Agios Pharmaceuticals, Inc. (AGIO) Earnings Call Transcript & Summary

Okay. Good afternoon, everyone. My name is Gena Wang, I'm a mid-cap biotech analyst at Barclays. It is my great pleasure to introduce our next presenting companies, Agios Pharmaceuticals. Sitting on the stage with me, we have Sarah Gheuens, Chief Medical Officer and Head of R&D. We also have Cecilia Jones, Chief Financial Officer. And before we dive into the questions, maybe I will let you guys give a quick overview about the company, and then we can discuss.

Great. Thanks, Gena, for having us, and thanks, everybody, for listening in. So for those of you that might not be as familiar with our story, our mission at Agios is to develop transformative treatments for patients living with rare diseases. And our main focus right now is on diseases that result in either the dysfunction or destruction of red blood cells, and we have programs in pyruvate kinase deficiency or PKD, Thalassemia, sickle cell disease and lower-risk MDS. Our lead program is called PYRUKYND or mitapivat, and it has a unique mechanism of actions called PK activation that allows it to help the metabolism of the red blood cells. So it improves their hydration, longevity and the energy of the cell that then helps these patients. PYRUKYND is approved today and commercialized today in the U.S. for adults with PK deficiency. And we are hoping to extend into new indications in Thalassemia and sickle cell. 2024 was a super exciting year for Agios. We had -- we set up the year at the beginning of the year with a lot of corporate milestones, which we hit on all either on or ahead of schedule. And one of the highlights that we had in 2024 was on our thalassemia program, where we presented the data of our 2 Phase III studies, one was called ENERGIZE, which was for nontransfusion-dependent patients. And the second one is ENERGIZE-T for transfusion-dependent patients. So between the 2 studies, we cover the totality of the patient population in thalassemia and that those results enabled us to file simultaneously by the end of the year in 4 regions: the U.S., Europe, Kingdom of Saudi Arabia and United Arab Emirates. For the U.S., particularly, we have a PDUFA goal date set for September 7 of this year. So the commercial team is really gearing up to that date. We've been increasing our sales reps and everybody surrounding the launch from PKD, which was ultraRare into still rare, but much bigger indication for us in thalassemia. So we're very excited for that. Another highlight of the year was for the sickle cell part of the program. We have a Phase III study called RISE UP. And in October of last year, we announced the full enrollment of the study. It's a 52-week study. So we expect to have top line data for that study by the end of this year. On the next program or the next molecule we have is also a PK activator that's called Tebapivat or used to be AG-946. And we have 2 paths for Tebapivat. The first one is in lower risk MDS and for that one, we're well underway on a Phase IIb study, and we expect to complete enrollment for that study by the end of the year. That's a very exciting area with high growth, and we're looking forward to having the data for that study as well. And then the second part of that will be also is to have a second PK activator in sickle cell. So we're planning to initiate a Phase II study by midpoint of this year. And that will allow us to eventually hopefully have a franchise for sickle cell, which is a disease with very high unmet need. Then lastly, I would say we have a very strong balance sheet, which was bolstered last year through the monetization of the vorasidenib royalty that we had kept from the transaction we did with Servier back in 2021. So we ended up the year with $1.5 billion in cash and equivalents. And the way we think about the priorities for cash allocation or capital allocation is, first and foremost, be able to maximize the launches, hopefully, back-to-back launches. If we're successful on sickle cell, we would have thalassemia in 2025, sickle cell in 2026. And we're hoping to build a franchise -- a multibillion-dollar franchise with PYRUKYND. The second priority is to advance the pipeline. So Tebapivat, like I described, and we also have some earlier programs in phenylketonuria PKU and polycythemia vera. And the third bucket would be to expand our pipeline, and that could be both on internal organic options and opportunities we're looking for as well as external opportunities through business development. So we have a very exciting year ahead of us for 2025, and we look forward to continue to share our progress.

Sounds great. So maybe starting with your PKD program there. How has the interaction with the FDA proceeding in recent weeks since your supplementary NDA just was accepted and a PDUFA was assigned?

Yes. So we're indeed building upon our PKD story now with the thalassemia program. And so we have a supplemental NDA that was submitted and as Cecilia mentioned, the PDUFA action goal date for September 7. So right now, the review is actively ongoing and progressing as expected, and we're very excited about the potential opportunity to deliver this therapy for patients with thalassemia.

Any comments regarding potential ADCOM?

So to date, we have not been informed that there will be an advisory committee. But as we've mentioned in the past, if we would be informed at any time point, then we will, of course, let the community know.

What could be the latest time that FDA -- that you know that there would not be any ADCOM?

Well, there is not really specific time point by which you are truly in the clear. However, as we are continuing to progress the chances of something like that, continue to decrease.

Okay. And so maybe the -- regarding the label change, what is in the community, with the increased monitoring, what is the feedback there?

So you are referring to the label change that we have made for pyruvate kinase deficiency. So that was -- we've added a warning and precaution based on an observation made in the thalassemia program in which we had observed hepatocellular injury in thalassemia patients. And so we've updated the label language in -- for pyruvate kinase deficiency to reflect that observation. And so that warning and precaution has led to a request to monitor on a monthly basis for the first 6 months of exposure to PYRUKYND, both for PKD and then across all of our clinical programs. And so in regards to how has that been perceived, it has been perceived as part of normal routine care really. So patients, when they are started on a new therapy when they have a hemolytic anemia, they are routinely being monitored both for efficacy, but also for safety. So physicians are used to actually routinely monitor for liver function, for kidney function in the context of these diseases, especially the liver is an organ that often gets damaged in the context of these hemolytic anemias or also in the context of iron chelators, something that needs to be monitored.

Okay. And then regarding the potential timing for approvals in thalassemia in the U.S., EU and other parts of the world.

So those regulators, they do not give you like an action date like the U.S. does, but those filings are progressing as normal and as anticipated. So we are looking forward to getting -- to progressing those further.

Okay. And then for the commercialization, what kind of maybe preparation you have done and then regarding the sales outreach?

Yes. So for the -- our main focus is the U.S. right now. So we are commercializing that directly, and we have started obviously building an infrastructure with PKD. But because it's ultra-rare, it was much smaller. As we move into thalassemia, it's a broader patient population. We are expanding. The nice thing is PKD gave us the opportunity to build the foundation on things like market access, patient services, and now we're leveraging that and enhancing. We had about 18 to 20 reps when we were just PKD, and we doubled that as we get to prepare for thalassemia. And sales rep is only one part of the ecosystem, if you want, of the support that we have. In terms of outside of ex U.S., we're not building direct presence. And what we've done is for the Gulf countries where there's a big prevalence, if you think the U.S. is our first market, the second one or the second group would be the Gulf countries. There's about 70,000 patients with thalassemia in those countries. So that's what you see we filed into Saudi Arabia and UAE as well as Europe and U.S. There, we signed an agreement with a company called NewBridge and, this is like a specialty company that does distribution of products for a lot of different pharmaceutical companies. They're very well known in the region, they understand the region. They basically are your feet on the ground. So they carry all the cost and the investment, but we still keep the strategic decisions and the strategic control of the asset as well as managing with pricing. And so our teams work very closely with them, but we leverage their expertise in the region, and we'll probably be some very similar in Europe.

Okay. And regarding the safety profile, do you think beta-thalassemia and the sickle cell have a different -- quite like a threshold that what patients are willing to take?

So each patient has to make their own individual decision, right? So this dependent on -- we're still working to generate the benefit risk profile in sickle cell disease because our Phase III is still ongoing. But then once that is available and if we can deliver to the target product profile that we are looking for, then that will be always an individual discussion between patients and physicians.

Okay. So I think that that's a good transition to sickle cell. So maybe the Phase III trial, remind us the primary endpoint and the -- what is your goal for the Phase III trial?

So as Cecilia mentioned in the beginning, we are indeed studying PYRUKYND in sickle cell disease. We believe that because of the mechanism of action of the drug, this drug has the potential to deliver an improvement both on hemolytic anemia and on vaso-occlusion in the context of sickle cell disease. And both those components are very important for patients living with sickle cell disease. Hemolytic anemia obviously has all of the complications of anemia mix. People really feel very, very bad, very fatigue. This is not -- I'm tired. This is like a bone-crushing fatigue that is really limiting what people can do, and the hemolysis and the hemolytic anemia ultimately leads to end organ damage as well. And then the vaso-occlusion part of the disease is basically acute ischemia that leads to pain and can lead to organ damage as well and ultimately can also lead to death. So very horrible disease, big unmet need, and our Phase III program is designed in such a way that we're trying to deliver one therapy that can address the totality of sickle cell disease. So that means we're looking to improve hemolytic anemia. So one primary endpoint is a hemoglobin response. And then we're looking to improve vaso-occlusion. So the other primary endpoint is looking at sickle cell pain crises reduction. We have done an alpha split on those endpoints because we would like to -- if one or both are positive, we would like to move on to secondary endpoint testing. And within that secondary endpoint bucket, we have other ways to look at how patients feel and function. As I just highlighted, fatigue is very important for patients living with sickle cell disease. So that is also something we are looking to improve. And we have precedent on being able to deliver on that on, an improvement of fatigue, both in our thalassemia program and in our pyruvate kinase deficiency program.

So regarding the primary endpoint, what is the alpha allocation?

So it is 0.02 to the hemoglobin response and 0.03 to the sickle cell pain crises rate.

Okay. And what is your assumption for the control arm?

So for the sickle cell pain crises rate, we're looking for the baseline of 3 sickle cell pain crises in the prior year that then we look to continue in the year that they are on drug and then the drug is hoping to reduce that from 3 to a little bit less than 2.

Okay. So basically, 30% reduction?

Yes.

Okay. And then for the hemoglobin level, the percentage...

So for the hemoglobin level, we are looking to improve the average hemoglobin concentration by 1 gram per deciliter between week 24 all the way to the end of the trial. It's important that, that is an average hemoglobin, not just the onetime point in that time period because we're also looking to highlight maintenance of effect by doing this. The trial is 90% powered to look for that improvement of 35% on the hemoglobin response.

Okay. And for the VOE also is 90% power?

Yes. One is 91% and the other 90%.

Okay. And then going to the secondary endpoint. So maybe remind us what you show so far and why you designed the study this way?

Yes. So the study is designed this way to really try to deliver to the totality of the disease as highlighted, but we've -- based that also, we have a Phase II obviously, which was a dose-finding study. So we tested 2 doses against placebo with a primary endpoint of a hemoglobin response. And then we looked at hemolytic parameters as a secondary endpoint and also a trend in sickle cell pain crises reduction. And so across the 2 doses, we were able to show an improvement when compared to placebo trends because we did not do statistical testing on the secondary endpoints based on the sample size and the shorter duration. But we basically have a hemoglobin improvement of hemolytic parameter reduction and a trend on sickle cell pain crises as well that allowed us to move on to Phase III.

Okay. And then secondary endpoint, is there any hierarchy there? Or it will be just even split of the alpha?

Yes, we are testing everything together.

Okay. That's very good. And then maybe status Phase III, like the timing...

Yes, we're very excited because the team really worked very hard and very collaboratively with all of the different sites, and they were able to enroll the study fast. So we announced full enrollment last October, the 1-year observation period for this study. And so we are -- one of our corporate milestones this year is delivery of the data of that trial by the end of this year.

Okay. So maybe going back to the primary end point, it seems you have a co-primary endpoint?

Well, 2 primary endpoints with the alpha split. Yes.

I see. So as long as you're hitting one, that will be enough for approval.

Well, for approval, that is like you do need a risk profile and all of that...

Right, right. So -- but then if the -- what you define as a positive study as long as you hit one of the primary endpoint, that will be enough or if they want you to hit both?

So it's always -- so everything is always dependent on the totality of the data. So if you have -- you need to be able to speak to clinical meaningfulness in your data package. Obviously, sickle cell pain crises reduction is considered a clinically meaningful endpoint. But when you speak to patients, what they are really looking for as a solution is something that also improves their fatigue. So hence, we have designed that trial to be able to deliver to that. So in the context of hemolytic anemia, when you can actually hit on hemoglobin and have a patient-reported outcome that is also statistically significant, that is also a clinical meaningful benefit. We have in that secondary endpoint bucket also other ways to look at sickle cell pain crises. So I think, as always, a regulator will always look at the totality of the data, especially in the context of a disease that is horrible and has a huge unmet need with no options. You really have to speak to the totality of the benefit risk profile.

Okay. Just trying to understand, so have you agreed with the FDA like -- did the FDA say anything that one is enough or you want to...

No. So an agency will -- like I have never heard of an agency committing proactively to what they will approve. Like even if you hit on -- if you have a positive trial, positive primary endpoint, you really need to have the totality of it work out, right? So there's plenty of precedents of drugs that did hit on a primary endpoint and ultimately did not get approved. And other way around, like drugs that did not hit on a primary endpoint, but ultimately got a proof because it's really everything [ that matters. ]

Right. Okay. That makes sense. And then was the study design was based on the feedback from the FDA?

Yes, of course, we like -- we always work with all of the different stakeholders with the different regulatory authorities across the globe. We work with our -- like patient advocates and advisory boards with patients and, of course, the physicians as well to make sure that we can deliver a drug that is not just going to hit on -- that you can claim a clinical trial is positive, but you really want to deliver something meaningful to all of those different audiences. So we take feedback into account from all of those different stakeholders to come up with what we believe is the best plan forward.

Okay. Quickly on your AG-946, what kind of data will we see later this year?

So for 946, it's another PK activator that we're currently studying in MDS and in sickle cell disease. And for MDS, we have a corporate milestone of enrolling -- full enrollment of a Phase IIb in lower-risk MDS. So that is not data, but it's actually an important step to be able to deliver data in that program. And for sickle cell disease, we have a corporate milestone of having first patient involved midyear.

Okay. Okay. Good. And then for your PK franchise, you do have several assets there? And how do you see this coexist in the marketplace?

Yes. So like first, sickle cell disease is a complex disease and will require a lot of options for these patients. They don't all respond to the drug -- to individual drugs. So first things, [ we care ] for everybody that's trying to get therapies for these patients. For us, like you said, we have 2 PK activators. PYRUKYND, which I was just talking about, which we expect to have the data readout this year. And the second one is Tebapivat, which is also a PK activator, but a more potent agent there. And our thinking is to be able to build a franchise to have the ability to address more patients down the road with our franchise and as well there's also different patent lives on each of the products. So it allows us to have flexibility there. So we're very excited to be able to go, but it's earlier, right, that's entering into Phase II.

Okay. Good. And Cecilia, you did mention you have the $1.5 billion, that's a lot of cash for biotech company. So how do you say, from the BD perspective, how would you use this cash?

Yes. So what we've said for a while, we're very disciplined in how we think about business development, and we establish criteria in terms of we want something within rare. That's kind of our core of what we are. We probably don't want to go ultrarare again as we did with PKD, but we still stay within the rare area where we've established very good capabilities on clinical development and now we're building on commercial transformative drugs that we really don't want to [ meet to ] something that really doesn't address an unmet need, something that has ideally a way too early derisk the program as we do kind of smaller bets before we put a lot of capital in it as well as good clear path to a regulatory approval. Our team has been amazing at being creative at designing study, but we have to have an end in sight there and of course, something that's value creative. In terms of what we're looking at, probably we're agnostic to modalities. I'd say probably not gene therapy, that would be very much outside of our capability there, but we are agnostic, otherwise, in terms of modalities. And in terms of stage of development, probably towards the earlier side where we can, again, apply all our capabilities to clinical development with potential back-to-back launches. We have the commercial team definitely busy there.

Very good. I think we have one minute left. So maybe which are the key topics you wanted to emphasize and that you think investors were misunderstood?

Yes. So I think -- so we have a lot going on. So we're very excited. I don't want to pick a favorite child. But one is I think we have an incredible potential with PYRUKYND for a franchise to build a multibillion-dollar franchise there. Hopefully, with success in RISE UP, that would mean back-to-back launches in thalassemia and in sickle cell after it. We also have an advancing pipeline with Tebapivat with the 2 programs. We didn't get to talk a lot about the next ones, but we have another asset in PKU, which is in healthy volunteers right now. And we're expecting to file an IND on the latest or the earliest asset, which is AG-236. And like you said, we have a very strong balance sheet, which allows us to move all these programs along.

Thank you very much.

Thank you.

Thank you. Thanks for having us.