Canaccord Raises Agios Pharma Price Target As Celgene Exercised Option To License AG-120
In a research report sent to investors today, Canaccord Genuity analyst John Newman maintained a Buy rating on Agios Pharma (NASDAQ:AGIO) and raised his price target to $163 (from $111), following the news that Celgene exercised its option to obtain an exclusive license of the company’s AG-120 outside the US.
Newman noted, “We believe the decision validates the potential success of the product in tumors with the specific mutation. To date, clinical data demonstrate an ORR of 50% in 14 IDH1m leukemia patients, with an impressive 29% CR, 14% CRi/ CRp, which we find very positive for an oral drug since most patients in this disease state are heavily pretreated and elderly. We look forward to the start of expansion cohort for AG-120 in 1H15, phase 1 data in solid tumors and combination trials for frontline AML treatment in 2015, with positive data a catalyst for further upside to the stock.”
The analyst added, “We increase our PT to $163 from $111 given the higher confidence of all assets based on the Celgene opt in and analysis of IDH variants in solid tumors. We increase our probability of approval for all products to 80% from 65% for all AG-120 assets. Additionally, given the increased price tag of oncology orphan indications (i.e., Revlimid has ~$160k annual price tag in certain indications), we increase our annual estimated cost for both AG-120 and AG-221 to $200,000 from $175,000.”
According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst John Newman has a total average return of 4.9% and a 62.5% success rate. Newman has a 33.0% average return when recommending AGIO, and is ranked #1216 out of 3420 analysts.