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Agios (AGIO) Progressing Well on Pipeline Amid Competition

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We issued an updated research report on Agios Pharmaceuticals, Inc. (AGIO - Free Report) on May 23.

Agios’ only marketed drug is Idhifa, which received FDA approval for treatment of patients with relapsed or refractory acute myeloid leukemia (AML) with an isocitrate dehydrogenase-2 (IDH2) mutation, in August 2017. However, apart from Idhifa, Agios does not have any approved product in its portfolio yet. Hence, the company’s top line mainly comprises collaboration revenues and milestone payments.

Year to date, shares of the company have increased 55.6%, compared with the industry’s increase of 7.2%.

The company has several interesting candidates in its pipeline. Its lead cancer pipeline includes Tibsovo (ivosidenib/AG-120; under the priority review in the United States), the most advanced candidate targeting mutated isocitrate dehydrogenase 1 (IDH1). In December 2017, Agios submitted a new drug application (NDA) to the FDA for Tibsovo (ivosidenib), which has been developed for treating patients with R/R AML and an IDH1 mutation.

Subsequently, in February 2018, the FDA accepted the NDA under priority review for the given indication. The FDA has set an action date of Aug 21, 2018. A regulatory filing for the candidate in the European Union is expected in the fourth quarter of 2018 for the same indication.

Its other candidates include AG-881, which targets both mutated IDH1 and mutated IDH2. These mutations are found in a wide range of hematological malignancies and solid tumors including AML, chondrosarcoma and cholangiocarcinoma, where both the treatment options and prognosis for patients are poor.

The company's lead rare genetic diseases candidate, AG-348, is under evaluation in a phase II study on adult, transfusion-independent patients with Pyruvate kinase (PK) deficiency. During the first quarter of 2018, the company initiated ACTIVATE-T, a single-arm pivotal study for AG-348, in adult PK deficiency patients who receive regular blood transfusions. In fact, the company plans to initiate another study -ACTIVATE, for AG-348 in adults with PK deficiency who do not receive regular blood transfusions in the second quarter of 2018.

Another candidate, AG-270, a first-in-class methionine adenosyltransferase 2a (MAT2A) inhibitor, is being evaluated in a phase I dose-escalation study in patients with methylthioadenosine phosphorylase (MTAP)-deleted tumors.

A potential approval for the pipeline candidates will be a huge boost for the company.

In May 2016, Agios and Celgene (CELG - Free Report) announced a new global strategic collaboration for the discovery, development and commercialization of novel therapies utilizing Agios’ innovative cellular metabolism research platform. Terms of the Celgene deal are lucrative as Agios is eligible to receive clinical, regulatory and commercial milestone payments plus royalties on net sales of products resulting under the collaboration.

However, the company depends heavily on Celgene for revenues, which it earns in the form of collaboration revenues. The company also faces stiff competition.

Zacks Rank & Stocks to Consider

Agioshas a Zacks Rank #3 (Hold).

Some better-ranked stocks from the same space are Illumina, Inc. (ILMN - Free Report) and Ligand Pharmaceuticals (LGND - Free Report) . While Illumina sports a Zacks Rank#1 (Strong Buy), Ligand carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Illumina’s earnings per share estimates have moved up from $4.60 to $4.84 for 2018 and from $5.34 to $5.57 for 2019 over the past 30 days. The company delivered a positive earnings surprise in all the trailing four quarters with an average beat of 23.17%. The stock has rallied 24.4% so far this year.

Ligand’s earnings per share estimates have been revised upward from $4.09 to $4.37 for 2018 over the past 60 days. The company came up with a positive earnings surprise in all of the trailing four quarters with an average beat of 31.79%. The company’s shares have rallied 39.3% year to date.


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