Scotiabank cuts Agios Pharma stock target to $71, keeps outperform rating

Published 02/05/2025, 13:00
Scotiabank cuts Agios Pharma stock target to $71, keeps outperform rating

On Friday, Scotiabank (TSX:BNS) analyst Greg Harrison adjusted the price target on Agios Pharma (NASDAQ:AGIO) shares to $71.00, down from the previous $74.00, while maintaining a Sector Outperform rating. The stock, currently trading at $30.94, sits significantly below its 52-week high of $62.58, suggesting potential upside according to InvestingPro analysis. The decision followed Agios Pharma’s first-quarter earnings call of 2025, during which the company reaffirmed its dedication to expanding the Pyrukynd franchise, particularly with potential new applications for treating thalassemia and sickle cell disease (SCD). With a market capitalization of $1.77 billion and strong financial health metrics according to InvestingPro, the company maintains a solid balance sheet with more cash than debt, though analysts note rapid cash utilization.

Agios Pharma’s management underscored their ongoing commercial preparations as they anticipate the September 7, 2025, Prescription Drug User Fee Act (PDUFA) date for mitapivat’s approval for thalassemia treatment. Harrison cited a high likelihood of approval, estimated at 90%, based on positive outcomes from two phase 3 trials for both non-transfusion-dependent and transfusion-dependent thalassemia. The analyst noted mitapivat’s broad efficacy profile, which covers all patient subtypes of thalassemia, and its oral administration as advantages for its market performance.

The company’s leadership also expressed confidence in their ability to manage reimbursement processes and secure favorable access for mitapivat, drawing on their experience with pyruvate kinase deficiency (PKD). Furthermore, Agios has reported positive interactions with the FDA, indicating no expected delays in the approval process despite recent changes within the agency.

The revised price target reflects the latest quarterly financial results and incorporates the anticipated milestones for Agios Pharma. The report included a detailed earnings-versus-consensus table and a calendar of upcoming catalysts that could influence the company’s stock performance. While the company posted revenue growth of 36% in the last twelve months, InvestingPro analysis indicates the stock is currently undervalued, with additional insights available through the platform’s comprehensive Pro Research Report, which covers over 1,400 US stocks.

In other recent news, Agios Pharmaceuticals reported a mixed financial outcome for the first quarter of 2025. The company exceeded earnings per share expectations, posting an EPS of -1.55 compared to the forecasted -1.78. However, Agios fell short of revenue projections, recording $8.7 million against an anticipated $9.97 million. Despite this revenue miss, Agios is advancing its PyroKind franchise, with significant developments expected in 2025, including a potential approval for thalassemia treatment in September.

The company maintains a strong cash reserve of approximately $1.4 billion, which it plans to use for future product launches and pipeline advancements. Agios is also preparing for potential product launches in the U.S. and the Gulf region, emphasizing its global expansion efforts. Analyst firms have noted the company’s strategic initiatives as a positive indicator for future growth. Additionally, Agios has confirmed that no FDA advisory committee is planned for its thalassemia application, indicating smooth regulatory proceedings.

The company is also focusing on expanding its presence in the rare disease market, with ongoing studies in sickle cell disease and plans to initiate new trials in 2025. Agios’ strategic capital deployment and robust product pipeline are seen as key drivers for potential growth, despite the current challenges in meeting revenue expectations.

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