Another failed midstage asset for Acceleron, another pipeline test dumped

Acceleron management
Acceleron's management has had a roller coaster few years. (Acceleron)

Acceleron has chalked up another phase 2 flop as its pipeline thins a little more.

The biotech, a former Fierce 15 winner, has had a roller coaster few years. The highs have predominately come from its Celgene/Bristol-Myers Squibb-partnered blood cancer drug luspatercept, a first-in-class erythroid maturation agent that could gain FDA approvals in December and April, respectively, after getting a priority review for its beta-thalassemia label and a standard review for its drug in myelodysplastic syndromes-associated anemia.

On the flip side, back in June 2017 it was forced to abandon its drug dalantercept after the inhibitor of ALK1 signaling failed to move the needle in a phase 2 kidney cancer trial. 

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Now you can add ACE-083’s attempt to that scrapheap, as the company dumped one of its phase 2 trials after it “did not achieve statistically significant improvements in functional endpoints relative to placebo” in patients with facioscapulohumeral muscular dystrophy (FSHD), a disorder characterized by muscle weakness and wasting.

RELATED: Acceleron dumps dalantercept after kidney cancer trial fail

There have been a fair few flops in biotech recently; that’s the risk in this business, but Acceleron, to their credit (and unlike some of their peers of late), ditched the spin and played it straight.

“Although ACE-083 demonstrated a robust, statistically significant increase in mean total muscle volume, the primary endpoint of the trial, the increase failed to translate to statistically significant improvements in functional tests,” it said in a statement.

“As a result, Acceleron will not conduct further clinical trials of ACE-083 in FSHD.” This is the end for the trial, but not for the drug, as it is still undergoing a placebo-controlled midstage test in patients with Charcot-Marie-Tooth disease—a neuromuscular disorder of different pathophysiology.

Data are expected from this in the first quarter next year.

Habib Dable, president and CEO of Acceleron, added: “We are certainly disappointed with these results. As we have stated consistently, for ACE-083 to become an important new therapy for patients with FSHD, it would have to deliver a meaningful functional benefit on top of an ability to grow muscle.

“Unfortunately, in this case, the data show no evidence of such a benefit and, therefore, do not support further development of ACE-083 for FSHD. We’re grateful to the patients, families, caregivers, and investigators who participated in this research.”

Analysts at LVB Leerink said in a note to clients: “The phase 2 trial was designed to evaluate ACE-083 in FSHD patients with upper and lower extremity weakness. 56 patients were randomized to receive the previously selected optimal dose via intramuscular injection every 4 to 8 weeks versus placebo, and were evaluated for structural changes in muscle volume and fat fraction, as well as corresponding changes in muscle strength (biceps brachii and tibialis anterior), and functional benefit.

“This follows the discontinuation of the systemically administered TGF-beta therapeutic ACE-2494 earlier this year, and suggests that the company’s approach does not have the ability to meaningfully improve systemic or local muscle function. We previously forecast ACE-083 generating ~$500mm in unadjusted peak sales by 2029 (~$167mm in sales with a 35% PoS-adjustment).

“Our total revenue forecasts for XLRN [Acceleron] are now 9% lower for 2022 and 2023, and approximately 7%-8% lower thru 2029. Acceleron’s portfolio now consists of their royalty rights to Bristol/Celgene’s luspatercept (which we believe is worth ~$18/share) and the optionality of the potential of their systemic activin receptor type IIA fusion protein, sotatercept, now in a large pivotal trial in pulmonary arterial hypertension (PAH).

“We see no read through from this result to the outlook for the PAH trial, although the lack of clinical effect does not provide any encouragement about the outlook for that trial. We continue to give that program a 35% probability of development success, and the combination of this optionality and the value of luspatercept royalties supports our new target price of $55.”

The biotech, which has a market cap of more than $2.3 billion, saw its shares off nearly 7% in after-hours trading when it released details of the failure. This will likely be a minor issue for the biotech, however, as all eyes are on the blockbuster potential of luspatercept and whether the FDA will give its first green light by year's end.

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