- Shares of Acceleron Pharma were up nearly 50% Tuesday morning in response to one of the company's experimental drugs succeeding in a mid-stage study of patients with a rare blood pressure condition.
- Acceleron didn't disclose specific data points, but said its drug sotatercept met the study's primary and key secondary endpoints. A detailed review of the topline results will be presented at a medical conference this year. The study enrolled approximately 100 patients with pulmonary arterial hypertension, or PAH, a disease where obstructions in the lung arteries lead to high blood pressure.
- While the positive news caused Wall Street analysts to significantly raise their price targets on Acceleron, they acknowledged the company's drug is years away from potential market entry. SVB Leerink's Geoffrey Porges wrote in a note to investors that pivotal PAH trials typically enroll 700 to 1,200 patients and take four to six years to complete. As such, Porges said the earliest sotatercept could gain approval is likely 2024.
Without treatment, PAH patients can develop heart damage from the effects of high blood pressure. Because of this, drugmakers have found PAH a lucrative market.
Maryland-based United Therapeutics built its business around PAH drugs. Over the first nine months of 2019, the company's five marketed products brought in a combined $1.1 billion in net sales. Meanwhile Johnson & Johnson, which acquired its portfolio of PAH medications through the $30 billion buyout of Actelion, recorded almost $2.5 billion in sales last year from the portfolio's three top-selling products.
Acceleron is looking to break into this market with sotatercept. According to the company, the drug blocks a cell-signaling pathway and, in doing so, better regulates the heart vessels. Acceleron helped develop with Celgene the recently-approved drug Reblozyl (luspatercept), which inhibits cell-signaling proteins to treat a blood disorder called beta-thalassemia.
The lack of detailed data didn't diminish investor reactions. Shares of Acceleron traded at nearly $79 at market's open Tuesday, up from nearly $53 Monday afternoon. Analysts were also bullish on the news: SVB Leerink raised its price target on the Massachusetts pharma from $48 to $104, while RBC Capital Markets raised its target from $47 to $52.
"Sotatercept is a heck of a drug," wrote analysts at Credit Suisse, who predict the drug will launch in 2024 and deliver around $750 million in sales by 2030. Credit Suisse has a price target of $99 on Acceleron, with 50% coming from M&A prospects.
Investors will have more to go on when Acceleron reveals fuller data later this year. In the study, patients receiving standard-of-care PAH therapy were given either placebo or sotatercept and then evaluated for 24 weeks. The primary endpoint was pulmonary vascular resistance, with key secondary endpoints including a six-minute walk distance test.
Notably, more than 50% in the trial had been on three or more therapies. With that in mind, analysts now see sotatercept as a potentially valuable and differentiated addition to standard-of-care. That optimism is a departure from a few years ago, when the drug's potential looked uncertain after Celgene handed back rights to it.
"This successful resurrection of sotatercept comes as a surprise to us and to many investors," Porges of SVB Leerink wrote.