Analyst Conference Summary

Biotechnology

conference date: February 27, 2020 @ 2:00 PM Pacific Time
for quarter ending: December 31, 2019 (Q4, fourth quarter)

Forward-looking statements

Overview: The FDA target action date for MDS is April 4, 2020.

Basic data (GAAP):

Revenue was $39.3 million, up sequentially from $4.2 million, and up from $3.8 million year-earlier.

Net income was negative $23.6 million, up sequentially from negative $45.3 million, and up from negative $34.7 million year-earlier.

Earnings per Share (EPS, diluted) were negative $0.44, up sequentially from negative $0.86, and up from negative $0.75 year-earlier.

Guidance:

none

Conference Highlights:

Habib Dable, CEO of Acceleron said: "In November, Reblozyl (luspatercept-aamt) became the first and only FDA approved erythroid maturation agent and is now indicated to treat anemia in adults with beta-thalassemia who require regular red blood cell transfusions. The approval of Reblozyl marks a huge victory for patients with beta-thalassemia, who-up until now-have been waiting for a better way to treat their anemia. It is also a validation of Acceleron's scientific platform leveraging our expertise in the TGF-beta superfamily of proteins and our unwavering commitment to develop and commercialize medicines to treat serious and rare diseases."

All revenue was from collaboration partner Bristol-Myers Squibb (BMY), mainly from cost-sharing and milestone payments. Acceleron has deployed its own sales of 20, and the launch is off to a good start. Beta-thalassemia potential patients number about 1,000 to 1,500, but the MDS population pool is much larger.

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.

Reblozyl (Luspatercept) received approval from the FDA for beta-thalassemia late in Q4 2019. 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 3 trial for myelofibrosis patients who are being treated with JAK inhibitor will start in 2020. New data presentations were made at ASH on December 9, 2019.

ACE-083 Phase 2 is enrolling a Phase 2 trial for Charcot-Marie-Tooth disease, with topline data expected in March 2020.

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 January 2020 annuonced sotatercept in PAH (pulmonary arterial hypertension) Phase 2 trial (PULSAR) met its primary and key secondary endpoints. Enrollment is ongoing in the SPECTRA trial in patients with PAH, with preliminary results expected in 2020. Acceleron has full rights.

See also Acceleron pipeline.

Cash and equivalents ended at $454 million, down sequentially from $468 million. No debt. Believes has sufficient cash to operate into 2021.

$49 million was spent on R&D and $16 million on general and administration. Total op ex was $65 million. Loss from operations was $26 million. Other income $2 million.

Q&A Summary:

Myelofibrosis progress? We gave the Phase 2 data at ASH. Will move forward with Phase 3 study, combined with ruxolitinib. On track to initiate this year.

Early sales? Reblozyl is launching into a small population, but with a significant unmet need. Sales were not significant in Q4. But we are seeing growth week to week, with repeat orders. Reimbursement progress has been good, most insurers are covering to the label. Mainly getting ready for MDS patients. We expect Q1 2020 to have small sales volume as well.

We plan to interact with regulators on sotatercept mid-year.

It is too early to talk about other potential targets for sotatercept.

We expect to step up exenses for new sotatercept trials, but the exact trials and therefore expense has not been determined.

We are using a third party CMO for the sotatercept material.

We do get queries about Reblozyl for MDS.

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