Analyst Conference Summary

biotechnology

conference date: August 2, 2018 @ 5:00 AM Pacific Time
for quarter ending: June 30, 2018 (Q2, second quarter 2018)

Forward-looking statements

Overview: Received FDA approval on July 20 for Tibsovo for AML patients with an IDH1 mutation.

Basic data (GAAP):

Revenue was $40.4 million, up sequentially from $8.8 million, and up 257% from $40.4 million year-earlier.

Net income was negative $68.7 million, up sequentially from negative $90.8 million, and up from negative $83.1 million year-earlier.

EPS (diluted GAAP) was negative $1.19, up sequentially from negative $1.81, and up from negative $1.78 year-earlier.

Guidance:

Collaboration revenue is expected to return to its (lower) historical run rate going forward.

Conference Highlights:

David Schenkein, M.D., CEO of Agios said "We are thrilled . . . The first half of 2018 has been productive across all aspects of our business, culminating in the recent approval and launch of our second internally discovered medicine. This achievement sets us well on the path to becoming a sustainable, multiproduct company with a thriving research engine on track to submit its 7th IND and a broad clinical development program with multiple trials planned or underway to expand our oncology and rare genetic disease portfolios."

Tibsovo (AG-120 or ivosidenib) in R/R AML patients with an IDH1 mutation received FDA approval in July. An EMA submission should be made before the end of 2018. Executing on launch plan, first prescriptions were written. Not aware of any payer-related issues.

Agios entered into an exclusive license agreement with CStone Pharmaceuticals for ivosidenib in Greater China, resulting in a $12 million upfront payment with the potential for $412 million in development and commercial milestones.

$1.6 million of revenue in the quarter was from royalties for Idhifa from Celgene, up sequentially from $1.4 million. Celgene had reported sales of $16 million in Q2. Idhiba was not on the market year-earlier. $38.8 million was from collaborations.

With Celgene, Agios plans to start a Phase 3 trial for frontline AML combining ivosidenib or enasidenib with 7+3 chemotherapy in Q4 2018. Updated Phase 1/2 data from the trial combining Tibsovo or Idhifa with Vidaza has been submitted for ASCO.

A randomized Phase 3 study (ClarlDHy) of AG-120 (ivosidenib) in IDH1 mutant positive cholangiocarcinoma in continued enrollment, which is expected to complete in first half of 2019. If approved would be the first targeted therapy for this disease, which has about 3,000 IDH1+ patients annually.

Further combination trials with a variety of agents and target variants are planned for ivosidenib.

Phase 1 dose-escalation and expansion study of AG-881 in IDH mutant positive hematologic malignancies completed the dose-escalation phase. Another Phase 1 study for IDHm positive glioma should report data at ASCO. Also looking at ivosidenib as a possible treatment for this disease.

Phase 1 study of AG-519 for PK deficiency in healthy volunteers enrollment continues.

AG-348, now mitapivat, for Pyruvate Kinase Deficiency (PKD) Activate, pivotal trial started for patients who do not receive regular blood transfusions.. A Phase 2 proof of concept trial for thalassemia will begin in Q4 2018. The Activate-t trial for PK patients receiving regular blood transfusions is ongoing.

A Phase 1 study is underway for AG-270 for MTAP (methylthioadenosine phosphorylase) deleted cancers .... 15% of all cancers have MTAP deletions. But some, like mesothelioma and glioblastoma, have rates over 50%. Celgene is collaborating on AG-270.

Will initiate preclinical development activities for the first molecule in the next wave of novel investigational cancer metabolism medicines.

An IND for AG-636, an DHODH (dihydroorotate dehydrogenase) inhibitor, for hematologic malignancies should be submitted in Q4 2018.

Cash (including equivalents & securities) ended at $937 million, down sequentially from $995 million. No debt. "Well financed through at least the end of 2020."

GAAP operating expenses were $1123.4 million, consisting of: $86.7 million for R&D and $26.6 million for G&A. Loss from operations was $72.9 million. Interest income was $4.2 million.

Q&A:

Agile study primary endpoint possible change? Still talking to regulators.

AG-348 trial powering assumptions, enrollment? Getting sites up, no projections on timeline. Earlier efficacy results are being used for projections. We have a good idea of how the placebo arm will perform, so we can power the study adequately.

High-risk frontline use of Idhifa? No updated metrics yet. Uptake is faster in academic centers than community centers. Neither Celgene nor Agios promotes off-label use, and we are surprised if such use does not meet payer resistance.

R&D run rate? This quarter should approximate the run rate going forward.

AML landscape? There have been a number of new medicines in AML this last year, which is great for patients. Physician feedback is that they prefer to use targetted medicines when a mutation has been identified. We intend to test more combinations, to move the needle for outcomes.

AG881 for glioma? There will be presentations during the year. We are comparing to ivosidenib to see which should be taken forward in glioma.

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