Citi: Agios Pharmaceuticals’s Experimental Cancer Drug Could Provide Major Upside

Published: Nov 10, 2014

Citi: Agios’s Experimental Cancer Drug Could Provide Major Upside

November 10, 2014

By Riley McDermid, Breaking News Sr. Editor

Agios Pharmaceuticals is making good progress with its pipeline and Wall Street analysts are encouraged about the “robust” early responses seen with experimental drug AG-221 in treating mutations in the tumor gene IDH2, Yaron Werber, head of the biotech analysis team at Citgroup, said Monday.

Citi said that so far Agios’s responses look durable with the drug and as such had raised the European Union price of the drug from $8,000 previously to $12,500. Their American price estimate remains at $15,000 in 2020 and raised their target price estimate to $93, an upgrade of $35.

Still, the debate continues around whether IDH2 mutations are more or less sensitive to chemo, said Werber.

“Our analysis of the literature suggests that these mutations are either as sensitive to chemo as regular AML clones or are harder to treat,” he wrote in a note to investors. “Either way, AG-221’s efficacy and better safety profile than chemo is encouraging.”

Werber said that right now analysts are trying to find the sweet spot for duration, as it appears to have a major effect on the therapy working. The key is whether the tumor can evade the drug. The issue with chemo is poor efficacy and very onerous side effects,” he said. “So far we are very encouraged with the potency and depth of response. The lack of breakthrough or resistance is also encouraging and hints that the PFS should be robust.”

Bears and bulls will continue to argue over Agios’s future until the path to approval becomes clear. “The bear argument is that AG-221 will not be approved for a very long time given FDA’s historical stance that OS is needed. However that was typically with chemo,” wrote Werber.

But Agios is currently testing the drug in four different cohorts including a population that is not able to tolerate chemo.

“The fact that this agent is targeting a specific mutation with high potency could provide a faster to market approval in r/r AML in 2018,” concluded Werber. “For a naïve population we assume approval in 2020 based on a lengthy Phase III program.”

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