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Edited Transcript of XLRN earnings conference call or presentation 6-Nov-19 3:00pm GMT

Q3 2019 Acceleron Pharma Inc Earnings Call

Cambridge Nov 12, 2019 (Thomson StreetEvents) -- Edited Transcript of Acceleron Pharma Inc earnings conference call or presentation Wednesday, November 6, 2019 at 3:00:00pm GMT

TEXT version of Transcript

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Corporate Participants

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* Ed Joyce

Acceleron Pharma Inc. - Director of IR

* Habib J. Dable

Acceleron Pharma Inc. - CEO, President & Director

* John D. Quisel

Acceleron Pharma Inc. - Executive VP & Chief Business Officer

* Kevin F. McLaughlin

Acceleron Pharma Inc. - Senior VP, CFO & Treasurer

* Sujay R. Kango

Acceleron Pharma Inc. - Senior VP & Chief Commercial Officer

* Todd James

Acceleron Pharma Inc. - VP of IR & Corporate Communications

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Conference Call Participants

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* Danielle Catherine Brill

Piper Jaffray Companies, Research Division - VP & Senior Research Analyst

* Edward Patrick White

H.C. Wainwright & Co, LLC, Research Division - MD of Equity Research & Senior Healthcare Analyst

* Eric William Joseph

JP Morgan Chase & Co, Research Division - VP & Senior Analyst

* Geoffrey Craig Porges

SVB Leerink LLC, Research Division - Director of Therapeutics Research, MD & Senior Biotechnology Analyst

* Jeff Hung

Morgan Stanley, Research Division - Equity Analyst

* Kennen B. MacKay

RBC Capital Markets, Research Division - MD & Co-Head of US Biotechnology Research

* Kyuwon Choi

Goldman Sachs Group Inc., Research Division - Equity Analyst

* Leland James Gershell

Oppenheimer & Co. Inc., Research Division - MD & Senior Analyst

* Mark William Connolly

Crédit Suisse AG, Research Division - Research Analyst

* Yaron Benjamin Werber

Cowen and Company, LLC, Research Division - MD & Senior Biotechnology Analyst

* Yigal Dov Nochomovitz

Citigroup Inc, Research Division - Director

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Presentation

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Operator [1]

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Good morning, ladies and gentlemen, and welcome to the Acceleron Third Quarter 2019 Earnings Conference Call. (Operator Instructions) 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.

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Ed Joyce, Acceleron Pharma Inc. - Director of IR [2]

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Thanks, and welcome, everyone, to our third quarter 2019 earnings call. The press release reporting our financial results and clinical and abstract, 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 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.

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

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Habib J. Dable, Acceleron Pharma Inc. - CEO, President & Director [3]

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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 3 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 U.S. FDA 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 a target action date of April 4, 2020. Our commercial organization has worked hard preparing for this milestone, and I am pleased to report that we'll be ready upon FDA approval to begin making luspatercept available to patient.

In addition, regulators in the E.U., 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 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 6 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 III trials in MDS and beta-thalassemia respectively, as well as interim results from our ongoing Phase II 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 achieved 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 a 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 units 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 15 units over the 24 weeks.

Lastly, the interim results included in the ASH abstract for our ongoing study in patients with anemia associated with myelofibrosis suggest 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 II trial with sotatercept, which received orphan drug designation from the FDA in 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 mg/kg sotatercept or 0.7 mg/kg 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 period. 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 II exploratory trial in 2020. I'll now turn to our neuromuscular program, with updates from ACE-083 trial in Charcot-Marie-Tooth disease or CMT. Although rare, CMT is the most commonly inherited neurological disorder, with a U.S. prevalence exceeding 100,000 patients. There are no FDA treatments for CMT. We are currently conducting Part 2 of our Phase II 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 the 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.

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Kevin F. McLaughlin, Acceleron Pharma Inc. - Senior VP, CFO & Treasurer [4]

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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.

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Habib J. Dable, Acceleron Pharma Inc. - CEO, President & Director [5]

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Thank you, Kevin. This is a very exciting time at Acceleron, with multiple near-term clinical updates in all 3 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 U.S. Further, we look forward to presenting 6 clinical abstracts related to luspatercept at the ASH meeting in December.

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

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Questions and Answers

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Operator [1]

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(Operator Instructions) Our first question comes from Yaron Werber with Cowen.

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Yaron Benjamin Werber, Cowen and Company, LLC, Research Division - MD & Senior Biotechnology Analyst [2]

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Great. And I was going to maybe start by focusing on the Phase II myelofibrosis data, Habib, and give us a little bit of a sense. So it looks like the combination with rux sort of expected, look pretty good. You're seeing between 32% and 57%. In Cohort A, you have a main duration of response of 12 weeks, and Cohort B, in 3B, you're looking at 32 weeks. So maybe give us a little bit of an explanation maybe if you can. What confirms the difference in the durability of response between the 2 of them? And then the second question: it looks like while luspatercept mono does not do quite as well as combo. Are patients on the mono arm -- were they naturally more advanced? Would they have failed rux in the past? I'm trying to understand why that data doesn't look as good in the context of the prior sotatercept data.

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Habib J. Dable, Acceleron Pharma Inc. - CEO, President & Director [3]

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Yes. 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.

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Yaron Benjamin Werber, Cowen and Company, LLC, Research Division - MD & Senior Biotechnology Analyst [4]

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

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Todd James, Acceleron Pharma Inc. - VP of IR & Corporate Communications [5]

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Hey, Yaron. It's Todd. Yes. 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.

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Yaron Benjamin Werber, Cowen and Company, LLC, Research Division - MD & Senior Biotechnology Analyst [6]

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Okay. And maybe a final question with respect to an AdCom for 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?

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Todd James, Acceleron Pharma Inc. - VP of IR & Corporate Communications [7]

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Yes. Hey, Yaron. It's Todd again. Yes. So what we've said historically is that given the new mechanism of action with luspatercept 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.

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Operator [8]

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Our next question comes from Danielle Brill with Piper Jaffray.

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Danielle Catherine Brill, Piper Jaffray Companies, Research Division - VP & Senior Research Analyst [9]

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Hey, guys. So I'm not sure if I'll get much of an answer here, but Steve, I'm just curious -- you mentioned the 25% to 30% response rates across cohorts to just moving forward. How should we think about the opportunity now? Should we only be modeling the 60% of patients that are on background rux? Any color you can provide would be helpful.

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Habib J. Dable, Acceleron Pharma Inc. - CEO, President & Director [10]

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Yes, 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.

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Danielle Catherine Brill, Piper Jaffray Companies, Research Division - VP & Senior Research Analyst [11]

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Okay. And then I guess you indicated that treatment durations 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 it evolved at all?

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Todd James, Acceleron Pharma Inc. - VP of IR & Corporate Communications [12]

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Hey, Danielle. It's Todd. Yes, so there is 2 patients types that would be eligible for monotherapy luspatercept. One would be treatment naive patients, 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 you are more referencing, it's the post-rux patients. Those patients have a very poor prognosis, kind of on the lines of a 18-month survival. And as you can 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 the larger addressable patient population and the unmet medical need in the myelofibrosis kind of patient groups.

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Danielle Catherine Brill, Piper Jaffray Companies, Research Division - VP & Senior Research Analyst [13]

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Got it. And we'll get the breakdown of the pre-rux versus (inaudible) rux patients at ASH, correct?

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Todd James, Acceleron Pharma Inc. - VP of IR & Corporate Communications [14]

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There will be absolutely be additional details within the presentation, but as you can imagine, the presentation itself hasn't been fully finalized. So it's hard for us to commit to every single detail that could potentially be in the presentation.

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Operator [15]

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Our next question comes from Martin Auster with Credit Suisse.

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Mark William Connolly, Crédit Suisse AG, Research Division - Research Analyst [16]

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This is Mark on for Marty. I guess I was hoping to drill more into the response rates you saw, and thinking about a potential Phase III study, I was curious, do you have a sense for how we should think about how a placebo patient would perform on the transfusion dependent primary endpoint or the hemoglobin primary endpoint? Thanks for taking my question.

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Todd James, Acceleron Pharma Inc. - VP of IR & Corporate Communications [17]

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Hey, Mark, it's Todd. Yes. So there is only one historic reference that you can really look at here. And again, always impossible to make cross study references as we can tell with the references that we were looking at ahead of the MEDALIST data. Always hard to say how it will play out. But within the Celgene Pomalidomide Phase III study, the placebo RBCTI and that study from a few years ago was approximately 16%. And so that's the best reference point. But again, not necessarily what would occur in an additional Phase III study. And there is no reference for hemoglobin response in the study, as one hasn't been executed. But you can imagine, it's very challenging for our patients on placebo to get a random hemoglobin increase. It's a very defined straightforward lab at endpoint.

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Operator [18]

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Our next question comes from Eric Joseph with JPMorgan.

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Eric William Joseph, JP Morgan Chase & Co, Research Division - VP & Senior Analyst [19]

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Just a couple on myelofibrosis. I guess, can you just remind us on how you're thinking about the relative sizing, myelofibrosis anemia is like severity, non-transfusion dependent versus transfusion dependent. And I guess in terms of looking to next steps, do you have a sense of what a registration endpoint might look like in the transfusion dependent population? With highlighting mean, hemoglobin rise here as one of the endpoint in the Phase II study. I guess it's not now, sort of what -- I guess what additional feedback that you look to get, some of the regulators are positioned for kind of build consensus on what a registration imply might be in transfusion dependent patients. Thanks.

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Todd James, Acceleron Pharma Inc. - VP of IR & Corporate Communications [20]

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Yes. So the way we generally view the patient breakdown based off of our research is within the prevalent pool, about 60% of patients are receiving ruxolitinib and whether they have a baseline transfusion burden or not at that time, they will eventually -- a majority of them will eventually have a transfusion burden and given the mechanism, it ends up that a large majority of them have a transfusion burden and a minority of them are anemia only and that's likewise with the non-rux patients. At diagnosis, you'll see maybe 1/3 of patients have a transfusion burden and just a year after diagnosis, you'll see that I'm getting closer to 50% and given that how the disease progresses, you'll see that number increase pretty steadily over the patient's disease which with a general median survival of kind of 5 plus years in this patient population.

As far as potential Phase III endpoints if we would go ahead with the transfusion dependent patient population, it would be fairly similar to what you saw here in the Phase II trial. Most likely RBC transfusion independents over any consecutive 12-week period over the primary treatment period. The secondary endpoint that we used in the Phase II proportion of patients that are seeing at least a 50% reduction in transfusions. That would be a high probability of another secondary endpoint beyond that, if we are able to commit to a Phase III in the future. As of today, we continue to plan. We'll be able to give more of those details once we finalize the protocol.

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Eric William Joseph, JP Morgan Chase & Co, Research Division - VP & Senior Analyst [21]

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Got it. I did say transfusion dependent, I meant to say non-transfusion dependent. If you were to move forward in the non-trans with a Phase III protocol in the non-transfusion dependent population, how should we think about registration endpoint there?

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Todd James, Acceleron Pharma Inc. - VP of IR & Corporate Communications [22]

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Yes. So we would need to talk to health authorities to finalize what that would be, given they are not on transfusions, obviously. Some kind of transfusion endpoint would not be appropriate. So it probably be either potentially hemoglobin increase alone or hemoglobin plus patient reported outcome measure kind of a combination endpoint.

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Operator [23]

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Our next question comes from Geoffrey Porges with Leerink.

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Geoffrey Craig Porges, SVB Leerink LLC, Research Division - Director of Therapeutics Research, MD & Senior Biotechnology Analyst [24]

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First, could you confirm when the data cut-off will be for the updated data? Because in MF -- because I think you said May 10 was the data in the abstract. And then could you just talk a little bit more about the population that the 40 patients, I think here, who are not on concomitant rux. I think you've -- I'm willing to disclose the proportion that were pre-rux and post-rux. But presumably you might still have an opportunity in the pre-rux patients. But it doesn't look like in post-rux. And then could we talk -- could you talk a little bit about the update from the MDS pivotal trial? It looks as though you've said a medium total duration of clinical benefit of 84 weeks. But that's in the responders. So can you give us a sense of the total duration or the median total duration of treatment across all the patients in that study? Because clearly, it's just the subpopulation who have got to that 21 months. Thanks.

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Todd James, Acceleron Pharma Inc. - VP of IR & Corporate Communications [25]

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Yes, so we're not -- given that the data cut-off date for what will be provided in the presentation, it is included in the abstract just like everything else that will be presented, it remains under embargo and so we're not able to provide that detail. Likewise, with the breakdown of patient baseline characteristics within the monotherapy that remains under embargo until the presentation. As for duration of all patients receiving luspatercept in the Phase III, I believe that's also included in the abstract. And let me just get you up here for you. So median treatment duration for all patients was 50.9 months -- weeks, sorry. And then for the clinical benefit for responders, which when most people model, they mostly model the responders in the 83.6 weeks or approximately 21 months. So that's a nice update relative to what we presented at ASH last year.

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Operator [26]

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Our next question comes from Yigal Nochomovitz with Citigroup.

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Yigal Dov Nochomovitz, Citigroup Inc, Research Division - Director [27]

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If we could move to talk a little bit about sotatercept in the PULSAR Phase II trial. I had a question there in terms of your assumptions for treatment effect. Obviously you're studying sotatercept in combination with standard of care, which usually includes a combination of background therapies, ERA, PDE5, prostacyclin and usually 2 or 3 background therapies and you've shown some very nice preclinical work in the sugen hypoxia model, the sotatercept does a better job on pulmonary arterial pressure reduction as well as a reduction in right heart failure in comparison to the single agents the ERA, PDE5, prostacyclin. But I'm wondering if you've done any additional work. I'm looking at how sotatercept would perform in addition to -- sorry in addition to those mechanisms in a combination setting. Could you just looking, you're comparing to single agent, so that would maybe more reflective of the real-world experience. So if you could just comment on that aspect and how you develop confidence in the design of the Phase II study.

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John D. Quisel, Acceleron Pharma Inc. - Executive VP & Chief Business Officer [28]

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So I think, the second half of your question was relating to preclinical efforts to look at combination therapy, if I heard that correctly.

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Yigal Dov Nochomovitz, Citigroup Inc, Research Division - Director [29]

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Right, right.

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John D. Quisel, Acceleron Pharma Inc. - Executive VP & Chief Business Officer [30]

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And you've correctly said, we presented data showing side-by-side in combination with sotatercept versus sildenafil or sotatercept on top of sildenafil and as you summarize, sotatercept reproducibly outperformed sildenafil very convincingly and then we can see combination benefit on top of sildenafil. We have not presented data, looking at double or triple combinations in the preclinical setting. And as you also correctly stated, those are patients in the trial. So the trial does allow enrollment of patients who are on a single vasodilators doublet to dual vasodilators or even triple, presuming that the prostacyclin therapy is stable at the time of enrollment. To summarize the reason why we think sotatercept is a very distinct mechanism looking at rebalancing of the NPR2 signaling pathway, which we believe has the potential to be disease-modifying that really change the way the vascular remodeling happens in those patients and our sense is that, we don't anticipate tremendous difference between having multiple layers of basal dilator in combination with sotatercept. But we have not done that or presented that data in the conference at this point.

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Operator [31]

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Our next question comes from Jeff Hung with Morgan Stanley.

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Jeff Hung, Morgan Stanley, Research Division - Equity Analyst [32]

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You have a Pediatric Phase II for luspatercept beta-thal patients that recently showed up on clinicaltrials.gov. Can you talk a little bit more about the study and then remind us of your strategy for moving into the pediatric population for different indications?

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Todd James, Acceleron Pharma Inc. - VP of IR & Corporate Communications [33]

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Yes, as everybody knows, given that beta-thalassemia is a hereditary disease. These patients are becoming symptomatic very early in life. Some patients started transfusion burden as early as at 2 years of age. And so what we're doing with this Phase II trial along with our partners, Celgene, is -- this is our first study in the pediatric setting and so we're looking across multiple age group and multiple doses across approximately 48 pediatric subjects and we'll be able to generate some nice data there to hopefully be able to move forward in the future with additional studies in pediatric thalassemia.

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Operator [34]

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Our next question comes from Ed White with H.C. Wainwright.

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Edward Patrick White, H.C. Wainwright & Co, LLC, Research Division - MD of Equity Research & Senior Healthcare Analyst [35]

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I just wanted to ask a quick one on ACE-083. In the CMT patient population, I'm just wondering after stopping the trial, the development in FSHD, if you can just briefly explain why you have -- you're continuing on or have confidence in the CMT population and then also, do you have any other TGF-beta protein superfamily drugs in the pipeline for muscular or neuromuscular disorders? I see you have one preclinical for the pulmonary disease, but just wondering if you have anything else in muscular neuromuscular?

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Habib J. Dable, Acceleron Pharma Inc. - CEO, President & Director [36]

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So it's obviously -- we were disappointed in September when we shared the FSHD results with ACE-083. Again asking why would we be continuing with the CMT program or where is the confidence coming from. So I would say a couple of things. First of all, we were very deliberate in terms of these 2 studies. One being in myopathy, one being in neuropathy such as CMT. And I also would remind you that even in the FSHD Group, we actually did see double-digit increases in muscle mass but unfortunately that did not translate into a functional benefit, which is why we decided not to move forward.

CMT trial has already been fully enrolled and as we've discussed previously, it will be reading out in the first quarter of next year. So it's really at the tail end of that study. And so we do look forward to unblinding that study in the first quarter of next year. And CMT is very much a different disease. I think based on the disappointment with FSHD, whatever percentage of success you had on translating muscle mass increases into a functional benefit probably have gone down now for CMT. So I would say, we're cautiously optimistic now.

But that said, CMT is a different disease and being in neuropathy, you do not -- you have damaged nerves, leading to the atrophy unlike a toxic protein, which is associated with the atrophy and FSHD. And it is also a much more focal and dispelled disease which may lend itself to a drug, which is locally injected into a dominant muscle. And so again, looking forward to seeing how that study reads out in the first quarter.

Regarding other products in our pipeline. No, we are not investing in any products at this point in our in-house pipeline in neuromuscular and we'll very much be looking forward to the CMT data, which I'm sure will help define our path forward in neuromuscular disease.

You mentioned ACE-1334. Just to be clear, again that asset is -- targets TGF-beta 1 and 3 and we are looking forward to talking a lot more about that next year as our next pulmonary asset coming -- that will be coming into the clinic.

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Operator [37]

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(Operator Instructions) Our next question comes from Leland Gershell with Oppenheimer.

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Leland James Gershell, Oppenheimer & Co. Inc., Research Division - MD & Senior Analyst [38]

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Just back then the myelofibrosis. Not sure if you can answer this one either, but patients on ruxolitinib certain of them will often start to lose efficacy or become effect to the failure of the population. If you could characterize for us the population in your Phase II that was combo with rux, to what extent those patients on rux prior to also being put on these patterns of that, perhaps the weighting of activity or approaching failure versus those who had already been -- who would remain stable and this was an add-on with potentially increased efficacy.

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Todd James, Acceleron Pharma Inc. - VP of IR & Corporate Communications [39]

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Yes. Unfortunately, given that is within the abstract we aren't able to get into that amount in detail. All that we can say is based off of the trial design that patients were on a stable rux dose when entering our trial.

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Operator [40]

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Our next question comes from Paul Choi with Goldman Sachs.

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Kyuwon Choi, Goldman Sachs Group Inc., Research Division - Equity Analyst [41]

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Maybe just staying on the topic of MF. As you think about a potential pivotal trial design, I was wondering if you could maybe provide some color on clinician feedback and buy-in with regard to the 1.5 grams per deciliter change as a clinical benchmark, relative to some of the guidance or guidelines and society documents like the international working group that have looked for 2 or higher and just your thoughts there as a potential input for clinical trial design here going forward?

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Todd James, Acceleron Pharma Inc. - VP of IR & Corporate Communications [42]

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Hey, Paul. It's Todd. Yes, so today, unfortunately there is nothing for these patients and so an agent -- and given the unmet need with anemia and that almost all patients have some form of anemia throughout the course of the disease and over 50% of them have moderate to severe anemia and most likely leading to transfusion burden, any agent that shows activity here would be very much welcomed by the community and patients. When we talk to docs about the unapproved agents that they use in the space, they get in the range of -- and they don't exactly define what they consider response. They get a teens' percentage response with [EPO] in these patients with Pomalidomide, the Celgene-run study had a 16% response rate, and so these are response rates in the teens. And so what we're showing, whether it be in hemoglobin response in the anemia only patients, or in the transfusion independence response and those cohorts, are fairly significant activity relative to what doctors are using today in the field.

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Kyuwon Choi, Goldman Sachs Group Inc., Research Division - Equity Analyst [43]

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Okay. And maybe just on the commercial side since you guys are approaching a product launch here in the not too distant future, I was wondering if you could maybe provide a little more color on how you and your partner will be sort of targeting or co-promoting at potential accounts who goes in first, how do you share and sort of divide these territories and accounts that -- maybe a little more color there would be helpful.

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Habib J. Dable, Acceleron Pharma Inc. - CEO, President & Director [44]

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Yes, sure. Maybe Sujay Kango, our Chief Commercial Officer, can a little bit of color there for you, Paul.

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Sujay R. Kango, Acceleron Pharma Inc. - Senior VP & Chief Commercial Officer [45]

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Hi, Paul. Great question. And thanks, Habib. I'm sure as you know, we are complementary and synergizing our efforts with the co-promotion partner Celgene, who has a tremendous leadership in hematology. So they have the breadth of covering the entire nation, and as we have communicated in the past, we have a total of 20 field-based people, but 16 reps and then leadership. So as part of that, we are focused largely on optimizing the high target accounts within the beta-thalassemia community, which would be our likely first approval. So with that in mind, what we tend to do is we are focused on really sort of going into the higher sort of decile targets where there is going to be a larger opportunity for the patient population, and we are coordinating all our efforts jointly alongside. So our reps have completely coordinated in knowing the Celgene reps: they're planning account plans together. And through this kind of collaboration at a grassroots level, we know we can actually do a better job together in addressing the customer needs in an efficient and a timely manner, so we are able to optimize their needs and no patient would be left behind. So that's the approach we're taking. So we're sort of targeting on the larger accounts alongside them and then they have the breadth so they can cover the rest of the country as well. So we'll be able to cover everyone that's necessary. Okay. Hope that answers your questions.

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Operator [46]

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Our next question comes from Kennen MacKay with RBC Capital Markets.

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Kennen B. MacKay, RBC Capital Markets, Research Division - MD & Co-Head of US Biotechnology Research [47]

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Two questions, one on the myelofibrosis data and then separate one on sotatercept in PAH. In the MF data, I was just wondering if you could discuss the intra-patient variability a little bit. It seems like that might play a part in the patients who are achieving greater than 1.5 grams per deciliter at any time point, which is sort of more of a best response versus patients are sustaining hemoglobin elevations. And also on that note, I was wondering if doses had to be held in that trial, if hemoglobin did rise to high which is something we've seen in the prior IST that MD Anderson had done with sotatercept. And then just a quick follow-up, on sotatercept in PAH, I was just hoping you could discuss a little bit more the decision to start the newer Phase II SPECTRA trial and some of the differences versus PULSAR and what you're hoping to see. It seems like both are on top of standard of care, but SPECTRA has the intra-patient dose escalation from 0.3 to 0.7, and I was just hoping you could remind us on rationale here, and rationale for the different primary of PVR verses VO2max. Looking forward to see the data at ASH.

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Todd James, Acceleron Pharma Inc. - VP of IR & Corporate Communications [48]

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Hey, Kennen. It's Todd. I'll start with your myelofibrosis questions and then I'll hand it over to John Quisel for your question on the difference between PULSAR and SPECTRA trials. For the 2 ways of being able to assess hemoglobin in the Phase II trial, I can't get into the details into intra-patient variability. The 2 endpoints are very distinct, but both are deemed acceptable from a response rate perspective for -- you might remember in both thalassemia and MDS, which we had the positive Phase III data in at ASH last year, that we were using. And in the Phase II, we are using mean hemoglobin as the response criteria, whether it be a gram 0.5 for 1g per deciliter, depending on the patient population. So this mean hemoglobin though are not as stringent as every assessment, is still a huge benefit to patients. And then what was the second part? Oh, excursions. So as per the protocol, if a patient has a hemoglobin excursion, there is either dosing down or a dose hold, but we're not able to get into what that data actually looks like or if it happened at all at this point, because that isn't included in the abstract today. So if it's included in the presentation at ASH, we'll absolutely be able to discuss that at that time.

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John D. Quisel, Acceleron Pharma Inc. - Executive VP & Chief Business Officer [49]

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Yes. Thanks, Todd. Yes, so back to your question on PAH and the 2 trials we're running. So there are 2 -- there's a PULSAR trial and the SPECTRA trial. The PULSAR trial is the placebo controlled blinded study that we -- it was designed for 100 patients. We enrolled a 106. And we're testing placebo 0.3 mg/kg dose and a 0.7 mg/kg dose, and the primary endpoint is pulmonary vascular resistance with an important secondary endpoint of 6-minute walk. So PULSAR is designed to put this product on a map of familiar endpoints that have been used for all of the drugs that have come before, primarily a vasodilator type agents, and give us a strong basis for comparing how sotatercept is performing when placed on top of that standard of care. Spectra is a trial we designed to really try to elicit and explore new endpoints and new potential effects of sotatercept, and the reason for those because of the potential disease modifying mechanism, quite distinct from the vasodilators that came before. We think that there is potential to see different type of activity in the patients, and so we want to have a chance to look at some additional types of effects the drug may have. So there we're doing I (inaudible) looking at exercise capacity with that technology, and we're also looking at cardiac MRI to have really the best possible way of visualizing the effects that sotatercept may have on right heart function and morphology. If you recall in some of the animal data we presented, we've seen reversal of right heart enlargements after 4 weeks of treatment in the animal model. So SPECTRA, in order to accomplish that exploratory goal we designed to be open label, we're enrolling roughly -- it's designed to enroll roughly 20 to 25 patients. And without the placebo control aspect of it, we felt that it would be desirable to have every patient capable of getting up to the 0.7 mg/kg dose, and we felt it would be useful to explore a tiering up to that dose by starting at 0.3 and then moving to 0.7, so we get a very nice look at how each patient responding at each dose level.

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Operator [50]

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This concludes the question-and-answer session. I would now like to turn the call back over to Habib Dable for closing remarks.

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Habib J. Dable, Acceleron Pharma Inc. - CEO, President & Director [51]

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Okay. Great. So thanks everybody again for joining our call today. Wishing you all a great day and very much looking forward to seeing all of you at ASH, where we're looking forward to sharing much more details on our programs. So with that, have a great day.

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Operator [52]

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Ladies and gentlemen, this concludes today's conference call. Thank you for participating. You may now disconnect.