Merck & Co., Inc. (MRK) Q4 2018 Earnings Report, Transcript and Summary

Good afternoon, ladies and gentlemen, and welcome to the Acceleron Fourth Quarter and Full Year 2018 Earnings Conference Call. [Operator Instructions] As a reminder, this conference call is being recorded. I would now like to hand the call over to Mr. Todd James, Vice President, Investor Relations and Corporate Communications at Acceleron. Please go ahead.

Thanks, and welcome everyone to our third quarter 2018 earnings conference call. The press release reporting our financial results, in addition to the presentation for today's webcast, are available on the Investors and Media page on the corporate website at www.acceleronpharma.com. Joining me for the call today are Habib Dable, our Chief Executive Officer; Robert Zeldin, our Chief Medical Officer; Kevin McLaughlin, our Chief Financial Officer; John Quisel, our Chief Business Officer; and Sujay Kango, our Chief Commercial Officer. As a reminder, we will be making forward-looking statements regarding our financial outlook in addition to regulatory and product development plans and research activities. These statements are subject to risks and uncertainties that may cause actual results to materially differ from those forecasted. A description of these risks can be found in our most recent Form 10-K on file with the SEC. I would now like to turn the call over to Habib Dable, our Chief Executive Officer.

Thank you, Todd, and good afternoon, everyone and thank you for joining us today. 2018 was an important year of Acceleron and I am extremely proud of the progress we've continued to make across our entire pipeline. 15 years after our founding, we have one of the most advanced TGF- beta super family based pipelines in the industry, focused on three disease areas. Hematology, Neuromuscular and Pulmonary. Looking ahead 2019 and 2020 includes several key milestones for all of our programs, including the potential approval and commercial launch of our lead product candidate luspatercept in both the United States and Europe. We also expect important Phase 2 results from each of our ongoing trials in Neuromuscular and pulmonary disease. Turning to our pipeline in Hematology along side our collaboration partner Celgene. We currently have multiple ongoing luspatercept trials in patients with anemia associated with myelodysplastic syndromes, or MDS and beta-thalassemia and myelofibrosis. In Neuromuscular, we have two Phase 2 trials of ACE-083in two diseases associated with focal muscle weakness, FSHD and CMT. Lastly in pulmonary both our PULSAR and SPECTRA trials are active and we'll be evaluating Sotatercept in patients with PAH. Focusing first on luspatercept, in the middle of last year we were excited to announce positive results from our pivotal Phase 3 trials, MEDALIST and BELIEVE in lower risk MDS and beta- thalassemia respectively. This set the stage for a very strong showing at ASH 2018 with luspatercept front and center. The Acceleron and Celgene teams did a phenomenal job planning and executing at this key Hematology Congress attended by more than 25,000 people. Among the key highlights at ASH, the top-line results from both MEDALIST and BELIEVE trials were reviewed and discussed at the meetings opening press conference along with only two other clinical trials. The BELIEVE trial presented by Dr. [Anika Capellini] from the University of Milan to a full room along with multiple ancillary rooms of attendee overflow. The MEDALIST trial, the first of six plenary presentations presented by Dr. Alan List from Moffitt Cancer Center to a main conference center room packed with over 10,000 meeting attendees. And both trials were selected from among thousands of scientific presentations at the meeting for Best of ASH honors distinguishing them as some of the biggest breakthroughs in hematology. Finally, with these important results in both MDS and beta -thalassemia, we and Celgene remain on track to submit regulatory marketing applications in the US and EU in the first half of 2019, starting with the submission of the VLA to the FDA expected in April. In addition to the patient population studied in the MEDALIST and BELIEVE trials, we have continued to expand the luspatercept's overall development plan with three additional trials already underway. This includes the COMMANDS Phase 3 trial and first-line lower risk MDS, the BEYOND Phase 2 trial in non -transfusion dependent beta- thalassemia and the Phase 2 trial in myelofibrosis, which recently reached its target enrollment of 70 patients. Patients with anemia associated with lower risk MDS, beta-thalassemia and myelofibrosis are in dire need of new therapies, with current treatment options larger limited to red blood cell transfusions and unapproved agents. Because of this significant unmet medical need, we in Celgene estimate annual global peak sales of luspatercept to exceed $2 billion for the MDS and beta -thalassemia indications alone. We also estimate as much as another $1 billion of global peak sales potential for the opportunity in myelofibrosis associated anemia. With our low to mid 20% tiered royalty rate and Celgene covering approximately 100% of the program cost, these peak sales estimates have the potential to translate to significant royalty revenue for Acceleron. As you would expect with an opportunity in an unmet need of this magnitude, the teams at Celgene and Acceleron remain highly focused on all upcoming regulatory and launch readiness activities along with continued clinical trial execution and expansion. I will now hand the call over to our Chief Medical Officer, Robert Zeldin to review our neuromuscular and pulmonary disease programs.

Thanks Habib. I'd like to begin with ACE-083 in neuromuscular disease. We continue to advance ACE-083, our locally acting muscle agent in Phase 2 trials in patients with facioscapulohumeral muscular dystrophy or FSHD and charcot-marie-tooth disease or CMT. FSHD is a myopathy caused by the expression of a typically dormant protein that is toxic to muscle tissue, while CMT is a neuropathy in which disease nerve leads to muscle atrophy. At the World Muscle Society Annual Meeting in October, we presented positive results from part one of the trials, the open-label part which evaluated safety and tolerability along with changes in muscle mass to enable dose selection for part two. Patients with FSHD and CMT treated with an ACE-083 experienced mean total muscle volume increases from baseline of greater than 14%, reduction in absolute fat fraction and a favorable safety profile over the 12-week treatment period. Based on these positive results, we moved into part two of the trials designed to assess the efficacy and safety of an ACE-083 versus placebo over a six-month treatment period followed by a six-month open-label period. The primary endpoint is the percent change in total muscle volume via magnetic resonance imaging with secondary endpoints including motor function tests such as timed walking tests in both FSHD and CMT, as well as upper limb tests in FSHD. We will also be evaluating disease specific patient reported outcomes in both trials. I am happy to announce that the FSHD trial recently completed full enrolment of 55 patients and we remain on track to present the top-line results in the second half of the year. Patient recruitment in the CMT trial is ongoing. With that I'd like to turn to our pulmonary disease program. As we described at our Pulmonary Arterial hypertension or PAH Deep Dive event in November, we are very excited to be developing Sotatercept in PAH, a rare progressive disorder characterized by high blood pressure or hypertension in the arteries of the lungs. There is an urgent need for new therapies in PAH despite 14 drug approvals over the 20 last years; the median survival for these patients is still only 5 to 7 years post diagnosis. Also in November, we and our collaborators at the Brigham and Women's Hospital presented preclinical research on Sotatercept at the American Heart Association Annual Scientific Sessions which demonstrated so Sotatercept's ability to reverse pulmonary vascular remodeling and improve pulmonary hemodynamics and right ventricular structure and function in an animal model of PAH. Our Phase 2 PULSAR trial to evaluate Sotatercept's activity in patients with PAH is ongoing. This is a randomized double-blind placebo-controlled trial that will enroll 100 patients with World Health Organization group one functional class 23 PAH. The primary treatment period is six months. The primary endpoint is change in pulmonary vascular resistance with multiple secondary endpoints. We also recently initiated an exploratory study called SPECTRA. This trial will look at innovative endpoints of invasive cardiopulmonary exercise tests or IC pet and cardiac MRI in addition to the more traditional PAH trial endpoints being assessed in the PULSAR trial. With that I will turn the call over to Kevin McLaughlin, our CFO to review the financials.

Thanks Robert. Our cash, cash equivalents and investments as of December 31st, 2018 were $291.3 million compared to $372.9 million as of December 31st, 2017. Additionally, we were recently able to successfully execute a follow-on offering of common stock including the full exercise of the underwriters over allotment option for net proceeds to Acceleron of approximately $248.2 million from new and existing institutional shareholders. Based on our current operating plan and projections, we believe that our cash, cash equivalents and investments together with the net proceeds from the offering will be sufficient to fund our projected operating requirements until such time as we expect to receive significant royalty revenue from the luspatercept sales. Collaboration revenue for the year was $14 million. The revenue is all from the company's Celgene partnership and is primarily related to expenses incurred by the company in support of luspatercept. Total costs and expenses for the year were $138.4 million. This includes R&D expenses of $103.9 million and G&A expenses of $34.5 million. The company posted a net loss for the year ended December 31st, 2018 of $118.9 million. I will now turn the presentation back over to Habib for final remarks.

Great. Thank you, Kevin. And with that I'll briefly summarize our priorities for the remainder of this year and beyond. Beginning with luspatercept and Hematology, we and Celgene plan to submit regulatory marketing applications to the US and EU health authorities in both lower-risk MDS and beta -thalassemia in the first half of 2019, starting with the submission of the BLA to the FDA expected in April. In addition, we plan to submit the Phase 3 MEDALIST and BELIEVE results for publication in 2019. For the Phase 2 trial in myelofibrosis, we anticipate reporting top-line results in the second half of 2019 and expect to provide preliminary top-line results for the BEYOND phase 2 trials in 2020. The recently initiated phase 3 COMMANDS trial continues to enroll patients. We also expect to discuss our initial clinical trial expansion plan for luspatercept in 2019. Looking at our neuromuscular programs, we plan to present preliminary results from part two of the Phase 2 trials with ACE-083 in the second half of 2019 for FSHD, and by year end 2019 for CMT. We expect to provide ASC-2494 preliminary results for the phase 1 healthy volunteer trial in the first half of this year. And lastly for PAH, we expect to provide preliminary results for the PULSAR and SPECTRA trials in 2020. In closing, luspatercept has created significant [Technical Difficulty] the need to date and we believe it will continue to do so through its commercial launch and further indication expansion over time. We are also approaching important value inflection points with both ACE-083 and Sotatercept expected to produce Phase 2 proof-of-concept data in neuromuscular and pulmonary disease over the next 12 to 18 months. We have a busy year ahead and remain confident in our ability to continue advancing these potentially transformative therapies for patients, while focusing on long- term value creation for both our business and shareholders. I will now open the call to questions. Operator?

[Operator Instructions] Our first question comes from Carter Gould of UBS. Your line is now open.

Great. Good afternoon, guys. Thanks for taking the question. I guess first on ACE-083, even clear on the need to show benefit in terms of function and strength, but I was just kind of wanted to get a little more detail on how you're thinking about the clinical hurdle in terms of them potentially moving that forward into essentially a phase 3 study. Any color on how you expect the placebo arm to perform or kind of what's a clinically meaningful separation there. And then since the studies enrolled, any color on the demographics of that Part B enrollment and maybe how that compares to Part one? Thank you.

Hey, Carter. This is Habib. Thanks for your question. Maybe I'll just kind of kick it off and then hand it over to Robert to add any additional color. So you're right with respect to ACE-083 in both charcot-marie-teeth which we plan to --in charcot-marie-tooth as well as FSHD where we plan to disclose top-line results for Part 2 of the studies in the second half of this year. The important part of this study as you knows is all about function as you alluded to. We have up to date been able to demonstrate double-digit growth in both indications in terms of total muscle volume in a generally safe and tolerable way. Now what we want to be able to do is to replicate that muscle growth and to be able to translate that into a functional benefit. Now when you're looking at FSHD where we're dosing both the biceps as well as the TA muscles, in the biceps we're looking at functional improvements by measuring, using a measurement called the PUL or the Performance Upper Limb test where patients are asked to engage in various exercises like putting pegs in holes, stacking cans et cetera and timing them. When you're looking at the TA muscle for both charcot-marie-tooth as well as FSHD, we're looking at end points such as for stair climb, time and meter walk run, six-minute walk distance et cetera. So at the end of the day, Carter, we again as I said, we're powering the studies to be able to demonstrate total muscle volume increases. And we're looking across a spectrum of functional endpoints including quality of life assessments through a validated PRO where we're working with collaborators at the University of Rochester. And we will be looking at all of that data in totality. And again we power the studies to be able to show us a functional improvement. We're looking for double-digit increases in function, but again looking at the totality of the data at the end of part two of these studies, we hope to be able to be very well informed in terms of what a phase three would look like in terms of a go/no-go. Robert, I don't know if there's anything on top of that you'd like to add?

Too comprehensive.

Hey, Carter, it's Todd. I would just add about the baseline demographics. We targeted patients based off of the muscle scores for the trial that they see mild to moderate patients. So the patients wouldn't be too far gone that we couldn't provide an improvement with a therapy like an ACE-083 and so that's in line with the patient's they were involved in the trial.

Our next question comes from Danielle Brill of Piper Jaffray. Your line is now open.

Hey, everyone. This is [Indiscernible] on for Danielle Brill. I just had a couple quick questions that I wanted to hit on. First was the myelofibrosis trial, would you be able to give us some color on what we should be looking out for in the preliminary data that's going to be coming up in the second half?

Yes. I know thanks for your question. So from myelofibrosis just to remind everyone this is a phase 2 study that we're running where we recruited 70 patients, and we have also guided that in the second half of this year that we would be presenting data on these patients. Again, the way we looked at these 70 patients was looking at we --40 patients who are being treated with our asset luspatercept without the combination of ruxolitinib because of the fact that they don't have an enlarged spleen. And then 30 patients out of that 70 are looking at luspatercept in combination with ruxolitinib. And again we're looking at transfusion dependent patients, as well as non transfusion dependent patients. And so at the end of the day, I think it's important to highlight the unmet need with these patients because of the fact that they are suffering from anemia in some --in many cases just due to the fibrotic bone marrow. And so therefore the disease induce anemia is something where we're looking at in the mono patient, but also please remember when you think about ruxolitinib and JAK inhibition in general, there also suffer -- because of the mechanism of action in many cases it is transient, but it is an impact on these patients where they're suffering from the fibrotic bone marrow, as well as drug-induced anemia because of the JAK inhibition. This also led us to announce together with our collaborators recently of Phase 1/ 2 study with Fedratinib which is Celgene JAK inhibitor where we'll be looking at combination use of luspatercept as well as part of our myelofibrosis study.

Hey, it's Todd. As far as the primary endpoints for the Phase 2 depending on which cohort the patient's in whether it's the anemia only cohort. There we're looking for consecutive 12 weeks hemoglobin increase of a 1.5 gram or greater within the first 24 weeks or the six-month primary treatment period. And for the patients that have the 2 to 4 unit transfusion burden over a four-week period of time, there we are looking for transfusion independence or no transfusions over a 12 consecutive week period within that 24 week primary treatment period. So that's the main endpoints that you could expect to see when we do present results in the second half of the year.

Great, thanks, Todd.

Got it, thank you so much. That was really helpful. And I guess the second question I had was you mentioned you're getting ready with launch readiness activities right now for the luspatercept. Could you expand on that a little bit? What are you guys doing and how is it coming about?

So thanks for your question. Obviously, now with announcement that we made recently with the BLA expected to be filed in April and under a standard review process we could anticipate that a year later from April we could be in launch mode. Now that said, we also are doing a number of activities together with our collaboration partner Celgene in preparation for that, as well as the fact that if indeed we were surprised with a priority review and we were able to launch earlier that we would be prepared. So a number of activities in terms of launch readiness. Whether it's in preparations from our positioning strategy, in terms of our pricing research, in terms of manufacturing and supply. I can tell you that there's a tremendous amount of work that's going on. Now with respect to specifics in terms of commercial launch perhaps, Sujay, you maybe you want to add a little bit of color in terms of some of the things that we're working on right now with our partners.

Sure. Thanks, Habib. So couple of things right as Habib mentioned, we do have joint commercialization teams already in place. And as part of that we are clearly understanding what the patient needs that on the forefront and putting programs together that would be necessary for launch as and when we get approval. So in that instance what we have is preparing all the materials that are necessary, trying to think from a peer engagement early peer engagement perspective planning around that component to ensure that access is appropriate, understanding the where the patients are within the US. So we are able to deploy the right team members appropriately at the right time point. So all this work for planning in a pre-launch phase is what we are doing to prepare with ensuring that at launch we'll be ready to go day one and have the patient's needs on the forefront of our mind. So that's what we are working on.

Our next question comes from Yaron Werber of Cowen and Company. Your line is now open.

Great. Thank you so much. I have a couple of questions and maybe just the first one to clarify the endpoint. Todd that you mentioned the consecutive 12-week endpoint. Is that any consecutive 12-week and you sort of record the best data within that 24 week or is it -- it needs to be consecutive 12-week within a specific time point?

Yes. And it's the first. So if it's week 0 to 12 or 2 to 14 or 12 to 24 within that 24 week period, all those instances would be considered a responder within that 24 week period.

And can you just remind us -- yes with the Sotatercept study that was done obviously in that single center how was that endpoint defined? Was it defined the same way that 33% to 39% response rate?

Yes, that's right and whether it was the Sotatercept IST or MDS trials there we're looking for a consecutive eight-week, that's how we've done the endpoints over the treatment period.

Okay, great. And then it sounds like you're going to - the way I'm hearing you're correct so maybe times like you're going to be asking for Priority Review. Can you just remind us, I don't know if you're comfortable sharing this whether which division of FDA is actually reviewing the application? Is it the same division reviewing both filings for both indications?

Yes. So Robert would you like to answer that?

What?

Division of Hematology.

So it's hematology, yes, our expectation is that division will review both applications.

Okay, so there will be a single priority review and they'll review of them at the same time.

Yes. So it's -- that's not necessarily the case that it would be single. So obviously, Yaron, at standard practice we would be looking and asking for that, but just to remind you again just so I'm clear, our base case assumptions that is a standard review process.

Our next question comes from Robyn Karnauskas of Citi. Your line is now open.

Hi, this is Nicole on for Robyn. Thanks for taking the questions. Just going back to the regulatory process could you --do you expect the regulatory process to be the same between or similar between the US and EU? And did you get a sense from your communications that the regulatory authorities that they're --there would be any potential hurdles or concerns about acceptance of the application?

Robert would you like to --

Yes. I mean I think that at the pre BLA meeting I think that was a very positive open discussion. I think the agency was excited about receiving the application. And I could not identify any specific areas of concern as folks are now clearly aware we intend to file with the FDA in April. And subsequently with the -submit the marketing authorization application in the first half.

Okay, great. And then just a quick follow up given the evolving and competitive landscape in beta cell with multiple different modalities being investigated. Where do you see greater potential for luspatercept been fall? And do you expect there to be any difference a take between the transfusion dependent and non transfusion dependencification?

Yes. So with respect to two beta -thalassemia, so let me answer the second part of your question first. The BELIEVE study just to remind everyone it was studied in transfusion dependent patients. So the initial approval that we will be looking for is exactly that. Now I think it's important to also note though is that there is a significant population probably equivalent to the transfusion dependent population that we're exploring through the BEYOND study. And so we're recruiting patients 150 there and so obviously this is a population and again it's just to kind of repeat what cited by Dr. Capellini on stage is that this is a population with a very high unmet need because of the fact that they are not actually being transfused but there are in many, many cases very symptomatic. So we're very much looking forward to the results of that study. Now in terms of the first part of your question in terms of competition and how --what the potential for beta - thalassemia and luspatercept would be. One of the things that we are extremely proud of is that luspatercept has been able to demonstrate the ability to restore healthy red blood cell formations in two very distinct diseases. Lower risk MDS as well as beta- thalassemia to date which has given us a confidence to want to proceed with other lifecycle management activities such as myelofibrosis and potentially other diseases of chronic anemia. With respect to beta- thalassemia, if we are approved, we feel that there will be a tremendous unmet need that we will be catering to. Now, obviously, I know there's a lot of attention right now on gene therapy and if gene therapies are proven to be safe and efficacious, I'm thrilled that the community is going to have that as an option. Do I feel that that option is going to cater to the many, many patients with unmet needs> No, I don't. And I feel that if indeed it is another option for patients, I feel there will be a tremendous opportunity for luspatercept to find a space and a very significant space for this patient population who may not feel or be qualified for such a therapy.

Our next question comes from Geoff Meacham of Barclays. Your line is now open.

Hi, this Greg Harrison on for Geoff. Thanks for taking the question. So now that potential luspatercept launch is on the horizon, do you think the expanded indications and development could end up garnering the same penetration as with the MEDALIST and BELIEVE populations? And if so, what factors could possibly enable that outcome?

So I just want to make sure I understood your question. You're asking for the -- in the follow-on indications beyond MEDALIST and BELIEVE as to whether or not we feel that they will be equally robust in terms of the opportunity, in terms of the unmet need, is that correct?

Yes, exactly.

Okay, great. So again let's start with MEDALIST and BELIEVE and make sure that we're on the same page. When we look at MEDALIST and BELIEVE, we feel that we're going to be catering to a very significant population. So for example when we look at the datasets that we've got that we feel that we have the most robust information around, and we look at US and Europe. For the MEDALIST population, we feel that there's approximately about 40,000 patients between the US and Europe that we'll be able to have an opportunity to serve. With the BELIEVE patient population, we feel that it's approximately 20,000. Now admittedly, the opportunity for that to expand is going to be driven by success in our subsequent studies. So if indeed the BEYOND study is successful, we feel that that patient population for beta-cell alone could double. If indeed the COMMAND study which is our first line treatment naive study in lower risk MDS is successful, we believe that that's population of patient has an incidence rate of approximately 15,000 a year, is that right Todd?

Yes. 15,000 to 25,000

15,000 to 25,000 a year. And the nice thing about that is it allows us to get into this space and to be able to provide with luspatercept much earlier in the disease setting as well. When you look at myelofibrosis, myelofibrosis patient population across between US and Europe is approximately 30,000 -35,000 patients and if you look at that patient group probably 50% to 60% of them suffer from moderate to severe anemia. So now you're again looking at another 15,000 to 20,000 patients and independent as to whether or not they're on ruxolitinib or not as I said before, these patients are suffering from chronic anemia due to this fibrotic bone marrow, as well as the drug-induced anemia. So the opportunity for a luspatercept to play a role here as an erythroid maturation agent can be pretty profound in this group. So all of these groups that we're looking at have a potential to have a very high unmet need and an underserved population. And then beyond that we obviously have talked about looking at expanding the lifecycle management strategy. We're working very closely with our partners at Celgene. They are very motivated to continue to moving forward beyond the already identified disease indications. I think you've heard us talk a little bit about chronic induced anemia as one that we're exploring, but it is one of many chemo induced anemia. And that's just one of many areas that we're exploring and prioritizing and hopefully more to come as that analysis continues to finalize.

Great. Thank you.

And just by the way just to kind of close off on that. we just recently this year we've given a little bit more granularity in terms of the commercial opportunity of these indications where we have traditionally always said that if you look at the lower risk MDS and beta-thalassemia that represented a $2 billion plus opportunity and now as we move forward with our next indication in myelofibrosis, if indeed the myelofibrosis study is successful and the drug is approved in that indication, we and our partners at Celgene believe that it's an incremental $1 billion opportunity, $1billion opportunity in that indication alone.

Our next question comes from Eric Joseph of JPMorgan. Your line is now open.

Hey, guys. Thanks for taking the questions. A couple from us. I guess the first on most luspatercept and myelofibrosis, assuming that safety data are good maybe can you talk a little bit about the registration path forward? Whether you would need to pursue individuals --individualized trials and the non transmuting dependent versus transfusion dependent populations? And whether there's sort of a wholesale way of pursuing the indication and how should we be thinking about where the Fedratinib combination studies factors in to later stage development?

Yes. So, Eric, I think the first question is pretty easy to answer in that too early right now. Let's wait and see how the phase 2 reads out, let's see what data comes out of that and based on that we'll obviously have the appropriate interactions with the regulatory agencies. And then we'll be guided by that feedback and then we'll share with you the development path forward for phase 3. With respect to Fedratinib, I think all I can tell you at this point are what have already been disclosed in terms of the phase ½ studies. The Celgene disclosed this last month and then on top of that I think it's important to note that also sends a very strong signal in terms of their commitment to myelofibrosis with luspatercept as their anchor.

Got it. And maybe just a clarification question on ACE-083, you made a point earlier that -- is it the expectation that you'll be able to detect a static benefit and functional improvement based on a trial sizing and which measure specifically are you expects to see that benefit be shown?

Yes. So I think Habib's point was that we're going to look at the totality of the data. So we know the primary efficacy endpoint is clear. That's overall most growth and now we have a number of assessments of functional benefit we're going to look at them in the totality. So I'd say in general we're guiding to say that we'd like to see a 10% improvement on those individual measures that would give us the confidence to advance the program. But I don't think we would you know pick one of our children above the other.

Got it, got it. And just can you comment around sort of how frequently subjects are assessed or the number of intervals that we'll see in the part 2 read out?

Yes. So as we haven't gotten to the granularity of the assessment timelines, but what again just so you know these patients are coming in every three weeks for their injections. Their intramuscular injections that are done in the OP.

Our question comes from Gerard Smith of SVB Leerink. Your line is now open.

Hey, thanks for taking the question. This is Gerard on for Geoff. A couple on muscle could you remind us how you expect to disclose the 2494 phase one data, what type of disclosure, what will you say exactly in terms of safety and volume et cetera? And then could you also talk about the different ligand specificities for the two different muscle agents? And how we should be thinking about making inferences on 2494 based on the ACE-083 function data that we'll get later in the year? Can we sort of try to make inferences about the two or it is not appropriate? Thank you.

Hey, Gerard, it's Todd. As far as the communication plan for those results, hard to say have to go fall exactly at Congress or not but at the very least there would be a press release that discloses the results. As far as what you could expect it's a single ascending dose trial across I think five, six different doses and as safety as you can imagine anything if serious would absolutely be outlined. Typically, if things are just grade one, two we categorize them. If there are injection site reactions for example like we saw in part one, we would comment about that. And as far as the PD that you could expect to see, we're looking at potential increases in muscle volume of the quad which is very regular to do in this style of a trial. As far as if you can read anything in from the ACE-083 results to the 2494 results, I think it would be fairly difficult to do that, very distinct molecule of ACE-083, is locally acting agent that we can take very high therapeutic dose levels, inject it right into the target muscle and there we've seen in part one increases of 14 plus percent at the high doses, whereas a systemic agent like 2494 you most likely to see mid to high single digit increases at least agents whether it be Regeneron, [Nagarmab] that have come before us, have seen increases of that nature. And so yes don't think there's much read through from one to the other. As far as the binding affinity. I think I'd let John Quisel get into those details.

Yes. So the important thing to remember to know about the ligand binding is the both ACE-083 and ACE-2494 are what we call myostatin plus, so they can form with our view of how best to stimulate muscle growth and improve function by inhibiting as many of the relevant ligands that are negative regulators of muscle as you can safely. The two molecules so apart from being minus and plus in their approaches as Todd mentioned they're very different ACE-083 being locally administered being able to reach local concentrations that you probably can't get to with a 2494 like systemic agent. So where we've shown the muscle lab increases in the in the teens, they would be surprising probably the feedback kind of effects from a systemic agent like 2494 even though the two agents are engaging similar spectrum of ligands. Just speaking briefly to the protein scaffolds are built off of a ACE083 it's based generally around [fall stand] structure while the other one 2494 is a ligand track based on the cell surface receptors that are involved in binding the key ligand. So they're very different proteins with similar ligand binding spectra and due to their different modalities we've very different, we expect very different effects on the muscle mass.

Our next question comes from Jeffrey Hung of Morgan Stanley. Your line is now open.

Thanks for taking the questions. Can you talk about conversations you've had with payers and anything that surprised you or any discussions on value-based pricing?

So I don't think there's much we can say about that discussion, but do you want to comment, Sujay, in terms of anything we can share with respect to payer or pay research that's ongoing?

Sure. So as you know we are conducting payer research, we are getting insights over there. And Celgene is a very methodological approach to value based pricing right. So at this juncture we are getting that insight that's what I can comment. And those sort of taking into account that we want to ensure that we have the broadest access possible for the patient population right. So with that in mind I think they're in a good position at this juncture to get all that insight. We can also based on FDA guidance we can do early payer engagement and through that we are collecting that insight. And then very close to launch we'll be able to disclose the price related to the value proposition as well. We feel that the phase 3 made us strong.

Great and then maybe for the neuromuscular and pulmonary franchises. Can you talk about your strategy in terms of -- and your thoughts on partnering versus going in alone?

Yes. It's a good question, Jeff, I think at the end of the day we are fully committed to both therapeutic areas as we disclosed during R&D day in 2017. We just successfully were able to execute on our secondary which gives us obviously the appropriate firepower to drive these studies to conclusion. And at the end of phase two and based on that data, we will take a good look in terms of what would be drive the most value strategically for the programs and for Acceleron. And we'll make a decision at that point. I think the most important nuance to all of that is we are positioning ourselves to be in a position of potentially partnering these programs to maximize value rather than the necessity to partner these programs because we would otherwise not be able to afford to do to run them. I think it's a very important nuance.

Our next question comes from Kennen MacKay of RBC Capital Markets. Your line is now open.

Thanks for taking the question. Habib that $2 billion to $3 billion in peak sales guidance is reminiscent of Babe Ruth pointing at centerfield bleachers that's quite the move I liked it. Couple of quick questions. On the luspatercept clearly in MEDALIST there's a major impact on hemoglobin and transfusion but it looks like there's also some impact on platelets. Could you maybe remind us how requirements for g-csf were impacted in MEDALIST and potentially how this could factor into own label or usage in the clinic? Then also in MDS, correct me if I'm wrong but when luspatercept will likely sort of be thought of as supportive care for these patients, and I guess how should we think about that impacting usage of either high or low intensity antineoplastic or immunosuppressive therapies in these patients? What --obviously there was no difference in leukemic transformation but is there any compound data out there with some of these anything leukemic. Thank you.

So I'm going to ask Dr. Robert Zeldin to comment. I'm not sure how much depth you want to get into and all of that. And I think the first part of that question I'm not sure if you caught all that, but cut out a little bit.

Yes. If you could repeat I think --

The first part of you --just repeat the first part.

On points, yes, looked like there was an effect on -- some of those forest plots that had been presented in the MEDALIST trial. I was wondering if there was any difference in requirements for g-csf in MEDALIST.

No. I can't speak to the specifics on an individual patient basis, but I can tell you having very comprehensively review the safety data that we have no concerns regarding thrombocytosis in the population of patients treated in the MEDALIST study.

Oh, no. I was thinking more that you could reduce the need for some of the --therapies from your last --

So, Kenn, sorry, I think we tripped over each other in hearing and we did --I think the first part of the question was answered by Robert in terms of the comment that you got from it. The second part of your question though I don't believe was answered. So you want to repeat that again, Kennen. Okay, we lost him, okay, we weren't catching at all. Okay, we'll have to go to the next question, operator.

And your next question comes from Terrence Flynn of Goldman Sachs. Your line is now open.

Hi, guys. This is Holly on for Terrence. Just one from us is that can you discuss the status of the COMMANDS trial enrollment and when we could potentially see data? Thank you.

Sure. Hey, Holly. It's Todd. Yes, we kicked off the COMMAND trial with our partner Celgene in late in the third quarter of last year. So as you can imagine in the first 6 to 12 months of trial that's all about getting sites up and running and obviously the initial patients into the trial, but as you get more sites on enrollment starts to pick up pretty quickly. So we're still in the early days here. As far as when you could expect data, we haven't guided to that today, but they are typically some initial forecast listed on clinical trials.gov for trials. End of Q&A

And this does conclude our question-and-answer session. I'll now turn the call back over to Habib Dable for any closing remarks.

Yes. No, if there is no other questions, thanks everybody for your participation. Thank you for your continued interest in the company. And look forward to meeting you at future investor conferences or -- with that everybody have good night.

Ladies and gentlemen, thank you for your participation in today's conference. This conclude today's program. You may all disconnect. Everyone have a great day.