A month has gone by since the last earnings report for Agios Pharmaceuticals (AGIO). Shares have added about 25.8% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Agios Pharmaceuticals due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Agios' Q1 Loss Narrower Than Expected, Revenues Beat
Agios reportedfirst-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.
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.
Tibsovo generated sales of $22.7 million in the first quarter, reflecting a sequential increase of 15.8%. The growth in Tibsovo sales was on a strong uptake of the drug in both the newly-diagnosed and relapsed and refractory AML setting.
Royalty revenues earned from Celgene, now part of Bristol-Myers, were $3.3 million on Idhifa net sales in the reported quarter.
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.
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.
Meanwhile, due to the coronavirus (COVID-19) pandemic, Agios expects some delays in its clinical programs and patient enrollment in studies. Several important data readouts and enrollment completion in studies are now expected by the end of 2020 and mid-2021, which was earlier planned by the end of 2020.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in estimates revision. The consensus estimate has shifted 16.46% due to these changes.
Currently, Agios Pharmaceuticals has an average Growth Score of C, though it is lagging a bit on the Momentum Score front with a D. Charting a somewhat similar path, the stock was allocated a grade of F on the value side, putting it in the bottom 20% quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Estimates have been trending upward for the stock, and the magnitude of this revision looks promising. It comes with little surprise Agios Pharmaceuticals has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.
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