Q2 2019 Earnings Call
Good afternoon, ladies and gentlemen, and welcome to the Acceleron second quarter 2019 earnings Conference call.
At this time, all participants are in listen only mode.
Later, we'll conduct a question and answer session and instructions will be given at that time.
As a reminder, this conference call is being recorded.
I would now like to hand, the call over to Mr., Ed Joyce director of Investor Relations at Acceleron. Please go ahead.
Thanks, and welcome everyone to our second quarter 2019 earnings call. The press release reporting our financial results. In addition to the presentation for todays webcast are available on the investors and media page of our corporate website at Www Dot Acceleron pharma dotcom.
Joining me for the call today are happy Valley, our Chief Executive Officer, Kevin Mclaughlin, Our Chief Financial Officer, John Quizzle, Chief Business Officer, CJ, Kangel, our Chief commercial officer, and Todd James Our Vice President of Investor Relations and corporate Communications.
As a reminder, we will be making forward looking statements regarding our financial outlook. In addition to regulatory and product development 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 have be doubly, our chief Executive Officer.
Thank you Ed and good afternoon, everyone and thank you for joining us today.
This is one of the most exciting times and Acceleron 16 year history.
Not only have we built one of the industry's most advanced TGF beta superfamily based pipelines spanning multiple disease areas, but with us and EU regulatory filings under review for Luspatercept. We are approaching the potential first approval of an acceleron discovered medicine.
Our commercial team alongside our global collaboration partner Celgene is hard at work preparing for the status of potential approval.
Patient access for this first in class ever through a maturation agent remains our top priority.
In parallel we are advancing our two acceleron lead clinical programs in neuromuscular and pulmonary disease.
Our three ongoing placebo controlled phase two trials two was 83 and one with Sotatercept had each completed patient enrollment and will help to establish proof of concept with topline results from all three phase two trials expected in the next nine months.
As you can see this is meaningful progress for all programs in 2019, and we are well positioned to achieve our near and medium term clinical and regulatory objectives.
Turning to Luspatercept in June we announced that both the USS Eastern European Medicines Agency accepted the BLA in EMEA filings, respectively of this patter set for beta thalassemia and Myelodysplastic syndromes associated anemia.
This is a huge achievement for the Acceleron and Celgene teams and represents another important step in delivering this novel therapy to patients.
With the filing acceptance we are pleased that the FDA granted priority review for beta thalassemia indication with a target action date of December 4th 2019, and set a target action date of April 4th 2020 for the Mds indication.
Likewise, the marketing authorization application for Luspatercept in adult patients with Mds or beta thalassemia associated anemia has been validated by the European Medicines agency with a potential decision on the filing expected in the second half of 2020.
We look forward to working closely with the U.S. and you agencies to move this therapy toward approval.
Patients are desperately in need of a viable treatment option and we believe that list patter sept could bring significant improvements to patients with these conditions by potentially eliminating or decreasing red blood cell transfusion burden.
For those patents have clinical development continued with three ongoing clinical trials first line treatment in lower risk Mds patients non transfusion dependent beta thalassemia and myelofibrosis associated anemia.
To that end, we also remain committed to expanding our clinical development plan to additional patient populations with anemia that could potentially benefit from treatment with Patterson.
I would now like to move to our Acceleron lead programs, beginning with 83 in neuromuscular disease.
We're currently evaluating 83 as a novel locally acting therapy with the potential to improve function in specific target muscles in two ongoing phase two trials in patients with vascular scapula, humoral muscular dystrophy, or if thats HD and Chuck will marry Twod.
Disease or a CMT.
Results from part one of the trials demonstrated substantial increases in muscle volume and target muscles.
We previously announced full enrollment of part two of the safety trial and recently completed full enrollment of part two of the CMT trial.
To quickly summarize beginning with FX HD part two of the trial is evaluating 56 patients with mild to moderate to be Alice interior or biceps weakness.
Randomized to receive either a cdthree or placebo.
Part two of the CMP trial is evaluating 40 patients with mild to moderate to be Alice anterior weakness randomized one to one to receive either a cdthree or placebo.
Specifically as outlined in this slide the trials are designed to evaluate similar topline outcome measures post six month randomized treatment period. These include the percent change in muscle volume and the change in intramuscular fat fraction as well as the percent change in motor function tests.
In the to be Alice interior cohort of the FSD trial. These include the six minute walk test for stair climb 10 meter walk run.
In addition to these outcome measures. We are also evaluating the change in disease specific health related quality of life as determined by patient reported outcomes in the FSD Health index, and the CMT Health index as well as overall safety and Tolerability in both trials.
We believe that if the trial demonstrates improved functional outcomes 83 has the potential to become an important new therapy for patients with neuromuscular disease and unmet medical needs.
We look forward to sharing topline results from both trials, we anticipate Fsh D results in the second half of 2019 and CMT results in the first quarter of 2020.
I'd now like to move to our pulmonary program, where we recently completed enrollment in the pulse our phase two trial of our lead pulmonary candidates sotatercept in pulmonary arterial hypertension or PPA, which.
We believe that pulsars rapid enrollment over the past 12 months underscores the excitement for the program and the urgency for new therapeutic options for patients with PPA age.
Currently the only approved ph treatments target three main pathways that each promote basal dilation of the pulmonary vessels to reduce pulmonary vascular resistance or PVR.
These therapies are used alone or in combination to improve exercise capacity and slow the progression of the disease.
Sadly, though median survival for patients is only five to seven years.
We believe that Sotatercept has the ability to engage a fundamental pathway in the disease by rebalancing BMP, our two signaling and potentially restoring vascular homeostasis.
In preclinical models of ph sotatercept reverse pulmonary vessel muscular ization and improved indicators of right heart failure.
As outlined on this slide the pulse our phase two trial is a randomized double blind placebo controlled study designed to evaluate the efficacy and safety of status up in th patients.
A total of 106 patients were randomized to receive placebo low dose sotatercept for hydro Sotatercept in combination with the standard of care therapies.
Following the six 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 from baseline in PVR and the key secondary endpoint is changed from baseline six minute walk distance.
We anticipate reporting topline results from Paul Star trial in the first quarter of 2020.
Additionally, our clinical team is currently enrolling patients with ph into the exploratory spectra study.
And with that I'll turn the call over to Kevin Mclaughlin, our CFO to review the financials.
Thanks, Steve Good afternoon, everyone.
Our cash cash equivalents and investments as of June Thirtyth 2019 were $500.9 million.
This cash balance includes the receipt of a $25 million gross milestone payment earned upon acceptance of the status of La and EMEA filings. This compares to December 30, Onest 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.
We 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 second quarter was $27.7 million.
The revenue is all from the company's collaboration partnership with Celgene.
And is largely related to expenses incurred by the company in support of Luspatercept and includes the 25 million dollar growth milestone payments.
The next potential milestone related to the fullest Patterson partnership is $35 million due upon first approval from either the FDA or M&A.
Total costs and expenses for the second quarter were $48.8 million. This includes R&D expenses of $34.8 million and seen a expenses of $14 million.
The company posted a net loss for the second quarter ended June 32019 of $17.9 million.
I will now turn the presentation back over to be for final remarks.
Thanks, Kevin So to briefly summarize our priorities for the remainder of this year and beyond.
Beginning with less Patterson hematology.
For a cdthree, we expect topline results from both phase two trials in the next nine months, starting with FX HD in the second half of 2019, followed by the CMT trial in the first quarter.
And finally in ph, we expect topline results from the pulse our phase two trial in the first quarter of 2020 and preliminary results from the spectra trial in 2020.
I will now open the call to questions operator.
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Our first question comes from the line.
Carter Gould of UBI, Yes. Your line is open.
Hi, guys. This is Andrew in for Carter. Thanks for taking my question I had a couple.
First on the F. a safety study in order to U.S. can move into phase three how critical is it that you demonstrate ethic across both the maybe al it and by the patients.
I guess that put another way if you demonstrate efficacy and just one cohort how would you think about the potential risk profile of that phase threea given the more make stayed on the other side.
I had a follow up on the status of that if you can start there that'd be great.
Yeah. So thanks. Thanks for your question this is to be.
So it's a it's an it's an excellent question and I think what's most important is as you mentioned for us to be able to move forward into phase three there are number of things that we're going to be looking at both with the F. a safety study as well as the CMP study, which will be reading out.
In the first quarter of next year.
Just to remind everybody the primary endpoint in both studies I'm just looking at a total muscle volume and then obviously the path forward is really going to be driven by our ability to reliably increased functional improvement in the patients that were treating and so whether its fsh de alone or C.M.T. alone or the T.A.S or the biceps, we'll be looking at that data and to ensure that we have been able to achieve some minimum thresholds and some of those thresholds that we talked about previously are looking at specific functional improvements such as Ah in India to be honest anterior muscle. We're looking at six minute walk distance time 10 meter walk run four stair climb and again, we're looking for trends, but we're also looking at some you know.
Discrepant did some some deviation from placebo I'm in the double digit and that's really what we've given ourselves a threshold so to decide today as to whether or not we would go with biceps alone or T.A. alone or ethics steel own we're going to be looking at the data in totality and then after that after having conversations with the regulators, we'll get back to you in terms of our path forward for phase three.
Great. Thank you and on with Patterson that I'm seeing as you're looking to co promote in the U.S. with your own team of I believe it was 15 to 20, how acceleron position. It team here and that where do you see Bristol Celgene operating and worked on layer on are amplified the efforts here. Thank you.
Yeah. So the so that's it that's it that's a great question and maybe I'll pass it onto our Chief commercial officer CJ Tangoe to elaborate on some of the details. So thanks for that question and as we have articulated before right first and foremost the co promote allows us to have a dedicated team and as you articulated we have about a 20 people feel for that is there. So we won't be fully focused on this data set and the approach we're taking with Celgene side is actually too.
Ensured that there is a surround sound. So we will be operating that all the key centers as well as the top decile accounts to ensure that there is coordination collaboration and you're going to maximize the opportunity right. So they are not limited to a particular sort of cohort of physicians et cetera, what you're going to do is synergized and coordinate and amplify what is necessary to drive an optimal value proposition for luspatercept and satisfy customer needs.
Great. Thanks, guys.
Thanks.
Thank you. Our next question comes from yarn Werber of Cowen Your line is open.
Great. Thanks for taking my question. So let me maybe I have a couple of questions.
The first one maybe just a little housekeeping, but you're mentioning now approval or M. A decision in the second half of 20 for Luspatercept.
It was filed I believe in early early April . So is it are you so still sort of expecting a 12 month CHP clock and then two to three months you may and maybe it sort of goes into Q3, I'm just trying to understand the thinking about second half and then I've a follow up yes. It's the so you run so that that is our expectation for the second half and again as Youve alluded to when you account for all of the clock stops et cetera that would take us into a into a second half potential a decision and so beyond that we havent elaborated, which you know exactly which quarter that would fall into but you're right. It does account for all of the clock stops.
Okay has there been any any any request from you may recently, the winning turnover.
No everything remains on track and is going as expected.
Okay, and then for the full force Friday, if it's 106 patients its randomized three or three to four.
And so you know overall, it's going to be sort of 30 40 patients and also and so I guess my my question really has to do with do you think that is powered.
For a statistically significant difference are you looking at trends at this point.
Yes, so with respect to the primary endpoint again, the primary endpoint is for PVR and it is powered to show a difference and we're looking for a difference of approximately 20% reduction in PBR.
Okay, and if that is the primary endpoint is in both doses right or is it one of the high dose really powered against.
Against a placebo.
Both.
It's both okay terrific. Thank you.
Thanks, John .
Thank you. Our next question comes from Daniel Borough of Piper Jaffray. Your line is open.
Thanks, Hi, guys. Thanks again for the question.
A couple from me as well I guess following up on the last question for the closer study.
In addition to PV are do you do you also need to see an improvement on the six minute walk distance to justify moving forward or will the PV, our endpoint be enough to go into phase three.
Yes, so it's a great question Danielle so so obviously the primary endpoint of PV, our is not going to be enough based on historical approvals that we've seen in the space. The gold standard has been and we believe we will continue to be six minute walk distance. So we're also looking at some secondaries, including six minute walk distance and we've given ourselves a threshold there for that functional improvement of 30 meters.
Now that said, we do believe that we potentially are approaching this disease area I'm from a very unique perspective through the mechanism of action of rebalancing BNP signaling and as such we could if approved the one of the first disease modifying drugs approved and for these patients.
And so we could have an opportunity to be looking at some unique endpoints I'm as we think about phase three and as such we move forward with respect to study and we're looking at some unique endpoints there such as cardiac MRI.
Invasive cardio pulmonary exercise testing and so as we think about phase three you know once we flip the card on phase two.
Yes, Indeed, we do want to see an improvement in six minute walk in addition to PVR, but we also could be looking at some creative endpoints as we think about phase three as we get a better look at some patients that they start coming out of spectra.
Okay. So.
What sort of trying be enough there.
Yes, So I think I think it's too early to say when we looked at the data will and coupled out again with what we're seeing in spectra I think we'll have a better read.
That said I think 30 30 meter increases what we've been hearing from a from a number of our stakeholders as a threshold that we'd like to achieve on top of standard of care.
Okay, and then one other related to those patterns that you guys mentioned plans for next indications can you just remind us what what some indications of interest might be and when we might get an update on on that.
Yes, so coming out of last summer, where we announced positive phase three results for beta thalassemia as well as lower risk Mds.
Not only were we thrilled that luspatercept was able to show that it can restore healthy red blood cell formation in two very distinct diseases, but also did so in a safe and tolerable way.
No.
Just to remind everyone. We do have three ongoing studies today, we've got the beyond study, which is looking at non transfusion dependent beta thalassemia.
We've got the command study, which is looking at the front line setting head to head against the assays.
We've also got the ongoing myelofibrosis study.
So myelofibrosis.
In addition to some of the team recently were actually I guess at the JP Morgan, We had announced that if we looked at beta thalassemia in Myelodysplastic syndromes, and all of the indications, including the frontline settings and non transfusion dependent we saw an opportunity of over $2 billion.
If indeed myelofibrosis at the next indication is successful.
We believe that that could add an incremental 1 billion in peak sales opportunity.
Beyond that we also feel that there is an opportunity to cast an even wider net and the teams are teens in the celgene teams are working and prioritizing some of those in the asking what else beyond myelofibrosis, we could be looking at.
We are looking at indications, where we believe the unmet need is very high but also where the mechanism of luspatercept could have a meaningful benefit for these patients and some of those indications could be.
Alpha thalassemia.
Chemo induced anemia.
As as you know some examples of areas, where we believe the unmet need is high and we we potentially could have a path forward so more to come.
Got it thanks, so much.
Yes, Thanks Aneel.
Thank you. Our next question comes from Eric Joseph of JP Morgan Your line is open.
Hey, guys. So my question is can you hear me.
Yes, Eric.
Hey.
Just a couple of questions I guess first on FX.
Sticking with it maybe three.
I guess im talking to docs it.
Seeing that.
Some of the feedback that we're getting conductions.
While.
Presenters function in.
In the UK and the biceps important other models.
Shoulders kept hurdle. So I guess I'm wondering if we were to sort of fast forward to where a cdthree essentially approved.
On how I wonder if you could kind of speak to.
How.
One other muscle groups might anticipate the use of 83.
In weather.
Other muscle groups might get factored into the design of a phase three trial.
Okay.
So Eric you did cut out a bit but I think what you're asking is based on some of the feedback you've been receiving from Kay wells is that the the T.A. into biceps are obviously important muscles.
That drive the disability in these patients early on.
But there are other muscles as the disease progresses that may warrant.
Perhaps.
Some further studies around and perhaps an opportunity for lifecycle management is that your question.
Yeah. Okay. I think we may have lost Eric, but I'm going to assume that is the question. So so.
I guess, when we think about it.
We were very deliberate about the biceps and the t. muscles as the early our muscle group to be looking at for a number of reason is one.
We've been able to identify these muscles as being the actual dominant muscle.
That actually affected the activities of daily living for these patients and in a very profound way. Furthermore.
We also know that specifically if you think about that could be OS anterior muscle on in CMP. For example, if one of the earlier muscles.
That are affected with disease progression.
And so if indeed, we are successful with fs HD or CMP or both.
We'll obviously take a look.
At lifecycle management opportunities and if indeed, we feel it's warranted that we can move into other dominant muscles, where an intramuscular injection.
Would would have a potential transformative effect for these patients lives than we yes, we will consider it but for now.
The focus is really on these two studies in part to a phase two.
To ensure that we have a reliable functional benefit for these patients as we consider moving into phase three or not.
Great.
One follow up if I can and hopefully.
Hopefully you might wind more disconnect here.
I guess are there concerns pollstar, which control fully crewed can you just comment on the rate of.
The open label extension of course.
And.
Hey, Eric its Todd.
Sorry, you're really breaking out.
So we heard Paul SAR and.
Recruited well, but then the rest was really hard to to here.
On it.
I'm interested in the rollover rates into the open label extension portion whether patients are continuing on.
Their current terms are being converted to either the lower high dose and frequency a follow up for TBR. Thank you.
Yes, Hey, it's Todd Eric Thanks for the question, Yes, we just finished enrollment and we're not in a spot to be able to talk about.
Percent rollover at this point, but when we get into the top line announcement for example, that's something that we could.
Talk about more as all the patients would have hit through the six months and so that will be a better data point to get into what that rollover rate would be.
Great hire for the line guys. Thanks for taking the question.
All right. Thanks, Eric.
Thank you. Our next question comes from Martin Ouster of Credit Suisse. Your line is open.
Hi, Thanks for taking my questions have been company.
First wanted to just kind of follow up and clarify something from an earlier question.
The spectra trial against or the biggest Patterson ph trial is powered for the primary endpoint will PBR reduction just wanted to clarify it's not powered on the secondary endpoint for six minute walk.
My second question had to do with.
You, obviously being a really good position to be generating significant cash flows pretty quickly potentially from the sponsors that wanted to talk a little bit about kind of how you're thinking about.
External BD discipline going forward as there is cash flow coming and what is the sort of magnitude do you think about and what what stage assets might you be looking to bring in the pipeline.
Conversely, if you have a 100% success with your current kind of mid stage pipeline do you think you've got adequate resources and kind of cash flow that you can manage global pivotal registrational programs for both assets or would you potentially see geographic partnerships are on those thanks.
Yeah. So so so great Marty so the first the first part of the question was really around powering and yes. It was power powering for the primary endpoint the PVR.
So.
Really the meet the need of the question is on the second part and its around our current cash resources and our intent moving forwards both from our organic strategy as well as inorganic.
So.
Again, just to remind everyone. When we raised capital last time in January .
One of the things that I had articulated was that for the very first time.
I would not be providing a cash runway guidance as we have done each and every time prior to that and the reason for that is exactly as you're suggesting Marty is that.
We believe that based on the current burn rate.
And assuming that we are able to conclude all of our phase two trials.
As planned.
That that our visibility.
Took us to the point, where we would have overlapping luspatercept royalties and receipt of various milestones and therefore, we never really saw that one year of cash if you want which would typically trigger.
A need for another race.
Now that said.
If indeed, we flip the card on all of our phase two programs and we feel that we have the opportunity to move forward into phase three from a position of strength.
Or if indeed, there is an inorganic opportunity to help us build out our leadership strategy in any one of the therapeutic areas that we've outlined as a commitment to moving forwards.
Then then that obviously would would potentially change our posture.
But again that would be on the heels of positive phase two data.
And then looking at say three investments in as to whether or not we felt it would be value generating and seeking an ideal partner or if indeed that we'd be better off to go it alone and so we will be assessing all of those.
At the end of phase two but right now as to where we sit I think we sit in an excellent position, where we're able to conclude our phase two studies and were able to take a good look at them and then assess what is the best path forward.
I agree you are in an enviable position do you do you have any loose sense that you can.
Frame for investors in terms of as those royalties kind of start accruing and building up in terms of attaining profitability or maintaining profitability as a metric or how important that is going to be looks aren't going forward or is that.
Going to be dependent upon the opportunities in front of you in the pipeline. Thanks.
Yes, so I again, I think at the end of the day Marty our goal.
Is to do what we do best and that is to innovate.
And to focus on bringing transformative medicines to the patients that were serving I think we're in an enviable position from a cash point of view and an ability to dictate.
Our future moving forwards in terms of how we would move into phase three if were successful, but I think we're also in a pretty enviable position that we are we are in three therapeutic areas. We've got two positive phase three results in hematology, we've got three phase twos that are going on between pulmonary and neuromuscular.
And we are in a wonderful situation here to be able to.
Take all of those studies to their conclusion, and then assess as to whether or not.
What the best investment strategy will be that said, we will always be discipline.
In making sure that our primary focus as we innovate it to do so in a way that we're continuing to also return value to our shareholders.
Hi, Thank you for the color appreciate it.
Thanks Marty.
Thank you. Our next question comes from Geoffrey Porges of SVB Leerink. Your line is open.
Hi, how are you doing this is neil filling in for Jeff.
I just had one question regarding luspatercept in the upcoming launch can you explain how the responsibilities will be shared between you and.
Celgene Bristol.
And how how do you intend to report expenses and revenues in the U.S. and you. Thank you.
Yes, great. Thanks for the questions again, I'll pass that commercial question on to a few Jane perhaps maybe even Kevin for a little detailed list. If there is anything that we can provide on the reporting.
Sure. Thanks, so that'll be the end so as sort of stated right. At this juncture, we are collaborating very closely with Celgene So art.
Discussions with them in relation to the promotional aspect as we are developing a complete approach to day. One to 90 plan. We have worked together to a joint collaboration committee that meets frequently as the led the joint operating team that meets almost on a monthly basis really map out our launch plan our launch strategy.
I'll sort of approach to training. So our field team is now high extra debt under its undergoing training and so all of those coordinations at taking place jointly with Celgene and we will be prepared day one.
Ensuring that there is a sense of urgency to to sort of really support the needs of the patients and the physicians. So thats our primary focus.
We both equally have a target to call on the B Anatel, let's see me Pete physician population as well as the Mds physician population like once we have the approval rights at this juncture theres no promotional elements that are going on there is more training and preparation thats going on at this juncture. So we will be up and sort of call now our territories are larger compared to the celgene territories. So we actually coordinated at a local level to decide what's the optimal basis for us to really execute.
And that's part of the account planning and territory planning that we're doing right now with our collaborators which safi.
Yes, Hi, Neal this is Kevin as far as the reporting goes as a reminder, celgene BMS.
We'll be reimbursing us for large very large portion of our commercial efforts, our direct sales force et cetera.
So you will see on in the PML a reimbursement lineup in collaboration revenue, but the corresponding expenses down in the sales and marketing line.
In addition revenue obviously will be reported product related revenue will for us royalty related revenue will be reported then we'll have a process in place where that will be reported.
Standard on a quarterly basis based upon the royalty and the achievement.
Great. Thanks for the clarification appreciate it.
Thank you. Our next question comes from the line of Yigal Nochomovitz of Citigroup. Your line is open.
Hi, David Thanks for taking the question I just wanted to dig in a little bit more on the biology of FX HD versus CMT and just in particular some of the differences in those two dates to diseases that could lead to possibly differential muscle growth and more specifically is there any reason to believe that either Apis HD or CMT is more likely to yield a clinical benefit.
In the context of a similar muscle volume growth.
Thanks.
Great. Thanks for your question I think I'll pass that onto to John Chrystal, Chief business officer to elaborate a bit sure. Thanks for the.
Yes, Thanks for your question.
Certainly one that we thought about a lot of them are setting up these trials.
And essentially these two diseases, we view as testing different hypotheses about patients where he Cdthree me provides the most benefit.
So I don't think Weve take a bet on which one is more likely to work with FCC you have a disease where the.
Pathologies really starting in the muscle with over expression of the Ducs for transcription factor.
Leading to the degradation of the muscle in that regard and the premise of the Cdthree is that if we can strengthen to rebuild those local fibers. We can restore function to the patients on the flip side. There are a variety of disorders, where patients experience a death of the neurons and a loss of.
Innovation of muscle fiber and.
Consequently, then a weakness that section.
Matt setting and that's what fee and the CMT trials intended to test.
So their patients are having a slow and partial retraction of the of the neurons innervate the muscle fibers and so what you have is waffles at the at the.
Ilim and the T. a muscle in particular at the bottom of the leg as affected where you have only a fraction of the muscle fibers are still innovated and as a result, the non innovative fibers lose strength.
Manifesting as foot drop for the patients.
And there are the premises that if you have a partial loss of strength in the muscle due to loss of innovation. If you can restore.
Muscle mass and strength using something like you should be three then you should be able to restore the function.
So again to summarize two different premises essentially diseases with a muscle origin like efficacy study.
Being tested in that trial interviews with the neurological origin like CMT being tested in that trial.
And we wouldn't handicap, which one is more likely to work.
Okay got it and then with respect to the different amounts of 1.6 minute walk 10 minute walk run four stair climb.
Is there any any reason to believe that one or one or more of those as more likely or do you have a higher confidence in one of those endpoints or is it just a matter of seeing the data where you can make any comments there.
It really is going to be data driven were as you know one of the.
Few companies to to run clinical trials in this space are really establishing the endpoints that are appropriate and.
And that are likely to read out with these patients.
And so weve redesigned the trials to measure a suite of different endpoints and we'll be looking at the totality of the data yes. The only thing I would add to that the you go would be we're also working very closely.
With the University of Rochester in validating a PR ROE, it's the SSH key health index as well as the CMP Health Index, where we're going to be looking at a number of questions, which affect a patient's activities of daily living and will be also assessing that.
That question here as we look at the phase two data as well and looking to working with the regulators and validating that.
Okay that makes sense and then just one question I wasn't asked yet.
Maybe you expected. This I just like to get your thoughts Mds, you received or you and Celgene received standard review in beta Thal was priority review.
Was that what you expected it so okay. If not I'm curious why you have to say there. Thanks.
Yes, actually I'll repeat what we expected we actually expect than it had been anticipating a standard review for both indications, but we always said that we would be prepared whether its from all of our efforts from a commercial footprint regulatory footprint supply footprint.
To be able to show the true to execute on whether or not one or both got a priority review and we were pleasantly surprised that we got a priority review for whenever indication and we are prepared to execute.
Got it all right. Thank you.
Thank you. Our next question comes from the line of Leland Gershell of Oppenheimer. Your line is open.
Thanks for taking the questions and great progress.
First question on Sotatercept with the poster trial fully enrolled one to ask if at this time you can.
Comment on the nature of the patients who came into the trial in terms of the level of severity of their P.H. and potentially the other therapies they were on.
That they came in on a interposer.
Hey, Leland its Todd, yes, so far as the patients that were included.
Based off the inclusion criteria, we're looking at functional class two and three and so we got what you would expect from a normal split in a in a phase two trial.
Of this size and then as far as.
Single doublet or triplet that really comes down to which countries. The patient got enrolled in and what the standard of care is for that country until we got that appropriate mix based off of how the trial enrolled per country.
Okay, Great and then just a couple questions on Luspatercept I think you'd mentioned in the past they plan to to fully publish the data from medalist and believe just wonder if you could comment on on that publication strategy, if we might be seeing those coming out in peer review in the near future.
Yes. So the goal is to submit for both of those studies in 2019.
And we're still on track.
Great and then just just last if I may any comment you can provide on the or color you can provide on the commands trial enrollment.
No no further updates we continue to be pleased obviously with that study.
And once we get closer to full enrollment are at full enrollment will be able to provide you a little bit more color in terms of the exact timelines you can expect for for topline release, but nothing nothing new to share Leland today.
Okay, great. Thanks, so much a beep and good luck yep yep. Thanks for your questions.
Thank you. Our next question comes from the line of Paul Choice of Goldman Sachs. Your line is open.
Hi, good afternoon, everyone and thanks for taking our questions.
Maybe pivoting back to await three for a moment and with with the phase two trials wrapping up and the extension trial.
Getting underway here can you maybe comment on what you're thinking with regard to potential duration here over the longer term and secondly, you know what you think as you proceed towards the phase three stage, what the what is the role of duration.
Oh and sustainability of the change in muscle.
The muscle change and the agencies view there going forward.
Yeah, Hey, Paul studied again, so thanks for your question.
Very very important question.
And quite frankly, it's really the driver of our investments in the extension study and when we think about duration. We can really think about it in two different ways one.
What is the appropriate dosing interval, where patients will see a meaningful benefit.
Whilst at the same time, minimizing office visits and door injections.
And to the other part of duration is looking at how long will the drug last and so as you know our primary endpoint and in part to the study was at six months and we were dosing with the dosing frequency of every three weeks.
When patients rollover into the extension study there will be randomized to either for every four weeks for every eight week dosing and so we'll get a better read there on the appropriate dosing interval for patients to be able to maintain the effect and again just to remind everyone. When we took a look backup part one data and we look back at the extended dosing intervals and we had a.
I believe that the efficacy was sustained up you potentially eight weeks, but I guess, we'll see if indeed that are going to materialize.
In part two and more specifically from a functional point of view.
With respect to how long the drug will last.
Again, that's one of the things that we're going to be looking at in the extension study as we follow patients out and so.
More to come but at the same time, a very important question on both fronts.
Okay, great. Thanks for that and maybe just on Luspatercept in myelofibrosis.
I guess as you think about that the phase two data coming up here in the not too distant future can you maybe think about.
You know where as a bigger opportunity to where are you more optimistic is it in the transfusion dependent or non transfusion dependent.
Population and do you see you know what as being.
You know potentially.
Quicker area for for development and potential label expansion.
Yeah. So another good question, Paul So again, when we when we recruited for the state Phase two study, we looked at transfusion dependent and non transfusion dependent but we also looked at patients who are on ruxolitinib because of an enlarged spleen and those who were not on ruxolitinib.
So we also need to look at that dimension as well.
Quite frankly, if you think about it in our.
Focused on patients with the highest unmet need across all of the disease areas that we focus on I would argue that the area. That's probably most important will be those that are on ruxolitinib, because again to remind everyone. These myelofibrosis patients are suffering not only from a anemia due to a five brought a bone marrow, but there are also suffering from drug induced anemia due to just simple mechanism of action of JAK inhibition.
So if you think about it from that point of view and that our internal estimates here have over half of the patients myelofibrosis patients who suffer from moderate to severe anemia that have been on rux. So that are on ruxolitinib arguably those patients that are on ruxolitinib and transfusion dependent would most likely be the largest opportunity for us to cater to an unmet need in this population.
And by the way you haven't asked the question, but maybe I'll just the stated anyways yeah.
What we've we've given ourselves also an internal hurdle rate of about 25% to 30% efficacy in this particular group based on a lot of the research and feedback that weve been receiving so thats, what we would hope.
To to achieve it to give us the confidence to wanting to move forward.
Great. Thanks for that and congrats on all the progress.
Yeah. Thanks for your questions Paul.
Thank you. Our next question comes from Jeff Hong of Morgan Stanley . Your line is open.
Hi, Thanks for taking the questions for the Medicaid patient population you said that the earlier you can get to patients are the chances are better that they'll have a bigger benefit from luspatercept. So from a commercial standpoint, what kinds of education or other initiatives are you considering to encourage earlier treatment versus the 44 months median time since diagnosis for patients and medalist.
Yeah.
So.
I think the first thing to keep in mind is when you think about our anticipated label for metal us.
To remind everyone. These are patients whose endogenous epo levels are over 200, and therefore, they would have been ineligible for E assays.
Or if indeed, they were refractory to the assays and.
90, approximately 95% of the patients in medalist or refractory to E assays and as you know as you stated the median time duration from therapy. Its sorry, the median time to entry into the trial from diagnosis was about 44 months.
Now.
One of the things to keep in mind.
Is that a lot of patients in the study were on USA for 44 months because of the fact that there is nothing else really in terms of an alternative to be able to go on to such as was Patterson.
So we're hoping that if indeed luspatercept is approved that its indeed, a patient is refractory to any I say that we may be able to get them earlier by the mere fact that we've got another approved drugs on the market as an option for treaters.
But most importantly to get patients earlier, it will be really important for us to be successful and the command study because the command study is doing exactly that its studying frontline dosing of Luspatercept head to head against yesterday's and we're designing it in a superior design fast and so I would say by the mere fact of having a drug approved in that indication I would hope that the time from diagnosis to getting on the status of two will have shrunk just by the mere.
Availability of another option for treating patients and to the command study in itself if successful we'll be able to to get patients earlier.
Great. Thanks, and then and then a housekeeping question books, I guess DNA ramped up a little bit from from Q1 to Q2 relative to prior quarters. So given commercial prepare preparations. So just your own sales reps, how should we think about US you need for the rest of the year.
So this is Kevin thanks for the question.
Obviously as I mentioned earlier, our sales costs will go up as we just brought on our sales force, but that will be reimbursed the celgene or BMS. So you'll see an increase in the DNA line without a corresponding increase in the collaboration revenue line.
Outside of that it's more normal growth of.
You know DNA coming into a commercial environment and along with additional marketing efforts that support both.
Well, Phil the status of program, but also our internal debate internally owned programs inserts have except in a in a city for it.
Hey, definitely caught him as you can imagine with four if you include Fsh de CMP now the extension studies the pulse our phase two trial with 106 patients in the Specter trial. This is the most internally lead programs, we've ever had running at any given time and so thats, where you are seeing on the R&D side, the increase quarter to quarter and you can expect that through the end of those trials.
Okay, great. Thanks.
Great. Thanks for your question.
Thank you. Our next question comes from Kennen Mackay of RBC capital markets. Your line is open.
Hey, guys. This is vikram on for Ken.
I had a follow up on the 25% to 30% hurdle rate you just mentioned on now.
Myelofibrosis study if you could be to elaborate on that and is that for both hemoglobin improvement than transfusion independence or how shall we be thinking about it.
Oh, Yes, Hey, it's Todd yes, there's multiple patient populations as he was describing that we're going after in this trial, we're casting a pretty broad and wide net here and so really.
Any any patient population.
If we meet that bar proportionate patients that hit any of the endpoints that would be enough for us to potentially move forward with the phase three and so that could be monarch monotherapy less patterns that the non transfusion dependent or the transfusion dependent or it could be a combination with rock.
Likewise in EEMEA, only or transfusion dependent though we now over the course of this progressive disease.
A majority of patients over time do become transfusion dependent.
Thanks for the color.
Thank you.
Thank you at this time I'd like to turn the call back over to happy to Black for any closing remarks, Sir.
I just want to close the call by thanking everybody for joining US today. Thank you for your continued interest in the Acceleron story and I very much look forward to meeting many of you over the course of the fall and winter as we close off the year and in the meantime, wishing you all a great remainder of your summer. Thanks again.
Thank you Sir and thank you ladies and gentlemen. This does conclude today's conference. Thank you for your participation and have a wonderful day you may disconnect. Your lines at this time.