Analyst Conference Summary


Acceleron Pharma

conference date: August 5, 2019 @ 2:00 PM Pacific Time
for quarter ending: June 30, 2019 (Q2, second quarter)

Forward-looking statements

Overview: Luspatercept applications accepted by FDA and EU for potential approvals, first decision date is December 4, 2019.

Basic data (GAAP):

Revenue was $27.7 million, up sequentially from $2.8 million, and up from $3.7 million year-earlier. All revenue is from collaborations.

Net income was negative $17.9 million, up sequentially from negative $38.0 million, and up from negative $28.9 million year-earlier.

Earnings per Share (EPS, diluted) were negative $0.34, up sequentially from negative $0.74, and up from negative $0.63 year-earlier.


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

Conference Highlights:

Habib Dable, CEO of Acceleron said: "With the luspatercept U.S. and European regulatory approval filings under review, we are now one step closer to the first-ever potential approval of an Acceleron-discovered medicine. Alongside our global collaboration partner, Celgene, we are focused on preparing for luspatercept's potential commercial launch, and we continue to execute on our ongoing clinical trials in first-line lower-risk MDS-, non-transfusion-dependent beta-thalassemia- and myelofibrosis-associated anemia. In parallel, we have advanced our two Acceleron-led clinical programs in neuromuscular and pulmonary disease as we work to establish key proof-of-concept results in three placebo-controlled Phase 2 trials over the next nine months. Following robust enrollment in our PULSAR Phase 2 trial in patients with PAH, we now expect topline results in the first quarter of 2020. For ACE-083, we anticipate topline results in patients with FSHD and CMT in the second half of this year and early 2020, respectively." Hopes to later expand luspatercept label to other forms of anemia.

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

Luspatercept programs, and royalties from Celgene 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.

Luspatercept Beta-thalassemia and MDS (myelodysplastic syndromes) BLA submissions to FDA were made in April. Beta-thalassemia has priority review with a PDUFA date of December 4, 2019, while MDS has a April 4, 2020 PDUFA date. The EU decision is expected in the second half of 2020 for beta-thalassemia associated anemias. A third Phase 3 trial, versus standard of care in first line, lower risk MDS patients continues. A phase 2 trial for myelofibrosis will be open-label and 24 weeks, with results in 2019. Luspatercept helps treat chronic anemia associated with the indicated diseases.

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 had side effects that were unacceptable, so we terminated the study.

Sotatercept in PAH (pulmonary arterial hypertension) Phase 2 trial (PULSAR) completed enrollment with preliminary results expected in Q1 2020. Acceleron has full rights.

See also Acceleron pipeline.

Cash and equivalents ended at $501 million, down sequentially from $513 million. No debt. Believes has sufficient cash to operate into 2021.

$34.8 million was spent on R&D and $14.0 million on general and administration. Loss from operations was $21.1 million. Other income $3.2 million.

Q&A Summary:

FSHD study efficacy? We will be looking at a primary endpoint of total muscle volume. Path forward would require functional improvements in movement, such as six minute walk distance, etc. We are looking for discrepancies from placebo. We will be looking at the totality of the data, then talk to regulators, then get back to you on the path forward.

Bristol acquisition of Celgene? The protocol allow us to have a 20 person field team for luspatercept.

EMA decision in 2H 2020? We have not picked a quarter in 2H. The timeline takes into account all clock stops.

Pulsar study? The primary endpoint is a 20% reduction in PDR at both doses. Six minute walk improvement would also be necessary for approval, we expect a threshold of 30 minutes. There could also be some unique endpoints in Phase 3.

ACE-083 muscle groups that might be added in the trials? There are other muscles that decline over time. We were deliberate in choosing the biceps and TA muscles for the study. If we are successful we will take a look at life cycle management opportunities.

We are not providing a cash runway guidance, but based on the burn rate and planned conclusion of Phase 2 trials, plus milestones and royalties, we do not see a need for a cash raise. But if we see an opportunity, we might change our posture, on the heels of Phase 3 data (in the indications that are currently in Phase 2).

Our promotional plans are being coordinated with Celgene, including the training of our own field team. We will be prepared day one.

FSHD v. CMT? Pretty different diseases, we are not sure which one ACE-083 will be more effective for. In CMT only a fraction of the muscle fibers are innervated. Two different premises leading to muscle weakness.

The myelofibrosis patients with the highest unmet medical need tend to be on roxolitinib for enlarged spleens, so that would be the largest opportunity. In this particular group we would like to see 20% to 25% efficacy to move forward.

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Disclaimer: My analyst call summaries may include both our condensations of statements made by company representatives and my own analysis. They are not covered by any warranty. I cannot guarantee anything said by company representatives is true. I try not to make errors, but it is possible. This is investment journalism, not financial advice. I use these notes to help me write my Seeking Alpha articles.

Copyright 2019 William P. Meyers