly-owned programs in neuromuscular and pulmonary disease are all advancing. We’re anticipating topline results from the placebo controlled part of our Phase 2 trials evaluating our locally-acting muscle agent, ACE-083, in FSHD and CMT by the end of the year. Lastly, 2020 will bring important Phase 2 trial results in PAH with sotatercept, which we believe has the potential to alter the treatment landscape for this devastating disease."

All revenue was from collaboration partner Celgene, mainly from cost-sharing.

Celgene funds 100% of expenses in the partnered luspatercept programs, and royalties 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.

LuspaterceptBeta-thalassemia BELIEVE study and MDS (myelodysplastic syndromes) MEDALIST trial reported positive top-line Phase 3 data, which should qualify for FDA approval for treatment of anemia, at ASH in December. BLA submission expected in April. Regulatory applications will be made in the first half of 2019. With Celgene, a third Phase 3 trial, versus standard of care in first line, lower risk MDS patients continues. A Phase 2 trial in beta-thalassemia started in Q1 2018; it is 48-weeks and double-blind. A phase 2 trial started in myelofibrosis will be open-label and 24 weeks. Luspatercept helps treat chronic anemia associated with the indicated diseases and is partnered with Celgene.

ACE-083 Phase 2 study for FSHD (facioscapulohumeral muscular dystrophy) continued enrollment and more data was presented in October 2018. Preliminary full trial results expected in 2H 2019. Also enrolling a Phase 2 trial for Charcot-Marie-Tooth disease, with data also presented at WMS.

ACE-2494 Phase 1 systemic muscle trial has begun; preliminary results possible in first half of 2019.

Sotatercept in PAH (pulmonary arterial hypertension) Phase 2 trial (PULSAR) started with preliminary results expected in 2020. Positive Phase 2 results in myelofibrosis were presented at ASH. Acceleron has full rights.

See also Acceleron pipeline.

Cash and equivalents ended at $291 million, down sequentially from $320 million. No debt. Raised another $248 million in Q1 2019. Believes has sufficient cash to operate into 2021.

$30 million was spent on R&D and $11 million on general and administration. Loss from operations was $37 million. Other income $2 million.

Q&A:

ACE-083 clinical hurdles to Phase 3? In both indications the important part is about function. We have demonstrated double digit growth in muscle volume. We want to show a functional benefit. Using Performance Upper Limb test and stair climbs and walks.

Looking at combining luspatercept with Celgene's Fedratinib JAK inhibitor for myelofibrosis.

Any difference in the regulatory process in the EU from US? We had a positive pre-BLA meeting. Can't identify any specific area of concern. The EU application will be after April but in the firt half.

Mostly just re-covered old ground.

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