Oppenheimer Upgrades Agios Pharma On Expectations For First Drug Launch

Oppenheimer has upgraded Agios Pharmaceuticals Inc (NASDAQ: AGIO) shares to Outperform from Perform on higher expectations for its first drug launch and attractive valuation.

The company’s AG-221, developed along with partner Celgene Corporation (NASDAQ: CELG), is submitted for FDA approval for mutant isocitrate dehydrogenase-2 (IDH2) in advanced hematologic malignancies. The brokerage estimates that AG-221 could launch in the fourth quarter of 2017.

In addition, AG-120 is being studied in isocitrate dehydrogenase-1 (IDH1) mutant positive glioma and chondrosarcoma.

“We anticipate Agios will launch its first drug, AG-221, in partnership with Celgene Corporation, in 2017 and its second drug, AG-120, in 2018, two years sooner than we previously estimated,” analyst Leah Rush Cann wrote in a note.

Analyst's Estimations

The analyst estimates Agios’ total revenue will grow at a CAGR of 70.9 percent for the next six years, increasing to $1.47 billion in 2021.

Rush Cann also projects AG-221 could result in 2021 product sales of $1.4 billion and 2021 royalty income to Agios of nearly $172 million.

Further, the analyst anticipates AG-120 could result in 2021 product sales to Agios of $1.278 billion, significantly higher than prior estimate of $55 million.

At last check, shares of Agios were down 0.96 at $41.15. The analyst has a price target of $75.

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