Acceleron Pharma Inc.
Q3 2018 Earnings Call Transcript

Published: 31 Oct 2018

[Operator:]

Good afternoon, ladies and gentlemen, and welcome to the Acceleron Third Quarter 2018 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. Todd James, Vice President, Investor Relations and Corporate Communications at Acceleron. Please go ahead.

[Todd James:]

Thanks, and welcome everyone to our third quarter 2018 earnings conference call. The press release reporting our financial results, in addition to the presentation for today's webcast, are available on the Investors and Media page on the corporate website at www.acceleronpharma.com. Joining me for the call today are Habib Dable, our Chief Executive Officer; Robert Zeldin, our Chief Medical Officer; Kevin McLaughlin, our Chief Financial Officer; John Quisel, our Chief Business Officer; and Sujay Kango, our Chief Commercial Officer. Our goal this afternoon is to provide an overview of our recent operational progress along with reviewing our corporate priorities and updated financial results for the second quarter. After that, we look forward to answering your questions. 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 now like to turn the call over to Habib Dable, our Chief Executive Officer.

[Habib Dable:]

Thank you, Todd, and good afternoon everyone, and thank you for joining us today. 2018 is proving to be a pivotal year for Acceleron. We made significant progress in each of our therapeutic areas of focus; hematology, neuromuscular and pulmonary disease. The entire pipeline is on track to reach multiple key inflexion points over the next two years. In hematology, alongside with our partner Celgene, we are continuing to execute on our vision to bring luspatercept our first-in-class erythroid maturation agent to the thousands of patients with myelodysplastic syndromes, or MDS and beta-thalassemia suffering from anemia. At the same time, we are evaluating further indication expansion as we believe luspatercept is a potential platform treatment for anemia. I will jump into this in more detail in just a minute. Outside of hematology, we continue to make strong progress in our neuromuscular and pulmonary programs. For ACE-083, we have initiated part two of each Phase II trial in patients with facioscapulohumeral muscular dystrophy or FSHD and Charcot-Marie-Tooth disease, or CMT. And for sotatercept, our PULSAR Phase II trial and pulmonary arterial hypertension, or PAH has been rolling as planned. Robert will review these in just a few moments. It’s an exciting time for luspatercept and it remains obviously our number one priority at Acceleron. Over the summer, we are pleased to report positive Phase III results for both the MEDALIST trial in patients with lower-risk MDS and the BELIEVE trial in patients with transfusion dependent beta-thalassemia. We are looking forward to the MEDALIST and BELIEVE Phase III trial presentations expected at the world's largest hematology meeting the upcoming American Society of Hematology or ASH 2018 annual meeting on December 1st to 4th in San Diego. As a reminder, all accepted ASH abstracts will be announced and available online this coming Thursday. We continue to invest heavily in the overall luspatercept opportunity to its expanded development in multiple ongoing clinical trials. With the recent initiation of the COMMANDS Phase III trial, we now have three ongoing clinical trials in three additional patient populations. The COMMANDS trial will enroll 350 patients with lower risk MDS who are treatment naïve with a baseline red blood cell transfusion burden of two to six units per eight weeks and baseline it with reporting levels of zero to 500 units. Patients will then be randomized one to one on luspatercept and Epoetin alfa, the primary endpoint of the trial is red blood cell transfusion independence for the first 24 weeks. Enrollment remains ongoing in the myelofibrosis and non-transfusion dependent beta-thalassemia Phase II trials for luspatercept. With positive results in two distinct hematologic diseases, we believe luspatercept has the potential to be a platform treatment for a range of anemias. We and our partners at Celgene are actively evaluating opportunities where luspatercept could be beneficial to the many additional patients suffering from anemia through extended development and lifecycle management plans. Based on the five current indications under development alone, we estimate that luspatercept could impact more than 120,000 patients in the US and EU who lack viable treatment options. And with that, I'll now turn over the presentation to our Chief Medical Officer Robert Zeldin to outline the progress of our neuromuscular and pulmonary programs.

[Robert Zeldin:]

Thanks Habib and good afternoon everyone. I'd like to begin by acknowledging the hard work of our neuromuscular and pulmonary teams in getting multiple Phase II trials underway for ACE-083 and sotatercept this year. Beginning with our neuromuscular program, we recently presented final part one results for ACE-083 from each of our Phase II trials in patients with FSHD and CMT respectively at the 2018 World Muscle Society Annual Meeting in Argentina. As a reminder, ACE-083 is designed to increase strength and function in specific target muscles. The data presented were consistent with the findings we reported at Neurology Congress's throughout this year where patients experienced robust mean increases in total and contracting muscle volume of over 12%. Additionally, we recently initiated part two of the Phase II CMT trial and enrolment is ongoing in part two of the phase 2 FSHD trial. Both of these are double-blind placebo controlled studies that are evaluating increases in muscle volume and functional outcomes over a six month period followed by a six month open label extension. In parallel with our ACE-083 trials, we continue to enroll healthy volunteers in our Phase I trial of ACE-2494. Our systemic neuromuscular candidate designed to have a systemic effect on muscle mass and strength throughout the body. Moving to our pulmonary program, we continue to advance the PULSAR Phase II trial where we are enrolling approximately 90 patients with pulmonary arterial hypertension a disease with a tremendous unmet medical need. As you recall, sotatercept acts as a ligand trap for specific proteins within the TGF beta super family that are directly involved in the BMP signaling pathway, a molecular pathway fundamental to all forms of the disease. Upcoming in PAH, we will be presenting multiple preclinical abstracts of sotatercept at the American Heart Association's Scientific sessions in Chicago on November 10th through 12th. We are also planning to initiate an exploratory study called SPECTRA during the first quarter of 2019 from which we expect to gain insights that will assist us in our evaluation of the effects of sotatercept as a potential first-in-class disease modifying treatment. On this note, we hope you will join us in New York on November 16 at our PAH Research and Development Deep Dive event. The event will include presentations by internal and external experts on the current treatment gaps, sotatercept’s mechanism of action and the importance of BMP signaling in PAH along with preclinical presentations and an overview of our clinical development efforts. For those of you, who are unable to attend the event a live and on-demand webcast will be available in the Investors and Media section of our website. With that I will now turn the call over to Kevin McLaughlin our Chief Financial Officer to run through the financials for the quarter.

[Kevin McLaughlin:]

Thanks Robert. Good afternoon everyone. Our cash, cash equivalents and investments as of September 30, 2018, were $319.8 million. This compares to December 31, 2017, cash, cash equivalents and investments of $372.9 million. As a reminder, we believe that our existing cash, cash equivalents and investments will be sufficient to fund our projected operating requirements into 2021. Collaboration revenue for the second quarter was $3.3 million. The revenue is all from our Celgene partnership and is primarily related to expenses incurred by the company in support of luspatercept. Total costs and expenses for the second quarter were $33.4 million. This includes R&D expenses of $24.7 million and G&A expenses of $8.7 million. The company posted a net loss for the third quarter ended September 30, 2018, of $29 million. I'd now like to turn the call over to Habib who will quickly cover our upcoming corporate priorities.

[Habib Dable:]

Thanks Kevin. And to quickly recap our upcoming corporate priorities; for hematology we expect to present MEDALIST and BELIEVE Phase III data at the 60th American Society of Hematology Annual Meeting and Exposition in December. We and Celgene plan to submit regulatory applications to the US and EU health authorities in both MDS and beta-thalassemia in the first half of 2019. We also continue to actively enroll our ongoing COMMANDS, BEYOND and myelofibrosis clinical trials with luspatercept. Turning to neuromuscular disease, we expect to report preliminary results from part 2 of the FSHD trial in the second half of 2019 and preliminary results from part 2 of the CMT trial are expected by year-end 2019 and ACE-2494 Phase I results remain on track for the first track of 2019. And finally in pulmonary disease, we will host a PAH R&D Deep Dive Event in just a few weeks on November 16th. Clinical activities are underway to initiate the exploratory study called SPECTRA in the first quarter of 2019. And preliminary results from the PULSAR Phase II trial are expected in the first half of 2020. Before I open the call to questions, I want to acknowledge our team for their incredible work in advancing our pipeline and these important indications with the goal of delivering transformative medicines to patients. I am very confident that we are well on our way to achieve our goal to be a fully integrated biopharmaceutical company with three programs in Phase III development by the end of 2020. With that, we welcome your questions.

[Operator:]

Certainly [Operator Instructions]. Our first question comes from the line of Carter Gould from UBS. Your question please?

[Carter Gould:]

Good afternoon guys. Thanks for taking the question. I guess to start, obviously lot of expectations around the ASH presentation particularly MEDALIST. Particularly interested in some of the duration data we are going to see there. Can you maybe help us think about how far out the duration data will go? Will that be limited to 48 weeks and then maybe just put that in the context of what we saw in the Phase II and then separately on ACE-2494 I reckon that’s just the Phase I but it looked like that moved from a multi-ascending dose study back to a single ascending dose and the patient numbers went down, enrolment numbers went down. So just trying to understand what’s going on there if that was based on feedback from FDA or other issues? Thank you.

[Habib Dable:]

Yes. Hi Carter, thanks for your questions. This is Habib I’ll take the first question with respect to the MEDALIST data and then maybe I’ll hand it over to Robert Zeldin our Chief Medical Officer to answer the question regarding 2494. So, just to remind everyone the last time we gave data cut with respect to duration it was at ASH 2017 and just to remind everyone when we looked at duration, the mean duration of therapy for those who were responders was approximately 19 months. Now obviously the MEDALIST study has primary end points at 24 weeks and the study was blinded to 48 weeks for the secondary end points. We will be unable to achieve that type of a mean duration of therapy. So, we’ll continue to potentially update the Phase II study for the ongoing patients and with respect to the MEDALIST study obviously there is going to be patients that would -- if they were to make it through the 48 weeks, we would need to continue to update them to see if indeed they will have similar types of mean duration of therapy as we’re seeing in the Phase II. So, impossible to see that kind of therapy in the Phase III so let’s wait and see. Robert with respect to 2494.

[Robert Zeldin:]

Yes. So, indeed as originally designed the study had a single ascending dose and then a multiple ascending dose component. When we reviewed the design, we felt that it was actually valuable to push the dose higher in the single ascending dose portion of the study. So, we’ve gone from 0.6 mg/kg and we’re going to push it up past that up to 3 mg/kg with the current design; single ascending dose that is. What we expect and, as that we’ll be able to move into the multiple ascending dose cohorts in the future study in patients with the disease. So that’s our planned approach and we’re moving the study forward as we had planned.

[Operator:]

Thank you. Our next question comes from the line of Geoff Porges from Leerink Partners. Your question please.

[Aravinda Kuntimaddi:]

Yes. Hello, this is Arvind I’m in for Geoff Porges. Just couple of questions regarding 2494. Was there any analysis of muscle responsive volume in the Phase I healthy volunteer study or will it be just safety and tolerability? And have you progressed in identifying the indications or further development of 2494 assuming the success in Phase I trial and lastly just regarding ASH, we’re excited about your presentation at ASH. Are you planning any special investor events with or without Celgene? Thanks.

[Habib Dable:]

So, we are of course primarily focused on the safety in the 2494 single ascending dose study, but we’re also are doing some pharmacodynamic assessments by MRI imaging in the low-risk remedy.

[Todd James:]

And as far as the indication goes. Hi, this is Todd. We continue to explore where we’ll go first in Phase II at our R&D Day last in September, we outlined that we are evaluating ALS, SMA, DMD and FSHD. So, a decision hasn’t been made there yet. You could expect that after we complete the Phase I next year that will give more details and we’ll go first with ACE-2494 in actual patients for Phase II. And then did you have another question about ASH?

[Aravinda Kuntimaddi:]

Yes. We’re just wondering if you are planning a special investor event with or without Celgene at ASH?

[Todd James:]

Yes. So, you’re exactly right. We will, we do plan to host a call. Acceleron only at ASH and there will be more details to come in the next few weeks on that call.

[Aravinda Kuntimaddi:]

All right. Thank you.

[Todd James:]

Thanks.

[Operator:]

Thank you. Our next question comes from the line of Danielle Brill from Piper Jaffray. Your question please.

[Danielle Brill:]

Hi. Thanks for the question. I guess I’m just wondering can you comment on powering assumptions for supeiority and command. And I have a couple of follow-ups.

[Habib Dable:]

Yes. Thanks Danielle. So, similar to MEDALIST and BELIEVE we weren’t able to talk about powering assumptions until we provided the top-line results. So, I think again here with COMMANDS we’ll most likely do the same thing. I think if you think about it in context of what we saw in Phase II and what we have historically seen in the Phase III, we saw over a 50% response rate for luspatercept in the Phase II for RBC transfusion-dependent. And in the Phase III and the II in those studies the primary was high [ph], so there’s a different endpoint but they saw response rates of 50% to 30% and so that’s at the ballpark of how you can think of powering assumptions for COMMANDS.

[Danielle Brill:]

And last time you spoke, you guys mentioned that for the trial you’ll be RS status agnostic. Can you just remind me what response rates look like with luspatercept, versus ESAs and RS negative patient?

[Habib Dable:]

Yes. Sure, so in the ESA trails they didn’t break the patients out by RS positive versus RS negative it was all common treatment naïve. So, we’re not aware of what those breakouts are. But in luspatercept when you look at the including criteria of COMMAND and those are patients with repo levels of zero to 500 both RS negative and RS positive. We had over 50% response rates.

[Danielle Brill:]

Okay. Thanks for the questions.

[Habib Dable:]

Thanks. Operator Thank you. Our next question comes from the line of Robyn Karnauskas from Citi. Your question please.

[Unidentified Analyst:]

Hi. This is Krupa for Robyn. Thank you so much for taking my questions. Can you help us understand the potential opportunity for luspatercept beyond the indications that you are currently pursuing, MDS, beta-thal and myelofibrosis? When do you think we can hear more details about these opportunities and also just trying to understand what sort of -- what is your strategy in trying to pick the indications that you would like to develop luspatercept? Thank you so much.

[Habib Dable:]

Yes. Thanks for your question Krupa. This is Habib. So again, throughout with the fact that we were able to show positive Phase III results in two very distinct diseases. And in doing so the versatility of luspatercept is providing us with that bullishness to cast a wider net if you want. And we and our partners at Celgene are working diligently. You made reference to myelofibrosis, we obviously have a myelofibrosis study that was initiated in the fourth quarter of last year where we were recruiting 70 patients in that particular indication. But we’re also working very hard now based on the Phase III data to be looking at other indications where we feel luspatercept can fulfill an unmet need. And as I mentioned, we and our partners are very much engaged in looking at where the potential mechanism of the action makes the most sense. Where we feel that the unmet needed high and we’ll be coming back to very, very shortly with updates in terms of that analysis and where we’ll be prioritizing our resources for the next indication. And I know that Sujay Kango our Chief Commercial Officer is also working with his team very closely to identify opportunities where we feel that we could work with the teams at Celgene. And perhaps Sujay you can give a little bit of an update in terms of those conversations and some of the next stuffs.

[Sujay Kango:]

Sure. So, hi Krupa thanks for your questions. So just to clarify right, the initial sort of estimates that we’ve communicated generally speaking have along with Celgene have been for the indication such as for MEDALIST, BELIEVE as well as COMMAND and BEYOND and those four which is MDS and just data [ph] as being upwards of $2 billion plus. Right, so I just want to sort of bucket that the first and to additional indications that we develop the way it is for platform drug in anemia with relation to chronic indications chemotherapy induced anemia or any other rare anemia that we may look at including myelofibrosis is beyond the $2 billion plus that we previously communicated. So, as we sort of finalized some of the newer indications then we’ll be able to provide sort of book and as to what the market potential for those would be. But I just wanted to frame it up right now for those who can. Okay?

[Unidentified Analyst:]

Okay. Great. Thank you so much.

[Sujay Kango:]

Thanks so much.

[Operator:]

Thank you. Our next question comes from the line of Martin Auster from Crédit Suisse. Your question please.

[Unidentified Analyst:]

Hi. It’s Tiago for Marty. So, as we approach the PAH R&D Deep Dive. Perhaps if you could provide some additional detail what investors may expect in terms of details about the clinical development plan and some initial call on perhaps on the exploratory study in novel and points that you might be looking at to better outline sotatercept’s potential impact in the disease? Thank you.

[Habib Dable:]

John, do you want to take that question?

[John Quisel:]

Hi. This is John Quisel. Yes, we are looking forward to this event. I think we plan to dive into some of the preclinical data that we expect to present at AHA just a week before that in November. And then as you mentioned get into similar plans and there is exploratory study that we’ve recently announced. And I think the way to think about that trial is we’re taking our PULSAR trial which is designed to provide a very efficient answer as to the efficacy of sotatercept in its patients using the conventional end points. And add to that a set of more exploratory end points that should drive to the question of how sotatercept is uniquely effecting the course of disease in these patients by effecting BMPRII signaling and this is the key signaling pathway that has been identified at the core of disease. So, that study is going to have a couple different end points that we’re going to dive into and provide detail around and otherwise we expect to have a panel of experts present to provide kind of a general overview of the treatment landscape and how sotatercept with it’s novel mechanism fits into that.

[Operator:]

Thank you. Our next question comes from the line of Eric Joseph from JPMorgan. Your question please.

[Eric Joseph:]

Hi guys, thanks for taking the question. Just a quick one on MEDALIST, you had a couple of incoming questions related to long-term safety and whether there is any reason to think there is any potential impact on blast cell count? Can you talk a little bit about sort of how blast cell count was monitored by the data monitoring committee whether FDA is seeking any specific length of follow-up potentially beyond 48 weeks or actually looking at AML transformation rate ahead of NSA submission or PDUFA action? Thanks.

[Todd James:]

Hi Eric, it’s Todd. Thanks for your question. Yes, so as including criteria patients had to have blast cell counts below 5% and so any increase above 5% would then have the patient transforming to a high risk patient and then any blast count over 20% would then be an AML patient. So, as you can imagine in this patient population that’s actively managed and if there were any issues around that they would be disclosed and then any significant issues in that we would have to stop the trial. And so, we feel really comfortable with safety profile around all those blast cell count type increases and everything in the Phase II has already been reported around things and there doesn’t look to be any signal there. And as far as really long term within the follow-up we’ll be looking to maybe we’ll even have a potential benefit for patients around progression of AML. So we’ll be looking at those stats and overall survival over a multi-year follow-up.

[Robert Zeldin:]

Yes, I would concur with that. This is Robert. I would not be surprised if this part of it is reviewed and final discussions with the agency that they were not a commitment for a longer term follow-up of this patient population. I think that would be pretty much expected.

[Eric Joseph:]

Great. Thanks for the color there. Appreciate it.

[Operator:]

Thank you. Our next question comes from the line of Geoff Meacham from Barclays. Your question please.

[Unidentified Analyst:]

Hi. Thanks so much for taking the question this is Jason on for Geoff. Just a question about, as you think about moving from MEDALIST, BELIEVE to COMMAND and BEYOND. I know you’ve discussed moving out to different indications. But I’m just curious is there something that gives you confidence that as you move say from second line MDS to first line or transfusion-dependent, beta-thal to non transfusion-dependent that the same level of efficacy that you saw in the earlier two trial are going to translate over into these broader populations or different patient populations. And I know its early days and maybe the discussions aren’t quite there yet. But have you looked at potential launch timelines and expectations. I’m just curious if you see any sort of hurdles with upticks or have positions kind of an expectation of the trial readout started asking and kind of what those discussions look like. If you can provide any color there? Thanks so much.

[Habib Dable:]

Yes. Hi Jason, this is Habib. Thanks for your questions. I mean two really separate questions there right. One; regarding life cycle management and the development and the other one regarding potential launch, if we’re approved and the potential uptick in questions that we’re getting. So, with respect to your first question when we think about life cycle management, and where is the bullishness being derived from? The first thing is obviously success in the Phase III studies, right. But specifically, in terms of the studies that are ongoing and why COMMANDS or other disease areas. So, the first this I would say to you is we have traditionally at Acceleron invested an awful lot in our Phase II development programs where we’re learning a lot about the program minimizing the differences and the changes as we learn in Phase II to confirm in Phase III. When we look at the Phase II data so far, for example when you look at the ongoing expansion cohorts within luspatercept and Todd made reference to some of the patients that would be very similar to the COMMANDS like patients that would be entering the study and if you compare those to the data that was presented at ASH for ASAs into Phase III company sponsored studies. We take tremendous amount of comfort that not only are we showing higher response rate in our Phase II, but we are doing that with an end point of transfusion independent very the clinically meaningful endpoint of HI-E. And similarly, if we look at what we’re doing at what we’re doing in myelofibrosis for example that was very much driven by an investigator sponsored study M.D. Anderson when they were looking at a similar compound of sotatercept where they actually showed response rate of 30% and 39% depending on whether they were looking at monotherapy or myelofibrosis patients or those that are using combination with ruxolitinib. And again, we’ve leveraged that information as we are designing in our studies. So, on top of that if you are looking for healthy volunteer study and the ability to make healthy red blood cells we take tremendous amount of comfort that our ability to cast a wider net for luspatercept and to fulfill an unmet need in new patients who really have nothing else other than regular red blood cell transfusions to make out for that deficiency that we have a tremendous amount of data that we’re leaning on to give us that confidence as we continue to make further investments into the program. Now with respect to timelines around launch et cetera, what I can tell you maybe I’ll start it off Sujay and then hand it over to you. Is that we do plan to submit for registration for both of our first indications of the beta-thalassemia and lower risk MDS in the first half of 2019 both with the FDA as well as the EMA and assuming a standard review process that would take us into the first half of 2020 for our launch. That said, we are doing everything possible to be well prepared that in the event that if there was a priority review that would take us into the tail end of year. We’ll be prepared for that whether it’s from a supply point of view from a commercial infrastructure et cetera, et cetera. But the expectation is for first half of 2021. Maybe Sujay you can add a little bit of color in terms of what you and your counterparts at Celgene are doing as part of a joint commercial committee to ensure that we are exceptionally well prepared for those launch scenarios.

[Sujay Kango:]

Yes. Thank you, Habib. Yes, absolutely. So, through the joint commercialization committee we are working to ensure that we have the sense of urgency, the readiness to prepare for launch. So, the standard approach is in understanding as you asked right, where the best patient population would be for the utility of the drug, we are understanding of that. The distribution models that we utilize the elements around patient journey and where those leverage points are to ensure that we have broadest access possible for the patient as well as awareness campaigns all of those are being put into play and accessing those as we speak. Once the data is disclosed, we’ll have the more ability to engaging and understanding the impact of the data to really understand where the utilization of the production would be best suited. But most of it right now is preparing for the launch from all of these components.

[Unidentified Analyst:]

Great. Thank you so much for the color.

[Habib Dable:]

Yes. Thank you for your question.

[Operator:]

Thank you. Our next question comes from the line of Kennen MacKay from RBC Capital Markets. Your question please.

[Unidentified Analyst:]

This is Justin on for Kenen. Thanks for taking the question and congratulations on the progress this quarter. We are just wondering as you think about enrolment into the COMMANDS trial or is it relates to a fine EPO expression and why not go for sort of the lower hanging fruit in patients with anemia and high EPO levels which we know would typically be poor responders to ESAs.

[Habib Dable:]

I can’t imagine that that would be very well received by the scientific community frankly. I think that it’s appropriate to identify population of patients who’s reflective of that with the underlying disease and not kind of cherry pick or try to bias the outcome. I think we are doing exactly what’s right. We’re identifying the population that’s in need of the therapy and going head-to-head and expect to show results that are favorable and impactful for the patient.

[Todd James:]

Hi Justin, it’s Todd. I’d just add a little bit more to that. In the MEDALIST protocol patients could be EPO eligible up to any EPO level so that captures, those are positive patients in those higher EPO levels where they could potentially use luspatercept and then we think about the overall epidemiology with EPO breakdown levels across patients. The above 500 EPO to Robert’s point is a real low percentage of patients. Our research suggest it’s less than 15% of the patient population and so COMMANDs in the first line setting really captures a large majority of the appropriate patients in low-risk MDS.

[Unidentified Analyst:]

Okay. Great, thank you very much.

[Operator:]

Thank you. Our next question comes from the line of Christopher Marai from Nomura Securities. Your question please.

[Christopher Marai:]

Hi. Thanks for taking the question. I wanted to touch base on the anti-myostatin approaches and your potential progress in the future through the clinical as some of these old muscle and previously physicians have highlighted that there may be a problem with the approach in certain indication such as DMD, perhaps other disease states where myostatin is not heavily expressed any more in the muscle and so inhibiting myostatin would a problem. So, I was just wondering how are you looking at that; number one from the perspective of treating disease muscles currently in your trials and then secondary the opportunities perhaps combined with the therapy with other efficacious therapies to augment treatment effect. Obviously you’ll take lots of examples, but would love to hear what you are thinking there. Thank you.

[Todd James:]

Hi Chris, it’s Todd. I’ll start and maybe I’ll ask Robert and Habib to add on. So from approach of what diseases that we’re going to go after FSHD, and CMT are the first two indications that we have gone after and those patients unlike DMD that’s not a dystrophinopathy and so they don’t have a fundamental protein issue in the muscle itself. So we’ve been very selective in the diseases that we go after first and so FSHD as you probably already know is an over expression of a protein called DUX4 that becomes tough through the muscle and now we’ve shown in part one that we’re able to increase that muscle mass over 12% in patients and CMT is initially where it’s a neuropathy, it’s a damage to the nerve which is done leading to atrophy of the muscle and there again in part one we’ve been able to see really nice double-digit increases in muscle mass. Except for part two we’re also interested in increasing the mass but very focused on both strength and functional outcomes there after 16 months of treatment and so second half of next year as far as timing goes it’s going to be a really important read out for ACE-083 and we’ll wait and see based off of those data if we decide to expand muscle disease for ACE-083 to your point exactly company that have taken a myostatin selective approach which is very different than our myostatin plus of engaging more bad actors within the entire pathway. They had negative to limited efficacy result in DMD and so that might be a case where you want to do something of a gene therapy first to somewhat replace some percentage of that protein and then add on muscle mass and function building agent like a myostatin plus whether it be ACE-2494 or one of the other agents being developed in the space and so we’ll just have to wait and see

[Operator:]

Thank you. Our next question comes from the line of Terence Flynn. Your question please.

[Unidentified Analyst:]

Hi, this is Holly on for Terrence. We were just wondering if you’ve had any preliminary discussion with peers now that you have the Phase III data. And if you could share your latest thoughts on pricing and reimbursement dynamics and if there are any key differences in the way you are thinking about MDS versus beta-thal? Thanks.

[Sujay Kango:]

Hi, this is Sujay. So thanks for the question. So, yes we’ve had peer research conducted of luspatercept with target product profiles and currently as we believe based on the peer dynamics that the value we would being with luspatercept based on the MEDALIST as well as the BLEIEVE data that it would be reimbursed and there would be limited sort of challenges in relation to access to the patient community. So that’s a viewpoint. Of course it’s put in context with how do we price the drug. So we would look at the current sort of comparative therapies and the other MDS drugs that are out there in relation to the value we bring and we’ll look at the totality of the data as we think about pricing. More than likely as Celgene is taking is going to be leading on the pricing side of the equation, our view is collectively that the pricing would be more likely disclosed more closer towards launch or at launch. So hopefully, that answers your question in relation to it. The second part of the question is pricing differential between MDS and beta-thal. At this stage just by virtue of the actual dose between the target dose and MDS and beta-thal there will be a differential between the price point, but we are going to launch it based on the actual roll out. So it would be priced same but for the -- price. But technically the price for the patient would be different based on the doses between beta-thal and MDS.

[Unidentified Analyst:]

Great. That’s very helpful. Thank you.

[Operator:]

Our next question comes from the line of Jeffrey Hung from Morgan Stanley. Your question please.

[Jeffrey Hung:]

Thanks for taking the question. For ACE-083, you said that you think there is a threshold of 5% to 6% increase in muscle mass leading to functional benefit. Are there other aspects that patients can control that by contributing to varying functional benefit among patients or do you think there is a more direct line from the peak increases in muscle mass to function?

[Todd James:]

Hi, thanks Jeff. It’s Todd. Yes, so our hypothesis bases on other agents that were developed in other muscle diseases is that the threshold might be 5% to 6% but for muscle mass increase that needs functional outcomes and that’s the reason why we’re running the experiment and so we’ll just have to see if that plays out in our own trial with part 2. So, we’re very encouraged by the muscle mass increases that we saw in part 1 and we’re encouraged by that and we’re hopeful that those peak increase will then will need to translating into functional outcomes for those patients that today FSHD patients only having bracing and crutches and same way the CMT patients for various reasons isn’t optimal when they think about going walking for example.

[Jeffrey Hung:]

Thanks.

[Operator:]

Thank you. This does conclude the question-and-answer session of today’s program. I’d like to hand the program back to Habib Dable for any further remarks.

[Habib Dable:]

Thanks everybody for joining the call today. And we look forward to seeing you at upcoming Investor Conferences and ASH. So have a great evening and please reach out to Todd if you have any additional question.

[Operator:]

Thank you, ladies and gentlemen for your participating in today's conference. This does conclude the program. You may now disconnect. Good day.