What: Shares of Agios Pharmaceuticals (NASDAQ:AGIO), a clinical-stage biopharmaceutical company focused on developing therapies to treat cancer and rare genetic disorders, tumbled as much as 16% during Friday's trading session after reporting a slew of new data on three of its experimental compounds at the European Hematology Association's annual meeting in Vienna.
So what: According to this morning's data dump, blood cancer drug AG-221 showed durable responses of more than 15 months in blood cancer patients with acute myeloid leukemia and myelodysplastic syndrome, with 76% of patients that did respond showing durability of response for at least six months. Specifically, the overall response rate of the study was 40% (63 of 158 evaluable patients) and included a complete response rate of 16% (26 of 158 patients). Under normal circumstances this data would be viewed in a very positive manner, but a previous update from Agios, when there were only 45 evaluable patients, showed an overall response rate of 56%. This drop in ORR, from 56% to 40%, is why Agios is getting throttled today.
In addition to the data on AG-221, Agios also announced durable response times of up to 11 months for its IDH1 inhibitor AG-120 in various blood cancers (its overall response rate was 31%), and it presented final data on AG-348, which is an experimental treatment for pyruvate kinase deficiency. The final data supports moving its compound into phase 2 studies.
Now what: Today's move lower is a good reminder that emotions can play a big role in determining clinical-stage biotech valuations. When biotech stocks are being whipsawed like this, your best course of action is to take a step back and reevaluate.
Overall, it's a bit disappointing to see AG-221's ORR fall back to 40% from 56%, but keep in mind that a response rate of 40% would likely still put AG-221 on track to become a standard of care in treating acute myeloid leukemia. Not a whole lot has materially changed in terms of its outlook other than the fact that we have a fuller data set to work with now. Plus, Agios' other two reported compounds appear to be on track. Thus, if you have a bullish thesis on Agios, I don't believe using today's data as a reason to jump ship would be a prudent idea. If this data translates well into a larger audience in phase 2 and 3 studies, then Agios and its development partner Celgene could be sitting pretty.