Agios Breaks Out On 'Buffed Up' Financials After Inking Massive Brain Cancer Deal

Agios Pharmaceuticals (AGIO) agreed Tuesday to sell its 15% royalty in a brain cancer drug to Royalty Pharma (RPRX) for $905 million upfront. Agios stock broke out at the opening bell.

Under the terms of the deal, Agios will sell its royalty on potential U.S. net sales of Servier's vorasidenib to Royalty Pharma. If the Food and Drug Administration approves vorasidenib on Aug. 20 — the review date — Agios will receive a $200 million milestone payment.

But Agios isn't letting go of vorasidenib entirely. Royalty will receive the entire 15% royalty on U.S. sales up to $1 billion. After $1 billion, Royalty Pharma will get a 12% royalty on sales, while Agios will retain a 3% royalty.

In a report to clients, RBC Capital Markets analyst Gregory Renza called it a "welcome and optimal move on monetizing a valuable noncore asset." Agios sells a drug called Pyrukynd for patients with anemia and PK deficiency, a disease that chronically destroys red blood cells. But Agios is working to expand the same drug, under the test name mitapivat, to other blood diseases.

https://www.investors.com/news/technology/agios-stock-break-out-royalty-pharma-brain-cancer-deal-servier-vorasidenib/