Summary
- The Reblozyl launch by partner Bristol-Myers Squibb is going well.
- Sotatercept for Pulmonary Arterial Hypertension reported positive Phase 2 results.
- The price of the stock is reasonable given longer-term expectations.
Acceleron (XLRN) reported a strong second quarter of 2020 on August 6. Revenue was $39.8 million, up sequentially from $4.3 million and up from the year-earlier figure of $27.7 million. Of that, Reblozyl royalty revenue in Q2 was $11.1 million, up sequentially from $1.5 million. Reblozyl (luspatercept) was first approved by the FDA for treatment of anemia related to beta thalassemia in late Q4 2019. The royalties are paid to Acceleron by Bristol-Myers Squibb (BMY).
Reblozyl royalty revenue has transformed Acceleron from a clinical-stage company to a commercial-stage pharmaceutical company. Looking at the stock price, the big bump came in late January 2020. From a base near $50 per share, since January the stock has mainly stayed in the $90-110 range. While it may be some time before a new event propels the stock significantly higher, I believe it is attractive below $110 a share for longer-term investors, based on potential Reblozyl revenue and the development of the rest of the pipeline.
Data by YChartsReblozyl background and approvals
Reblozyl is used to treat anemia associated with certain serious blood disorders. It is a recombinant fusion protein that binds several TGF-beta superfamily ligands, thereby diminishing Smad2/3 signaling. More simply, it helps red blood cells to mature despite disease-driven failures in erythropoiesis. Take beta thalassemia. Reblozyl is not a cure for the disease, which is caused by mutations in the genes needed to develop hemoglobin. However, it does (when it works) make the red blood cells functional, which allows patients to live without, or with less, blood transfusion. It is a rare disease, with perhaps about 1,000 patients in the United States, which contributed to Q1 royalties reaching only $1.5 million.
