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Analyst Blog

Agios Pharmaceuticals, Inc. (AGIO - Free Report) posted third-quarter 2016 loss of $1.63 per share, wider than the Zacks Consensus Estimate of a loss of $1.51 and the year-ago loss of $1.07.

Agios does not have any approved product in its portfolio yet. Thus, its top line comprises collaboration revenues and milestone payments. Total collaboration revenue in the third quarter amounted to approximately $9 million, again missing the Zacks Consensus Estimate of $11 million. However, reported revenues were up a significant 63.6% from the year-ago period.

Research & development expenses were up almost 68.3% year over year to $60.6 million. The increase was largely due to higher investments associated with the advancement of the company's lead investigational medicines into late-stage studies. General and administrative expenses increased 20.2% year over year to $11.9 million due to a rise in the headcount and higher other professional expenses for supporting its expanding operations.

Pipeline Updates

The company currently has several candidates in its pipeline including an IDH1 mutant inhibitor – AG-120, am IDH2 mutant inhibitor – enasidenib (AG-221), and a pan-IDH mutant inhibitor – AG-881.

Enrollment in the expansion cohort for the phase I study on AG-120 in 125 patients with relapsed or refractory acute myeloid leukemia (R/R AML) is expected to be complete in 2016. Agios is planning to start a randomized phase II study on AG-120 in IDH1 mutant-positive cholangiocarcinoma this year.

Meanwhile, the company plans to initiate an expansion study on AG-221 for the treatment of high-risk myelodysplastic syndrome in 2016.

In Sep 2016, Agios, along with partner Celgene Corporation (CELG - Free Report) , announced plans to submit a new drug application (NDA) for enasidenib) in the U.S. by the year end. The NDA will be based on data from an ongoing phase I/II trial in patients with R/R AML and other advanced hematologic malignancies with an IDH2 mutation.

As a result of an upfront payment of $190 million received from Celgene in May this year in relation to new immuno-oncology collaboration, Agios raised its 2016-end cash, cash equivalents and marketable securities guidance. It expects 2016-end cash, cash equivalents and marketable securities to be over $550 million versus previous expectation of more than $390 million. The cash balance is expected to be sufficient for funding Agios’ operating expenses and capital expenditure requirements through 2018 end.

We are encouraged by the company’s progress with its pipeline. Going forward, investor focus is expected to remain on updates related to the company’s pipeline development.

AGIOS PHARMACT Price, Consensus and EPS Surprise

 

AGIOS PHARMACT Price, Consensus and EPS Surprise | AGIOS PHARMACT Quote

Zacks Rank & Key Picks

Agios currently carries a Zacks Rank #3 (Hold). A couple of better-ranked stocks in the health care sector include Anika Therapeutics Inc. (ANIK - Free Report) and Exelixis, Inc. (EXEL - Free Report) . Both the stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Anika’s earnings estimates have increased from $1.96 to $2.06 for 2016 and from $2.03 to $2.09 for 2017 over the last 60 days. The company has posted a positive earnings surprise in all of the four trailing quarters with an average beat of 33.1%. Its share price has gained 8.6% year to date.

Exelixis’ loss estimates have narrowed from 71 cents to 61 cents for 2016 and from a loss of 16 cents to a gain of 4 cents for 2017 over the last 60 days. The company has posted a positive earnings surprise twice in the four trailing quarters with an average beat of 9.1%. Its share price has surged 77.6% year to date.

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