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Agios (AGIO) Q2 Loss Wider than Expected, Pipeline in Focus
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Agios Pharmaceuticals, Inc. (AGIO - Free Report) reported a second-quarter 2016 loss of $1.47 per share, much wider than the Zacks Consensus Estimate of a loss of $1.28 and the year-ago loss of 85 cents.
Agios does not have any approved product in its portfolio. The company recognizes revenues in the form of collaboration revenues and milestone payments. Its total collaboration revenue in the second quarter of 2016 was approximately $7 million, also below the Zacks Consensus Estimate of $10.4 million. Revenues were also down 47.2% from the year-ago period.
Research & development expenses increased almost 40% year over year to $50.8 million. The increase was largely due to higher investments in pipeline development. General and administrative expenses shot up 41.6% year over year to $12.6 million due to an increased headcount and other professional expenses to support the company’s expanding operations.
Focus on Pipeline
The company currently has several candidates in its pipeline, which includes IDH1 mutant inhibitor – AG-120, IDH2 mutant inhibitor – AG-221, and pan-IDH mutant inhibitor – AG-881.
Enrollment in the expansion cohort for the phase I study on AG-120 in patients with relapsed/refractory acute myeloid leukemia (R/R AML) is expected to be completed in the second half of 2016. Agios is planning to start a randomized phase II study on AG-120 in IDH1 mutant positive cholangiocarcinoma in the second half of 2016. Meanwhile, the company plans to initiate an expansion arm in high-risk myelodysplastic syndrome patients on AG-221 in the second half of the year.
The company plans to continue enrolling in the following studies – a phase III (IDHENTIFY) study on AG-221 versus standard of care chemotherapy in R/R AML patients, a phase Ib frontline combination study on AG-221 or AG-120 with standard-of-care intensive chemotherapy in AML patients, and a phase I/II frontline combination study on AG-221 or AG-120 in combination with Celgene Corporation’s Vidaza in AML. Apart from these, enrollment is also ongoing in a phase 1 dose-escalation and expansion study on AG-881 in IDH mutant positive hematologic malignancies.
The company plans to present updated data on its pyruvate kinase deficiency candidates, AG-348 (phase II) and AG-519 (phase I), in the second half of the year.
In May 2016, Agios and Celgene signed a new global strategic collaboration focused on metabolic immuno-oncology for the discovery, development and commercialization of novel therapies utilizing Agios’ innovative cellular metabolism research platform. Agios received an upfront cash payment of $200 million and is eligible to receive additional payments if certain development and regulatory milestones are achieved.
As a result of an upfront payment of $200 million related to the new collaboration, Agios updated 2016 ending cash, cash equivalents and marketable securities to more than $390 million (previous guidance: cash, cash equivalents and marketable securities of more than $180 million). This revised cash balance is expected to be sufficient to fund Agios’ operating expenses and capital expenditure requirements through mid-2018.
Additionally, both Agios and Celgene agreed to amend certain rights under their 2010 collaboration with the former gaining full global development and commercialization rights to AG-120. Previously, Agios held only the U.S. rights to AG-120. There were no other changes to the existing IDH partnership (AG-221 and AG-881) between Agios and Celgene.
We are encouraged by the company’s progress with its pipeline. Investor focus will remain on updates pertaining to pipeline development.
Agios is a Zacks Rank #3 (Hold) stock. A couple of better-ranked stocks in the health care sector are Geron Corporation (GERN - Free Report) and Anika Therapeutics Inc. (ANIK - Free Report) , each sporting a Zacks Rank #1 (Strong Buy).
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Agios (AGIO) Q2 Loss Wider than Expected, Pipeline in Focus
Agios Pharmaceuticals, Inc. (AGIO - Free Report) reported a second-quarter 2016 loss of $1.47 per share, much wider than the Zacks Consensus Estimate of a loss of $1.28 and the year-ago loss of 85 cents.
Agios does not have any approved product in its portfolio. The company recognizes revenues in the form of collaboration revenues and milestone payments. Its total collaboration revenue in the second quarter of 2016 was approximately $7 million, also below the Zacks Consensus Estimate of $10.4 million. Revenues were also down 47.2% from the year-ago period.
Research & development expenses increased almost 40% year over year to $50.8 million. The increase was largely due to higher investments in pipeline development. General and administrative expenses shot up 41.6% year over year to $12.6 million due to an increased headcount and other professional expenses to support the company’s expanding operations.
Focus on Pipeline
The company currently has several candidates in its pipeline, which includes IDH1 mutant inhibitor – AG-120, IDH2 mutant inhibitor – AG-221, and pan-IDH mutant inhibitor – AG-881.
Enrollment in the expansion cohort for the phase I study on AG-120 in patients with relapsed/refractory acute myeloid leukemia (R/R AML) is expected to be completed in the second half of 2016. Agios is planning to start a randomized phase II study on AG-120 in IDH1 mutant positive cholangiocarcinoma in the second half of 2016. Meanwhile, the company plans to initiate an expansion arm in high-risk myelodysplastic syndrome patients on AG-221 in the second half of the year.
The company plans to continue enrolling in the following studies – a phase III (IDHENTIFY) study on AG-221 versus standard of care chemotherapy in R/R AML patients, a phase Ib frontline combination study on AG-221 or AG-120 with standard-of-care intensive chemotherapy in AML patients, and a phase I/II frontline combination study on AG-221 or AG-120 in combination with Celgene Corporation’s Vidaza in AML. Apart from these, enrollment is also ongoing in a phase 1 dose-escalation and expansion study on AG-881 in IDH mutant positive hematologic malignancies.
The company plans to present updated data on its pyruvate kinase deficiency candidates, AG-348 (phase II) and AG-519 (phase I), in the second half of the year.
In May 2016, Agios and Celgene signed a new global strategic collaboration focused on metabolic immuno-oncology for the discovery, development and commercialization of novel therapies utilizing Agios’ innovative cellular metabolism research platform. Agios received an upfront cash payment of $200 million and is eligible to receive additional payments if certain development and regulatory milestones are achieved.
As a result of an upfront payment of $200 million related to the new collaboration, Agios updated 2016 ending cash, cash equivalents and marketable securities to more than $390 million (previous guidance: cash, cash equivalents and marketable securities of more than $180 million). This revised cash balance is expected to be sufficient to fund Agios’ operating expenses and capital expenditure requirements through mid-2018.
Additionally, both Agios and Celgene agreed to amend certain rights under their 2010 collaboration with the former gaining full global development and commercialization rights to AG-120. Previously, Agios held only the U.S. rights to AG-120. There were no other changes to the existing IDH partnership (AG-221 and AG-881) between Agios and Celgene.
We are encouraged by the company’s progress with its pipeline. Investor focus will remain on updates pertaining to pipeline development.
AGIOS PHARMACT Price and EPS Surprise
AGIOS PHARMACT Price and EPS Surprise | AGIOS PHARMACT Quote
Agios is a Zacks Rank #3 (Hold) stock. A couple of better-ranked stocks in the health care sector are Geron Corporation (GERN - Free Report) and Anika Therapeutics Inc. (ANIK - Free Report) , each sporting a Zacks Rank #1 (Strong Buy).
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>