Agios Pharma Shares Crushed Under Weight Of Clinical Setback

Shares of Agios Pharmaceuticals Inc (NASDAQ: AGIO) plunged more than 20 percent as it discontinued the development of a blood disorder study after FDA opined that the drug no longer had an appropriate risk-benefit ratio.

Agios was developing AG-519, its "backup" pyruvate kinase-R (PKR) activator, as a treatment for ultra-rare blood disorder pyruvate kinase deficiency (PKD).

The company will rely on its original product candidate AG-348 for addressing the PKD opportunity, but still requires regulatory feedback regarding the design of potential pivotal trials, which is expected sometime in H1 2017.

Also, Agios reiterated plans to submit the NDA filing for AG-221 as treatment for relapsed/refractory AML in the next weeks, and for proprietary AG-120 in 2017.

“We are maintaining our Market Perform rating on AGIO and are lowering our PT to $45/sh from $56/sh to account for incrementally increased development uncertainty in PKD,” Leerink analyst Michael Schmidt wrote in a note.

“AG-221 and AG-120 continue to look well positioned in AML and we see a path forward for AG-348 in adult pts. w/ pyruvate kinase (PK) deficiency,” Schmidt continued.

Further, Schmidt lowered his probability of success in PKD to 55 percent from 75 percent previously to reflect the increased level of uncertainty on the PKR program. PKD currently represents about 54 percent of his AGIO valuation. But, the analyst raised the probability of success of AG-120 in r/r AML to 90 percent from 70 percent.

However, the analyst noted that the above opportunities are already priced in to the shares, implying limited number of catalysts to drive shares higher in the near term.

At last check, shares of Agios fell 19.86 percent to $44.83.

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