Agios Is A Must Own Stock, But Not At Current Valuation, Says Roth Capital


Roth Capital’s healthcare analyst Debjit Chattopadhyay came out with a few comments on Agios Pharmaceuticals Inc (NASDAQ:AGIO), after the company reported a worse than expected fourth quarter results yesterday. The analyst maintained a Neutral rating on the stock, with a price target of $114, which implies an upside of 5% from current levels.

Chattopadhyay wrote, “Agios reported a 4Q operating loss of $(0.76) a share. For 2015 we anticipate an operating loss of $(3.02)/share. Key catalysts for 2H15 include: (1) AG-120; solid tumor and expansion cohort data in relapsed/refractory (r/r)-AML as well as the initiation of combination studies targeting frontline AML (2) AG-221; expansion cohort data and initiation of global registration studies (r/r-AML) and initiation of front-line combination studies in AML (3) AG-348: Phase 2 is expected to commence for this wholly-owned, high-value asset.”

Bottom line, “Agios is a must own stock in core healthcare portfolios, in our opinion, since its transformative pipeline is leveraged on a adoptive, biomarker-based development strategy with a high probability of success. However, we are reluctant to recommend initiating new positions at current levels as we believe the stock’s valuation (EV~$3.9B) adequately reflects many of the anticipated positives.”

According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Debjit Chattopadhyay has a total average return of 4.4% and a 45.5% success rate. Chattopadhyay is ranked #1112 out of 3476 analysts.