Analyst Conference Summary

biotechnology

conference date: August 1, 2019, @ 5:00 AM Pacific Time
for quarter ending: June 30, 2019 (Q2, second quarter 2019)

Forward-looking statements

Overview: Tibsovo revenue is ramping as a %, but overall revenue lower as collaboration revenue fell. Losses increased on higher R&D expense.

Basic data (GAAP):

Revenue was $26.2 million, down 13% sequentially from $30.2 million, and down 35% from $40.4 million year-earlier.

Net income was negative $109.9 million, down sequentially from negative $93.1 million, and down from negative $68.7 million year-earlier.

EPS (diluted GAAP) was negative $1.87, up sequentially from negative $1.59, and up from negative $1.19 year-earlier.

Guidance:

Has sufficient cash to last until the end of 2020.

Conference Highlights:

Jackie Fouse, CEO of Agios said "Our commercial team continues to deliver on the AML launch for Tibsovo and prepare for our first potential solid tumor launch on the heels of the positive ClarIDHy study in cholangiocarcinoma. On the clinical side, we continued to broaden our IDH program into earlier lines of AML therapy and expand our PKR programs into new disease areas while enrolling the PK deficiency pivotal studies. In addition, we completed dose escalation in our AG-270 Phase 1 trial and are on track to initiate the next phase of development. The great progress we made during the quarter keeps us on track to deliver on our remaining 2019 milestones and drive further value across our portfolio."

EU application should get a CHMP opinion on Tibsovo in the second half of 2020. Growth of Tibsovo in the U.S. remains strong as prescriber base broadens and frontline approval ramps. There are about 10,000 newly diagosed IDH1/2 newly diagnosed AML patients in the US and EU combined, annually.

Tibsovo plus Vidaza has generated good data, so is now in a Phase 3 trial. Investigator-sponsored studies are testing tibsovo with various other agents for AML.

Tibsovo net sales were $13.7 million, up 50% sequentially from $9.1 million. $2.7 million of revenue in the quarter was from royalties for Idhifa from Celgene, up sequentially from $2.2 million. $10 million was from collaborations, which was down from $39 million year-earlier.

Hopes to be able to treat all front-line AML patients with IDH1 mutation. Data so far are encouraging. Also resuming study of Myelodysplastic Syndromes.

Agios received FDA approval on May 2, 2019 for the supplemental new drug application (sNDA) for single agent Tibsovo for the treatment of patients with newly diagnosed AML with an IDH1 mutation who are not eligible for standard therapy. Updated data from Phase 1 studies of Tibsovo in newly diagnosed AML and First Data from Perioperative Study of Tibsovo and Vorasidenib were accepted for presentation at ASCO 2019.

Agios plans to submit an sNDA to the FDA for Tibsovo for second line or later IDH1 mutant cholangiocarcinoma by year-end 2019. The Phase 3 trial had positive results.

In Q1 2019 Agios presented updated data from the ongoing Phase 1 combination trial of Tibsovo with azacitidine in patients with newly diagnosed AML with an IDH1 mutation at the 17th International Symposium on Acute Leukemias.

Plans to initiate a registration-enabling Phase 3 study of vorasidenib (AG-881) in low-grade glioma with an IDH1 mutation by year-end 2019. is currently working with regulators on the trial design. Phase 1 study for IDHm positive glioma should reported data at ASCO.

Completed dose escalation phase of trial for AG-270, a first-in-class methionine adenosyltransferase 2a (MAT2A) inhibitor, in methylthioadenosine phosphorylase (MTAP)-deleted tumors. Will initiate expansion arms, including a single-agent arm in a variety of MTAP-deleted cancers and a combination arm in a solid tumor in Q3 of 2019. Celgene is collaborating on AG-270.

In Q2 2019 initiated a Phase 1 dose-escalation trial of AG-636, an inhibitor of the metabolic enzyme dihydroorotate dehydrogenase (DHODH), in lymphoma.

Will complete enrollment in two global pivotal Phase 3 trials for mitapivat (AG-348) in adults with pyruvate kinase (PK) deficiency by year-end 2019.

Agios dosed the first Phase 2 patient in Q1 and hopes to achieve proof-of-concept for mitapivat in thalassemia in the second half of 2019. The NIH is sponsoring a sickle cell study to start in 2019.

AG-881 (vorasidenib) was chosen (in Q1 2019) as the molecule to continue in the IDH1-mutant glioma study. About 80% of patients are IDH1-mutant.

With Celgene, Agios is enrolling a Phase 3 trial for frontline AML combining ivosidenib or enasidenib with 7+3 chemotherapy.

Phase 3 AGILE trial expects full enrollment in 2020 now that event free survival is primary endpoint, in combination with azacitidine for newly diagnosed AML patients with IDH1 mutation ineligible for intensive chemotherapy.

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

Cash (including equivalents & securities) ended at $624 million, down sequentially from $708 million. No debt.

Cost of Sales $0.3 million. GAAP operating expenses were $140 million, consisting of: $107 million for R&D and $32 million for G&A. Loss from operations was $114 million. Interest income was $4 million.

Q&A:

40% increase in unique prescribers? Even between community and academic physicians.

Tibsovo growth, any other color? Q2 growth was a continuation of end of Q1 momentum. Then got more momentum with the first-line approval. There is little off-label use.

Gross to net? Guidance is for mid-teens, but it does fluctuate, for instance in Q1 due to the Medicare donut-hole.

AG-270 dosing, combinations? We have a good feel after the single-agent dose escalation. When you start to combine you do have to look at the side-effects profiles. Most of the potential for this drug is in combinatino therapies. We are ready to move forward with testing them.

Duration is now 4 months, we expect it to stabilize at 4 to 5 months.

AG-270 tumor data, will it be presented? For the triple meeting we will provide safety, efficacy, pharma dynamics. So a pretty normal Phase 1 report.

Frontline patient contribution to sales? We got the approval in early May, so it is relatively early, and we could not tell how much was frontline.

Cholangio sales force? There is a fair amount of overlap in accounts between AML and Cholangiocarcinoma. We only see a moderate increase in the sales force to support the launch.

IDH testing availability? We will have a simultaneous filing of a companion diagnostic for cholangio, so we expect testing to be broadly available.

Expansion desire v. cash available? We are seeing a nice ramp in Tibsovo. We have prioritized the economic opportunities in our portfolio. We will be efficient with our capital allocation.

For lung and pancreatic cancers, IDH mutations run about 20%. We have a table with many tumor types and their mutation frequency.

Mitapivat for Thalassemia compared to potential oral competition? Data shows it activates wild type PKR. If the pilot study demonstrates compelling activity we will need to think about its potential v. or in combination with new or approved therapies.

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