Acceleron Reignites Pipeline After Latest Trial Success With PAH Drug

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Summary

Acceleron Pharma (XLRN) announced that it had achieved the primary endpoint in the phase 2 PULSAR study, treating patients with pulmonary arterial hypertension (PAH). This positive data is only the beginning for this program, because there is another phase 2 study known as SPECTRA, which has the potential to build upon the recent successful study. In addition, the biotech can now move on to initiate discussions with regulators, so that it can advance the drug sotatercept in a phase 3 study. If it can get the drug approved, it is likely to end up as a blockbuster, being able to generate billions in revenue in the coming years.

Phase 2 Study Data Causes Investor Frenzy

As soon as the primary endpoint was met in the phase 2 PULSAR study, shares of Acceleron closed higher by 50% the very same day. Since then, the stock has continued to climb. It is because the data released was very good news for patients with pulmonary arterial hypertension (PAH). Another reason why is the large market opportunity possible. It is expected that the global PAH market is expected to reach $10.36 billion by 2025. Pulmonary arterial hypertension involves a rare progressive disorder where there is high blood pressure in the arteries of the lungs. In essence, the blood vessels on the right side of the heart that are connected to the lungs.

What's even worse is that it is not known what causes this disease. Not only that, but it is a chronic disease that continues to last for years. Some medications can help alleviate symptoms, but patients still have to go through life with many problems. For instance, they can't eat foods with heavy salts, and they have to adhere to lifestyle changes. In certain cases, PAH can lead to heart failure. The last item to note, which is quite concerning, is that patients have to be monitored regularly. They go to the doctor every 3 months for testing to make sure that everything is okay.

The phase 2 PULSAR study had recruited a total of 106 patients with PAH. Patients were randomized to receive either:

The drug sotatercept was given to patients intravenously. It is also important to point out, which I believe makes this drug a good treatment option, that patients were still taking their standard of care therapies while in this study.

This is good, because patients don't have to stop taking other therapies. It also shows that the drug was synergistic with the therapies these patients were already on and didn't interfere with them. Patients were treated over a 24-week period. The primary endpoint of the study was to see if sotatercept could achieve a statistically significant reduction in pulmonary vascular resistance (PVR) compared to placebo. The primary endpoint was met, along with all secondary endpoints as well. Why is a reduction of PVR a good measure for this patient population? That's because it is the resistance that the heart must overcome with this disease, so that it can get blood flowing through freely. In turn, this improves the heart function of the patient.

Additional Shots On Goal

The thing is that, despite the phase 2 PULSAR study meeting the primary endpoint, there are two additional shots on goal right behind it. The first of which is another phase 2 study known as SPECTRA. This mid-stage study is using sotatercept in combination with standard of care (SOC) in patients with WHO functional class III PAH. What this means is that these are PAH patients who experience no symptoms while at rest. However, when they perform activities, they have shortness of breath or experience fatigue. Two other differences are that this phase 2 study is a single-arm study and uses a different primary endpoint. For this patient population, the primary endpoint is change from baseline in peak oxygen intake. Results from this phase 2 SPECTRA study are expected in 2020. In particular, the clinicaltrials website has an estimated primary completion date established for May of 2020. That means it is possible such results could be released by mid-2020. This will be additional proof that sotatercept is a strong drug in treating patients with PAH. Besides sotatercept, there is a preclinical product in the pipeline known as ACE-1334. No exact specific indication has yet been given for this product, but it is going to be used to treat a pulmonary disease. It may very well be used for PAH or another pulmonary disease.

Financials

According to the 10-Q SEC Filing, Acceleron had cash, cash equivalents and investments of $468.3 million as of September 30, 2019. This company is in great shape though, because it had already received FDA approval for its drug luspatercept for the treatment of anemia in patients with beta thalassemia, who required red blood cell (RBC) transfusions. This FDA approval was achieved back in November of 2019. Its drug is also up for potential FDA approval of luspatercept for anemia in patients with myelodysplastic syndrome (MDS). The expected FDA approval date for this indication is expected by April 4, 2020. It should have sufficient capital for now. However, Acceleron notes that any other additional strategic transaction may result in raising funds earlier than anticipated. Having said that, it believes it should have sufficient capital for the time being. Especially, since it will be receiving royalty revenue for its luspatercept approved drug.

Risks To Business

There are a few risks that investors should keep their eye on. One such risk is the FDA review of luspatercept for the treatment of anemia in MDS patients. There is no guarantee that the drug will be approved by the FDA. Another risk is the expected data from the other phase 2 PAH study, known as SPECTRA, which may not succeed. The estimate for now on this study is that the readout is expected in 2020. There is a high likelihood that the trial should do well, based on the fact that the mechanism of action of sotatercept was proven in the PULSAR study. On the flip side, it's important to note that the primary endpoint for the phase 2 SPECTRA study is different. Its endpoint is a change from baseline in peak oxygen intake.

Conclusion

With Acceleron achieving the primary endpoint for its phase 2 PULSAR study, that will open the door so that it can speak to regulatory authorities about advancement of sotatercept treating patients with PAH. This will be to either advance the drug in a late-stage study or potentially seek regulatory approval for it. Detailed top-line results from the PULSAR study are expected to be released later this year at a medical meeting. This will be another catalyst for Acceleron, among many others, like the potential FDA approval of luspatercept for treatment of anemia in MDS patients expected by April 4, 2020. I believe that Acceleron has made significant progress in advancing its pipeline towards other indications. It is in great shape and a good long-term buy.

This article is published by Terry Chrisomalis, who runs the Biotech Analysis Central pharmaceutical service on Seeking Alpha Marketplace. If you like what you read here and would like to subscribe to, I'm currently offering a two-week free trial period for subscribers to take advantage of. My service offers a deep-dive analysis of many pharmaceutical companies. The Biotech Analysis Central SA marketplace is $49 per month, but for those who sign up for the yearly plan will be able to take advantage of a 33.50% discount price of $399 per year.

Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.