Acceleron Pharma Inc.
Q4 2019 Earnings Call Transcript

Published: 28 Feb 2020

[Operator:]

Good afternoon, ladies and gentlemen and welcome to the Acceleron Fourth Quarter and Full Year 2019 Earnings Conference Call. At this time, all participants are in a listen-only mode. Later, we will 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. Todd James, Senior Vice President, Corporate affairs and Investor Relations at Acceleron. Please go ahead.

[Todd James:]

Thanks and welcome everyone to our fourth quarter and full year 2019 earnings call. The press release reporting our financial results, 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 on the call this afternoon are Habib Dable, our Chief Executive Officer; Kevin McLaughlin, our Chief Financial Officer; Dr. Jay Backstrom, our Head of Research & Development; Sujay Kango, our Chief Commercial Officer.As a reminder, we’ll 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.With that I would now like to turn the call over to Habib Dable, our CEO.

[Habib Dable:]

Great. Thank you, Todd. Good afternoon, everyone and thank you for joining us today. It certainly has been a busy time at Acceleron since our third quarter earnings call at the beginning of November. Shortly after that call, Acceleron and our collaboration partner, Bristol-Myers Squibb announced the US FDA approval of REBLOZYL for the treatment of anemia in adult patients with beta-thalassemia, who require regular red blood cell transfusions.REBLOZYL also known as luspatercept is the first Acceleron discovered medicine in the first erythroid maturation agent to receive FDA approval. We have deployed a 20 person commercial team under the leadership of our Chief Commercial Officer, Sujay Kango to complement Bristol’s hematology and oncology commercial footprint. Our teams continue to target the top healthcare providers in thalassemia centers of excellence throughout the US with a sense of urgency and focus to ensure brand awareness and patient access, which remain our top priorities.Despite a short selling cycle, with the beta-thalassemia approval coming at the tail end of last year, the launch is off to a great start. We are seeing week-over-week growth in the number of vials shipped to new and repeat prescribing accounts. If we receive approval in our second indication Myelodysplastic Syndromes or MDS for which we are awaiting a decision by the FDA’s PDUFA target action date of April the 4th, the opportunity to reach a larger market we’ll grow considerably.In fact, we estimate that in the US, there are more than 20,000 patients with lower risk MDS who have ring sideroblasts and require red blood cell transfusions. A much larger population than the estimated 1,000 to 1,500 patients in the US with beta-thalassemia, who require red blood cell transfusions.Turning to the most recent clinical updates. At the ASH Annual Meeting in December, we had the opportunity to share new long-term analyses in a total of 5 abstracts from the MEDALIST and BELIEVE pivotal Phase 3 trials in MDS and beta-thalassemia, respectively, as well as the initial results from the Phase 2 trial in patients with myelofibrosis-associated anemia.Among the highlights of the long-term results from the MEDALIST trial, more than 64% of patients treated with luspatercept achieved clinical benefit with a median duration of close to two years. Notably, we showed that the occurrence of the most common adverse events the fatigue, asthenia, and headache were decreasing over time. I’m also pleased to point out that the top line results from this trial were recently published in the New England Journal of Medicine, marking our first publication in this prestigious peer reviewed journal.Long-term results from the BELIEVE trial also demonstrated strong clinical benefit for patients treated with luspatercept. Overall, more than 45% of patients experienced clinical benefit with a median duration of almost 18 months and with the occurrence of the most common adverse events of bone pain, arthralgia and dizziness decreasing over time. In the Phase 2 myelofibrosis trial patients treated with luspatercept experienced clinical activity, whether they receive red blood cell transfusions or not, the most profound effects were seen in patients receiving treatment in combination with ruxolitinib.Following these positive results in myelofibrosis, we are now preparing for a new pivotal Phase 3 trial called INDEPENDENCE evaluating luspatercept for the treatment of anemia and patients with myelofibrosis who are on a JAK inhibitor and require red blood cell transfusions. We look forward to providing you with additional details about the design of the study closer to the trials initiation later this year.As we look toward the future for REBLOZYL, the consistent positive results now seen across three distinct blood disorders further validates REBLOZYL’s novel mechanism of late-stage erythroid maturation as a possible platform treatment for thousands of patients suffering from anemia caused by a variety of hematologic diseases.Turning now to our pulmonary program. As shown on Slide 6, we were thrilled last month to announce positive top line results from the PULSAR Phase 2 trial of sotatercept in patients with Pulmonary Arterial Hypertension or PAH. I’d like to quickly recap those results, which we also reviewed during an in-depth investor call with two world renowned experts in PAH.As you may recall, the PULSAR trial is a double blind, placebo-controlled study in which 106 patients on stable background PAH specific therapies were randomized to receive placebo, 0.3 milligrams per kilogram of sotatercept or 0.7 milligrams per kilogram of sotatercept subcutaneously every 21 days over a 24-week treatment period. The study was powered to show a placebo adjusted 18% reduction in Pulmonary Vascular Resistance or PVR, an important hemodynamic measure and the trials’ primary endpoint.The trial was also powered to show a placebo adjusted 24-meter improvement in the key secondary endpoint of 6-minute walk distance. We achieved statistically significant improvements in both the primary and key secondary endpoints. We also achieved a clinically meaningful improvement of at least a 30-meter absolute change in 6-minute walk distance compared to baseline.The trial achieved other secondary endpoints as well, including change from baseline in NT-proBNP, an important biomarker of cardiovascular health and change in WHO functional class. In terms of its safety profile, sotatercept was generally well tolerated with adverse events consistent with previously published data in other diseases. Importantly, 97 patients enrolled in the PULSAR trial rolled over into the 18-month extension period of the trial, which will provide further insight into long-term efficacy and safety.We could not be happier with the outcome of the PULSAR trial, we continue to believe in sotatercept’s potential to shift the treatment paradigm in PAH and to provide significant clinical benefit on top of currently available therapies. I’m extremely proud of all of the efforts of our team over the last few years to achieve this outcome.We hope you can join us for the presentation of a more detailed review of the top line results from the PULSAR trial at the American Thoracic Society of International Conference also known as APS 2020 on May 15th to the 20th in Philadelphia, Pennsylvania. We also look forward to upcoming interactions with Global Health Authorities to provide us with important regulatory feedback for the future development plan for sotatercept and PAH.Looking at the overall pipeline, the positive results from the PULSAR trial further cement our commitment to pulmonary disease. We continue to enroll the structured open label study in sotatercept patients with PAH, our Phase 1 healthy volunteer trial of ACE-1334 is now underway and at the close of 2019, we announced a research and discovery collaboration with Fulcrum Therapeutics to help us identify small molecules that can modulate specific pathways associated with a target indication in the pulmonary space.With that, I’d like to turn to our hematology program. In addition, to the regulatory and clinical activity that I highlighted earlier, our collaboration partner, Bristol-Myers Squibb recently completed enrollment in the BEYOND Phase 2 trial of luspatercept in patients with non-transfusion dependent beta-thalassemia and expect top line results by the end of this year. The COMMANDS pivotal Phase 3 trial continues to enroll treatment naive patients with anemia associated with lower risk MDS. We anticipate top line results from this trial in late 2021 or early ‘22.Moving to our neuromuscular program, we expect to share top line results from the part two of the Phase 2 trial of ACE-083 in patients with the Charcot-Marie-Tooth Disease or CMT next month. To recap, in this part of the study approximately 40 patients with CMT with mild to moderate ankle dorsiflexion weakness were randomized to receive either ACE-083 or placebo.The trial is designed to assess change in total and contract all muscle volume and fat fraction, 6-minute walk distance, time 10-meter walk run, patient reported disease burden and safety and tolerability over a six month randomized treatment period. As you can see, it has been a busy and productive period for us at Acceleron.And with that, I’d like to hand over the call to Kevin McLaughlin, our CFO to review the financials.

[Kevin McLaughlin:]

Thanks, Habib. Good afternoon, everyone. I’d like to refer you to our press release issued earlier today for a summary of our financial results for the fourth quarter and full year ended 2019 and take this opportunity to briefly review a few items. We ended the fourth quarter and full year with approximately $453.8 million in cash, cash equivalents and investments.Collaboration revenue for the year was $74 million. The revenue was all derived from the company’s partnership with Bristol-Myers Squibb and is primarily related to expenses incurred by the company in support of REBLOZYL, as well as one-time gross milestone payments totaling $60 million earned upon the FDA acceptance of the BLA and EMEA validation of the MAA of REBLOZYL in June and the FDA approval of REBLOZYL in November 2019. Total costs and expenses for the year were $210.4 million. The company’s net loss for the year ended December 31st, 2019 was $124.9 million. Habib?

[Habib Dable:]

Thanks, Kevin. And with that, I’d like to open up the call to questions. Operator?

[Operator:]

Thank you, sir. [Operator Instructions] Our first question comes from Yaron Werber from Cowen. Please go ahead. If your line is muted, please unmute your line.

[Yaron Werber:]

Hey, congrats on the quarter. Thanks for taking our question. This is [indiscernible] on for Yaron Werber. So I just have a few questions regarding your Phase 3 in myelofibrosis, can you please share with us more progress on that? And also in terms of the early adoption on the REBLOZYL, can you share with us some early dynamics in the field, please? Thank you.

[Habib Dable:]

Yeah. Hi. This is Habib, thanks for your question. I just want to make sure that I heard the question correctly. I think the first question was, can we share any more details on the path forward with the Phase 3 in myelofibrosis? And the second question was, can we add any color in terms of the REBLOZYL launch in the first indication. Is that correct?

[Yaron Werber:]

Yes. Thank you.

[Habib Dable:]

Okay. Okay, great. So as we’ve announced at ASH, we shared with you the details of the Phase 2 data in myelofibrosis. And obviously together with our collaborators at Bristol-Myers, we were thrilled to announce that we’ll be moving forward with the INDEPENDENCE study, which was basically the Phase 3 study looking at luspatercept combined with ruxolitinib in myelofibrosis patients which were transfusion-dependent.And so we had said that we would initiate that study in 2020. Things continue to go on track, and really at this point, there’s really nothing else to add. So we’re really excited about moving forward there in another space, again, validating the ability for luspatercept to be able to restore healthy red blood cell formation in rare blood disorders where anemia is really the hallmark of a lot of these disorders.With respect to your second question in terms of the launch of REBLOZYL, what I can tell you is that we continue to be very, very pleased with the initial launch. Obviously, the first indication of adult beta-thalassemia patients who are transfusion-dependent is a very small indication in the United States, we estimated roughly about 1,000 or 1,500 patients. So it’s a very small indication, the unmet need obviously still is an important one. And we’re happy to be able to have an opportunity to cater to these patients with a significant unmet need.But when we think about the launch itself, you’ll notice that we didn’t have – we don’t have any specifics in terms of calling out the actual sales, because – again, it’s a very small indication in the United States. Secondly, we got the approval at the tail end of the year and therefore, if you think about and you put it into context with the line – with the approval in November, couple that with a major Congress and a couple of holidays, the selling cycle was around 4 or 5 weeks and that’s the revenues were very low, not material or even informative at this point.So that said, when we think about how things are moving in terms of week-over-week sales, which are continuing to grow, even into the new year, when we think about repeat orders, we’re very happy with how all of the metrics, when we think about reimbursement hurdles, we’re very pleased on how the access has continued to progress. And thus I would say, all in all, we’re very, very pleased with the launch today. But obviously, the big indication that we’re all anticipating and hoping for is the action date of the PDUFA date of April the 4th, which would be for a second indication for lower risk MDS patients who were regularly transfused.

[Yaron Werber:]

I have just a quick follow-on, it’s around just in terms of the ATS data and rather afterwards, should we think about the [indiscernible] development plan? And they’re sort of 2 or 3 Phase 3 studies, including sort of a switch study with PD4s or an oral is sort of what you would think about doing is a strategy to move up? Thank you.

[Habib Dable:]

Yeah, so Yaron, I – first of all, you said with respect to the - with the ATS presentation, and in dentist studies, and I’m assuming you’re talking about the PD5 inhibitors. So we’re not adding any color at this point other than the fact that we plan to present the data and we can confirm that that data will be at ATS. Beyond that, we will not be sharing any details until after we got the opportunity to meet with the regulators.

[Yaron Werber:]

Great, thank you.

[Operator:]

Thank you. Our next question comes from Danielle Brill from Piper Sandler. Please go ahead.

[Danielle Brill:]

Hi, guys. Thanks for the questions and congrats again on all the progress. I guess I have a couple follow-ups to the prior question if I can start there. First, Habib given how things are tracking with the REBLOZYL the launch? Do you expect that sales will be called out in for 1Q? And then also just any commentary on how we should think about the launch cadence over the remainder of the year? And then can you comment on when you might be expecting to interact with regulators on path forward for sotatercept?

[Habib Dable:]

Yeah. So thanks for your questions, Danielle. So maybe I’ll answer the last one first. So what we’ve said previously that we plan to be interacting with regulators as soon as possible and that, you know, we said roughly before the mid year of this year, and then we’d obviously share the feedback with that at the appropriate time.With respect to what we plan to be sharing with respect to the launch of REBLOZYL. Again, just to repeat, qualitatively what we’re seeing in terms of repeat customers growth week-over-week, reimbursement and access, we continue to every week be pleased with the progress that we’re making.Now, in terms of what you can expect, again, remember the PDUFA date for the MDS indication is not until April the 4th. So you can probably expect another quarter of relatively, you know, non-material or low or you know, low sales volume because of the fact that beta-thalassemia in the United States is just simply a very small indication where we again, we estimate about 1,000 to 1,500 patients.Obviously, once with MDS, you know, if and when MDS is approved, we would be looking more likely at having seen some significant sales in Q2, Q3 and beyond, which I believe would be much more informative. So I would look at that in terms of the cadence in terms of the growth than what you could potentially expect.

[Danielle Brill:]

Got it, that’s helpful. And then just one more, if I may. Are there any other fibrotic diseases that might be of interest for sotatercept that you may plan to evaluate it for us? Thanks.

[Habib Dable:]

Yeah, so too early to talk about that. We’re obviously thrilled with the preliminary data in our Phase 2 study in PAH and we obviously have a wonderful opportunity to cater to a very significant unmet need and with potentially the first drug to be introduced to this patient population outside of the dilatory – the 14 dilatory drugs that are out there. So as you can imagine, there’s a tremendous opportunity and a lot of work to do still to move sotatercept forward there.Obviously, as we continue to interrogate the data, we will look for other opportunities will benefit from the Council of the regulators and our steering committee to identify opportunities beyond the preliminary indications that we’re looking for, but that will come with time.Now, what I can tell you though, we obviously are looking at other areas with other assets as well. And I think we mentioned earlier at least I know we did at JP Morgan, where we talked about ACE-1334, which is now in a healthy volunteer study, which we believe could potentially be targeting more fibrotic-driven diseases within pulmonary disease, such as, you know, we could be looking at areas such as idiopathic pulmonary fibrosis, interstitial lung disease, systemic scleroderma, et cetera, but we have yet to determine that indication.

[Todd James:]

And hey, Danielle, it’s Todd. As far as sotatercept goes, the amended agreement with Celgene/Bristol allows for our development in PAH indications. And so outside of PAH, which is PAH group one, we would have the potential ability, if it makes sense from a biology science and business case for group two or the other PAH groups as far as sotatercept goes, but we’d be limited to being able to develop that based off of the current terms of the amended agreement.

[Danielle Brill:]

Got it, very helpful. Thanks again for the questions and congrats again.

[Habib Dable:]

Yeah. Thanks, Danielle.

[Operator:]

Thank you. Our next question comes from Geoffrey Porges from SVB Leerink. Please go ahead.

[Geoffrey Porges:]

Thank you very much and congratulations, Habib and the team on all the progress. A one financial question, which is you haven’t given us any indication about your expense trajectory for 2020. I know it’s not necessarily you’re accustomed to give financial guidance, but it would seem helpful to get some at least bracketing of what your expenses are going to be, particularly, I suppose since you are going to be ending a number of studies on the R&D side, but conversely, investing in SG&A. So could you at least give us a sense of whether you expect a significant step up in overall operating expenses this year or whether this is about the right level even though there might be some flux?And then just to go back to sotatercept, I know you’ve been reluctant to discuss things about your regulatory interaction, but should we assume that you will be going to the agency with a development plan or are you going to the agency with the results and then coming back with a plan. So I guess setting the expectation of whether sometime in the summertime, perhaps on a Q2 call we could hear the next steps with sotatercept and how, you know whether that’s the right timing?

[Habib Dable:]

Okay, thanks for your questions, Geoff. So for the first questions regarding the financial guidance and bracketing, I’m going to ask Kevin McLaughlin, our CFO to answer that. And then for the second part, regarding sotatercept and our plan discussions with the regulators, I will ask our new Head of R&D, Jay Backstrom to address that one. So, Kevin, do you want to take the first part, please?

[Kevin McLaughlin:]

Sure, thanks Habib. Hi, Geoff, how’re you doing? Listen. You’re correct, that we have historically not given the expense guidance or and as you know, we no longer give cash guidance. I think what’s safe to say, though, is this. The – we will have a step up in our expenses as the year continues on, we will be preparing for additional trials with sotatercept and obviously you know, those are all funded by us. So there’s no cost sharing there so they’ll all be funded by us.Now, the size of that step up will be determined by the type of trials we have to run. And obviously, that has not yet been communicated or determined. So, I think that, you know, we are growing the footprint of the company a bit in order to support, you know, us moving to a fully commercial company. And so there will be growth, but I think you know us well enough to know that we do things as necessary. We keep things, you know, I think well in control and we want to make sure that we are very effective in the manner in which we spend the cash we have on board.

[Habib Dable:]

Thank you. Jay, could you answer the second question, please Jay?

[Jay Backstrom:]

Yes, certainly. Hi. So, this is Jay. So Geoff in answering the question, both, you know, we are actively interrogating data. So, our intention when we meet with FDA and other health authorities is to review that data with them, but as you can imagine, we’re also in the process of developing the plan, we’d like to socialize and get some input from them as well. So we’ve been very aggressive and active on that right now, engaging our steering committee to further kind of refine that. But until we actually meet with the health authorities, it’s just that as a plan, you know, we’d like to be able to as Habib said earlier, kind of be able to move forward with those meetings by midyear. So that’s a pretty reasonable time point.

[Geoffrey Porges:]

Right. Habib, can I just follow-up with other question, which is, could you share some of the feedback from your Expert Advisors in PAH about, you know, what, you’ve been able to share with them so far? Could you give us a sense of how they’re responding and how they’re thinking about the product?

[Habib Dable:]

Yeah, no, what I can tell you, Geoff, is and I’m not sure if you had the opportunity. Yeah, actually, I think you did, that we respond kind of with respect to the call with [Val McLaughlin] [ph] and [indiscernible], two thought leaders who had joined us on the call right after the date. And what I can tell you is that across the board, the feedback we’re getting is that the leaders, the opinion leaders are very, very excited about having a new mechanism of action for the first time in PAH.The fact that, you know, you’ve got tremendous progress in this disease area over the last 30 years through, you know, 14 approvals is really, I think, important to comprehend in that, survival rates have improved from, you know, three to five years in the early 80s to now maybe that, you know, six, seven years. That’s a significant improvement because of that innovation.But there’s still horrible survival rates, when you think about five to seven years when the median age of the patients that are being affected by this are, you know, 50, 55 years old. We have an opportunity here to potentially be not only disease modifying, but potentially remodeling the disease. And if indeed, we are able to do that, and to be able to have significant impact on patients’ lives, I hope that we will be able to introduce the sotatercept to these patients, and to cater to a very, very significant unmet need.And I can tell you that the community is very excited about that. I think that potential, but there also the feedback that we receive, Geoff, is they’re really pleased with the concordance of the data. It’s not just one significant – one specific endpoint that’s driving the optimism. But the fact that there is consistency across multiple endpoints and that’s according to that data seems to be driving even more of a positive reaction based on the feedback that I’m getting today. That said, still a lot of work to do. And at the end of the day, I would say everyone is excited, optimistic, but at the same time, we still have a lot of work to do to cross the finish line.

[Geoffrey Porges:]

Great. Thanks very much for that color.

[Habib Dable:]

Yeah, thanks.

[Operator:]

Thank you. Our next question comes from Carter Gould from Barclays. Please go ahead.

[Carter Gould:]

Hey, great guys. Thanks for taking the call and all the – congrats on all the progress. I guess two questions appreciate all the color on terms of timing, on potential interactions with regulators but I guess to put you on the spot, Habib, have you specifically requested that end of Phase 2 meeting with FDA yet? And then on sotatercept with – on the manufacturing side, I believe with the Phase 2s that Bristol had provided you with material there in terms of your own scaling up on the manufacturing side, any color there and are you going to be in a position to yeah, maybe just leave it there.

[Habib Dable:]

Okay, so with respect to the request to the FDA, we haven’t shared any information of – on any interactions with regulators and that’s typically not a practice that we do. Once we’ve got the appropriate feedback from the regulators and the path forward, Carter, we will definitely share that with you. With respect to the materials, et cetera, we are leveraging a third-party CMO with respect to sotatercept material.

[Operator:]

Thank you. Our next question comes from Eric Joseph from JP Morgan. Please go ahead.

[Eric Joseph:]

Hey, guys. Thanks taking the questions. I know we’re still ahead of a formal level in MDS, but I’m just wondering whether in any of the ordering or prescription patterns you’re seeing any pull through from MDS with REBLOZYL so far and I think that there is any – whether there’s any sort of reimbursement pushback or hurdles that patients are running into? And just the second question on the – coming back to OpEx, whether there any unique items in the fourth quarter R&D spend where that sort of an appropriate run rate for thinking about the cadence of spend in 2020? Thanks.

[Kevin McLaughlin:]

Yeah. Hey, Eric, this is Kevin. In the fourth quarter, there was the $10 million charge that went through R&D related to the Fulcrum deal that we did. So you’re – it’s a good observation and that, you know, it did pop up because of that.

[Habib Dable:]

And regarding the sales to-date, I’ll ask our Chief Commercial Officer, Sujay , if he wants to chime in if there is anything that you can really say in terms of incremental color, Sujay.

[Sujay Kango:]

Yeah, sure. Eric thanks for that question. So as you pointed out, we are still awaiting the MDS approval and you know, till that time point, very difficult for us to dig into any kind of data sets that with respect to MDS. However, I can tell you is with regards to access, as of to-date, you know, most of the insurance companies have, you know, very good coverage for REBLOZYL and we’re not seeing any kind of pushback, et cetera, they’re covering to label. And that’s going according to plan.So we’re pretty pleased with the uptake as of now as we’re seeing in regards to where the, you know, utilization is coming from for beta-thalassemia and the accounts per se, and spread across the country. It’s not whereby you’re just seeing pockets of it, it is broadly across where the pockets of influenza for beta-thalassemia, that’s how we are seeing the utilization, you know, ramp up as well. Okay. So hope that helps.

[Operator:]

Thank you. Our next question comes from Jeffrey Hung from Morgan Stanley. Please go ahead.

[Jeffrey Hung:]

Thanks for taking the questions. Maybe if I can ask Eric’s question a different way. What are you hearing anecdotally about off label use of REBLOZYL?

[Sujay Kango:]

So, maybe I can restate that, right. So at least what we’re saying is we’re not analyzing any off label data set, what we can tell you is there are queries coming in from a medical perspective, that you know information, so there is interest about it. But people are probably waiting to see the see the approval come through and we’re just around the corner of our PDUFA date is April 4th. So probably people are just looking into the data set with the publication, and we’re getting medical inquiries about the information. So that’s kind of where we are right now.

[Jeffrey Hung:]

Okay, thanks. And then you talked about repeat orders with REBLOZYL so understanding limited numbers, but I guess what proportion of patients don’t reorder and whether a typical reasons cited if a patient doesn’t reorder?

[Sujay Kango:]

Early days, as of now, I haven’t seen the repeat orders not come through. So we very positive whereby, you know, we are getting repeat orders, the consistency of it is going to be different for different accounts because we you know, it’s not one to one matchup between the ordering patterns, right, but so far, pretty much every account that has ordered at some point in time has gone back and reordered the drug. So we are very happy with how we are seeing the trend lines between new prescriptions and repeat prescriptions.

[Jeffrey Hung:]

Okay. Great, thanks.

[Sujay Kango:]

Thanks, Jeff.

[Operator:]

Thank you. Our next question comes from Yigal Nochomovitz from Citi. Please go ahead.

[Unidentified Participant:]

Hi, this is [indiscernible] for Yigal. Thanks for taking our question. We’ve spoken with a couple of KOLs on REBLOZYL and beta-thal and you know, they seem really positive on our expectations for prescribing and majority of their patients seem to be eligible in their view. But they’ve noted that they’ve run into some problems with prior authorization. I’m curious, could you comment on what the volume of prior auth you’re seeing? And what percentage get approved? And if you’re seeing an amount of prior off, is this a good indication for your payers discussion to sort of indicate physician interest?

[Sujay Kango:]

You know very important question and a good one right. So as just to remind the audience as you know very well, we’ve launched REBLOZYL right now under Part B which is a buy and bill product right. And under the Part B side of the medical benefits side, almost always when you’re doing this you’re going to have all you need a J-Code. And we are in this period of time where we have a miscellaneous J-Code, and it is very common during this timeframe till you get a permanent product code that almost all insurance companies are going to ask for a prior authorization, because of listening the J-Code just triggers that.And so that’s just part of the process. It’s not out of the ordinary that it’s happening. So we anticipated that we have extensive support from our BMS colleagues, through patient services as well as field reimbursement team members that are able to help these accounts appropriately to ensure that they followed the required billing and coding processes. So it’s a – it sometimes could be just the timeframe that it takes to get the product reimbursed, but it is not being denied as such in any ways for beta-thalassemia. So I just want to say that that’s a positive trend. We anticipated that and it’s not out of the ordinary in regards to it till you get the permanent J-Code.

[Unidentified Participant:]

Thank you. That’s helpful. And then what is the normal timeframe to getting a J-Code that’s permanent?

[Sujay Kango:]

It varies, it depends from when you actually got the product approved and you file for the codes, et cetera. I can tell you that we’ve already, BMS has already filed for all the required coding and to get the permanent J-Codes. So we should be getting that hopefully sometime later this year, that’s our hope. It usually takes anywhere is between 12 months to 18 months depending upon when you actually get the product approved. So it’s that cycle timeframe, so we should anticipate to get it sometime later this year or early next year, so well in time.

[Unidentified Participant:]

And other separate J-Codes for beta-thal and MDS or would they be the same?

[Sujay Kango:]

The product code the J-Code would be the same. The diagnosis codes are different though.

[Unidentified Participant:]

Okay. Thank you so much for taking the question.

[Operator:]

Thank you. Our next question comes from Kennen MacKay from RBC Capital Markets. Please go ahead.

[Vikram Kaushik:]

Hi this is – hi, thanks for taking our question. This is Vikram on for Kennen. Maybe quick one on CMT readout in March. Going into the readout, so what are the internal expectations maybe around the some of the functional endpoints you talked about? And how shall we be thinking about them?

[Habib Dable:]

Yeah, hi Vikram this is Habib. Thanks for your question. So again, just to remind everyone, our plan is to reveal the top line results before the end of this first quarter. And just to remind everyone what the hurdle rate that we’ve given ourselves again, just in part one, we have typically seen double-digit increases in total muscle volume. And what we hope to be able to do is to see that again in part two, but more importantly, to see that total muscle volume translate into a functional benefit.And when you think about that, when you think of functional benefits, such as the 6-minute walk distance, for example, what we hope to be able to see in a placebo corrected way is a benefit of at least 10% to be able to give us the confidence to move forward in a development pathway for approval.If we see that and continue to see some trends across multiple endpoints, that will give us the confidence. And remember, we typically want to learn as much as we can in Phase 2 and move into Phase 3 with very little ambiguity and how the Phase 3 is confirming what we’re seeing in Phase 2. And so we would only do so if we had that confidence to move forward to the next step.

[Vikram Kaushik:]

Got it. Thank you.

[Habib Dable:]

Yeah, thanks for your question.

[Operator:]

Thank you. Our next question comes from Leland Gershell from Oppenheimer. Please go ahead.

[Leland Gershell:]

Hey, Habib and team. Thanks for taking my questions. Have a couple, one, with respect to the J-Code. I was under the impression that at least for certain products has been in acceleration in the cycles, perhaps more frequently, as frequently is quarterly versus what used to be annually. Is that not applied to your case? Or is it just a distinction that I wasn’t aware of? And I’ve had a couple of follow-ups?

[Sujay Kango:]

It’s a valid question and that’s correct. They are some – accelerating some of these coding so as I said, normally it could take as long as 18, but we anticipate that we should have the codes later this year.

[Leland Gershell:]

Okay. And then with regard to PAH, obviously, the SPECTRA trial should be very informative on filling out more color around sotatercept. I was wondering if you could maybe provide us some more sort of description of what you would define as disease modifying activity for the agent? And there any quantifiable thresholds that you’d want to see in terms of reverse remodeling on the images from SPECTRA?

[Sujay Kango:]

So I can start and then maybe I’ll hand it over to Jay Backstrom to fill in some of the blanks. So I want to just kind of go back and repeat what Dr. [indiscernible] said on the call, when, what they would need to see if indeed, this was a disease modifying drug. Now, first of all, you know, for remodeling, et cetera, it’s really hard to get anything definitive without biopsying that patient which we obviously aren’t to do a lung biopsy. That said, there are other metrics that one could look at to give the confidence of disease remodeling or vascular remodeling.And when we look at the cardiac MRIs, as you can imagine, there’ll be a lot of information that we can gain in terms of what’s happening with the heart. We also have, if you remember what [indiscernible] said, the most important element of disease modification is functional class improvement, which will pay very close attention to as well.But at the end of the day, and kind of going back to the Jeffrey’s question regarding where the enthusiasm is coming from. Remember, over half of the patients in the PULSAR study were on triplet therapy and we are showing an improvement above max vasodilation in these patients. And so ultimately, it’s the end benefit to the patient that they’re going to be looking for whether that’s an opportunity to go above max vasodilation, functional class improvement and are their effects on right heart function that will be able to extract as we continue to interrogate the SPECTRA data as well. So I think they’re going to be looking at all of those, Leland.

[Leland Gershell:]

Okay. Thanks then.

[Jay Backstrom:]

This is - yeah, just to agree. Now, I think that was well summarized.

[Leland Gershell:]

All right now, much appreciated. And then one more question if I may, you know, on luspatercept without having been studied in lower and intermediate risk MDS, just wondering, is there a scientific rationale or perhaps a clinical or both reason to not study that agent in high risk MDS? Is it that that category of patient is that they have other issues going on? A lot of them could be, you know, advanced to, frankly to AML other hematologic you know, issues going on with those patients. Just wondering why high risk, why not be a scope of interest? Thanks.

[Jay Backstrom:]

Yeah, so maybe I’ll take that, this is Jay. I mean, with high risk, the life expectancy and risk for progression are really different than the lower risk group. So to your point, usually it require a little bit more aggressive therapy to try to control that. And anemia can still be a component to the disease, but the primary treatment course are really try to prolong survival and reduce the risk of progression to AML.Combinatorial strategies and some certainly can be considered. I think where we went with a development plan that was to really target the area where we felt there was just a very, very good place for luspatercept to be given in the absence of other available therapies. It’s a really great place for it in the low risk MDS space.

[Leland Gershell:]

All right, makes sense. Thanks very much for taking my questions.

[Kevin McLaughlin:]

Thanks, Leland.

[Operator:]

Thank you. And our next question comes from Paul Choi from Goldman Sachs. Please go ahead.

[Liz Ewing:]

Hi, this is Liz on for Paul. Congrats on all the recent progress and thanks for taking our question. So recently at ASH you had presented the Phase 2 data for luspatercept and myelofibrosis, where we saw the lower response rate and the non- ruxolitinib group. So we’re just wondering if you guys have done any additional analyses on that data or have any more visibility on the dealt in responses, and how you see that impact impacting the Phase 3 or its opportunity in general? Thanks so much.

[Habib Dable:]

Great, thanks for your question. I think Jay, can you please address this myelofibrosis’s question?

[Jay Backstrom:]

Yeah. So you know, as we talked about at JP Morgan, we take a look at the study, the differences between the rux – the patients with without ruxolitinib tend to be a little bit careful how we interpret that because the numbers were small and way to really amplify that would be a little bit additional data. There has been continued effort to underscore at least to assess why.With respect to the Phase 3 though, and I think again, what we had shared earlier, is that we liked the combinations, you know, ruxolitinib is a very commonly used, 30% of patients present with anemia that there is a problem with anemia’s patients continue even on rux. And so that combination looks quite good. And as you know, as you just referenced, when we looked at that cohort, those data also looked really quite compelling, if you will, for us to be able to advance to a phase 3.

[Liz Ewing:]

Great, thanks so much.

[Habib Dable:]

Great, thanks for your question.

[Operator:]

Thank you. I show no further questions. At this time, I’d like to turn the call over to Habib Dable, CEO for closing remarks. Please go ahead.

[Habib Dable:]

Yeah, thank you. Thanks again, everybody for joining the call. Obviously, 2020 is really shaping up to be a pivotal year for Acceleron, very much looking forward to continuing with the progress that we’ve achieved in the tail end and looking forward to meeting a lot of you at some upcoming conferences.

[Operator:]

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