Shares of Agios Pharmaceuticals collapsed Monday on an unexpected side effect related to the company's thalassemia treatment, mitapivat.
The company disclosed two patients experienced liver injury following mitapivat treatment. Both dropped out of the study, Leerink Partners analyst Andrew Berens said in a client note. Agios suggested patients undergo monthly monitoring for the first six months of mitapivat treatment.
"While this finding is a surprise given the perception of mitapivat as a very safe and tolerable drug based on the (pharmacodynamics) experience, we think the proposed liver test monitoring and reversible nature of the transaminase elevations are likely to make this toxicity manageable," he said.
In response, Agios Pharmaceuticals stock crashed 21.1% to 48.64.
Shares had broken out of a cup base with a buy point at 53.28 on Nov. 7 and were approaching a profit-taking zone, according to MarketSurge. But the news Monday sent Agios stock down almost 9% below its entry. That triggered a sell rule. Savvy investors are encouraged to cut their losses when a stock falls 7% to 8% below its buy point.
Agios Pharmaceuticals' Mitapivat
Agios Pharmaceuticals tested mitapivat in patients with transfusion-dependent alpha or beta thalassemia. In this condition, patients' bodies don't make enough hemoglobin, the protein that helps red blood cells carry oxygen. Generally, these patients need regular blood transfusions.
After 48 weeks of treatment with mitapivat, 30.4% of patients could tolerate a 50% reduction in blood transfusions for 12 straight weeks. In comparison, just 12.6% of placebo recipients reached the same bar.
The company says it's currently seeking approval in the U.S., European Union, Saudi Arabia and United Arab Emirates.
Outside the liver injuries, mitapivat appeared relatively safe. About 19% of patients experienced serious side effects related to the treatment. That compares to roughly 14% in the placebo group. Around 6% and 1% of mitapivat and placebo patients dropped out of the study due to side effects.
Berens kept his market perform rating on Agios Pharmaceuticals stock.
Follow Allison Gatlin on X, the platform formerly known as Twitter, at @IBD_AGatlin.
