Celgene Corp. (NASDAQ: CELG) is making a move out of left field that has sent shares of its partner Agios Pharmaceuticals Inc. (NASDAQ: AGIO) significantly higher. In a surprise move, Celgene is expected to disclose the planned enasidenib (Ag-221) New Drug Application (NDA) submission at the Citi 11th Annual Biotech Conference in Boston on Wednesday.

The planned NDA will be based on the ongoing Phase 1/2 expansion cohort data and is expected to be completed by the end of 2016, which is well ahead of schedule — Janney Capital Markets is saying two years ahead of schedule.

The completed NDA implies a first-in-class drug for relapsed and/or refractory acute myeloid leukemia (R/R-AML) patients with IDH2 mutation is likely to be commercial during the second half of 2017. Currently, Janney is assuming this is an accelerated approval filing with conversion to full approval upon completion of Phase 3, and expects to get additional clarity after the Celgene webcast.

At the same time, in an 8-K filing the company noted that patients with isocitrate dehydrogenase 1 (IDH1) mutant-positive AML whose disease has progressed after standard therapies also have limited treatment options. As a result, Agios plans to explore a similar regulatory path for AG-120, its wholly-owned, first-in-class, oral, potent inhibitor of mutant IDH1, which could lead to a NDA submission in 2017 in the United States. The company plans to provide a regulatory update on AG-120 by the end of 2016 as well.

Janney said in its report:

There is a strong precedence for granting accelerated approval (AA) at the Oncologic Drugs Advisory Committee (ODAC) and in R/R-AML Mylotarg was granted AA with a 27% overall response rate (ORR). However, this was a more rigorous measurement of ORR as only patients with CR+CRp were included in the assessment. Data available from AGIO/CELG points to suggests that of the 159 patients treated, 59 achieved an objective response: including 29 CR and 1 CRp, which implies an 18% ORR (based on the Mylotarg comparison). Agios is expected to receive a mid to low-teen royalty from CELG.

Shares of Agios were trading up 25% at $46.81 on Wednesday. The stock has a consensus analyst price target of $62.83 and a 52-week trading range of $33.50 to $99.46.

Celgene was up fractionally to $107.23, with a consensus price target of $137.39 and a 52-week range of $93.05 to $128.39.

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