Agios (AGIO) Q4 Earnings Beat, Tibsovo Sales Push Up Stock

Agios Pharmaceuticals, Inc. (NASDAQ:AGIO) incurred fourth-quarter 2018 loss of $1.58 per share, narrower than the Zacks Consensus Estimate of a loss of $1.65 and also the year-ago loss of $1.81.

Total revenues in the reported quarter were $30 million, higher than the Zacks Consensus Estimate of $21 million as well as the year-ago top-line figure of $10 million.

This year-over-year rise in Agios’ revenues can be attributed to sales registered by its first wholly owned precision medicine, Tibsovo (ivosidenib), following the FDA nod secured last July, a month ahead of the scheduled action date of Aug 21, 2018.

Royalty revenues earned from Celgene (NASDAQ:CELG) were $2.2 million on Idhifa (enasidenib) net sales in the reported quarter while collaboration revenues were $18.4 million during the same time period.

Agios’ new chief executive officer (CEO) Dr. Jacqualyn Fouse took over the reins of responsibility from former CEO Dr. David Schenkein on Feb 1, 2019.

Shares of Agios were up almost 6.3% following the news on Thursday. However, the stock has declined 27.2% in the past year against the industry’s increase of 4.6%.

Quarter in Detail

Research & development expenses were up 21.5% year over year to $93.8 million, largely due to the clinical trial activity for mitapivat in Pyruvate kinase (PK) deficiency and start up activities for the thalassemia study. Also, the investigational new drug (IND) application for AG-636, the DHODH inhibitor, and the cost associated with Agios’ ongoing research for discovery platform programs.

General and administrative expenses escalated 40.5% year over year to $31.9 million on higher investments in supporting the commercial launch of Tibsovo.

Agios ended the fourth quarter with cash, cash equivalents and marketable securities of $805.4 million, lower than the sequential quarter’s tally of $878.4 million. The company expects this cash balance and revenues recognized from Tibsovo to effectively fund its current operating plans for at least through 2020.

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. The drug generated sales of $9.4 million in the fourth quarter of 2018.

Agios announced that it has submitted a marketing authorization application (MAA) to the European Medicines Agency (EMA) for Tibsovo pertaining to the same indication. The filing has now been validated by the EMA and the review procedure is already underway.

Agios also petitioned a supplemental new drug application (sNDA) for Tibsovo as a monotherapy for the first-line treatment of IDH1m AML patients, who are not eligible for any standard treatment.

During the fourth quarter, 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 submit an sNDA for the same by this year end.

Tibsovo is also being evaluated in combination with Celgene’s Vidaza for treating newly diagnosed AML patients, who are ineligible for intensive chemotherapy. Agio plans to conclude enrollment in the study by 2020.

Pipeline Update

Agios’ pipeline candidate, mitapivat (AG-348), is being developed to treat patients with (PK) deficiency. During the first quarter of 2018, the company initiated the phase III ACTIVATE study on the candidate to address adult patients complaining of PK deficiency, who do not receive regular blood transfusions.

AG-348 is also being studied in a phase III program called ACTIVATE-T on PK deficiency patients, who take regular blood transfusions. The company plans to close enrollment in the study by the end of the ongoing year.

Agios also aims to initiate a phase II proof of concept analysis on AG-348 for thalassemia during the second half of 2019.

It received the FDA clearance of the IND application regarding another candidate, AG-636, an inhibitor of the metabolic enzyme dihydroorotate dehydrogenase (DHODH) to treat hematologic malignancies. The company plans to initiate a phase I dose-escalation probe on lymphoma during the first half of 2019.

Last November, Agios presented follow-up data from an ongoing phase I dose-escalation study on AG-881 for advanced glioma at the Society for Neuro-Oncology Annual Meeting in New Orleans. The data showed that AG-881 achieved a favorable safety profile at the doses selected.

Longer treatment duration and a reduction in tumor growth rates were also observed as encouraging signs to reduce the intensity of low-grade glioma. The company plans to begin a registration-enabling phase III evaluation of AG-881 for low-grade glioma with an IDH1 mutation by the end of 2019.

Agios Pharmaceuticals, Inc. Price, Consensus and EPS Surprise

Zacks Rank & Stocks to Consider

Agios currently carries a Zacks Rank #4 (Sell).

Better-ranked stocks in the healthcare sector include Sunesis Pharmaceuticals, Inc. (NASDAQ:SNSS) and BioDelivery Sciences International, Inc. (NASDAQ:BDSI) , each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Sunesis’ loss per share estimates have been narrowed 14.7% for 2019 over the past 60 days.

BioDelivery Sciences’ loss per share estimate has been narrowed 12% for 2019 over the past 60 days. The stock has skyrocketed 113.8% in the past year.

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