Oppenheimer Upgrades Agios Pharma On Expectations For First Drug Launch

Oppenheimer has upgraded Agios Pharmaceuticals Inc 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 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.