Emerging Drug Developer: Acceleron Pharma

Fast growth may herald an IPO for Acceleron

By just about every measure you can judge a private biotech company by, Acceleron Pharma has been on a roll.

Its lead drug, the ACE-011 program partnered with Celgene, just began a Phase II study-its second-for chemotherapy-induced anemia. The first round of mid-stage data is expected for review at ASH in December. ACE-031, designed to beef up skeletal muscle mass and strength, is in Phase I - with early data expected in the fall. A third program dubbed ACE-041-an inhibitor that blocks the development of vasculature in tumors--is headed into the clinic this year with two more programs slated to start human studies in the next six to nine months.

CEO and founder John Knopf, PhD, is clearly bullish about the company's prospects at the bargaining table.

"I think by the end of the year we will very likely partner another one of our programs," he tells FierceBiotech.

While much of the rest of the biotech industry has been plagued by the sudden tightening of credit and investment dollars, Acceleron has been expanding swiftly in Cambridge. Just last spring, with its headquarters complete and a second manufacturing site up and running, the developer leased 19,700 square feet of laboratory and office space.

The company now has a payroll of about 150, quite sizeable when you compare that to other companies at the same stage of development.

"We felt it was important to build to 150 to have a critical mass for the infrastructure," he adds. "We're going to hold at 150 and then grow a little from there. But the rapid growth is behind us. We've been growing 50 percent a year for the past four years."

Contrary to popular belief, he adds, this has been a good time to add more square footage in the heart of one of the world's biggest biotech hubs. "There is a glut of available biotech space in Cambridge right now," says Knopf.

Just a few years ago, that kind of growth spurt would have heralded an IPO. And despite a public market that has been frozen shut for developers, Knopf can see a time ahead when Acceleron could make its move on the public market.

"If you fast forward, we think February, 2011, would be a great time for us to do an IPO," says the CEO. "11 will be positioned for Phase III if not in a Phase III. We'll have a muscle product in multiple Phase II studies around that time, the 41 product will be about to start Phase II. We think that's an excellent profile."

It's been nearly two years since Acceleron raised its last venture round of $31 million, but Acceleron's deal with Celgene in late 2008 delivered $50 million upfront with hundreds of millions more available in milestones. And Knopf says that the company can tap more investment dollars as needed.

"We have a great board," he says. "We can pick and choose."

Knopf also credits an early decision to keep manufacturing for itself in-house as a big reason why it has been able to move at such a rapid speed.

"We manufacture our own clinical product on site," says Knopf, "which gives us a tremendous advantage. We can move very quickly from preclinical to toxicology and straightaway into the clinic. Smaller biotechs have to anticipate what goes forward, then get into a queue with a commercial manufacturing partner. Then after producing one small batch they have to go back again and again. You run into problems with a scale-up. The slowdown is very, very expensive to the company. We have such a deep pipeline, we can keep the manufacturing folks busy, making it cost effective to produce our products."

Emerging Drug Developer: Acceleron Pharma
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