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Agios Pharmaceuticals (AGIO) Down 8% Since Last Earnings Report: Can It Rebound?

Zacks Equity Research

A month has gone by since the last earnings report for Agios Pharmaceuticals (AGIO). Shares have lost about 8% in that time frame, underperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is Agios Pharmaceuticals due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.

Agios Earnings and Revenues Surpass Estimates in Q1

Agios 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 product Tibsovo generated sales of $9.1 million in the first quarter of 2019, which reflected a sequential decrease of 3.2%.

Royalty revenues earned from Celgene were $2.2 million on Idhifa net sales in the reported quarter while collaboration revenues were $18.8 million during the same time period.

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.

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

How Have Estimates Been Moving Since Then?

Fresh estimates followed a flat path over the past two months.

VGM Scores

At this time, Agios Pharmaceuticals has a subpar Growth Score of D, however its Momentum Score is doing a lot better with a B. However, the stock was allocated a grade of F on the value side, putting it in the fifth quintile for this investment strategy.

Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Agios Pharmaceuticals has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.



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