A phase III study evaluating the ability of the red blood cell maturation agent luspatercept to help people with anemia caused by low- to intermediate-risk myelodysplastic syndromes — a type of blood cancer — minimize the need for blood transfusions met its primary endpoint, catapulting shares of drug originator Acceleron Pharma Inc. (NASDAQ:XLRN) 42.8 percent higher to $48.52 by Monday's market close. Global regulatory filings are now planned for the first half of 2019, the companies said.

Summit, N.J.-based Celgene Corp. has been involved in developing the drug ever since striking a deal with Acceleron in August 2011. The late-stage outcome – no surprise after positive phase II data – provided it with a solid late-stage pipeline win at a time when analysts have fretted over the productivity of its business development efforts and the looming erosion of revenues from its blockbuster, Revlimid (lenalidomide).

Shares of Celgene (NASDAQ:CELG) traded higher on Friday, rising by a more modest 2.8 percent to $79.42.

Top-line details from the placebo-controlled trial, called Medalist, were somewhat thin. The study enrolled 299 participants with myelodysplastic syndromes with chronic anemia and refractory to, intolerant of, or ineligible to receive an erythropoietin-stimulating agent (ESA), the usual treatment for the condition. To be eligible, each patient's case had to be ranked by a commonly used prognostic scoring system as either very low risk, low risk or intermediate risk and to test positive for sideroblastic anemia.

The companies reported that luspatercept helped patients achieve "a highly statistically significant improvement" in the primary endpoint of red blood cell (RBC) transfusion independence of at least eight consecutive weeks out of the first 24 weeks of treatment. It also met a key secondary endpoint of demonstrating "a highly statistically significant improvement" in RBC transfusion independence of at least 12 consecutive weeks during the first 24 weeks of treatment. Modified hematologic improvement-erythroid, another secondary endpoint sometimes used in MDS studies to address limitations of standardized response criteria, was also achieved.

Adverse events observed in the study were generally consistent with previously published data, the partners said. The majority of adverse events that occurred in the phase II program were grade 1 or 2. Events possibly or probably related to the study drug that occurred in at least three patients during the studies were headache, hypertension, fatigue, bone pain, diarrhea, arthralgia, injection site erythema, myalgia and edema peripheral.

More detailed data from Medalist won't be shared until a future medical meeting this year. But "we believe luspatercept likely achieved a 25 percent – 40 percent rate of transfusion independence for the primary endpoint," wrote Jefferies analyst Michael Yee.

Yee explained his assumption based on phase II data that showed a consistent 39 percent to 50 percent rate of transfusion independence in a similar ring sideroblast-positive subgroup patient population. The phase III study, being twice as long as the 12-week phase II, should allow more time for luspatercept to work, he reasoned.

A second phase III trial, aimed at expanding the drug's potential reach, is being planned. That study, called Commands, will test luspatercept in first-line, lower-risk MDS patients. Another study, called Believe, is testing it in patients with beta-thalassemia. The Beyond phase II trial in non-transfusion-dependent beta-thalassemia and a phase II trial in myelofibrosis are ongoing.

"Overall, Celgene believes that this drug could achieve greater than $2 billion" in annual revenue, Suntrust Robinson Humphrey analyst Yatin Suneja wrote on Friday, "and while we also believe luspatercept holds blockbuster potential, Celgene will need more drugs like this to offset declining future Revlimid revenue."

For Acceleron, luspatercept clearly continues to be a net positive. The experimental growth and differentiation factor therapy already softened the blow of the phase II failure of its combination of dalantercept plus Inlyta (axitinib, Pfizer Inc.) in advanced renal cell carcinoma last year. And should the drug succeed in gaining approval, Acceleron has North American co-promotion rights, which it could use to help boost the payout of the tiered royalties — in the low-to-mid 20 percent range — on net sales of the drug. (See BioWorld, June 14, 2017.)