Agios (AGIO) Q1 Loss Wider Than Expected, Revenues Miss

Agios Pharmaceuticals, Inc. (NASDAQ:AGIO) posted first-quarter 2018 loss of $1.63 per share, wider than the Zacks Consensus Estimate of a loss of $1.60 and the year-ago loss of $1.56.

Total revenues in the reported quarter amounted to $8.8 million, which lagged the Zacks Consensus Estimate of $14 million. Revenues plunged 16.2% from the year-ago figure of $10.5 million due to the adoption of the new revenue recognition standard.

The stock has outperformed the industry year to date, having surged 42.6% compared with the industry’s rally of 3.1%.

Research & development expenses were up 24.7% year over year to $78.2 million, largely driven by start-up costs for the AG-348 pivotal program in PK deficiency, including the initiation of the ACTIVATE-T trial, initiation of a phase I dose-escalation study of AG-270, the first-in-class MAT2A inhibitor, and IND enabling activities for AG-636, the DHODH inhibitor.

General and administrative expenses increased 66.2% year over year to $24.6 million due to higher costs due to growth in the company’s United States’ commercial organization to support the expected launch of Tibs0vo (ivosidenib) in the third quarter of 2018.

Pipeline Update

During the quarter, the FDA accepted on a priority review basis and set an action date of Aug 21, 2018 for the new drug application (NDA) for Tibsovo for the treatment of patients with R/R AML with an isocitrate dehydrogenase-1 (IDH1) mutation. The company plans to submit a Marketing Authorization Application to the European Medicines Agency for Tibsovo for R/R AML and an IDH1 mutation in the fourth quarter of 2018.

The company also initiated a phase I dose-escalation study for AG-270, a first-in-class methionine adenosyltransferase 2a (MAT2A) inhibitor, in patients with methylthioadenosine phosphorylase (MTAP)-deleted tumors. It also initiated ACTIVATE-T, a single-arm pivotal trial for AG-348, in adult pyruvate kinase deficiency patients who receive regular blood transfusions.

The company plans to submit an investigational new drug application for its latest development candidate, AG-636, an inhibitor of the metabolic enzyme dihydroorotate dehydrogenase for the treatment of hematologic malignancies in the fourth quarter of 2018.

The company also plans to initiate a phase II proof of concept trial of AG-348 in thalassemia in the fourth quarter of 2018.

Zacks Rank & Stocks to Consider

Agios is a Zacks Rank #3 (Hold) stock.

A few better-ranked stocks from the same space worth considering are Ligand Pharmaceuticals (NASDAQ:LGND) , Protagonist Therapeutics (NASDAQ:PTGX) and Illumina, Inc. (NASDAQ:ILMN) . All of them sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Ligand’s earnings per share estimates have moved up from $4.24 to $4.43 for 2018 over the last 60 days. The company delivered a positive earnings surprise in three of the trailing four quarters, with an average beat of 24.88%. The company’s shares have rallied 15.2% year to date.

Protagonist’s loss estimates narrowed from $1.30 to 66 cents for 2018 and from $1.99 to $1.26 for 2019, over the last 60 days. The company delivered a positive earnings surprise in three of the trailing four quarters, with an average beat of 24.95%.

Illumina’s earnings per share estimates have moved up $4.59 to $4.84 for 2018 and from $5.33 to $5.57 for 2019, in the last 60 days. The company came up with a positive earnings surprise in all the preceding four quarters, with an average beat of 23.17%. The stock has rallied 16.4% so far this year.

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