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.
Sean Williams has no material interest in any companies mentioned in this article. You can follow him on CAPS under the screen name TMFUltraLong, track every pick he makes under the screen name TrackUltraLong, and check him out on Twitter, where he goes by the handle @TMFUltraLong.
The Motley Fool owns shares of and recommends Apple. It also recommends Celgene. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.