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Agios' (AGIO) Loss Widens in Q2, Tibsovo Drives Sales

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Agios Pharmaceuticals, Inc. (AGIO - Free Report) reported second-quarter 2019 loss of $1.87 per share, wider than the Zacks Consensus Estimate of a loss of $1.73 and also the year-ago loss of $1.19.

However, total revenues in the reported quarter were $26.2 million, higher than the Zacks Consensus Estimate of $24.6 million but lower than the year-ago top-line figure of $40.4 million.

Agios’ first wholly owned drug, Tibsovo (ivosidenib), was approved for treating adult patients suffering relapsed or refractory acute myeloid leukemia (AML) with IDH-1 mutation last July. The drug generated sales of $13.7 million in the second quarter of 2019, reflecting a sequential surge of more than 50%. Tibsovo is also under review in the EU for the same indication.

In May, the FDA approved the supplemental new drug application (sNDA) for Tibsovo in the first-line setting. The nod came much earlier than the expected date of Jun 21, 2019.

Shares of Agios have increased 4.4% so far this year, underperforming the industry’s rally of 15.9%.

Meanwhile, royalty revenues earned from Celgene (CELG - Free Report) were $2.7 million on Idhifa (enasidenib) net sales in the reported quarter while collaboration revenues were $9 million. Idhifa is owned by Agios’ partner Celgene Corporation while the former is entitled to receive royalties on the drug’s net sales. Idhifa is also under review in the EU.

Agios’ new CEO Dr. Jacqualyn Fouse took over the charge from former CEO Dr. David Schenkein in the first quarter of 2019.

Quarter in Detail

Research & development expenses rose 23.9% year over year to $107.4 million, largely due to higher cost of clinical studies for pipeline development.

General and administrative expenses escalated 21.8% year over year to $32.4 million on account of higher investments in supporting the commercial launch of Tibsovo and steep personnel costs.

Agios ended the second quarter with cash, cash equivalents and marketable securities of $624 million, lower than the sequential quarter’s tally of $707.8 million. The company expects this cash balance and revenues recognized from Tibsovo and royalties to effectively fund its current operational plans for at least through 2020.

Tibsovo and Other Pipeline Updates

In May this year, Tibsovo met the primary endpoint in a late-stage study, which evaluated it for the previously treated IDH1 mutant cholangiocarcinoma, also called bile-duct cancer.

Agios plans to file an sNDA to the FDA for including the above indication in Tibsovo’s label by this year-end. Notably, no treatment options are currently available for this disease.

Agios’ key pipeline candidate, mitapivat, is being developed to treat patients with PK deficiency. The company is also looking to close enrollment it two pivotal studies on mitapivat by the end of 2019. The studies are a single-arm ACTIVATE-T analysis for addressing PK deficiency in patients, taking regular blood transfusions, and the ACTIVATE study for treating PK deficiency in patients with no regular blood transfusions.

Agios also plans to initiate a phase II proof of concept analysis on mitapivat for thalassemia in the second half of 2019.

This apart, Agios’ other early-stage cancer product candidates are vorasidenib, AG-270 and AG-636.

Agios plans to begin a registration-enabling phase III study on vorasidenib for treating low-grade glioma with an IDH1 mutation by this year-end. Moreover, the company initiated dosing in the phase I dose-escalation study on AG-636 for treating advanced lymphoma during the reported quarter.

Notably, AG-270 is being developed for the treatment of cancers carrying a methylthioadenosine phosphorylase (MTAP)-deleted tumors. During the reported quarter, Agios completed the dose-escalation part of the ongoing phase I study of AG-270 for treating patients with MTAP-deleted tumors.

Agios Pharmaceuticals, Inc. Price, Consensus and EPS Surprise

Zacks Rank & Stocks to Consider

Agios currently carries a Zacks Rank #3 (Hold). Better-ranked stocks from the healthcare sector include Acorda Therapeutics, Inc. (ACOR - Free Report) and Repligen Corporation (RGEN - Free Report) , both sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Acorda’s loss per share estimates have been narrowed 2.2% for 2019 and 1.3% for 2020 over the past 60 days.

Repligen’s earnings estimates have been revised 4.3% upward for 2019 and 3.6% for 2020 over the past 60 days. The stock has soared 79% year to date.

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