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Agios (AGIO) Earnings and Revenues Surpass Estimates in Q1

Zacks Equity Research

Agios Pharmaceuticals, Inc. AGIO reported first-quarter 2019 loss of $1.59 per share, narrower than the Zacks Consensus Estimate of a loss of $1.74 and also the year-ago loss of $1.63.

Total revenues in the reported quarter were $30.2 million, higher than the Zacks Consensus Estimate of $21.8 million as well as the year-ago top-line figure of $8.7 million.

Agios’ first wholly owned drug, Tibsovo, was approved for treating adult patients suffering relapsed or refractory acute myeloid leukemia (AML) with an isocitrate dehydrogenase-1(IDH-1) mutation last July. The drug generated sales of $9.1 million in the first quarter of 2019, which reflected a sequential decrease of 3.2%. Tibsovo is also under review in the EU for the same indication.

Despite better-than-expected sales and earnings, shares of Agios dipped almost 3.2% on Thursday as the sequential decline in Tibsovo’s sales hurt investor sentiments. However, the stock has increased 11.7% so far this year, outperforming the industry’s rise of 9.2%.


 

Meanwhile, royalty revenues earned from Celgene CELG were $2.2 million on Idhifa (enasidenib) net sales in the reported quarter while collaboration revenues were $18.8 million during the same time period. Idhifa is owned by its partner Celgene Corporation while Agios is entitled to receive royalties on the drug’s net sales.

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

Quarter in Detail

Research & development expenses inched up 22.1% year over year to $95.6 million, largely due to the clinical trial activity for mitapivat in Pyruvate kinase (PK) deficiency and the phase II study for thalassemia. Also, the frontline programs related to Tibsovo and start up activities for AG-636, the DHODH inhibitor.

General and administrative expenses escalated 29.3% year over year to $31.8 million on higher investments in supporting the commercial launch of Tibsovo and steep personnel costs.

Agios ended the first quarter with cash, cash equivalents and marketable securities of $707.8 million, lower than the sequential quarter’s tally of $805.4 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.

Update on Tibsovo’s Label Expansion

In a separate press release, Agios announced that the FDA has approved its supplemental new drug application (sNDA), looking for an approval of Tibsovo in the first-line setting. Tibsovo won the nod for the first-line treatment of IDH1 mutant adult AML patients, who are not eligible for intensive induction chemotherapy. The approval came much earlier than the expected date of Jun 21, 2019.

In March, Agios achieved another goal when the regulatory agency granted a Breakthrough Therapy designation to Tibsovo in combination with Celgene’s Vidaza for treating the newly diagnosed AML in adult patients with an IDH-1 mutation, who are aged 75 and above and are ineligible for intensive chemotherapy.

Notably, during the fourth quarter of 2018, Agios completed enrollment in the phase III ClarIDHy study on Tibsovo for the treatment of second-line or later IDH1 mutant cholangiocarcinoma. The company plans to report top-line data from the study in the first half of 2019 with full results supposed to be presented during the second half of this year. The company expects to file an sNDA for the above indication by this year-end.

Pipeline Update

Agios’ pipeline candidate, mitapivat, is being developed to treat patients with (PK) deficiency. The company aims to initiate a phase II proof of concept analysis on mitapivat for thalassemia during the second half of 2019.

Agios is also looking to close enrollment it two pivotal investigations on mitapivat by the end of this year. 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’ pre-commercial clinical cancer product candidates are vorasidenib, AG-270 and AG-636.

AG-636 is being developed to treat hematologic malignancies. The company plans to initiate a phase I dose-escalation probe on lymphoma during the first half of 2019.

AG-270 is being developed for the treatment of cancers carrying a methylthioadenosine phosphorylase, or MTAP, deletion. Agios is likely to demonstrate data from the dose-escalation part of the ongoing phase I study for treating patients with MTAP-deleted tumors in the second half of the ongoing year.

Vorasidenib is being developed for the treatment of IDH mutant-positive glioma. Agios plans to begin a registration-enabling phase III evaluation on low-grade glioma with an IDH1 mutation by the close of the current year.

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 #4 (Sell).

Better-ranked stocks from the healthcare sector include Merus N.V. MRUS and PDL BioPharma, Inc. PDLI, both sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Merus’ loss per share estimates have been narrowed 28% for 2019 and 30.7% for 2020 over the past 60 days. The stock has rallied 10.5% year to date.

PDL BioPharma’s earnings estimates have been revised 100% upward for 2019 and 30% for 2020 over the past 60 days. The stock has rallied 15.5% year to date.

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