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Agios (AGIO) Q4 Loss Wider Than Expected, Revenues Slump Y/Y


Agios Pharmaceuticals, Inc. AGIO posted fourth-quarter 2017 loss of $1.81 per share, wider than both the Zacks Consensus Estimate of a loss of $1.65 and the year-ago loss of $1.34.

Total revenues in the reported quarter amounted to $9.8 million, which lagged the Zacks Consensus Estimate of $16 million. Revenues plunged 56.6% from the year-ago figure of $22.6 million due to lower collaboration revenues.

However, Agios shares increased almost 2% despite reporting wider loss and lower revenues as the company sounds bullish on its pipeline progress. In fact the stock has outperformed the industry in a year’s time, having surged 69.1% compared with the industry’s rally of 15.1%.

Notably, in August 2017, Agios’ only marketed drug Idhifa (enasidenib), received an FDA approval for treatment of patients with relapsed or refractory acute myeloid leukemia (AML) with an isocitrate dehydrogenase-2 (IDH2) mutation. The company earned $1.9 million of royalty revenues from Celgene Corporation CELG on the net sales of Idhifa in the quarter under review compared with $0.7 million in the third quarter. The drug posted revenues of $13 million in the reported quarter.

Research & development expenses were up 19.3% year over year to $77.2 million, largely driven by escalated costs associated with the ivosidenib program.

General and administrative expenses increased 47.4% year over year to $22.7 million due to higher costs related to investment in increasing commercial capabilities of Idhifa and the potential launch of ivosidenib in 2018.

In December 2017, Agios submitted a new drug application (NDA) to the FDA for ivosidenib (AG-120), which has been developed for treating patients with R/R AML and an IDH1 mutation. The NDA submission was based on encouraging data from dose expansion part of an ongoing phase I study, evaluating the candidate as a single agent on patients with advanced hematologic malignancies and 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 given indication.

2017 Results

Full-year sales decreased 38.5% year over year to $43 million. Sales also missed the Zacks Consensus Estimate of $49.3 million.

The full-year loss of $6.75 per share was also wider than the Zacks Consensus Estimate of a loss of $6.59. The company had incurred a loss of $5.07 a year ago.

Pipeline Update

Agios has several candidates in its pipeline, including a pan-IDH mutant inhibitor, AG-881 and genetic diseases candidate, AG-348.

Meanwhile, Agios is conducting phase I programs on AG-881 for treating patients with advanced IDH1 or IDH2 mutant-positive solid tumors including glioma. In October 2017, the company announced positive data from the study.

The company has another interesting candidate, AG-348, in its portfolio. This lead rare genetic diseases candidate is under evaluation in a phase II study on adult, transfusion-independent patients with Pyruvate kinase (PK) deficiency. Last December, Agios reported impressive data from the trial, demonstrating the candidate’s potential as the first disease-modifying therapy for patients with PK deficiency. The company expects to initiate two global pivotal studies for AG-348 in PK deficiency in the first half of 2018.

Agios Pharmaceuticals, Inc. Price, Consensus and EPS Surprise

Agios Pharmaceuticals, Inc. Price, Consensus and EPS Surprise | Agios Pharmaceuticals, Inc. Quote

Zacks Rank & Key Picks

Agios carries a Zacks Rank #3 (Hold). Two better-ranked stocks in the health care sector are XOMA Corporation XOMA and Exelixis, Inc. EXEL, with both carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

XOMA’s loss per share estimates have narrowed from 99 cents to 42 cents for 2018 over the last 60 days. The company came up with an average beat of 47.92%. The stock has skyrocketed 395% in the last 12 months.

Exelixis’ earnings per share estimates have been revised upward from 72 cents to 77 cents for 2018 over the last 60 days. The company pulled off a positive surprise in all the trailing four quarters with an average beat of 572.92%. Share price of the company has surged 35.6% in a year’s time.

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