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Agios' (AGIO) Q3 Loss Narrower Than Expected, Revenues Miss

Zacks Equity Research

Agios Pharmaceuticals, Inc. AGIO reported third-quarter 2019 loss of $1.81 per share, narrower than the Zacks Consensus Estimate of a loss of $1.85 but wider than the year-ago loss of $1.63.

Meanwhile, total revenues in the reported quarter were $26 million, lower than the Zacks Consensus Estimate of $29 million but higher than the year-ago revenue figure of $15 million. Revenues increased year-over-year, driven by a strong uptake of Tibsovo in the frontline and relapsed/refractory acute myeloid leukemia (AML) settings.

Agios’ first wholly owned drug Tibsovo (ivosidenib) was approved for treating adult patients suffering relapsed or refractory AML with IDH-1 mutation last July. In May 2019, the FDA approved Tibsovo in the frontline setting. The drug generated sales of $17.4 million in the third quarter of 2019, reflecting a sequential surge of 27%.

Tibsovo is under review in the EU for treating relapsed or refractory AML with a potential approval expected in the second half of 2020.

Shares of Agios were down 4.8% following this news on Thursday, probably as sales lagged investor expectations. In fact, the stock has plunged 34.8% so far this year versus the industry’s rally of 12%.

Meanwhile, royalty revenues earned from Celgene CELG were $2.7 million on Idhifa (enasidenib) net sales in the reported quarter while collaboration revenues were $5.5 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.

Quarter in Detail

Research & development expenses rose 23.1% year over year to $101.7 million, largely due to higher cost of late-stage clinical studies for pipeline development.

General and administrative expenses increased 6.1% year over year to $33 million on account of higher investments.

Agios ended the third quarter with cash, cash equivalents and marketable securities of $540.5 million, lower than the sequential quarter’s tally of $624 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 September 2019, Agios presented detailed data from the phase III ClarIDHy study on Tibsovo being evaluated in previously treated patients with IDH1 mutant cholangiocarcinoma at the European Society for Medical Oncology Congress held in Spain.

Data from the study showed that patients who were treated with Tibsovo had a 6-month and 12-month progression-free survival (PFS) rate of 32% and 22%, respectively, while none of the patients in the placebo arm was free from disease progression for more than six months. Tibsovo also reduced the risk of disease progression or death by 63%.

Notably, in May 2019, Tibsovo met the primary endpoint in the ClarIDHy study. The company plans to file a supplemental new drug application (sNDA) to the FDA for including data from ClarIDHy study on Tibsovo’s label by this year-end. Currently, there are no treatment options 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 in two pivotal studies on mitapivat by the end of 2019. The studies are single-arm ACTIVATE-T analyses for addressing PK deficiency in up to 40 patients, who are on regular blood transfusions, and the ACTIVATE study for treating PK deficiency in up to 80 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 INDIGO study on vorasidenib for treating Grade 2 non-enhancing glioma with an IDH1 mutation by this year-end. The primary endpoint of this study is PFS.

AG-636 is in phase I development for treating advanced lymphoma.

Notably, AG-270 is being developed for treating cancers carrying a methylthioadenosine phosphorylase (MTAP)-deleted tumors. During the reported quarter, Agios initiated two combination arms for the phase I study of AG-270 in MTAP-deleted tumors.

One study is evaluating AG-270 in combination with docetaxel, a chemotherapy drug for addressing MTAP-deleted second-line non-small cell lung cancer. The other study is evaluating AG-270 in combination with nab-paclitaxel and Eli Lilly’s LLY Gemzar (gemcitabine) for MTAP-deleted first or second-line pancreatic ductal adenocarcinoma.

Agios Pharmaceuticals, Inc. Price, Consensus and EPS Surprise

Agios Pharmaceuticals, Inc. Price, Consensus and EPS Surprise

Agios Pharmaceuticals, Inc. price-consensus-eps-surprise-chart | Agios Pharmaceuticals, Inc. Quote

Zacks Rank & Key Pick

Agios currently carries a Zacks Rank #3 (Hold). A better-ranked stock in the healthcare sector is Acorda Therapeutics, Inc. ACOR, 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 20.4% for 2019 and 43% for 2020 over the past 60 days.

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