Analyst Conference Summary


Acceleron Pharma

conference date: Novmeber 5, 2020 @ 2:00 PM Pacific Time
for quarter ending: September 30, 2020 (Q3, third quarter)

Forward-looking statements

Overview: Rapidly growing Reblozyl royalty revenue.

Basic data (GAAP):

Revenue was $22.6 million, down sequentially from $39.8 million, and up from $4.2 million year-earlier.

Net income was negative $39.2 million, down sequentially from negative $18.5 million, and up from negative $45.3 million year-earlier.

Earnings per Share (EPS, diluted) were negative $0.66, down sequentially from negative $0.34, and up from negative $0.86 year-earlier.



Conference Highlights:

Habib Dable, CEO of Acceleron said: "We and our partner Bristol Myers Squibb continue to see strong product uptake in the U.S. along with initial sales contributions from the recent availability of Reblozyl in certain E.U. countries. Adding to the momentum, we successfully expanded the global reach of Reblozyl with its recent approval by Health Canada. As our hematology franchise continues to grow, we are advancing our pulmonary program, with a primary focus in PAH. Encouraged by the impressive topline results from our PULSAR Phase 2 trial, we look forward to multiple presentations on sotatercept at the upcoming virtual meeting of the AHA 2020 Scientific Sessions next week as our team is preparing to initiate our registrational Phase 3 trial, STELLAR."

All revenue was from collaboration partner Bristol Myers Squibb (BMY).

Reblozyl royalty revenue in Q2 was $19.3 million, up sequentially from $11.1 million. Based on BMY sales of $96 million. $3.3 million was cost share revenue.

Reblozyl (Luspatercept) received FDA approval for MDS in April 2020 after having received for beta-thalassemia Q4 2019. Also approved in the EU. 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 in Q1 2021. Enrollment is ongoing in the COMMANDS Phase 3 trial in patients with treatment-naive, lower-risk MDS, with topline results expected in 2022. The BEYOND Phase 2 trial in NTD (non-transfusion dependent) beta thalassemia could have results in Q1 2021.

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.

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 June 2020, Acceleron presented positive topline results of the PULSAR Phase 2 trial of sotatercept in patients with PAH during the American Thoracic Society (ATS) 2020 Virtual Conference. 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, STELLAR. Acceleron plans initiate the HYPERION (early intervention) Phase 3 trial and the ZENITH (later intervention) Phase 3 trial in expanded PAH populations in the middle of 2021.

See also Acceleron pipeline.

Cash and equivalents ended at $888 million, up sequentially from $390 million. In July 2020, closed a follow-on public offering of common stock, for net proceeds of $492.5 million. No debt. Believes has sufficient cash to operate into .

$41 million was spent on R&D and $21 million on general and administration. Total op ex was $62 million. Loss from operations was $39 million. Other income $0 million.

Q&A Summary:

U.S. prescription trends? Seeing both old accounts continue to subscribe and adding new accounts. Most centers of excellence for MDS are ordering.

Sotatercept early and late stage intervention trials, how do they expand the label? They will be complementary. Will give a description next year.

Reblozyl growth in Q4? Long term we believe it will be a multi-billion dollar brand. But in Q4 the patient profile likely to shift to earlier stage MDS patients. Also, pandemic surge could decrease office visits. So more moderate growth in Q4 than Q3. It is early for Europe to ramp.

Reblozyl competitive dynamics in MDS? We provide a unique value proposition. Positioned so far in low-risk pop. Other molecules are being developed, not so much for low-risk population. The gene therapies tend to have select groups of patients.

Appetite for business development, acquiring a pipeline asset? Our focus is on building out Reblozyl and sotatercept. We do want to continue to innovate, organically or by looking outside. We do have a deal with Fulcrum Therapeutics for pulmonary diseases. If an opportunity arises that makes sense, we would be open, but we see no necessity for it.

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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 2020 William P. Meyers