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Agios (AGIO) Q2 Loss Narrows, Revenues Surpass Estimates

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Agios Pharmaceuticals Inc. (AGIO - Free Report) incurred second-quarter 2018 loss of $1.19 per share, narrower than the Zacks Consensus Estimate of a loss of $1.62 and the year-ago loss of $1.78.

Total revenues in the reported quarter was $40.4 million, significantly higher than the Zacks Consensus Estimate of $12.09 million as well as theyear-ago figure of $11.3 million.

The substantial rise in Agios’ revenues can be attributed to a $26.4-million milestone payment from Celgene in relation to filing a regulatory application for Idhifa in the EU and another $1.6 million as royalty revenues from Idhifa sales in the United States. The company also received an upfront payment of $12 million from CStone Pharmaceuticals for out-licensing the China rights to Tibsovo (ivosidenib) to the Chinese biotech, which supplemented its revenues in turn.

In June, Agios entered into an exclusive collaboration and license agreement with CStone Pharmaceuticals to develop and commercialize Tibsovo in Mainland China, Hong Kong, Macau and the Taiwan territory for leukemia indications.

Shares were down more than 7% on Aug 2. However, year-to-date, shares of Agios have surged 40.6% year to date, outperforming the industry’s increase of 10.7%.

Quarter in Detail

Research & development expenses were up 8.6% year over year to $86.7 million, largely driven by increased investments for AG-348 pivotal pipeline program in pyruvate kinase (PK) deficiency including the initiation of the ACTIVATE-T trial and investigational new drug (IND) enabling activities for AG-636, the DHODH inhibitor.

General and administrative expenses escalated 65.1% year over year to $26.6 million due to higher investments for the commercial launch of Tibsovo

Agios ended the second quarter with cash, cash equivalents and marketable securities of $937 million. The company expects this cash balance as well as revenues recognized from Tibsovo to effectively fund current operating plans for at least through 2020.

Pipeline Update

Late last month, Agios announced the FDA approval of Tibsovo for the treatment of patients with relapsed or refractory acute myeloid leukemia (AML) with an isocitrate dehydrogenase-1(IDH-1) mutation. The approval came a month earlier than the action date of Aug 21, 2018, which is a huge boost to the company as it represents immense commercial potential in the AML market.

Tibsovo, an oral, targeted inhibitor of the IDH1 enzyme, is the first and the only FDA-approved therapy for patients with R/R AML and an IDH1 mutation.

Though Tibsovo did not contribute to Agios’ revenues in the second quarter, it is likely to pull up the top-line in future quarters.

Meanwhile, a regulatory application for Tibsovo (ivosidenib) is expected to be filed in the EU in fourth quarter of 2018 for the same indication.

Currently, Tibsovo is also being evaluated in phase I study for the treatment of advanced hematologic malignancies and in a phase I/II combination trial with Celgene’s (CELG - Free Report) Vidaza for treating newly diagnosed AML patients, who are not eligible for an intensive chemotherapy.

Agios’ lead pipeline candidate, mitapivat.AG-348, is being developed to treat patients with Pyruvate kinase (PK) deficiency. In June, the company announced the initiation of the phase III ACTIVATE study on the candidate to treat adult patients with PK deficiency, who do not undergo regular blood transfusions.

AG-348 is also being evaluated in a phase III program called ACTIVATE-T, a single-arm pivotal study on adult PK deficiency patients, who receive regular blood transfusions. The company also plans to initiate a phase II proof of concept study on AG-348 for thalassemia in the fourth quarter of 2018.

Agios plans to submit an investigational new drug (IND) application for its latest development candidate, AG-636, an inhibitor of the metabolic enzyme dihydroorotate dehydrogenase (DHODH) for the treatment of hematologic malignancies during the fourth quarter.

 

Agios Pharmaceuticals, Inc. Price, Consensus and EPS Surprise

Agios Pharmaceuticals, Inc. Price, Consensus and EPS Surprise | Agios Pharmaceuticals, Inc. Quote

Zacks Rank & Stocks to Consider

 

Agios currently carries a Zacks Rank #3 (Hold). Two better-ranked stocks in the health care sector are Eagle Pharmaceuticals, Inc. (EGRX - Free Report) and Vanda Pharmaceuticals Inc. (VNDA - Free Report) , each sporting a Zacks Rank #1 (Strong Buy).You can see the complete list of today’s Zacks #1 Rank stocks here.

Eagle Pharmaceuticals’ earnings estimates have been moved 15.1% north for 2018 and 26% for 2019 over the past 60 days. The stock has surged 40.8% year to date.

Vanda Pharmaceuticals’ earnings estimates have been revised 11.1% upward for 2018 and 3.9% for 2019 over the past 60 days. The stock has soared 42.8% so far this year.

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