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Acceleron (XLRN) Reports Narrower-Than-Expected Q2 Loss

Zacks Equity Research

Acceleron Pharma Inc. XLRN reported a loss of 34 cents in the second quarter of 2020, narrower than the Zacks Consensus Estimate of a loss of 55 cents but in line with the year-ago quarter’s reported figure. The year-over-year growth in revenues was offset by increased operating expenses.

The company reported collaboration revenues of $39.7 million in the reported quarter, increasing from $27.7 million in the year-ago quarter and beating the Zacks Consensus Estimate of $32 million.

Total revenues reported in the quarter include $11.1 million in royalty revenues from approximately $55.0 million of net U.S. sales of Reblozyl (luspatercept-aamt) and the recognition of a $25.0-million regulatory-based milestone for the approval of Reblozyl in Europe.

Acceleron Pharma Inc. Price, Consensus and EPS Surprise

 

Acceleron Pharma Inc. Price, Consensus and EPS Surprise
Acceleron Pharma Inc. Price, Consensus and EPS Surprise

Acceleron Pharma Inc. price-consensus-eps-surprise-chart | Acceleron Pharma Inc. Quote

In November 2019, the FDA approved Reblozyl for the treatment of anemia in adult patients with beta-thalassemia, who require regular red blood cell or RBC transfusions. The drug was developed in collaboration with Bristol Myers Squibb BMY.

 

Research and development costs increased to $38.2 million from $34.8 million in the year-ago quarter. Selling, general and administrative costs too increased to $20.4 million from $14 million in the year-ago quarter.

Cash, cash equivalents and investments as of Jun 30, 2020, were $389.8 million, down from $453.8 million at December-end. Based on its current operating plans and projections, Acceleron believes that current cash, cash equivalents and investments will be sufficient to fund projected operating requirements for the foreseeable future as it expects to receive significant royalty revenues from Reblozyl sales.

Acceleron’s stock has surged 100.8% in the year so far compared with the industry’s growth of 5.4%.

 

Other Updates

In April 2020, Acceleron and partner Bristol Myers obtained FDA approval for the label expansion of Reblozyl for the treatment of anemia failing an erythropoiesis-stimulating agent and requiring two or more red blood cell (RBC) units over 8 weeks in adult patients with very low- to intermediate-risk MDS with ring sideroblasts (MDS-RS) or with myelodysplastic/myeloproliferative neoplasm with ring sideroblasts and thrombocytosis (MDS/MPN-RS-T).

In June, the European Commission (EC) also approved Reblozyl for the treatment of adult patients with transfusion-dependent anemia due to very low, low and intermediate-risk MDS with ring sideroblasts, who had an unsatisfactory response to or are ineligible for erythropoietin-based therapy and associated with beta-thalassemia.

Meanwhile, Bristol-Myers is currently conducting a phase II study, BEYOND, with luspatercept-aamt in non-transfusion-dependent beta-thalassemia patients. The top-line results are currently expected by the end of 2020 or early 2021. The company is also conducting a phase III study, COMMANDS, in first-line, lower-risk MDS patients, with top-line results expected in 2022.

A phase III study, INDEPENDENCE, in patients with myelofibrosis (MF) on concomitant JAK 2 inhibitor therapy, who require RBC transfusions, is expected to start by the year-end or early 2021.

Acceleron is also developing sotatercept for the treatment of patients with pulmonary arterial hypertension (PAH) in partnership with Bristol Myers. In April, sotatercept was granted Breakthrough Therapy designation by the FDA for the treatment of patients with PAH. The company expects to initiate a phase III study in PAH by 2020-end.

While the label expansion of Reblozyl is encouraging, competition can be stiff from Novartis's NVS Exjade and Jadenu. Moreover, Incyte’s INCY Jakafi is already approved for MF.

Acceleron currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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