UPDATE: MLV Initiates Coverage On Agios Pharmaceuticals

MLV initiated coverage on Agios Pharmaceuticals Inc (NASDAQ: AGIO) with a Buy rating and $123 price target.

Analyst Arlinda Lee noted that “AGIO’s integrated metabolome and genome approach identifies novel targets and has produced 3 drug candidates targeting metabolic dysfunction in cancer and rare genetic disease.

“We anticipate rapid product development with first product approval from wholly owned AG-348 in pyruvate kinase deficiency (PKD, worth $87e/share) and approvals for partnered product candidates AG-221 and AG-120 for IDH2 and IDH1 mutant acute myelogenous leukemia (AML) in 2020 (worth $8e/share) and ($26e/share), respectively. “

Lee expected “multiple catalysts in the near and mid-term to support the stock” but also believed that “the long-term value proposition for AGIO’s integrated approach, that can continue to produce novel product candidates for many years to come, is underappreciated.

In the next 12-18 months Lee anticipated “interim Phase 1 data in hematologic malignancies for AG-221 and final Phase 1 data for AG-348 at ASH this week, and data for both AG-120 and AG-221 in solid tumors in 2015.”

The Buy rating was based on the “view that Agios has a differentiated platform based on integrating metabolomics and genomics that has already generated 3 product candidates since its founding in 2007” and it was believed the company “will continue to drive an innovative and productive drug pipeline.”

Lee assigned “a 45-60 percent probability that each of its three first-in-class therapeutic drug candidates (AG-221, AG-120, and AG-348) will show benefit in the clinic and attain rapid regulatory approval in 2018-2020.”

Agios Pharmaceuticals recently traded at $104.70, up 2.6 percent.