Agios (AGIO) Up 23% on Selling Brain Cancer Drug Royalty

Core Viewpoint - Agios Pharmaceuticals has entered a deal with Royalty Pharma to sell royalty rights on vorasidenib, leading to a significant increase in its stock price by over 20% on May 28, 2023 [1] Financial Deal Summary - Agios will receive an upfront payment of $905 million if the FDA approves vorasidenib, which is under review for IDH-mutant diffuse glioma [2] - Royalty Pharma will receive a 15% royalty on U.S. sales up to $1 billion, and a 12% royalty on sales exceeding that threshold [2] - Agios retains a 3% royalty on U.S. sales exceeding $1 billion and a milestone payment of $200 million from Servier upon FDA approval [2] Stock Performance and Market Position - Year-to-date, Agios shares have surged 74.3%, significantly outperforming the industry average increase of 2.6% [3] - The approval of Pyrukynd for treating hemolytic anemia was crucial for Agios, providing a stable revenue stream after the divestiture of its oncology business [3] Clinical Trials and Future Prospects - Agios is conducting two phase III studies for Pyrukynd in thalassemia, with positive results from the ENERGIZE study indicating potential for the drug to be the first oral therapy for non-transfusion-dependent patients [4] - A data readout from the ENERGIZE-T study is expected soon, with plans for label expansion across all thalassemia sub-types if results are favorable [4] - Agios is also evaluating mitapivat for sickle cell disease in a phase II/III study, with the phase II portion achieving its primary endpoint [5] Industry Context - Agios currently holds a Zacks Rank 2 (Buy), indicating a favorable position in the healthcare sector [6] - Other companies in the sector, such as Arcutis Biotherapeutics and Heron Therapeutics, also show strong performance and improved earnings estimates [6][7]