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Agios (AGIO) Up 23% on Selling Brain Cancer Drug Royalty
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Shares of Agios Pharmaceuticals (AGIO - Free Report) rose more than 20% on May 28 after it entered into a deal with Royalty Pharma (RPRX - Free Report) to sell the royalty rights on potential net sales of vorasidenib, a brain cancer therapy.
Vorasidenib was a part of Agios’ oncology business that was sold to France-based pharmaceutical company Servier in 2021. Per the sale terms, the company is entitled to receive a 15% royalty on potential net sales of the drug in the United States following a possible FDA approval.
Currently, the Servier drug is under the FDA’s review for a brain tumor called IDH-mutant diffuse glioma. If approved, it will be the first targeted therapy for this indication. A final decision is expected by Aug 20.
Per the deal terms with Royalty Pharma, Agios will receive an upfront payment of $905 million if the FDA approves the drug. In exchange for this payment, RPRX will receive the entire 15% royalty on U.S. sales up to $1 billion. Post this threshold, Royalty Pharma will get a 12% royalty on sales.
However, Agios is not selling all of its rights. It will still be eligible to receive a royalty of 3% on U.S. sales of the drug exceeding $1 billion. It also retains the right to receive the milestone payment of $200 million from Servier upon the drug’s FDA approval.
The deal was cheered by investors, who believed that the funds from the Royalty Pharma deal would help the company to expand its pipeline. The increased cash balance should provide Agios with financial independence when it launches its sole marketed drug, Pyrukynd, across thalassemia and sickle cell disease (SCD) indications.
In the year so far, shares of Agios have surged 74.3% compared with the industry’s 2.6% rise.
Image Source: Zacks Investment Research
Agios’ Pyrukynd is currently approved for treating hemolytic anemia in adults with pyruvate kinase (PK) deficiency. This approval was much needed for Agios since it lacked a marketed drug and did not have any stable revenue stream following the divestiture of its oncology business.
Agios is evaluating Pyrukynd in two phase III studies — ENERGIZE and ENERGIZE-T — for the treatment of thalassemia in adult patients who are non-transfusion-dependent (NTD) and transfusion-dependent, respectively.
In January, management reported that the ENERGIZE study achieved its primary endpoint of hemoglobin response, along with lower levels of fatigue. These results strengthen the drug’s potential to become the first oral therapy for NTD thalassemia patients. Currently, there is no approved therapy in the country to treat NTD patients. Agios estimates that the overall thalassemia patient population in the United States stands at around 6,000, more than half of which is represented by NTD patients.
A data readout from the ENERGIZE-T study is expected before the end of next month. If this data is positive, management plans to seek label expansion for Pyrukynd across all thalassemia sub-types before 2024-end. A commercial launch in this indication is expected next year.
Agios is also evaluating conducting the phase II/III RISE UP study evaluating mitapivat for sickle cell disease (SCD). Last year, management reported that the phase II portion of the RISE UP study achieved its primary endpoint of hemoglobin response, along with reductions in SCD pain. Based on this data, the company initiated the phase III portion of the study. The company intends to secure approval in SCD by 2026.
In the past 60 days, estimates for Arcutis Biotherapeutics’ 2024 loss per share have narrowed from $2.49 to $1.60. During the same period, the loss estimates per share for 2025 have improved from $1.77 to $1.14. Year to date, shares of Arcutis have surged 174.9%.
Earnings of Arcutis Biotherapeutics beat estimates in three of the last four quarters while missing the mark on one occasion. Arcutis delivered a four-quarter average earnings surprise of 14.93%.
In the past 60 days, estimates for Heron Therapeutics’ 2024 loss per sharehave improved from 22 cents to 10 cents. During the same period, estimates for 2025 have improved from a loss of 9 cents to earnings of 1 cent. Year to date, HRTX’s shares have appreciated 100.6%.
Earnings of Heron Therapeutics beat estimates in three of the last four quarters while missing the mark on one occasion. HRTX delivered a four-quarter average earnings surprise of 30.33%.
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Agios (AGIO) Up 23% on Selling Brain Cancer Drug Royalty
Shares of Agios Pharmaceuticals (AGIO - Free Report) rose more than 20% on May 28 after it entered into a deal with Royalty Pharma (RPRX - Free Report) to sell the royalty rights on potential net sales of vorasidenib, a brain cancer therapy.
Vorasidenib was a part of Agios’ oncology business that was sold to France-based pharmaceutical company Servier in 2021. Per the sale terms, the company is entitled to receive a 15% royalty on potential net sales of the drug in the United States following a possible FDA approval.
Currently, the Servier drug is under the FDA’s review for a brain tumor called IDH-mutant diffuse glioma. If approved, it will be the first targeted therapy for this indication. A final decision is expected by Aug 20.
Per the deal terms with Royalty Pharma, Agios will receive an upfront payment of $905 million if the FDA approves the drug. In exchange for this payment, RPRX will receive the entire 15% royalty on U.S. sales up to $1 billion. Post this threshold, Royalty Pharma will get a 12% royalty on sales.
However, Agios is not selling all of its rights. It will still be eligible to receive a royalty of 3% on U.S. sales of the drug exceeding $1 billion. It also retains the right to receive the milestone payment of $200 million from Servier upon the drug’s FDA approval.
The deal was cheered by investors, who believed that the funds from the Royalty Pharma deal would help the company to expand its pipeline. The increased cash balance should provide Agios with financial independence when it launches its sole marketed drug, Pyrukynd, across thalassemia and sickle cell disease (SCD) indications.
In the year so far, shares of Agios have surged 74.3% compared with the industry’s 2.6% rise.
Image Source: Zacks Investment Research
Agios’ Pyrukynd is currently approved for treating hemolytic anemia in adults with pyruvate kinase (PK) deficiency. This approval was much needed for Agios since it lacked a marketed drug and did not have any stable revenue stream following the divestiture of its oncology business.
Agios is evaluating Pyrukynd in two phase III studies — ENERGIZE and ENERGIZE-T — for the treatment of thalassemia in adult patients who are non-transfusion-dependent (NTD) and transfusion-dependent, respectively.
In January, management reported that the ENERGIZE study achieved its primary endpoint of hemoglobin response, along with lower levels of fatigue. These results strengthen the drug’s potential to become the first oral therapy for NTD thalassemia patients. Currently, there is no approved therapy in the country to treat NTD patients. Agios estimates that the overall thalassemia patient population in the United States stands at around 6,000, more than half of which is represented by NTD patients.
A data readout from the ENERGIZE-T study is expected before the end of next month. If this data is positive, management plans to seek label expansion for Pyrukynd across all thalassemia sub-types before 2024-end. A commercial launch in this indication is expected next year.
Agios is also evaluating conducting the phase II/III RISE UP study evaluating mitapivat for sickle cell disease (SCD). Last year, management reported that the phase II portion of the RISE UP study achieved its primary endpoint of hemoglobin response, along with reductions in SCD pain. Based on this data, the company initiated the phase III portion of the study. The company intends to secure approval in SCD by 2026.
Agios Pharmaceuticals, Inc. Price
Agios Pharmaceuticals, Inc. price | Agios Pharmaceuticals, Inc. Quote
Zacks Rank & Key Picks
Agios currently carries a Zacks Rank #2 (Buy). Some other better-ranked stocks in the overall healthcare sector include Arcutis Biotherapeutics (ARQT - Free Report) and Heron Therapeutics (HRTX - Free Report) , each carrying a Zacks Rank #2 at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
In the past 60 days, estimates for Arcutis Biotherapeutics’ 2024 loss per share have narrowed from $2.49 to $1.60. During the same period, the loss estimates per share for 2025 have improved from $1.77 to $1.14. Year to date, shares of Arcutis have surged 174.9%.
Earnings of Arcutis Biotherapeutics beat estimates in three of the last four quarters while missing the mark on one occasion. Arcutis delivered a four-quarter average earnings surprise of 14.93%.
In the past 60 days, estimates for Heron Therapeutics’ 2024 loss per sharehave improved from 22 cents to 10 cents. During the same period, estimates for 2025 have improved from a loss of 9 cents to earnings of 1 cent. Year to date, HRTX’s shares have appreciated 100.6%.
Earnings of Heron Therapeutics beat estimates in three of the last four quarters while missing the mark on one occasion. HRTX delivered a four-quarter average earnings surprise of 30.33%.