It has been about a month since the last earnings report for Agios Pharmaceuticals (AGIO). Shares have lost about 15.5% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Agios Pharmaceuticals due for a breakout? Before we dive into how investors and analysts have reacted as of late, let’s take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Agios’ Q2 Loss Narrower Than Expected, Revenues Surpass
Agios reported second-quarter 2020 loss of $1.31 per share, narrower than the Zacks Consensus Estimate of a loss of $1.42 as well as the year-ago loss of $1.87.
Total revenues of $37.3 million were above the Zacks Consensus Estimate of $35 million. The top line also grew year over year, driven by a 101% increase in Tbisovo sales.
Tibsovo generated sales worth $27.6 million in the second quarter, reflecting a sequential increase of 21.5%, driven by a strong uptake of the drug. Tibsovo total number of unique prescribers was expanded by 15% from the previous quarter. In 2020, the company expects Tibsovo sales in the range of $105-115 million.
Royalty revenues earned from Celgene, now part of Bristol-Myers, were $3.3 million in the reported quarter on Idhifa’s net sales.
Collaboration revenues were $6.4 million in the quarter compared with $9.8 million in the year-ago period.
Research & development expenses declined 15.4% year over year to $90.9 million owing to the ramp-down of clinical studies for pipeline development.
General and administrative expenses increased 11.1% year over year to $36 million on account of higher infrastructure costs.
Agios ended the second quarter with cash, cash equivalents and marketable securities of $794 million, higher than the sequential quarter’s $613.1 million. The company expects this cash balance and revenues recognized from Tibsovo plus royalties to effectively fund its current operational plans for at least through the end of 2022.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in estimates revision.
VGM Scores
At this time, Agios Pharmaceuticals has a subpar Growth Score of D, a grade with the same score on the momentum front. Charting a somewhat similar path, the stock was allocated a grade of F on the value side, putting it in the lowest quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of F. If you aren’t focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending upward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Agios Pharmaceuticals has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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