Agios Pharmaceuticals, Inc. — Q1 2022 Form 10-Q
Reporting period: Three months ended March 31, 2022. Agios is a biopharmaceutical company focused on genetically defined diseases. Its lead product, PYRUKYND (mitapivat), received U.S. FDA approval on February 17, 2022, for hemolytic anemia in adults with pyruvate kinase (PK) deficiency; the company began its commercial launch during the quarter.
Financial performance and liquidity
| Metric | Q1 2022 | Q1 2021 |
|---|---|---|
| Revenue | $0.8 million | None |
| Research and development | $70.1 million | $57.7 million |
| Selling, general and administrative | $31.5 million | $33.6 million |
| Operating loss | $101.1 million | $91.2 million |
| Net loss from continuing operations | $94.8 million | $90.9 million |
| Net income (loss), including discontinued operations | $(94.8) million | $1,874.3 million |
| Operating cash flow | $(97.7) million | $(120.7) million |
Product revenue was offset by $0.3 million of cost of sales, leaving a simple revenue-minus-cost-of-sales amount of approximately $0.5 million. This is not a representative ongoing product margin: certain PYRUKYND manufacturing costs incurred before FDA approval were expensed as R&D rather than cost of sales. No meaningful operating margin is indicated given the early-stage launch and low initial sales.
At March 31, 2022, cash and cash equivalents were $80.0 million and marketable securities totaled $1.099 billion, or approximately $1.18 billion combined. Total assets were $1.336 billion, total liabilities $128.4 million, and stockholders’ equity $1.207 billion. The filing reports no conventional borrowings; liabilities primarily include operating leases. Accumulated deficit was $333.5 million.
Cash and cash equivalents declined $123.1 million during the quarter. Investing cash use was $26.6 million, principally reflecting purchases of marketable securities exceeding maturities and sales. Q1 2022 includes a $6.5 million unrealized loss on available-for-sale securities in other comprehensive loss.
Material changes versus the prior comparable period
- PYRUKYND generated $0.8 million of initial product revenue following FDA approval; there was no product revenue in Q1 2021.
- R&D expense increased $12.5 million, primarily due to higher PYRUKYND trial and research-platform activity. SG&A decreased $2.0 million, mainly due to lower workforce-related costs.
- Q1 2022 continuing-operations net loss increased to $94.8 million from $90.9 million. Q1 2021 reported $1.965 billion of net income from discontinued operations, principally reflecting the oncology-business sale to Servier; therefore, reported total net income comparisons are not indicative of underlying operating performance.
- Operating cash use improved to $97.7 million from $120.7 million, partly because Q1 2021 included $30.5 million of cash use from discontinued operations.
Outlook, commentary, and risks
- Management expects available cash, cash equivalents, and marketable securities to fund operations for at least 12 months from the financial-statement issuance date, and says existing resources are expected to support the operating plan through major catalysts and to cash-flow positivity without additional equity. The company nevertheless expects significant expenses and losses for the foreseeable future.
- Management expects R&D costs to increase as development advances. ENERGIZE and ENERGIZE-T (Phase 3 thalassemia trials) were enrolling, with meaningful enrollment expected by year-end 2022. The Phase 2 portion of RISE UP (SCD) was enrolling, with completion expected by year-end 2022. Pediatric PK-deficiency trials were expected to start in mid-2022. AG-946’s SCD patient cohort had begun, and a Phase 2a study in lower-risk MDS was expected by year-end 2022.
- The EMA review of PYRUKYND for adult PK deficiency was ongoing. The company was exploring options, including potential partnerships, for development and commercialization outside the United States.
- Servier royalties on U.S. TIBSOVO sales contributed $2.7 million in Q1 2022. Servier also owes a potential $200 million milestone if specified vorasidenib FDA approval conditions are met before January 1, 2027, plus contractual royalties; timing and amounts are uncertain. Agios paused share repurchases and said capital allocation would prioritize pipeline development and potential business-development opportunities.
- Key risks include successful PYRUKYND commercialization, market access and reimbursement, clinical-trial enrollment and outcomes, regulatory approvals, manufacturing and third-party dependence, competition, and the company’s continuing losses. COVID-19 had disrupted some clinical timelines and China-based CRO research; the company reported no significant financial or supply-chain impact to date.
Important facts for investors to verify
- Progress of the U.S. PYRUKYND launch, including uptake, net pricing, reimbursement, and subsequent revenue.
- Enrollment and milestone timing for the thalassemia and SCD trials, pediatric studies, and AG-946 development.
- Quarterly cash burn and whether management’s stated runway and path to cash-flow positivity remain achievable.
- Servier royalty receipts and the likelihood and timing of the conditional vorasidenib milestone.
- Whether marketable-security valuation changes, clinical or supply disruptions, or other contingencies materially affect liquidity or plans.