Shares of Agios Pharmaceuticals surged nearly 15% in premarket trading on Wednesday after the US Food and Drug Administration approved an expanded use of its drug mitapivat, strengthening investor optimism around the company’s growth prospects.
The approval allows mitapivat to be used to treat anemia in patients with both non-transfusion-dependent and transfusion-dependent alpha- or beta-thalassemia, Agios said late on Tuesday.
Thalassemia is an inherited blood disorder that impairs the body’s ability to produce haemoglobin and healthy red blood cells, often requiring lifelong management.
The drug will be marketed under the brand name Aqvesme and is expected to be available in late January next year, following the implementation of a required safety programme.
Mitapivat was previously approved by the FDA in 2022 under the brand name Pyrukynd for adults with pyruvate kinase deficiency, a rare genetic condition that also causes low red blood cell counts.
Clinical data support expanded use
The latest approval is based on results from a late-stage clinical trial, which showed that patients receiving mitapivat achieved a statistically significant improvement in hemoglobin levels compared with those on placebo.
The data reinforced confidence in the drug’s broader application across multiple forms of anemia linked to genetic disorders.
Aqvesme will carry a boxed warning requiring liver function tests every four weeks during the first 24 weeks of treatment and advises against use in patients with cirrhosis, according to analysts.
Despite these safeguards, the expanded indication is seen as a meaningful step in building out Agios’s rare disease portfolio.
BofA analyst raises PT, maintains Buy rating
Truist Securities analyst Gregory Renza said the approval unlocks an additional $320 million in peak revenue potential on top of the existing mitapivat franchise.
He initiated coverage on the stock in November with a Buy rating and a price target of $32.
Bank of America Securities analyst Greg Harrison maintained a Buy rating on Agios on Wednesday while raising his price target to $34 from $32, citing the commercial opportunity created by the expanded label.
The revised target represents a 6.25% increase.
Mixed views across Wall Street
Analyst sentiment on Agios has been mixed in recent weeks.
Citigroup initiated coverage on November 26 with a Buy rating and a $38 price target.
JP Morgan, however, maintained a Neutral rating earlier in November and sharply cut its target to $20 from $37, citing uncertainty around longer-term uptake.
Goldman Sachs and HC Wainwright also reduced their targets while maintaining Neutral and Buy ratings, respectively.
Based on price targets from eight analysts, Agios has an average one-year target of $32.38, with estimates ranging from $20 to $48.
That implies an upside of about 32% from its most recent trading price of $24.59.
The stock carries an average brokerage recommendation of 2.0, indicating an Outperform rating.
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