Agios' Leukemia Drug Bodes Well For Growth & Strong Pipeline

On Apr 17, 2018, we issued an updated report on Agios Pharmaceuticals, Inc. (NASDAQ:AGIO) , a development-stage biopharmaceutical company focused on development of treatments for cancer and rare genetic metabolic disorders (RGD), a subset of orphan genetic metabolic diseases.

Shares of Agios have soared 51.9% so far this year, outperforming the industry’s increase of 2.8%.

Agios’ only marketed drug is Idhifa, which received an FDA approval last August for the treatment of patients with relapsed or refractory acute myeloid leukemia (AML) with an isocitrate dehydrogenase-2 (IDH2) mutation. The approval lent a huge boost to the company on the back of its immense commercial potential in the target market. Moreover, Idhifa provides a first-ever treatment, alternative to patients living with the aforementioned indication in the United States. Notably, Idhifa also enjoys an Orphan Drug status in the EU for treating AML.

Agios’ progress with the pipeline has been quite impressive. The company has some interesting candidates in its portfolio including an IDH1 mutant inhibitor, AG-120 (ivosidenib) and a pan-IDH mutant inhibitor, AG-881.

Ivosidenib is presently under priority review in the United States for treating patients with R/R AML with an IDH1 mutation. An approval for ivosidenib is expected in the third quarter of 2018. Additionally, the company anticipates a regulatory filing for the candidate in the EU in the fourth quarter of 2018 for the same indication.

Ivosidenib is also being evaluated in phase I study for addressing advanced hematologic malignancies and in phase I/II combined with Celgene’s (NASDAQ:CELG) Vidaza for the cure of newly diagnosed AML patients, who are not eligible for intensive chemotherapy.

Meanwhile, Agios is conducting phase I programs on AG-881 for treating patients with advanced IDH1 or IDH2 mutant-positive solid tumors including glioma. Last October, the company announced positive findings from the study.

Notably, the company also plans to initiate a perioperative window study to analyze ivosidenib and AG-881 in low grade glioma for investigating the effects on brain tumor tissue in the first half of 2018.

The company has another interesting candidate in its portfolio. Its lead rare genetic diseases candidate, AG-348, is under evaluation in a phase II trial on adult, transfusion-independent patients with Pyruvate kinase deficiency. Agios reported positive data from the program in June 2017. The FDA granted a fast track designation to the candidate for the given indication. As the RGD market is still untapped, newer therapies in this area hold huge potential.

Successful development and commercialization of the above investigational candidates should boost the company’s top line going forward, considering the lucrative markets that it is targeting.

Zacks Rank & Key Picks

Agios carries a Zacks Rank #3 (Hold). Two better-ranked stocks in the health care sector are Ligand Pharmaceuticals Incorporated (NASDAQ:LGND) and Infinity Pharmaceuticals, Inc. (NASDAQ:INFI) , both sporting 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 north from $3.78 to $4.40 for 2018 and from $4.75 to $5.32 for 2019 in the last 60 days. The company delivered a positive surprise in three of the trailing four quarters with an average beat of 24.88%. Share price of the company has soared 62.8% over a year.

Infinity’s loss per share estimates have narrowed from $1.69 to 74 cents for 2018 and from 94 cents to 66 cents for 2019 in the last 60 days. The company pulled off a positive surprise in three of the trailing four quarters with an average beat of 7.87%.

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