Acceleron Pharma (XLRN) recently reported its quarterly results and also provided an update on operations. The Cambridge, Massachusetts-based company ended the June quarter with $262.7 million in cash on its balance sheet, which translates to roughly 25% of the company’s market capitalization.
XLRN’s lead product candidate is luspatercept, which 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 (CELG).
Under the collaboration agreement with Celgene, XLRN is entitled to tiered royalties in the low-to-mid 20% range. The company also entitled to development, regulatory and commercial milestones. In addition, CELG is responsible for 100% of development costs and 100% of XLRN’s commercialization costs for North America.
XLRN shares have fallen nearly 40% this year. The stock suffered during the sell-off in the biotech sector at the start of this year and has failed to recover since. I believe XLRN is attractively valued at current levels and offers a favorable risk/reward profile.