Yesterday, small cap biotech Acceleron Pharma Inc (NASDAQ: XLRN) rose 9.76% plus shares are up 183.6% for retail investors since its September IPO, meaning its worth taking a closer look at the stock along with the performance of other biotech IPOs like BIND Therapeutics Inc (NASDAQ: BIND), Ophthotech Corp (NASDAQ: OPHT) and Foundation Medicine Inc (NASDAQ: FMI) which also debuted at the same time.
What is Acceleron Pharma?Small cap Acceleron Pharma's scientists have world-leading expertise in developing medicines that regulate the transforming growth factor beta (TGF-β) superfamily of proteins, which play fundamental roles in the growth and repair of cells and tissues such as red blood cells, bone and blood vessels. Based on this expertise, Acceleron Pharma has built a pipeline of protein therapeutics targeted to key mechanisms underlying blood diseases and cancer:
The company is developing sotatercept in collaboration with Celgene Corporation (NASDAQ: CELG) for the treatment of anemia in rare blood diseases plus both are developing ACE-536 to treat anemia in patients with rare blood disorders. Acceleron Pharma is also developing dalantercept for the treatment of patients with advanced cancer who have failed prior therapy.
As for the other biotech IPOs around the same time, BIND Therapeutics is a clinical-stage nanomedicine platform company developing Accurins™, its novel targeted and programmable therapeutics; Ophthotech Corp specializes in innovative treatment strategies for wet age-related macular degeneration (AMD), the leading cause of vision loss in people over the age of 55 in the US and EU; and Foundation Medicine is a molecular information company focused on fundamentally changing the way patients with cancer are treated.
What You Need to Know or Be Warned About Acceleron PharmaLast Tuesday, Acceleron Pharma announced it had commenced an underwritten public offering of $100 million of its common stock with a further announcement coming yesterday about the 2,400,000 shares of common stock being offered at a price of $50.00 per share (before underwriting discounts) plus the underwriters having a 30-day option to purchase up to an additional 360,000 shares of common stock at the public offering price. The offering is expected to close on or about January 28, 2014 but what's odd is that the stock closed at $56.70 yesterday and is still rising in premarket trading.
With that in mind moving forward, it should be mentioned that December was an interesting month for Acceleron Pharma when it was selected for addition to the Russell 2000®, Russell 3000® and Russell Global® Indexes as part of Russell Investments' quarterly addition of stocks that had recent IPOs. In addition, Celgene Corporation initiated a phase 2 clinical trial of sotatercept in patients with end stage renal disease on hemodialysis – triggering a $7 million milestone payment to Acceleron Pharma which is also eligible to receive future development, regulatory and commercial milestones of up to $360 million for the sotatercept program.
A look at Google Finance for Acceleron Pharma's financials reveals revenues of $15.25M (2012) and $80.91 (2011) plus a net loss of $32.58M (2012) and net income $36.27M (2011) while last year the company reported revenues of $4.27M (3 months ending 2013-09-30), $26.43M (3 months ending 2013-06-30) and $15.01M (3 months ending 2013-03-31) along with a net loss of $18.51M (3 months ending 2013-09-30) and net income of $13.08M (3 months ending 2013-06-30) and $1.65M (3 months ending 2013-03-31). Acceleron Pharma also had $116.48M in cash at the end of last September to cover $16.52M in current liabilities and $10.98M in long term debt – meaning the company is not going to run our of funds anytime soon when you consider the just announced follow on offering.
Share Performance: Acceleron Pharma vs. BIND, OPHT & FMIOn Wednesday, small cap Acceleron Pharma rose 9.76% to $56.70 (XLRN has a 52 week trading range of $16.78 to $57.89 a share) for a market cap of $1.59 billion plus the stock is up 183.6% for retail investors since its September IPO. Here is a look at the performance of Acceleron Pharma verses that of other September 2013 biotech IPOs BIND Therapeutics, Ophthotech Corp and Foundation Medicine:
As you can see from the above performance chart, Acceleron Pharma is the best performing biotech IPO of the batch while the performance of BIND Therapeutics, Ophthotech Corp and Foundation Medicine has been more mixed, but none have exactly been duds either.
Finally, here is a look at the latest technical charts for Acceleron Pharma verses
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The Bottom Line. Small cap Acceleron Pharma has certainly been a winner for investors thanks in part to the credibility it gets from the Celgene Corporation connection, but new investors might want to be more cautious before jumping in given that run-up.
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