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Agios' (AGIO) Q1 Loss Narrower Than Expected, Revenues Beat

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Agios Pharmaceuticals, Inc. (AGIO - Free Report) reported first-quarter 2020 loss of 59 cents per share, much narrower than the Zacks Consensus Estimate of a loss of $1.70 as well as the year-ago loss of $1.59.

Moreover, total revenues of $87.1 million were above the Zacks Consensus Estimate of $31 million. The top line also grew significantly year over year, mainly owing to increased collaboration revenues and product sales.

Agios’ first wholly owned drug Tibsovo (ivosidenib) generated sales of $22.7 million in the first quarter, reflecting a sequential increase of 15.8%. This growth in Tibsovo sales was on a strong uptake of the drug in both the newly-diagnosed and relapsed and refractory AML setting.

Per the company, demand for Tibsovo both from patients and doctors was not negatively impacted in the quarter by the COVID-19 pandemic. Agios does not expect an interruption in the supply of Tibsovo as it believes it has sufficient inventory levels, which can meet demand even if some disruption occurs in manufacturing operations due to the lockdown. As a result, the company continues to expect Tibsovo U.S. revenues in the range of $105-$115 million for the current year, which reaffirms the previous expectation.

Tibsovo was approved for treating adult patients suffering relapsed or refractory AML with IDH-1 mutation in July 2018. The FDA approved Tibsovo for the frontline setting in May 2019. The drug is also under review in the EU for treating relapsed or refractory AML with a potential nod expected by this year-end.

Shares of Agios were down 5.5% following the earnings release on Thursday. In fact, the stock has declined 13.9% so far this year compared with the industry’s decrease of 6.1%.


Quarter in Detail

Royalty revenues earned from Celgene, now part of Bristol-Myers (BMY - Free Report) , were $3.3 million on Idhifa (enasidenib) net sales in the reported quarter. Idhifa is owned by Agios’ partner Celgene and the company is entitled to receive royalties on the drug’s net sales.

Collaboration revenues were $61.1 million in the quarter compared with $18.9 million in the year-ago quarter. This huge surge in collaboration revenues was attributable to Agios’ recognition of the majority of deferred revenues under its collaboration with Celgene during the first quarter of 2020.

Notably, in March 2020, Agios announced that Celgene refused to extend the metabolic immuno-oncology research collaboration with Agios. Also, later, Celgene decided not to exercise its option to gain the rights to AG-270, which is currently being evaluated in a phase I study as a combo regime with taxane-based therapy to potentially treat methylthioadenosine phosphorylase (MTAP)-deleted non-small cell lung cancer and pancreatic cancer.

Research & development expenses declined 4.5% year over year to $91.3 million due to ramped-down activity of clinical studies for pipeline development.

General and administrative expenses increased 21.1% year over year to $38.5 million on account of higher personnel costs.

Agios ended the first quarter with cash, cash equivalents and marketable securities of $613.1 million, lower than the sequential quarter’s $717.8 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 June 2022.

Update on Pipeline and Coronavirus Response

Due to the coronavirus (COVID-19) pandemic, Agios expects some delays in its clinical programs and patient enrollment in studies.

Notably, Tibsovo is being evaluated in the phase III ClarIDHy study in previously-treated patients with IDH1 mutant cholangiocarcinoma, also called bile-duct cancer. The company now expects to file a supplemental new drug application (sNDA) for the above indication between this year-end and mid-2021, which was earlier planned by the end of 2020. Currently, there are no treatment options available to address this cancer.

Last December, the FDA granted a Breakthrough Therapy designation to Tibsovo for the treatment of relapsed/refractory myelodysplastic syndrome (MDS) in adult patients with a susceptible IDH1 mutation. Enrollment completion in this study is now expected in 2021, later than the previously projected timeline  of 2020 end.

Tibsovo is also being evaluated in combination with Celgene’s Vidaza for treating newly diagnosed AML patients, who are ineligible for intensive chemotherapy. Agios plans to conclude recruitment in the study in 2021. Earlier, the same was expected within 2020.

The company’ key pipeline candidate mitapivat is being developed to treat patients with PK deficiency. It is conducting the single-arm ACTIVATE-T study for addressing PK in patients, who are on regular blood transfusions, and also the ACTIVATE study for treating PK deficiency in patients with no regular blood transfusions. Top-line data from both studies is now awaited between the end of 2020 and mid-2021. Previously, the same was expected by the end of 2020.

In January this year, Agios announced that the phase II study on mitapivat for treating patients with non-transfusion-dependent thalassemia achieved the clinical proof-of-concept. Meanwhile, decision on proof-of-concept for mitapivat to deal with sickle cell disease remains on track for mid-2020 with new enrollment currently being halted as a result of the COVID-19 pandemic.

In March 2020, the FDA cleared an investigational new drug (IND) application for AG-946, a next-generation pyruvate kinase-R (PKR) activator. A phase I study on the same is expected to start in mid-2020.

Due to limited recruitment, Agios stopped the in-house development of AG-636, which was in phase I development for treating advanced lymphoma. The company is exploring partnering options to develop the same.

Agios Pharmaceuticals, Inc. Price, Consensus and EPS Surprise

Zacks Rank & Other Stocks to Consider

Agios currently sports a Zacks Rank #1 (Strong Buy). Other top-ranked stocks in the healthcare sector include MacroGenics, Inc. (MGNX - Free Report) and Menlo Therapeutics Inc. , both flaunting the same Zacks Rank as Agios. You can see the complete list of today’s Zacks #1 Rank stocks here.

MacroGenics’ loss per share estimates have been narrowed 2.6% for 2020 and 4.2% for 2021 over the past 60 days.

Menlo Therapeutics’ loss per share estimates have been narrowed 37.6% for 2020 and 60.2% for 2021 over the past 60 days.

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