Analysts Confident In Acceleron Pharma's Drug Trial Outcomes

Barclays reiterated its Overweight rating on Acceleron Pharma Inc XLRN after a meeting with management reinforced key elements of the firm's thesis on the company, particularly regarding the drug Luspatercept.

Luspatercept And Acceleron's Recent Performance

Acceleron's lead therapeutic candidate, Luspatercept, is being evaluated in Phase 3 studies for the treatment of the hematologic diseases, myelodysplastic syndromes (MDS) and beta-thalassemia under a global partnership with Celgene Corporation CELG.

The meeting highlighted "(1) low expectations for the comparator arms in both the MDS/beta-thal pivotal trials, and (2) the breadth and durability of responses to luspatercept supporting the drug's commercial potential."

Related Link: Barclays Raises Acceleron Price Target On Positive Luspatercept Data

"Indeed, we view these studies as among the lowest risk pivotal trials in our universe — with uncertainty more on exact timing, rather than outcome," analyst Carter Gould wrote in a note.

The analyst also expects the second half of 2016 "could provide good opportunities to add shares on the back of pipeline catalysts around which we have less conviction (e.g., go/no-go decision for sotatercept in CKD, phase 2 data in RCC for dalantercept)."

Other Drugs

In addition, Gould highlighted the company's "cautious" tone on Sotatercept — acknowledging scenarios where Celgene may not proceed in chronic kidney disease.

"If that plays out, we expect a negative reaction in XLRN shares, but don't think it rules out development in other indications (e.g. myelofibrosis; an ongoing sotatercept IST with MD Anderson was expanded)," Gould noted.

On Dalantercept, the analyst sees "a high hurdle for the required PFS benefit (50–100 percent) over axitinib for relevancy given the competitive environment." Acceleron is developing Dalantercept for the treatment of patients with advanced cancer who have failed prior therapy.

At the time of writing, shares of Acceleron were up 2.06 percent at $34.25. Gould has a price target of $42 on the stock.