How a Little Serendipity Led Acceleron to a Crippling Blood Disease

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treating a group of anemias caused by defects in the later stages of red blood cell production, where engineered erythropoietin isn’t effective. What’s more, it just so happens that those anemias—like beta-thalassemia and myelodysplastic syndrome (or MDS, when the bone marrow doesn’t produce enough healthy blood cells)—are rare disorders with few current treatment options.

“It was a little bit of luck, which we’ll take, [and] is important in drug development, that we came up with a drug that targets a particular anemia that has a high unmet need,” Knopf says.

Acceleron was also fortunate because partner Celgene wasn’t just solely thinking about sotatercept as a multiple myeloma drug. Rather, Knopf says Celgene was interested in its impact both on bone formation and anemia. The two companies initially cut a deal in 2008 to co-develop sotatercept, and when they did, called the drug prospect a “novel bone-forming compound.” But the focus has since shifted, and Celgene’s investment in the drug, and Acceleron, has deepened. Celgene has poured more than $200 million into Acceleron to date, according to chief business officer Steven Ertel. It’s gained rights to co-develop sotatercept for a range of diseases, and is covering the cost for a slate of Phase 2 studies in beta-thalassemia, MDS, and even multiple myeloma and kidney disease-related mineral and bone disorder, a common problem for people on dialysis. (Acceleron paid for the earlier studies, and would split sales in North America and get a more than 20 percent royalty on sales elsewhere if the drug succeeds.) The two companies are also working together on a second, similar protein drug known as ACE-536, also for beta-thalassemia and MDS. Acceleron doesn’t have a partnership in place for its third drug, dalantercept, a prospective cancer treatment.

“You see [it a lot] with biotech companies—if [a drug] fails in one particular indication, a lot of times the partner will run off,” Knopf says. “So in this case, it worked out well.”

Celgene’s support, in part, helped fuel Acceleron’s IPO. The company upsized its offering and priced in September at the top of its proposed $13 to $15 per share range. Knopf says Acceleron could have priced higher, around $18 per share. But the company chose not to, and to go public ahead of pending data on beta-thalessemia at the American Society of Hematology’s annual meeting in December instead, to reward investors with near-term gains and establish trust with its backers. Indeed, Acceleron’s stock ran up through the meeting, and Acceleron immediately priced a follow-on offering at $50 per share, raising $129 million without excessive dilution. Shares now trade at about $26 apiece, almost double the IPO price, although they closed as high as $52.27 apiece in March before an overall pullback in biotech stocks.

None of this, of course, means that Acceleron’s drugs will succeed—just that through a series of moves, the company has maneuvered itself into a chance. Acceleron is going to need its good fortune to continue in the Phase 2 studies—enough increases in hemoglobin, without the big safety worries—and in the first of Acceleron’s Phase 3 studies, which are planned to start early next year, according to Knopf. In beta-thalassemia, Acceleron will also have to keep an eye on Bluebird, whose shares skyrocketed after its gene therapy, Lenti-Globin, helped a couple patients kick their transfusions in a matter of days—small, but promising results. Still, even with that potential battle looming, Knopf thinks there’ll be plenty of room for treatment options.

“The really unique thing is that there’s no competition other than this very early work of Bluebird that’s in the gene therapy space,” Knopf says. “You just don’t find that very much these days.”

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