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Agios (AGIO) Q3 Earnings Beat, Tibsovo Sales Drive Stock

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Agios Pharmaceuticals Inc. (AGIO - Free Report) incurred third-quarter 2018 loss of $1.63 per share, narrower than the Zacks Consensus Estimate of a loss of $1.69 but wider than the year-ago loss of $1.59.

Total revenues in the reported quarter were $15.2 million, higher than the Zacks Consensus Estimate of $14 million as well as the year-ago top-line count of $11 million.

The year-over-year rise in Agios’ revenues can be attributed to sales registered by its first wholly owned precision medicine, Tibsovo (ivosidenib), in the very first quarter following its FDA nod. The drug received an approval in July 2018, a month ahead of the scheduled action date of Aug 21, 2018.

Royalty revenues earned from Celgene (CELG - Free Report) on the back of an increase of $1.3 million in Idhifa (enasidenib) net sales in the reported quarter, which was offset by a decrease in collaboration revenues received under the collaboration agreement with Celgene.

Shares of Agios have rallied 19.8% year to date versus the industry’s decrease of 0.9%.

Quarter in Detail

Research & development expenses were up 13.2% year over year to $82.5 million, largely due to the start-up cost for AG-348 pivotal pipeline program in pyruvate kinase (PK) deficiency, the investigational new drug (IND) application for AG-636, the DHODH inhibitor and the cost associated with Agios’ ongoing research for discovery platform programs.

General and administrative expenses escalated 78.2% year over year to $31.1 million on higher investments to support the commercial launch of Tibsovo.

Agios ended the third quarter with cash, cash equivalents and marketable securities of $878 million, lower than the sequential quarter’s tally of $937 million. The company expects this cash balance as well as revenues recognized from Tibsovo to effectively fund its current operating plans for at least through 2020.

Agios’ first wholly owned drug, Tibsovo, was approved for the treatment of patients with relapsed or refractory acute myeloid leukemia (AML) with an isocitrate dehydrogenase-1(IDH-1) mutation. The drug generated sales of $4.5 million in the very first partial quarter since its launch in July. A regulatory filing for Tibsovo in the EU is expected in the fourth quarter for the same indication.

Agios plans to submit a supplemental new drug application (sNDA) for Tibsovo as a monotherapy for the first-line treatment of IDH1m AML patients, who are not eligible for any standard treatment by the end of January 2019.

Tibsovo is also being evaluated in combination with Celgene’s Vidaza for treating newly diagnosed AML patients, who are ineligible for intensive chemotherapy. The company plans to complete enrollment in this phase III AGILE study during 2020, which was previously supposed to be closed by 2021 with a newly modified primary endpoint of event free survival (EFS). Idhifa, developed by Agios, is owned by its partner Celgene Corporation. The company receive royalties on the drugs’ net sales. Idhifa is also under review in the EU.

Pipeline Update

Agios plans to initiate a phase III HOVON 150 study on Idhifa in combination with Tibsovo for frontline AML patients with an IDH1 or IDH2 mutation by the year-end. The study will help the subjects receive either IDH inhibitor as a single agent or as a combination under a two-year maintenance phase.

Agios’ lead pipeline candidate, mitapivat (AG-348), is being developed to treat patients with Pyruvate kinase (PK) deficiency. During the first quarter of 2018, the company initiated the phase III ACTIVATE study on the candidate to treat adult patients with PK deficiency, who do not receive regular blood transfusions. AG-348 is also being evaluated in a phase III study, ACTIVATE-T, on PK deficiency patients, who take regular blood transfusions. The company plans to complete enrollment in the study in 2019.

Agios also aims to initiate a phase II proof of concept study on AG-348 for thalassemia by this year end.

During the quarter undre review, Agios submitted an IND application for another candidate, AG-636, an inhibitor of the metabolic enzyme dihydroorotate dehydrogenase (DHODH) to treat hematologic malignancies.

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 healthcare sector are Gilead Sciences, Inc. (GILD - Free Report) and Caladrius Biosciences, Inc. (CLBS - Free Report) , both sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Gilead Sciences’ earnings estimates have been revised 4.4% upward for 2018 and 4.2% for 2019 over the past 60 days.

Caladrius’ loss per share estimates has been narrowed 5.7% for 2018 and 1.6% for 2019 in the last 60 days. The stock has surged 37.9% year to date.

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