JPMorgan Upgrades Agios Pharma To Overweight Despite Last Week's 25% Decline

Agios Pharmaceuticals Inc AGIO presented “de-risking” data for its PKD program at the EHA. The stock has declined 25 percent since June 9.

JPMorgan’s Anupam Rama upgraded the rating on the company from Neutral to Overweight, while raising the price target from $50 to $62.

Thoughts On The Stock

Rama believes the risk/reward on the stock has shifted and there now is upside potential of 20–25 percent from the current valuation levels.

The analyst believes that “investors fear some level of a ‘sell the news’ event near term given Agios will likely have quiet news flow between now and ASH 2016.”

Rama mentioned that at approximately $50 per share, the stock offers an attractive buying opportunity.

Related Link: Goldman Sachs: 3 Questions For Agios Pharmaceuticals

The PKD Program

The DRIVE PK data showed a 50 percent responder rate among PKD patients, with hemoglobin increases observed for both doses tested.

The analyst expects the hemoglobin increases to be associated with quality of life benefits going forward, with the company presenting a better understanding into the clinical benefits associated with the other secondary endpoints at ASH 2016.

“Agios reiterated its goal to move either AG- 348 or AG-519 into pivotal trials by YE16. Based on known data, our best guess is that AG-519 will likely emerge as the go-forward compound,” Rama stated.

The analyst expects $500 million in peak sales for the PKD program, which could prove conservative.