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Acceleron Pharma Inc (NASDAQ:XLRN)
Q3 2019 Earnings Call
Nov 6, 2019, 10:00 a.m. ET

Contents:

  • Prepared Remarks
  • Questions and Answers
  • Call Participants

Prepared Remarks:

Operator

Good afternoon, ladies and gentlemen, and welcome to the Acceleron Third Quarter 2019 Earnings Conference Call. At this time, all participants are in a listen-only mode.

Later we will conduct a question-and-answer session and instructions will be given at that time. As a reminder, this conference call is being recorded.

I would now like to hand the call over to Mr. Ed Joyce, Director of Investor Relations at Acceleron.

Please go ahead.

Ed Joyce -- Director of Investor Relations

Thanks, and welcome everyone to our Third Quarter 2019 Earnings Call. The press release reporting our financial results and clinical abstracts in addition to the presentation for today's webcast are available on the Investors & Media page of our corporate website at www.acceleronpharma.com.

Joining me for the call today are Habib Dable, our CEO; Kevin McLaughlin, our Chief Financial Officer; John Quisel, our Chief Business Officer; Sujay Kango, our Chief Commercial Officer; and Todd James, Vice President, Investor Relations and Corporate Communications.

As a reminder, we will be making forward-looking statements regarding our financial outlook in addition to regulatory, product development, commercialization plans and research activities. These statements are subject to risks and uncertainties that may cause actual results to materially differ from those forecasted. A description of these risks can be found in our most recent Form 10-K on file with the SEC.

I would like to now turn the call over to Habib Dable, our CEO.

Habib Dable -- Chief Executive Officer

Great. Thank you Ed. Good morning everyone and thank you for joining us today. So, as you can see Acceleron, has deep expertise across the TGF-beta superfamily with significant development in the three disease areas. This is really an exciting time for us, with a number of near-term clinical and regulatory updates across our entire pipeline in the coming weeks and months. I am extremely proud of the tremendous progress of all of our disease area teams, beginning with luspatercept, the USFDA and the European Medicines Agency are currently reviewing the BLA and MAA filings respectively for the treatment of anemia in adult patients with beta-thalassemia who require regular red blood cell transfusions and for the treatment of anemia in adult patients with myelodysplastic syndromes who are RS negative -- who are RS position and RS positive and require red blood cell transfusions.

With FDA granting priority review for the beta-thalassemia indication, not far away from the potential of our first approval of an Acceleron discovered medicine with a PDUFA target action date of December 4, 2019. For the MDS indication, the FDA has set the target action date of April 4, 2020, our commercial organization has worked hard preparing for this milestone and I am pleased to report that will be ready upon FDA approval to begin making luspatercept available to patients.

In addition, regulators in the EU, are expected to deliver their decision on applications for both indications in the second half of 2020. We'll continue to work closely with both agencies to advance this therapy toward approval. We believe that luspatercept could bring significant benefit to

benefit to patients with these blood disorders by potentially eliminating or decreasing the red blood cell transfusion burden. This is a huge achievement for Acceleron and our collaboration partner Celgene and another step forward in delivering this innovative therapy to patients. We are looking forward to another important and productive ASH Annual Meeting, a total of six clinical abstracts on luspatercept have been accepted, and are now publicly available on ASH's website.

Key presentations include new and updated analyses from the pivotal MEDALIST and BELIEVE Phase 3 trials in MDS and beta-thalassemia respectively, as well as interim results from our ongoing Phase 2 myelofibrosis trial.

I'll now summarize some of the important data points included in these abstracts. Beginning with MEDALIST which enrolled patients with lower risk, who are RS positive. The updated analysis with treatment through the January 2019 data cut show that 47.1% of patients treated with luspatercept achieve red blood cell transfusion independence relative to the 37.9% response rate at week 24, seen in the top line data cut, in May 2018.

So, this abstract, based on the more recent data cut, we calculated median duration of clinical benefit, which is defined as red blood cell transfusion independence for at least 8 weeks and/or modified HI-E response.

For patients responding to luspatercept, the median duration of clinical benefit was 83.6 weeks or approximately 21 months. It is also important to note that most patients in the trial achieving transfusion independence and or erythroid response with luspatercept in the MEDALIST study had multiple periods of response with cumulative clinical benefit, durability, superior to that of patients receiving placebo.

Moving to the key BELIEVE trial abstract. Median duration of clinical benefit, defined as the time of first response of greater than equal to 33% reduction in red blood cell transfusion units over any 24 weeks to discontinuation due to any cause in that episode for luspatercept responders was 53.5 weeks as of the May 2018 data cut. 47% or 21% of patients receiving luspatercept had no loss of response within the entire study period.

The average number of red blood cell unit saved over any 24 weeks in all luspatercept responders was 6.55 units and was 8.16 units for patients with a baseline transfusion burden of more than

of more than 15 units over the 24-week. Lastly, the interim results included in the ASH abstract for our ongoing study in patients with anemia associated with myelofibrosis suggests clinically meaningful activity of luspatercept, including those patients receiving concomitant ruxolitinib. Notably, in the cohorts including treatment with ruxolitinib in combination with luspatercept cohort 3A 8 or 57% of the non-transfusion dependent patients achieved a mean hemoglobin increase of at least 1.5 grams per deciliter. In the transfusion dependent group cohort 3B, 6 patients or 32% achieved transfusion independence over any consecutive 12 weeks.

Also within this cohort, 10 or 53% of patients achieved a 50% or better reduction in red blood cell transfusion burden compared to baseline. Moving to the cohorts for patients receiving treatment with luspatercept alone; in trial cohort 1, 3 or 15% of non-transfusion dependent patients achieved a mean hemoglobin increase of at least 1.5 grams per deciliter. In trial cohort 2, 2 or 10% of transfusion dependent patients achieved transfusion independence over any consecutive 12 weeks.

Looking at safety, results showed that a minority of AEs were grades 3 to 4 in severity, which is consistent with previous studies in MDS and beta-thalassemia.

With that, I'd like to move to our pulmonary program with focus on our PULSAR Phase 2 trial with sotatercept which received orphan drug designation from the FDA and PAH in September. PULSAR is a randomized double blind placebo-controlled study designed to evaluate the efficacy and safety of sotatercept in PAH patients. A total of 106 patients have been randomized to receive placebo, 0.3 milligrams per kilogram of sotatercept or 0.7 milligrams per kilogram of sotatercept, in combination with standard of care therapies. Following the 6-month primary treatment period, participants in the trial will be eligible to continue in the 18-month extension periods. The primary endpoint of the trial is the change in baseline in pulmonary vascular resistance.

A key secondary endpoint is change from baseline in 6-minute walk distance. We look forward to reporting top line results from the PULSAR Trial in the first quarter of 2020, and preliminary results from our SPECTRA Phase 2 exploratory trial in 2020.

I'll now turn to our neuromuscular program with

with updates from our ACE-083 trial and Charcot-Marie-Tooth Disease or CMT. Although rare, CMT is the most commonly inherited neurological disorder with a US prevalence exceeding 100,000 patients. There are no FDA treatments for CMT. We are currently conducting Part 2 of our Phase 2 CMT trial which was designed to assess the efficacy and safety of ACE-083 versus placebo in a total of 40 patients, randomized one-to-one over a 6-month treatment period, followed by a 6-month open label study.

The primary endpoint is the percent change in total muscle volume and fat fraction as measured via MRI with secondary endpoints, including motor function tests such as timed walking tests. We will also be evaluating disease specific patient reported outcomes. We anticipate reporting top line results from Part 2 of this study in the first quarter of 2020.

And with that, I'd like to hand over the call to Kevin McLaughlin, our CFO to review the financials.

Kevin McLaughlin -- Chief Financial Officer

Thanks Habib. Good morning everyone. Our cash, cash equivalents and investments as of September 30, 2019 were $468.3 million compared to December 31, 2018 cash, cash equivalents and investments of $291.3 million. Based on our current operating plan and projections, we believe that current cash, cash equivalents and investments will be sufficient to fund projected operating requirements until such time, as we expect to receive significant royalty revenue from luspatercept sales.

Collaboration revenue for the third quarter was $4.2 million. The revenue was all from the company's partnership with Celgene and is related to expenses incurred by the company in support of luspatercept. Total costs and expenses for the third quarter were $53.1 million. This includes R&D expenses of $37.6 million and G&A expenses of $15.5 million. The company posted a net loss for the third quarter ended September 30, 2019 of $45.4 million.

I will now turn the presentation back over to Habib for final remarks.

Habib Dable -- Chief Executive Officer

Thank you Kevin. This is a very exciting time at Acceleron, with multiple near term clinical updates in all three of our disease areas. With respect to luspatercept, we and our partner Celgene are preparing for a potential first approval and commercial launch in the US. Further, we look forward to presenting six clinical abstracts related to luspatercept at the ASH Meeting in December.

And with that, I'd like to open the call to questions. Operator?

Questions and Answers:

Operator

(Operator Instructions) Our first question comes from Yaron Werber with Cowen. Your line is open.

Yaron Werber -- Cowen -- Analyst

Great, thanks for taking the question. And I was going to maybe start by focusing on the Phase 2 myelofibrosis data, Habib and give us a little bit of a sense. So, it looks like the combination with rux sort of as expected looked pretty good. You're seeing between 32% and 57%. In cohort A, you have a mean duration of response of 12 weeks, in cohort B, in 3 B you're looking at 32 weeks. So, maybe give us a little bit of an explanation, maybe if you can what confers the difference in the durability of response between the two of them. And then the second question, it looks like luspatercept mono did not do quiet as well as combo. Are patients on the mono arm, were they naturally more advanced, would they have failed ruxo in the past? I'm trying to understand, why that data doesn't look as good in the context of the prior Sotatercept data. Thank you.

Habib Dable -- Chief Executive Officer

Yeah. Thanks for your question, Yaron. So, as you can imagine, we're pretty excited about this data and you're right. In the important rux cohorts, we did see efficacy rates of 32% and 53%. That said, I do very much look forward to sharing with you more of the details in terms of the why and what some of our suspicions are at ASH, but I'm sure you can appreciate that beyond this right now -- beyond what's in the press release, we really can't share a lot more details and we do very much look forward to doing that in a few weeks at the ASH presentation.

But, I can tell you from this data, based on some of the, I guess hurdle rates, we had provided ourselves in the past, we and our collaboration partners are very excited about this and very much looking forward to sharing with you our plans moving forward in a few weeks.

Yaron Werber -- Cowen -- Analyst

Okay. And can you maybe give us a little bit of a sense, is the data at ASH going to be more mature because you're continuing to enroll patients or is it going to be based on this initial 74 patients?

Todd James -- Vice President, Investor Relations and Corporate Communications

Hey Yaron. It's Todd. Yeah, so, most likely the same similar number of patients. So not much more mature, but as you could imagine across an oral presentation versus a very defined amount of words that you can put in an abstract, there'll be additional details in the presentation on Monday at ASH.

Yaron Werber -- Cowen -- Analyst

Okay. And maybe a final question with respect to AdCom luspatercept, for beta-thalassemia any new thoughts as to whether you've heard from FDA relating to a panel and whether you're still potentially expecting one?

Todd James -- Vice President, Investor Relations and Corporate Communications

Yeah, hey Yaron. It's Todd again. Yeah, so what we've said historically, is that given the new mechanism of action with luspatercept as a

as erythroid maturation agent that always a high potential for an AdCom here. We haven't gotten into specific details on whether it would be one or both indications. So, the teams continue to plan as if there could be one, but until the FDA would put something on the federal registry as being 100% happening there is -- the company can't comment further.

Yaron Werber -- Cowen -- Analyst

Okay, got it. Thank you.

Habib Dable -- Chief Executive Officer

Thanks Yaron.

Operator

Our next question comes from Danielle Brill with Piper Jaffray. Your line is open.

Danielle Brill -- Piper Jaffray -- Analyst

Hi guys, thanks for the question. So I'm not sure if I will get much of an answer here, but Habib, I'm just curious, you mentioned the 25% to 30% response rate across cohorts to justify moving forward, how should we think about the opportunity now, should we only be modeling the 60% of patients that are on background reps, any color you can provide would be helpful.

Habib Dable -- Chief Executive Officer

Yeah. So, I understand your question Danielle, and thanks for that. I think right now and I guess you did preface to your question, but it's really tough to say much more than we are today. I will just simply repeat, in this cohort with the rux combination, which we've always deemed to be the most important cohort for multiple factors; we are very, very pleased with these results. We will continue to share with you more information on how these results will translate in a little bit more color behind these results, in a few weeks and very much looking forward with sharing our plans in terms of moving forward in myelofibrosis with luspatercept.

Danielle Brill -- Piper Jaffray -- Analyst

Okay, thanks. And then, I guess you indicated that treatment duration would likely be shorter in patients not on background rux as well due to a worse prognosis. I know, you're not providing details on data but has your thinking on this evolved at all?

Todd James -- Vice President, Investor Relations and Corporate Communications

Hey Danielle, it's Todd. Yes. There's two patient types that would be eligible for monotherapy, luspatercept. One would be a treatment-naive patient, so patients that wouldn't see rux. So, this is most likely a more newly diagnosed patient. That patient would, as you could imagine have a fairly good prognosis and then there is the patients that I think that you are more referencing, it's that post rux patients. Those patients have a very poor prognosis kind of on the lines of 18 month survival and as you could imagine that first patient that I was talking about pre-rux a good kind of 60% plus of those patients will end up on rux eventually, and that's on top of the rux prevalent patients today.

Those -- also patients that will be receiving rux in the future that's what makes the rux combination

Duration: 46 minutes

Call participants:

Ed Joyce -- Director of Investor Relations

Habib Dable -- Chief Executive Officer

Kevin McLaughlin -- Chief Financial Officer

Todd James -- Vice President, Investor Relations and Corporate Communications

Yaron Werber -- Cowen -- Analyst

Danielle Brill -- Piper Jaffray -- Analyst

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