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Acceleron Pharma Inc (NASDAQ:XLRN)
Q4 2019 Earnings Call
Feb 27, 2020, 5:00 p.m. ET

Contents:

  • Prepared Remarks
  • Questions and Answers
  • Call Participants

Prepared Remarks:

Operator

Good afternoon, ladies and gentlemen, and welcome to the Acceleron Fourth Quarter and Full Year 2019 Earnings Conference Call. [Operator Instructions]

I would now like to hand the call over to Mr. Todd James, Senior Vice President, Corporate Affairs and Investor Relations at Acceleron. Please go ahead.

Todd James -- Senior Vice President of Corporate Affairs and Investor Relations

Thanks and welcome, everyone to our fourth quarter and full year 2019 earnings call. The press release reporting our financial results, in addition to the presentation for today's webcast are available on the Investors and Media page of our corporate website at www.acceleronpharma.com.

Joining me on the call this afternoon are Habib Dable, our Chief Executive Officer; Kevin McLaughlin, our Chief Financial Officer; Dr. Jay Backstrom, our Head of Research and Development; and Sujay Kango, our Chief Commercial Officer.

As a reminder, we will be making forward-looking statements regarding our financial outlook in addition to regulatory product development and 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.

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

Habib Dable -- President and Chief Executive Officer

Great. Thank you, Todd. Good afternoon, everyone and thank you for joining us today. It certainly has been a busy time at Acceleron, since our third quarter earnings call at the beginning of November. Shortly after that call, Acceleron and our collaboration partner Bristol-Myers Squibb announced the US FDA approval of REBLOZYL for the treatment of anemia in adult patients with beta-thalassemia, who require regular red blood cell transfusions. REBLOZYL also known as luspatercept is the first Acceleron discovered medicine and the first erythroid maturation agent to receive FDA approval. We have deployed a 20% commercial team under the leadership of our Chief Commercial Officer, Sujay Kango to complement Bristol's hematology and oncology commercial footprint. Our teams continue to target the top healthcare providers and thalassemia centers of excellence throughout the US with the sense of urgency and focus to ensure brand awareness and patient access, which remain our top priorities.

Despite a short selling cycle, with beta-thalassemia approval coming at the tail end of last year, the launch is off to a great start. We are seeing week-over-week growth in the number of vials shipped to new and repeat prescribing accounts. If we receive approval on our second indication myelodysplastic syndromes or MDS, for which we are awaiting a decision by the FDA's PDUFA target action date of April the 4th, the opportunity to reach a larger market will grow considerably. In fact, we estimate that in the US, there are more than 20,000 patients with lower risk MDS, who have ring sideroblasts and require red blood cell transfusions, a much larger population than the estimated 1,000 patients to 1,500 patients in the US with beta-thalassemia who require red blood cell transfusions.

Turning to the most recent clinical updates. At the ASH Annual Meeting in December, we had the opportunity to share new long-term analysis in a total of five abstracts from the MEDALIST and BELIEVE pivotal Phase 3 trials in MDS and beta-thalassemia, respectively, as well as the initial results from the Phase 2 trial in patients with myelofibrosis-associated anemia. Among the highlights of the long-term results from the MEDALIST trial more than 64% of patients treated with luspatercept achieved clinical benefit with the median duration of close to two years.

Notably, we showed that the occurrence of the most common adverse events of fatigue, asthenia and headache were decreasing over time. I'm also pleased to point out that the top line results from this trial were recently published in the New England Journal of Medicine marking our first publication in this prestigious peer-reviewed journal. Long-term results from the BELIEVE trial also demonstrated strong clinical benefit for patients treated with luspatercept. Overall, more than 45% of patients experienced clinical benefit with the median duration of almost 18 months and with the occurrence of the most common adverse events of bone pain, arthralgia and dizziness decreasing over time. In the Phase 2 myelofibrosis trial, patients treated with luspatercept experienced clinical activity, whether they received red blood cell transfusions or not. The most profound effects we're seeing in patients receiving treatment in combination with ruxolitinib.

Following these positive results in myelofibrosis, we are now preparing for a new pivotal Phase 3 trial called INDEPENDENCE evaluating luspatercept for the treatment of anemia in patients with myelofibrosis, who are in a JAK inhibitor and require red blood cell transfusions. We look forward to providing you with additional details about the design of this study closer to the trials initiation later this year. As we look toward the future for REBLOZYL, the consistent positive results now seen across three distinct blood disorders, further validates REBLOZYL's novel mechanism of late-stage erythroid maturation as a possible platform treatment for thousands of patients suffering from anemia caused by a variety of hematologic diseases.

Turning now to our pulmonary program. As shown on slide 6, we were thrilled last month to announce positive top line results from the PULSAR Phase 2 trial of sotatercept in patients with pulmonary arterial hypertension or PAH. I'd like to quickly recap those results, which we also reviewed during an in-depth investor Call with two world-renowned experts in PAH. As you may recall, the PULSAR trial is a double blind placebo-controlled study in which 106 patients on stable background PAH specific therapies were randomized to receive placebo, 0.3 milligrams per kilograms of sotatercept, or 0.7 milligrams per kilogram of sotatercept subcutaneously every 21 days over a 24 week treatment period.

The study was powered to show a placebo adjusted 18% reduction in pulmonary vascular resistance, or PVR, an important hemodynamic measure and the trial's primary endpoint. The trial is also powered to show a placebo adjusted 24 meter improvement in the key secondary endpoint of six-minute walk distance. We achieved statistically significant improvements in both the primary and key secondary endpoints. We also achieved a clinically meaningful improvement of at least a 30 meter absolute change in six minute walk distance compared to baseline.

The trial achieved other secondary endpoints as well, including change from baseline in NT-proBNP, an important biomarker of cardiovascular health and change in WHO functional class. In terms of its safety profile, sotatercept was generally well tolerated with adverse events consistent with previously published data and other diseases. Importantly, 97 patients enrolled in the PULSAR trial rolled over into the 18 month extension period of the trial, which will provide further insight into long-term efficacy and safety. We could not be happier with the outcome of the PULSAR trial.

We continue to believe sotatercept's potential to shift the treatment paradigm in PAH and to provide significant clinical benefit on top of currently available therapies. I'm extremely proud of all of the efforts of our team over the last few years to achieve this outcome. We hope you can join us for the presentation of a more detailed review of the top line results from the PULSAR trial at the American Thoracic Society's International Conference, also known as ATS2020 on May 15th to the 20th in Philadelphia, Pennsylvania. We also look forward to upcoming interactions with global health authorities to provide us with important regulatory feedback for the future development plan for sotatercept in PAH.

Looking at the overall pipeline, the positive results from the PULSAR trial further cement our commitment to pulmonary disease. We continue to enroll the SPECTRA open label study in sotatercept patients with PAH, our Phase 1 healthy volunteer trials ACE-1334 is now under way. And at the close of 2019, we announced a research and discovery collaboration with Fulcrum Therapeutics to help us identify small molecules that can modulate specific pathways associated with a target indication in the pulmonary space.

With that, I'd like to turn to our hematology program. In addition to the regulatory and clinical activity that I highlighted earlier, our collaboration partner Bristol-Myers Squibb recently completed enrollment in the BEYOND Phase 2 trial of luspatercept and patients with non-transfusion dependent beta-thalassemia and expect top line results by the end of this year. The COMMANDS pivotal Phase 3 trial continues to enroll treatment-naive patients with anemia associated with lower risk MDS. We anticipate top line results from this trial in late 2021, or early 2022.

Moving to our neuromuscular program, we expect to share top line results from the Part 2 of the Phase 2 trial of ACE-083 in patients with the Charcot-Marie-Tooth disease or CMT next month. To recap, in this part of the study, approximately 40 patients with CMT with mild to moderate ankle dorsiflexion weakness were randomized to receive either ACE-083 or placebo. The trial is designed to assess change in total and contractile muscle volume and fat fraction, six-minute walk distance, 10-meter walk run, patient reported disease burden and safety and tolerability over six-month randomized treatment period. As you can see it has been a busy and productive period for us at Acceleron.

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

Kevin McLaughlin -- Senior Vice President, Chief Financial Officer and Treasurer

Thanks, Habib. Good afternoon, everyone. I'd like to refer you to our press release issued earlier today for a summary of our financial results for the fourth quarter and full year ended 2019 and take this opportunity to briefly review a few items. We ended the fourth quarter and full year with approximately $453.8 million in cash, cash equivalents and investments. Collaboration revenue for the year was $74 million.

The revenue was all derived from the Company's partnership with Bristol-Myers Squibb and is primarily related to expenses incurred by the Company in support of REBLOZYL, as well as one-time gross milestone payments totaling $60 million earned upon the FDA acceptance of the BLA and EMA [Phonetic] validation of the MAA of REBLOZYL in June and the FDA approval of REBLOZYL in November 2019. Total costs and expenses for the year were $210.4 million. The Company's net loss for the year ended December 31st, 2019 was $124.9 million. Habib?

Habib Dable -- President and Chief Executive Officer

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

Questions and Answers:

Operator

Thank you, sir. [Operator Instructions] Our first question comes from Yaron Werber from Cowen. Please go ahead. If your line is muted, please unmute your line.

Leo Ai -- Cowen and Company -- Analyst

Hey, congrats on the quarter. Thanks for taking our question. This is Leo Ai on for Yaron Werber. So I just have a quick question regarding your Phase 3 in myelofibrosis. Can you please share with us more progress on that? And also in terms of the early adoption on the REBLOZYL, can you share with us some early dynamics in the field, please? Thank you.

Habib Dable -- President and Chief Executive Officer

Yeah, hi. This is Habib, thanks for your question. I just want to make sure that I heard the question correctly. I think the first question was, can we share any more details on the path forward with the Phase 3 in myelofibrosis? And the second question was, can we add any color in terms of the REBLOZYL launch in the first indication. Is that correct?

Leo Ai -- Cowen and Company -- Analyst

Yes. Thank you.

Habib Dable -- President and Chief Executive Officer

Okay. Okay, great. So as we've announced at ASH, we shared with you the details of the Phase 2 data in myelofibrosis, and obviously together with our collaborator, with Bristol-Myers, we were thrilled to announce that we'd be moving forward, with the INDEPENDENCE study, which was basically the Phase 3 study looking at luspatercept combined with ruxolitinib and myelofibrosis patients, which were transfusion dependent. And so we had said that we would initiate that study in 2020, things continue to go on track and really at this point there's really nothing else to add.

So we're really excited about moving forward there in another space again validating the ability for luspatercept to be able to restore healthy red blood cell formation in rare blood disorders, where anemia is really the hallmark of a lot of these disorders.

With respect to your second question, in terms of the launch of REBLOZYL, what I can tell you is that, we continue to be very, very pleased with the initial launch. Obviously, the first indication of adult beta-thalassemia patients who were transfusion dependent is a very small indication in the United States. We estimated roughly about 1,000 or 1,500 patients. So it's a very small indication. The unmet need obviously still is an important one. And we're happy to be able to have an opportunity to cater to these patients with a significant unmet need. But when we think about the launch itself, you'll notice that we didn't have -- we don't have any specifics, in terms of calling out the actual sales, because again, it's a very small indication in the United States.

Secondly, we got the approval at the tail end of the year. And therefore, if you think about and you put it into context with the approval in November, couple of that with a major Congress, in a couple of holidays, the selling cycle was around four or five weeks and thus the revenues were very low, not material or even informative at this point. That said, when we think about how things are moving in terms of week over week sales, which are continuing to grow, even into the New Year.

When we think about repeat orders, we're very happy with how all of the metrics. When we think about reimbursement hurdles, we're very pleased on how the access is continued to progress. And thus, I would say, all in all, we're very, very pleased with the launch to date, but obviously, the big indication that we're all anticipating and hoping for is the action date, the PDUFA date of April the 4th, which would be for a second indication for a lower risk MDS patients, who are regularly transfused.

Yaron Werber -- Cowen and Company -- Analyst

I have just a quick follow on, it's Yaron. In terms of the ATS data and rather afterwards, should we think about the Adempas development plan? And they were sort of two or three Phase 3 studies, including sort of a switch study with PDE4s or an oral is sort of what you would think about doing as a strategy to move up. Thank you.

Habib Dable -- President and Chief Executive Officer

Yes. So Yaron, I -- first of all, you said, with respect to the -- with the ATS presentation and the Adempas study, I'm assuming you're talking about the PDE5 inhibitors.

Yaron Werber -- Cowen and Company -- Analyst

Yeah.

Habib Dable -- President and Chief Executive Officer

So we're not adding any color at this point other than the fact that we plan to present the data and we can confirm that data will be at ATS. Beyond that, we will not be sharing any details until after we've had the opportunity to meet with the regulators.

Yaron Werber -- Cowen and Company -- Analyst

Great. Thank you.

Operator

Thank you. Our next question comes from -- thank you. Our next question comes from Danielle Brill from Piper Sandler. Please go ahead.

Danielle Brill -- Piper Sandler -- Analyst

Hi, guys. Thanks for the questions and congrats again on all the progress. I guess I have a couple of follow-ups on to the prior questions, if I can start there. First, Habib, given how things are tracking with the REBLOZYL launch, do you expect that sales will be called out in for 1Q? And then also just any commentary on how we should think about the launch cadence over the remainder of the year? And then can you comment on when you might be expecting to interact with regulators on the path forward for sotatercept? Thanks.

Habib Dable -- President and Chief Executive Officer

Yeah. So, thanks for your questions, Danielle. So -- maybe I'll answer the last one first. So, what we said previously that we plan to be interacting with regulators as soon as possible, in that, we said roughly before mid-year of this year, and then we'd obviously share the feedback with that at the appropriate time. With respect to what we plan to be sharing with respect to the launch of REBLOZYL, again just to repeat, qualitatively what we're seeing in terms of repeat customers, growth week-over-week, reimbursement in access, we continue to every week be pleased with the progress that we're making.

Now in terms of what you can expect again, remember the PDUFA date for the MDS indication is not until April the 4th. So you can probably expect another quarter of relatively non-material, or low sales volume because of the fact that beta-thalassemia in the United States is just simply a very small indication, where we again we estimate about 1,000 to 1,500 patients. Obviously, once the MDS, if and when MDS is approved, we would be looking more likely and hasn't seen some significant sales in Q2, Q3 and beyond, which I believe would be much more informative. So, I would look at that in terms of the cadence in terms of the growth in what you could potentially expect.

Danielle Brill -- Piper Sandler -- Analyst

Got it. That's helpful. And then just one more, if I may. Are there any other fibrotic diseases that might be of interest for sotatercept that you may plan to evaluate it for? Thanks.

Habib Dable -- President and Chief Executive Officer

Yes. So too early to talk about that. We're obviously thrilled with the preliminary data in our Phase 2 study in PAH, and we obviously have a wonderful opportunity to cater to us a very significant unmet need and with potentially the first drug to be introduced to this patient population outside of the regulatory, that they reporting the regulatory drugs that are out there. So you can imagine there's a tremendous opportunity and a lot of work to do still to move sotatercept forward there. Obviously, as we continue to interrogate the data, we will look for other opportunities. We'll benefit from the council of the regulators and our steering committee to identify opportunities beyond the preliminary indications that we're looking for. But that will come with time.

Now what I can tell you though is, we obviously are looking at other areas with other assets as well. And I think we mentioned earlier at least, I know we did a JP Morgan, where we talked about ACE-1334, which is now in a healthy volunteer study, which we believe could potentially be targeting more fibrotic driven diseases within pulmonary disease such as we could be looking at areas such as idiopathic pulmonary fibrosis, interstitial lung disease, systemic scleroderma, etc., but we have yet to determine that indication.

Todd James -- Senior Vice President of Corporate Affairs and Investor Relations

Hey, Danielle, it's Todd. As far as the tariffs that goes the amended agreement with Celgene/Bristol allows for our development in PAH indications. And so outside of PAH, which is PAH Group 1. We would have the potential ability, if it makes sense from a biology science and business case for Group 2, or the other PAH Groups as far as sotatercept goes, but we'd be limited to being able to develop that based on the current terms of the amended agreement.

Danielle Brill -- Piper Sandler -- Analyst

Got it. Very helpful. Thanks again for the questions and congrats again.

Habib Dable -- President and Chief Executive Officer

Yeah. Thanks, Danielle.

Operator

Thank you. Our next question comes from Geoffrey Porges from SVB Leerink. Please go ahead.

Geoffrey Porges -- SVB Leerink -- Analyst

Thank you very much and congratulations, Habib and the team on all the progress. One financial question, which is, you haven't given us any indication about your expense trajectory for 2020? I know it's not necessarily your custom to give financial guidance, but it would seem helpful to get some at least bracketing of what your expenses are going to be. Particularly, I suppose, since you are going to be ending a number of studies on the R&D side, but conversely investing in SG&A. So could you at least give us a sense of whether you expect a significant step up in overall operating expenses this year, or whether this is about the right level even though there might be some flux.

And then just to go back to sotatercept, I know you've been reluctant to discuss things about the regulatory interaction, but should we assume that you will be going to the agency with a development plan, or you're going to the agency with the results and then coming back with the plan. So, I guess setting the expectation of whether sometime in the summer time perhaps on the Q2 call, we could hear the next steps with sotatercept and whether that's the right timing.

Habib Dable -- President and Chief Executive Officer

Okay. Thanks for your questions, Geoff. So for the first question is regarding the financial guidance and bracketing. I'm going to ask Kevin McLaughlin, our CFO to answer that. And then for the second part regarding sotatercepts and our planned discussions with the regulators, I will ask our new Head of R&D, Jay Backstrom to address that one. So, Kevin, do you want to take the first part?

Kevin McLaughlin -- Senior Vice President, Chief Financial Officer and Treasurer

Sure. Thanks, Habib. Hi, Geoff, how are you doing? Listen, you're correct that we have historically not given the expense guidance or -- and as you know, we no longer give cash guidance. I think what's safe to say though is this. We will have a step-up in our expenses as the year continues on. We will be preparing for additional trials with sotatercept and obviously you know those are all funded by us. So there is no cost sharing there. So they will all be funded by us.

Now, the size of that step up will be determined by the type of trials we have to run and obviously that has not yet been communicated or determined. So I think that we are growing the footprint of the company a bit, in order to support us moving to a fully commercial company. And so there will be growth, but I think you know us well enough to know that we do things as necessary. We keep things, I think well in control. And we want to make sure that we are very effective in the manner in which we spend the cash we have on board.

Habib Dable -- President and Chief Executive Officer

Jay, could you answer the second question, please, Jay.

Jay T. Backstrom -- Executive Vice Presiden and Head of Research and Development

Yeah. Certainly, hi. So this is, Jay. So just to answer the question, both. We are actively interrogating the data. So our intention when we meet with FDA and other health authorities is to review that data with them, but as you can imagine we're also in the process of developing the plan. I would like to socialize and get some input from them as well. So we've been very aggressive and active on that right now, engaging our steering committee to further kind of refine that. But until we actually move with the health authorities just to add into plan, we'd like to be able to as Habib said earlier, I'm going to be able to move forward with those meetings by mid-year, so that's pretty reasonable timeline.

Geoffrey Porges -- SVB Leerink -- Analyst

Great. Habib, can I just follow up with one other question, which is, could you share some of the feedback from your expert advisors in PAH about what you've been able to share with them so far. Could you give us a sense of how they're responding and how they're thinking about the product?

Habib Dable -- President and Chief Executive Officer

Yeah. No, what I can tell you Geoff is, and I'm not sure if you had the opportunity, yeah, actually you guys think you did, we spent and with respect to the call with, McLaughlin and Marc Humbert, two thought leaders who have joined us on the call right after the date. And what I can tell you is that across the board, the feedback we're getting is that the treaters, the opinion leaders are very, very excited about having a new mechanism of action for the first time in PAH. The fact that you've got tremendous progress in this disease area over the last 30 years through 14 approvals is really I think important to its comprehend in that, survival rates have improved from three years to five years in the early '80s to now maybe six years, seven years. That's a significant improvement because of that innovation. But there's still horrible survival rates. When you think about five years to seven years when the median age of the patients that are being affected by this are 50 years, 55 years old.

We have an opportunity here to potentially be not only disease modifying, but potentially remodeling the disease. And if indeed, we are able to do that, and to be able to have significant impact on patients' lives, I hope that we will be able to introduce sotatercept to these patients and to cater to a very, very significant unmet need. And I can tell you that the community is very excited about that. I think that potential, but they're also, the feedback that we've received just is they are really pleased with the concordance of the data. It's not just one significant -- one specific endpoint that's driving the optimism, but the fact that there is consistency across multiple endpoints and that concordance of that data seems to be driving even more of a positive reaction based on the feedback that I'm getting to date.

That said, I still have a lot of work to do. And at the end of the day, I would say, everyone is excited, optimistic, but at the same time, we still have a lot of work to do to cross the finish line.

Geoffrey Porges -- SVB Leerink -- Analyst

Great. Thanks very much for that color.

Habib Dable -- President and Chief Executive Officer

Yeah. Thanks.

Operator

Thank you. Our next question comes from Carter Gould from Barclays. Please go ahead.

Carter Gould -- Barclays -- Analyst

Hey, great guys. Thanks for taking the call, and thanks, congrats on all the progress. I guess two questions. Appreciate all the color, in terms of the timing on potential interaction with regulators. But I guess to put you on the spot Habib, have you specifically requested that end of Phase 2 meeting with FDA yet? And then on sotatercept with -- on the manufacturing side, I believe with the Phase 2's that Bristol had provided you with material there in terms of your own scaling up on the manufacturing side. Any color there? And are you going to be in a position to -- yeah, maybe just leave it there.

Habib Dable -- President and Chief Executive Officer

Okay. So with respect to the request to the FDA, we haven't shared any information on any interactions with regulators, and that's typically not a practice that we do. Once we've got the appropriate feedback from the regulators in the path forward, Carter, we will definitely share that with you. With respect to the materials, etc, we are leveraging a third-party CMO with respect to sotatercept material.

Operator

Thank you. Our next question comes from Eric Joseph from JP Morgan. Please go ahead.

Eric Joseph -- JP Morgan -- Analyst

Hey, guys. Thanks for taking the questions. I know we're still ahead of a formal level in MDS, I'm just wondering, whether any of the ordering or prescription patterns you're seeing any pull-through from MDS with REBLOZYL so far. And to the extent there is any -- whether there is any sort of reimbursement push-back or hurdles efficiency you are running into.

And just second question on, coming back to opex, whether there are any unique items in the fourth quarter R&D spend. Well, that's sort of an appropriate run rate for thinking about the cadence of spend in 2020? Thanks.

Kevin McLaughlin -- Senior Vice President, Chief Financial Officer and Treasurer

Yeah. Hey, Eric, this is Kevin. In the fourth quarter there was the $10 million charge that went through R&D related to the Fulcrum deal that we did. So you're -- it's a good observation in that, it did pop-up because of that.

Habib Dable -- President and Chief Executive Officer

And regarding the sales to date, I'll ask our Chief Commercial Officer, Sujay, if he wants to chime in, if there is anything that you can really say in terms of incremental color, Sujay.

Sujay Kango -- Executive Vice President and Chief Commercial Officer

Yeah, sure. Eric, thanks for the question. So as you pointed out, we are still awaiting the MDS approval, and till that time point very difficult for us to dig into any kind of data sets with respect to MDS. However, I can tell you is, with regards to access as of to-date most of the insurance companies have very good coverage for REBLOZYL and we are not seeing any kind of push back, etc. They are covering to label, and that's going according to plan. So we are pretty pleased with the uptake as of now as we are seeing in regards to where the utilization is coming from for beta thalassemia and the accounts per se. And spread across the country, it's not whereby you were just seeing pockets of it, it is broadly across where the pockets of influence are for beta-thalassemia. That's how we are seeing the utilization ramp up as well, OK. So hope that helps.

Operator

Thank you. Our next question comes from Jeff Hung from Morgan Stanley. Please go ahead.

Jeff Hung -- Morgan Stanley -- Analyst

Thanks for taking the questions. Maybe if I can ask Eric's question in a different way. What are you hearing anecdotally about off-label use of REBLOZYL?

Sujay Kango -- Executive Vice President and Chief Commercial Officer

So maybe I can restate it, right. So at least what we are seeing is, we are not analyzing any off-label data set. What we can tell you is, that our queries coming in from a medical perspective that information. So there is interest about it, but people are probably waiting to see the approval come through. And we are just around the corner. Our PDUFA date is April 4. So probably people are just looking into the data sets with the publication. And we are getting medical increase about the information. So that's kind of where we are right now.

Jeff Hung -- Morgan Stanley -- Analyst

Okay, thanks. And then you talked about repeat orders with REBLOZYL. So understanding limited numbers, but I guess what proportion of patients don't reorder and whether typical reasons cited if a patient doesn't reorder?

Sujay Kango -- Executive Vice President and Chief Commercial Officer

Early days, as of now, I haven't seen the repeat orders not come through. So we are very positive whereby we are getting repeat orders, the consistency of it is going to be different for different accounts, but those -- it's not one-to-one match up between the ordering patterns, right. But so far, pretty much every account that has ordered at some point in time has gone back and reordered the drug. So we are very happy with how we are seeing the trend lines between new prescriptions and repeat prescriptions.

Jeff Hung -- Morgan Stanley -- Analyst

Okay, great. Thanks.

Habib Dable -- President and Chief Executive Officer

Thanks, Jeff.

Operator

Thank you. Our next question comes from Yigal Nochomovitz from Citi. Please go ahead.

Samantha Semenkow -- Citi -- Analyst

Hi, this is Samantha on for Yigal. Thanks for taking our question. We've spoken with a couple of KOLs on REBLOZYL and beta-thal. And they seem really positive on our expectations for prescribing and majority of their patients seem to be eligible in their view, but they've noted that they've run into some problems like prior authorization. I'm curious, could you comment on what the volume of prior-offs you're seeing? What percentage get approved? And if you're seeing an amount of prior-offs, is this a good indication for your payers discussions to sort of indicate physician interests?

Sujay Kango -- Executive Vice President and Chief Commercial Officer

Yeah. Very important question and a good one, right. So as just to remind the audience, as you know very well, we've launched REBLOZYL right now under Part B, which is a buy-and-bill product, right. And under the Part B side of the medical benefit side, almost always when you're doing this, you're going to have, or you need a J code. And we are in this period of time where we have a miscellaneous J code, and it is very common during this time frame till you get a permanent product code that almost all insurance companies are going to ask for a prior authorization, because of listening a J code just triggers that.

And so that's just part of the process. It's not out of the ordinary that it is happening. So we anticipated that we have extensive support from our BMS colleagues through patient services as well as field reimbursement team members that are able to help these accounts appropriately to ensure that they follow the required billing and coding processes. So it's sometimes could be just the time frame that it takes to get the product reimbursed, but it is not being denied as such in any ways for beta-thalassemia. So I just want to say that, that's a positive trend. We anticipated that and it's not out of the ordinary in regards to it, till you get the permanent J code. Okay.

Samantha Semenkow -- Citi -- Analyst

Thank you. That's helpful. And then what is the normal time frame to getting a J code that's permanent?

Sujay Kango -- Executive Vice President and Chief Commercial Officer

It varies. It depends from when you actually got the product approved a you file for the codes, etc. I can tell you that, we've already done. BMS has already five for all the required coding and to get the permanent J codes. So we should be getting that hopefully sometime later this year. That's our hope. It usually takes anywhere between 12 months to 18 months depending upon when you actually get the product approved. So it's that cycle time frame. So we should anticipate to get it sometime later this year or early next year, so well in time.

Samantha Semenkow -- Citi -- Analyst

And are there separate J codes for beta-thal and MDS, or whether it be the same?

Sujay Kango -- Executive Vice President and Chief Commercial Officer

The product code the J code will be the same. The diagnosis codes are different.

Samantha Semenkow -- Citi -- Analyst

Okay, right. Thank you so much for taking my question.

Operator

Thank you. Our next question comes from Kennen MacKay from RBC Capital Markets. Please go ahead.

Bikram Singh -- RBC Capital Markets -- Analyst

Hi, thanks for taking our questions. This is Bikram on for Kennen. Maybe quick one on CMT readout in March. Going into the readouts what are the internal expectations may be around the -- some of the functional endpoints you talked about? And how shall we be thinking about them?

Habib Dable -- President and Chief Executive Officer

Yeah. Hi, Bikram. This is Habib. Thanks for your question. So again just to remind everyone, our plan is to reveal top line results before the end of this first quarter. And just to remind everyone the hurdle rate that we've given ourselves. Again just in Part 1, we have typically seen double-digit increases in total muscle volume. And what we hope to be able to do is to see that again in Part 2. But more importantly to see that total muscle volume translate into a functional benefit. And when you think about that, when you think of functional benefits such as six-minute walk distance for example, what we hope to be able to see in a placebo-corrected way is a benefit of at least 10% to be able to give us the confidence to move forward in a development pathway for approval.

If we see that and continue to see some trends across multiple end points that will give us the confidence. And remember, we typically want to learn as much as we can in Phase 2 and move into Phase 3 with very little ambiguity and have the Phase 3 is confirming what we're seeing in Phase 2. And so we would only do so, if we have that confidence to move forward to the next step.

Bikram Singh -- RBC Capital Markets -- Analyst

Got it. Thank you.

Habib Dable -- President and Chief Executive Officer

Yeah. Thanks for your question.

Operator

Thank you. Our next question comes from Leland Gershell from Oppenheimer. Please go ahead.

Leland Gershell -- Oppenheimer -- Analyst

Hey, hi, Habib and team, thanks for taking my questions. I have a couple. One with respect to the J code, I was under the impression that at least for certain products there's been an acceleration in the cycles, perhaps more frequently, as frequently as quarterly versus what used to be annually? Is that not applied to your case, or is it just a distinction that I wasn't aware of? And I've got a couple of follow-ups.

Sujay Kango -- Executive Vice President and Chief Commercial Officer

It's a valid question and that's correct. There are some -- accelerating some of these coding. So as I said, normally it could take as long as 18, but we anticipate that we should have the codes later this year.

Leland Gershell -- Oppenheimer -- Analyst

Okay. And then with regard to PAH, obviously, the SPECTRA trial should be very informative. I'm filling out more color around sotatercept. I was wondering, if you could maybe provide us some more sort of description of what do you define as disease modifying activity for the agent. And if there are any quantifiable thresholds that you'd want to see in terms of reverse remodeling on the images from SPECTRA?

Habib Dable -- President and Chief Executive Officer

So I think I can start and then maybe I'll hand it over to Jay Backstrom to fill in some of the blanks. So, I want to just kind of go back in repeat what Dr. Marc Humbert on the call. When asked what they would need to see, if indeed this is a disease-modifying drug. Now, first of all, for remodeling, etc, it's really hard to get anything definitive without biopsying a patient which we obviously aren't going to do a lung biopsy. That said there are other metrics that one could look at to give the confidence of disease remodeling, a vascular remodeling.

And when we look at the cardiac MRIs, as you can imagine, there will be a lot of information that we can gain in terms of what's happening with the heart. We also have, if you remember what Marc Humbert said, the most important element of disease modification is functional class improvement, which will pay very close attention to as well. But at the end of the day and kind of going back to the Geoffrey's question, regarding where the enthusiasm is coming from, remember over half of the patients in the PULSAR study were on triplet therapy. And we are showing an improvement above mass vasodilation in these patients. And so ultimately the -- it's the end benefit to the patient that they're going to be looking for whether that's an opportunity to go above mass vasodilation, function of class improvement and are there effects on right heart function that we'll be able to extract as we continue to interrogate disruptive data as well. So I think you're going to be looking at all of those, Leland.

Leland Gershell -- Oppenheimer -- Analyst

Okay, thanks, sorry.

Sujay Kango -- Executive Vice President and Chief Commercial Officer

Yeah. Just to agree. No, I think that was well summarized.

Leland Gershell -- Oppenheimer -- Analyst

All right. Much appreciated. And then one more question, if I may. On luspatercept without having been studied in lower and intermediate risk MDS, I'm just wondering, is there a scientific rationale or perhaps a clinical or both reason to not study that agent in high risk MDS. Is it that the current category of patient is that have other issues going on, a lot of them could be advanced to frankly, to frank AML, are there other hematologic issues going on with those patients? Just wondering, why high risk might not be a scope of interest? Thanks.

Jay T. Backstrom -- Executive Vice Presiden and Head of Research and Development

Yeah. So, Leland, I'll take that. This is Jay. I mean with high risk, the life expectancy and risk for progression are really different in the lower-risk group. So to your point, usually you required a little bit more aggressive therapy to try to control that. And anemia can still be a component of the disease, but the primary treatment goals are really trying to prolong survival and reduce the risk of progression to AML. Combinatorial strategy to some certainly can be considered, I think where we went with the development plan that was to really target the area where we felt there was just a very, very good place for luspatercept to be given the absence of other available therapies. It's a really great place for it in a low risk MDS space.

Leland Gershell -- Oppenheimer -- Analyst

All right. It makes sense. Thanks very much for taking my questions.

Habib Dable -- President and Chief Executive Officer

Thanks, Leland.

Operator

Thank you. And our next question comes from Paul Choi from Goldman Sachs. Please go ahead.

Lisa Yang -- Goldman Sachs -- Analyst

Hi, this is Lisa on for Paul. Congrats on all the recent progress and thanks for taking our question. So recently at ASH you had presented the Phase 2 data for luspatercept and myelofibrosis where we saw the lower response rate in the non-ruxolitinib group. So just wondering, if you guys have done any additional analysis on that data or have any more visibility on the delta and responses, and how you see that impacting the Phase 3, or its opportunity in general. Thanks so much.

Habib Dable -- President and Chief Executive Officer

Great. Thanks for your question. I think Jay, can you please address this on myelofibrosis question.

Jay T. Backstrom -- Executive Vice Presiden and Head of Research and Development

Yeah. So as we talked about JP Morgan, we take a look at the study, the differences between the Rux the patients with our ruxolitinib. Just to be a little bit careful how we interpret that because the numbers were small way to really amplify that would be a little bit additional data. There has been continued efforts underscore at least to assess why. With respect to the Phase 3 though, and I think again, what we had shared earlier is that we like the combination. Ruxolitinib is very commonly used. 30% of patients present with anemia that there is a problem with anemia's patients continue even on Rux. And so that combination looks quite good. And as you know, as you just referenced, when we looked at that cohort those data also looked really quite and compelling, if you will for us to be able to advance to a Phase 3.

Lisa Yang -- Goldman Sachs -- Analyst

Great. Thank you so much.

Jay T. Backstrom -- Executive Vice Presiden and Head of Research and Development

Great. Thanks for your question.

Operator

Thank you. I show no further questions at this time. I'd like to turn the call over to Habib Dable, CEO for closing remarks. Please go ahead.

Habib Dable -- President and Chief Executive Officer

Yes, thank you. Thanks, again, everybody, for joining the call. Obviously, 2020 is really shaping up to be a pivotal year for Acceleron. I'm very much looking forward to continuing with the progress that we've achieved in the tail end, and looking forward to meeting a lot of you at some upcoming conferences.

Operator

[Operator Closing Remarks]

Duration: 46 minutes

Call participants:

Todd James -- Senior Vice President of Corporate Affairs and Investor Relations

Habib Dable -- President and Chief Executive Officer

Kevin McLaughlin -- Senior Vice President, Chief Financial Officer and Treasurer

Jay T. Backstrom -- Executive Vice Presiden and Head of Research and Development

Sujay Kango -- Executive Vice President and Chief Commercial Officer

Leo Ai -- Cowen and Company -- Analyst

Yaron Werber -- Cowen and Company -- Analyst

Danielle Brill -- Piper Sandler -- Analyst

Geoffrey Porges -- SVB Leerink -- Analyst

Carter Gould -- Barclays -- Analyst

Eric Joseph -- JP Morgan -- Analyst

Jeff Hung -- Morgan Stanley -- Analyst

Samantha Semenkow -- Citi -- Analyst

Bikram Singh -- RBC Capital Markets -- Analyst

Leland Gershell -- Oppenheimer -- Analyst

Lisa Yang -- Goldman Sachs -- Analyst

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