Agios Pharmaceuticals, Inc. AGIO is scheduled to report first-quarter 2015 results before the opening bell on May 7. Last quarter, the company had posted a negative earnings surprise of 38.18%. Let’s see how things are shaping up for this announcement.
Factors at Play
Agios, a development-stage biopharmaceutical company, focused on the development of potential treatment for cancer and rare genetic disorders of metabolism, currently has three candidates in its pipeline, namely, AG-221 (IDH2 mutant inhibitor – advanced hematologic malignancies like acute myelogenous leukemia/AML and solid tumors), AG-120 (IDH1 mutant inhibitor – AML and solid tumors) and AG-348 (pyruvate kinase deficiency). The company also plans to advance AG-881 into clinical development in the second quarter of 2015.
With Agios not having any approved products in its portfolio, investor focus should remain on pipeline updates since a number of pipeline related activities are lined up for the rest of 2015.
While Agios plans to initiate expansion cohorts as part of an ongoing phase I study on AG-120 (hematologic malignancies) in the first half of 2015, data from the expansion cohorts in the ongoing phase I study on AG-221(hematologic malignancies) is expected in the second half of the year.
Meanwhile, the company expects to initiate a phase II study on AG-348 in the first half of 2015. The candidate enjoys Orphan Drug designation for the pyruvate kinase deficiency indication.
Agios is collaborating with Celgene Corporation CELG for AG-221 and AG-120. Agios will continue to recognize collaboration revenues under its agreement with Celgene.
Earnings Whispers?
Our proven model does not conclusively show that Agios is likely to beat estimates this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1, 2 or 3 for this to happen. This is not the case here, as you will see below.
Zacks ESP: The Earnings ESP for Agios is -3.49%. This is because the Most Accurate estimate of a loss of 89 cents is wider than the Zacks Consensus Estimate of a loss of 86 cents per share.
Zacks Rank: Agios carries a Zacks Rank #3 (Hold). Agios’ Zacks Rank #3 when combined with an ESP of -3.49% makes surprise prediction difficult.
We caution against stocks with a Zacks Rank #4 and 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Stocks That Warrant a Look
Here are some companies you may want to consider as our model shows that these have the right combination of elements to post an earnings beat this quarter:
Tetraphase Pharmaceuticals, Inc. TTPH has an Earnings ESP of +6.06% and carries a Zacks Rank #3 (Hold). It is expected to report results on May 11.
Actavis plc ACT has an Earnings ESP of +0.78% and carries a Zacks Rank #2. The company is scheduled to release first-quarter 2015 results on May 11.
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