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Agios Pharmaceuticals (AGIO) Q1 Earnings: What's in Store?

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Agios Pharmaceuticals, Inc. (AGIO - Free Report) is scheduled to report first-quarter results on May 4 before market open.

Shares gained 19.1% so far this year, while the Zacks classified Medical Products industry witnessed an increase of 14.3%.

Agios’ performance has been mixed with the company missing estimates twice in the trailing four quarters and surpassing the same twice. Overall, Agios has an average positive surprise of 0.59%.

In the last reported quarter, the company posted a positive surprise of 13.55%. Let’s see how things are shaping up for this quarter.

Factors at Play

Agios, a development-stage biopharmaceutical company, is focused on the formulation of treatments for cancer and rare genetic metabolic disorders. As a development-stage company, Agios does not have approved products in its portfolio yet. Investors are thus expected to keep an eye on pipeline updates at the earnings call.

In this regard it is worth mentioning that the company has several interesting candidates in its pipeline. Its cancer pipeline comprises enasidenib (IDH2 mutant inhibitor), AG-120 (IDH1 mutant inhibitor) and AG-881 (pan-IDH mutant inhibitor). We note that Agios is developing enasidenib and AG-881 in collaboration with Celgene Corporation , which should bring in collaboration revenues.

Moreover, during the quarter (ended Mar 2017) Agios announced that the FDA has accepted its new drug application (NDA) for enasidenib for the treatment of patients with relapsed or refractory acute myeloid leukemia (AML) with an isocitrate dehydrogenase 2 (IDH2) mutation. Also, FDA granted priority review to the NDA with PDUFA date of Aug 30, 2017.

Meanwhile, enasidenib is being evaluated in several phase I dose-escalation studies evaluating both hematological and solid tumor cancers with IDH2 mutations. Agios and Celgene intend to initiate a high-risk myelodysplastic syndrome study on enasidenib in 2017.Agios is also planning to initiate a phase III study evaluating AG-120 in front-line AML patients with an IDH1 mutation in the first half of 2017. The company plans to explore a similar regulatory path for AG-120, which could lead to an NDA submission in the U.S. in 2017.

Earnings Whispers

Our proven model does not conclusively show that Agios is likely to beat estimates this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), #2 (Buy) or #3 (Hold) for this to happen. But that is not the case here, as you will see below.

Zacks ESP: The Earnings ESP is 0.00%. This is because both the Most Accurate estimate stands and the Zacks Consensus Estimate stands at a loss of $1.78 per share. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Agios has a Zacks Rank #3. Though the company’s favorable Zacks Rank increases the predictive power of ESP, its 0.00% Earnings ESP makes surprise prediction difficult.

Note that we caution against stocks with a Zacks Rank #4 or 5 (Sell rated) going into the earnings announcement, especially when the company is seeing negative estimate revisions.

Stocks That Warrant a Look

Here are some health care stocks that you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this quarter.

BioMarin Pharmaceutical Inc. (BMRN - Free Report) is scheduled to release results on May 4. The company has an Earnings ESP of +20% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Editas Medicine, Inc. (EDIT - Free Report) is expected to release results on May 15. The company has an Earnings ESP of +33.33% and a Zacks Rank #3.

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