What changed in this filing

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Item 1. Financial Statements

2021-07-29 compared with 2021-04-29 · 131 added, 81 removed, 385 unchanged (36% of the section changed)

7 unchanged sentences

Marketable securities 703,864 445,493

Other receivable 8,131 —

Prepaid expenses and other current assets 21,443 15,889

5 unchanged sentences

Financing lease assets 871 590

Other non-current assets 2,900 —

Non-current assets of discontinued operations — 2,601

16 unchanged sentences

25,000,000 shares authorized;

no shares issued or outstanding at March 31, 2021 and December 31, 2020

no shares issued or outstanding at June 30, 2021 and December 31, 2020

Common stock, $ 0.001 par value;

125,000,000 shares authorized;

69,812,205 and 69,293,920 shares issued and outstanding at March 31, 2021 and December 31, 2020, respectively

70,404,782 shares issued and 59,910,814 outstanding at June 30, 2021, and 69,293,920 shares issued and outstanding at December 31, 2020

Additional paid-in capital 2,306,304 2,242,801

Accumulated other comprehensive (loss) income ( 144 ) 105

Retained earnings (Accumulated deficit) 30,850 ( 1,843,475 )

Accumulated deficit ( 55,367 ) ( 1,843,475 )

Treasury stock, at cost ( 10,493,968 shares at June 30, 2021 and no shares at December 31, 2020)

( 529,047 ) —

Total stockholders’ equity 1,721,816 399,500

3 unchanged sentences

Condensed Consolidated Statements of Operations

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

(In thousands, except share and per share data)

2021 2020 2021 2020

Cost and expenses:

3 unchanged sentences

Loss from operations ( 91,222 ) ( 83,264 ) ( 182,439 ) ( 170,294 )

Interest income, net 340 2,936

Gain on sale of oncology business

2,000 — 2,000 —

Interest (expense) income, net ( 92 ) 1,769 248 4,705

Other income, net 6,524 — 6,524 —

Net loss from continuing operations ( 82,790 ) ( 81,495 ) ( 173,667 ) ( 165,589 )

Net income from discontinued operations, net of tax 1,965,202 43,838

Net income (loss) from discontinued operations, net of tax ( 3,427 ) ( 8,983 ) 1,961,775 34,855

Net income (loss) $ ( 86,217 ) $ ( 90,478 ) $ 1,788,108 $ ( 130,734 )

Net loss from continuing operations per share - basic and diluted $ ( 1.36 ) $ ( 1.18 ) $ ( 2.66 ) $ ( 2.41 )

Net income from discontinued operations per share - basic and diluted $ 28.26 $ 0.64

Net income (loss) from discontinued operations per share - basic and diluted $ ( 0.06 ) $ ( 0.13 ) $ 30.05 $ 0.51

Net income (loss) per share - basic and diluted $ ( 1.41 ) $ ( 1.31 ) $ 27.39 $ ( 1.90 )

Weighted-average number of common shares used in computing net income (loss) per share from continuing operations and discontinued operations and net income (loss) per share – basic and diluted 69,543,510 68,608,279

Weighted-average number of common shares used in computing net loss per share from continuing operations, net income (loss) per share from discontinued operations and net income (loss) per share – basic and diluted 61,066,977 68,958,091 65,281,827 68,784,109

See accompanying Notes to Condensed Consolidated Financial Statements.

AGIOS PHARMACEUTICALS, INC.

Condensed Consolidated Statements of Comprehensive Income (Loss)

Three Months Ended March 31,

Condensed Consolidated Statements of Comprehensive (Loss) Income

Three Months Ended June 30, Six Months Ended June 30,

(In thousands)

2021 2020 2021 2020

Net income (loss) $ ( 86,217 ) $ ( 90,478 ) $ 1,788,108 $ ( 130,734 )

Other comprehensive loss

Unrealized loss on available-for-sale securities ( 108 ) ( 128 )

Other comprehensive (loss) income

Unrealized (loss) gain on available-for-sale securities ( 141 ) 1,562 ( 249 ) 1,434

Comprehensive income (loss) $ ( 86,358 ) $ ( 88,916 ) $ 1,787,859 $ ( 129,300 )

6 unchanged sentences

(Loss) Income Accumulated

Deficit Total

Deficit Treasury Stock Total

Stockholders’

(in thousands, except share amounts) Shares Amount

(in thousands, except share amounts) Shares Amount Shares Amount

Balance at December 31, 2020 69,293,920 $ 69 $ 2,242,801 $ 105 $ ( 1,843,475 ) — $ — $ 399,500

5 unchanged sentences

Balance at March 31, 2021 69,812,205 $ 70 $ 2,265,713 $ ( 3 ) $ 30,850 — $ — $ 2,296,630

Common stock issued under stock incentive plan and ESPP 592,577 $ — $ 25,673 $ — $ — — $ — $ 25,673

Stock-based compensation expense — — 14,885 — — — — 14,885

Repurchase of common stock — — — — — ( 10,493,968 ) ( 529,047 ) ( 529,047 )

Other comprehensive loss — — — ( 141 ) — — — ( 141 )

Net loss — — — — ( 86,217 ) — — ( 86,217 )

Disposition of oncology business — — 33 — — — — 33

Balance at June 30, 2021 70,404,782 $ 70 $ 2,306,304 $ ( 144 ) $ ( 55,367 ) ( 10,493,968 ) $ ( 529,047 ) $ 1,721,816

See accompanying Notes to Condensed Consolidated Financial Statements.

AGIOS PHARMACEUTICALS, INC.

Condensed Consolidated Statements of Stockholders' Equity

Common Stock Additional

12 unchanged sentences

Balance at March 31, 2020 68,789,925 $ 69 $ 2,181,517 $ 74 $ ( 1,556,361 ) $ 625,299

Common stock issued under stock incentive plan and ESPP 268,771 $ — $ 1,652 $ — $ — $ 1,652

Stock-based compensation expense — — 17,614 — — 17,614

Other comprehensive income — — — 1,562 — 1,562

Net loss — — — — ( 90,478 ) ( 90,478 )

Disposition of oncology business — — 2,816 — — 2,816

Balance at June 30, 2020 69,058,696 $ 69 $ 2,203,599 $ 1,636 $ ( 1,646,839 ) $ 558,465

See accompanying Notes to Condensed Consolidated Financial Statements.

1 unchanged sentence

Condensed Consolidated Statements of Cash Flows

Three Months Ended

Six Months Ended

(In thousands) 2021 2020

7 unchanged sentences

Net amortization of premium (accretion of discount) on marketable securities 3,422 473

Loss on disposal of property and equipment 12 —

Non-cash operating lease expense 4,760 4,435

Changes in operating assets and liabilities:

Other receivables ( 8,131 ) —

Prepaid expenses and other current and non-current assets ( 8,454 ) 1,295

9 unchanged sentences

Purchases of property and equipment ( 1,261 ) ( 8,340 )

Net cash provided by investing activities - continuing operations 71,141 108,394

Net cash (used in) provided by investing activities - continuing operations ( 227,008 ) 130,942

Net cash provided by (used in) investing activities - discontinued operations 1,802,936 ( 348 )

2 unchanged sentences

Payments on financing lease obligations ( 170 ) ( 166 )

Purchase of treasury stock ( 529,047 ) —

Net proceeds from stock option exercises and employee stock purchase plan 33,020 7,117

Net cash provided by financing activities - continuing operations 7,261 5,385

Net cash (used in) provided by financing activities - continuing operations ( 496,197 ) 6,951

Net cash provided by financing activities - discontinued operations — 250,537

Net cash provided by financing activities 7,261 5,385

Net cash (used in) provided by financing activities ( 496,197 ) 257,488

Net change in cash and cash equivalents 841,688 214,927

4 unchanged sentences

Operating lease liabilities arising from obtaining operating lease assets $ — $ —

Financing lease liabilities arising from obtaining financing lease assets $ 511 $ —

See accompanying Notes to Condensed Consolidated Financial Statements.

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and its consolidated subsidiaries, and “our Board of Directors” refers to the board of directors of Agios Pharmaceuticals, Inc.

We are a biopharmaceutical company committed to transforming patients’ lives through scientific leadership in the field of cellular metabolism and adjacent areas of biology, with the goal of creating differentiated, small molecule medicines for genetically defined diseases, or GDDs, and, prior to the completion of the sale of our oncology business to Servier Pharmaceuticals LLC, or Servier, as described below, hematologic malignancies and solid tumors.

To address our focus areas, we take a systems biology approach to deeply understand disease states, drive the discovery and validation of novel therapeutic targets, and define patient selection strategies, thereby increasing the probability that our experimental medicines will have the desired therapeutic effect.

1 unchanged sentence

Sale of our Oncology Business to Servier

On March 31, 2021, we completed the sale of our oncology business to Servier.

We entered into a Purchase and Sale Agreement, or the Purchase Agreement, with Servier on December 20, 2020.

On March 31, 2021, we completed the sale of our oncology business to Servier Pharmaceuticals LLC, or Servier.

The transaction included the sale of our oncology business, including TIBSOVO®, our clinical-stage product candidates vorasidenib, AG-270 and AG-636, and our oncology research programs for a payment of approximately $ 1.8 billion in cash at the closing, subject to certain adjustments, and a payment of $ 200 million in cash, if, prior to January 1, 2027, vorasidenib is granted new drug application, or NDA, approval from the U.S.

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Servier also acquired our co-commercialization rights for Bristol Myers Squibb’s IDHIFA® and the right to receive a $ 25.0 million potential milestone payment under our prior collaboration agreement with Celgene Corporation, and following the sale Servier will conduct certain clinical development activities within the IDHIFA® development program.

We recorded income from royalties of approximately $ 2.0 million on U.S.

net sales of TIBSOVO® by Servier in the gain on sale of oncology business line item within the condensed consolidated statements of operation s , for the three and six months ended June 30, 2021.

We also recorded approximately $ 3.5 million of cash receipts from customers owed to Servier within the prepaid expenses and other current assets line item within the condensed consolidated balance sheet as of June 30, 2021.

Basis of presentation

The condensed consolidated balance sheet as of March 31, 2021, the condensed consolidated statements of operations, comprehensive income (loss) and stockholders' equity for the three months ended March 31, 2021 and 2020, and the condensed consolidated statements of cash flows for the three months ended March 31, 2021 and 2020 are unaudited.

The unaudited condensed consolidated financial statements have been prepared on the same basis as the annual financial statements and, in the opinion of our management, reflect all adjustments, which include only normal recurring adjustments, necessary to fairly state our financial position as of March 31, 2021, our results of operations and stockholders' equity for the three months ended March 31, 2021 and 2020, and cash flows for the three months ended March 31, 2021 and 2020.

The financial data and the other financial information disclosed in these notes to the condensed consolidated financial statements related to the three-month periods are also unaudited.

The results of operations for the three months ended March 31, 2021 are not necessarily indicative of the results to be expected for the year ending December 31, 2021 or for any other future annual or interim period.

The condensed consolidated balance sheet as of June 30, 2021, the condensed consolidated statements of operations, comprehensive income (loss) and stockholders' equity for the three and six months ended June 30, 2021 and 2020, and the condensed consolidated statements of cash flows for the six months ended June 30, 2021 and 2020 are unaudited.

The unaudited condensed consolidated financial statements have been prepared on the same basis as the annual financial statements and, in the opinion of our management, reflect all adjustments, which include only normal recurring adjustments, necessary to fairly state our financial position as of June 30, 2021, our results of operations and stockholders' equity for the three and six months ended June 30, 2021 and 2020, and cash flows for the six months ended June 30, 2021 and 2020.

The financial data and the other financial information disclosed in these notes to the condensed consolidated financial statements related to the three and six-month periods are also unaudited.

The results of operations for the three and six months ended June 30, 2021 are not necessarily indicative of the results to be expected for the year ending December 31, 2021 or for any other future annual or interim period.

The condensed consolidated balance sheet data as of December 31, 2020 was derived from our audited financial statements, but does not include all disclosures required by U.S.

1 unchanged sentence

The condensed consolidated interim financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2020 that was filed with the Securities and Exchange Commission, or the SEC, on February 25, 2021.

In late March 2021, our oncology business met all the conditions to be classified as held for sale and, because we consider the disposal of the oncology business to be a strategic shift that will have a major effect on our operations and financial results, represented a discontinued operation.

In late March 2021, our oncology business met all the conditions to be classified as held for sale and, because we consider the disposal of the oncology business to be a strategic shift that had a major effect on our operations and financial results,

represented a discontinued operation.

All assets and liabilities associated with our oncology business were therefore classified as assets and liabilities of discontinued operations in our condensed consolidated balance sheets for the periods presented.

Further, all historical operating results for our oncology business are reflected within discontinued operations in the condensed

consolidated statements of operations for all periods presented.

Further, all historical operating results for our oncology business are reflected within discontinued operations in the condensed consolidated statements of operations for all periods presented.

For additional information, see Note 3, Discontinued Operations.

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We base our estimates on historical experience and on various other assumptions that we believe are reasonable, the results of which form the basis for making judgments about the carrying values of assets, liabilities and equity and the amount of revenues and expenses.

The full extent to which the COVID-19 pandemic will directly or indirectly impact our business, results of operations and financial condition, including sales, expenses, reserves and allowances, clinical trials, research and development costs and employee-related amounts, will depend on future developments that are highly uncertain, including as a result of new information that may emerge concerning COVID-19 and the actions taken to contain the pandemic or treat COVID-19, as well as the economic impact on local, regional, national and international customers and markets.

The full extent to which the COVID-19 pandemic will directly or indirectly impact our business, results of operations and financial condition, including expenses, reserves and allowances, clinical trials, research and development costs and employee-related amounts, will depend on future developments that are highly uncertain, including as a result of new information that may emerge concerning COVID-19 and any variant strains of the virus and the actions taken to contain the pandemic or treat COVID-19, as well as the economic impact on local, regional, national and international customers and markets.

We have made estimates of the impact of COVID-19 within our financial statements and there may be changes to those estimates in future periods.

1 unchanged sentence

On March 31, 2021 we completed the sale of our oncology business to Servier, and received approximately $ 1.8 billion in cash at closing.

In connection with the sale, on March 25, 2021, we announced that our board of directors authorized the repurchase of up to $ 1.2 billion of our outstanding shares.

We expect to conduct the share repurchases over the next 12 — 18 months, including executing a meaningful portion of the planned repurchases by the end of 2021 through a combination of 10b5-1 plans, open market purchases and privately negotiated block sales.

As of March 31, 2021, we had cash, cash equivalents and marketable securities of $ 2.4 billion.

In connection with the sale, on March 25, 2021, we announced that our board of directors authorized the repurchase of up to $ 1.2 billion of our outstanding shares of common stock, or the Repurchase Program, using the proceeds from the sale of our oncology business to Servier.

On March 31, 2021, in connection with the Repurchase Program, we entered into a definitive share repurchase agreement with Bristol-Myers Squibb Company, or BMS, to repurchase 7,121,658 shares of our common stock held by certain subsidiaries of BMS for an aggregate purchase price of $ 344.5 million, or $ 48.3785 per share.

This repurchase was completed on April 5, 2021.

Further, on April 2, 2021, in connection with the Repurchase Program, we entered into a Rule 10b5-1 repurchase plan pursuant to which we may repurchase up to $ 600 million of shares of our common stock.

As of June 30, 2021, we have repurchased approximately 3.4 million shares for $ 184.5 million, or $ 54.71 per share, under the plan with approximately $ 415.5 million remaining under the plan for additional repurchases.

In total, as of June 30, 2021, we have repurchased 10.5 million common shares for $ 529.0 million under the Repurchase Program.

As of June 30, 2021, we had cash, cash equivalents and marketable securities of $ 1.7 billion.

Although we have incurred recurring losses and expect to continue to incur losses for the foreseeable future, we expect our cash, cash equivalents and marketable securities will be sufficient to fund current operations for at least the next twelve months from the issuance date of these financial statements.

8 unchanged sentences

The statements of cash flows for the periods presented are also reclassified to reflect the results of discontinued operations as separate line items.

ASU 2014-08 requires that only a disposal of a component of an entity, or a group of components of an entity, that represents a strategic shift that has, or will have, a major effect on the reporting entity’s operations and financial results be reported in the financial statements as discontinued operations.

ASU 2014-08 requires that only a disposal of a component of an entity, or a

group of components of an entity, that represents a strategic shift that has, or will have, a major effect on the reporting entity’s operations and financial results be reported in the financial statements as discontinued operations.

ASU 2014-08 also provides guidance on the financial statement presentations and disclosures of discontinued operations.

2 unchanged sentences

All amounts included in the notes to the unaudited condensed consolidated financial statements relate to continuing operations unless otherwise noted.

Treasury Stock

Treasury stock purchases are accounted for under the cost method whereby the entire cost of the acquired stock is recorded as treasury stock.

There have been no other material changes to the significant accounting policies previously disclosed in our Annual Report on Form 10-K for the year ended December 31, 2020.

3 unchanged sentences

On March 31, 2021, we completed the sale of our oncology business to Servier.

We have determined the sale of the oncology business represents a strategic shift that will have a major effect on our business and therefore met the criteria for classification as discontinued operations at March 31, 2021.

We have determined the sale of the oncology business represents a strategic shift that had a major effect on our business and therefore met the criteria for classification as discontinued operations at March 31, 2021.

Accordingly, the oncology business is reported as discontinued operations in accordance with ASC 205-20, Discontinued Operations .

45 unchanged sentences

Gain on sale, net of tax $ 1,979,684

As of June 30, 2021, there were no assets or liabilities classified as discontinued operations.

The following table presents the financial results of the discontinued operations:

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

(in thousands) 2021 2020 2021 2020

17 unchanged sentences

As such, the research and development, marketing, selling and general and administrative expenses in discontinued operations include corporate costs incurred directly to solely support our oncology business.

Pursuant to the Purchase Agreement, we have also entered into a Transition Services Agreement with Servier, through which we will provide transitional services related to discovery, clinical development, technical operations, commercial and G&A related activities for periods ranging from one month to approximately one year after March 31, 2021.

We have also entered into a Transition Services Agreement with Servier, through which we will provide transitional services related to discovery, clinical development, technical operations, commercial and general and administrative related activities for periods ranging from one month to approximately one year after March 31, 2021.

The milestone payment for approval of vorasidenib and royalty payments related to vorasidenib and TIBSOVO® represent contingent consideration.

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Level 3 – Unobservable inputs that reflect our own assumptions about the assumptions market participants would use in pricing the asset or liability in which there is little, if any, market activity for the asset or liability at the measurement date.

The following table summarizes our cash equivalents and marketable securities measured at fair value on a recurring basis as of March 31, 2021:

The following table summarizes our cash equivalents and marketable securities measured at fair value on a recurring basis as of June 30, 2021:

(In thousands) Level 1 Level 2 Level 3 Total

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The pricing services utilize industry standard valuation models, including both income and market-based approaches, and observable market inputs to determine value.

After completing our validation procedures, we did not adjust or override any fair value measurements provided by the pricing services as of March 31, 2021.

There have been no changes to the valuation methods during the three months ended March 31, 2021.

We have no financial assets or liabilities that were classified as Level 3 at any point during the three months ended March 31, 2021.

After completing our validation procedures, we did not adjust or override any fair value measurements provided by the pricing services as of June 30, 2021.

There have been no changes to the valuation methods during the six months ended June 30, 2021.

We have no financial assets or liabilities that were classified as Level 3 at any point during the six months ended June 30, 2021.

Marketable Securities

Our marketable securities are classified as available-for-sale pursuant to ASC 320, Investments – Debt and Equity Securities , and are recorded at fair value.

Unrealized gains are included as a component of accumulated other comprehensive (loss) income in the condensed consolidated balance sheets and statements of stockholders’ equity and a component of total comprehensive loss in the condensed consolidated statements of comprehensive income (loss), until realized.

Unrealized losses are evaluated for impairment under ASC 326, Financial Instruments - Credit Losses , to determine if the impairment is credit-related or noncredit-related.

1 unchanged sentence

Realized gains and losses are included in investment income on a specific-identification basis.

There were no material realized gains or losses on marketable securities for the three months ended March 31, 2021 or 2020.

Marketable securities at March 31, 2021 consisted of the following:

There were no material realized gains or losses on marketable securities for the three and six months ended June 30, 2021 or 2020.

Marketable securities at June 30, 2021 consisted of the following:

(In thousands) Amortized

5 unchanged sentences

Total Current 703,949 29 ( 114 ) 703,864

Treasuries 10,227 — ( 3 ) 10,224

Government securities 25,000 — ( 20 ) 24,980

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Total marketable securities $ 542,996 $ 321 $ ( 216 ) $ 543,101

As of March 31, 2021 and December 31, 2020, we held both current and non-current investments.

As of June 30, 2021 and December 31, 2020, we held both current and non-current investments.

Investments classified as current have maturities of less than one year.

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(i) have a maturity of greater than one year, and (ii) we do not intend to liquidate within the next twelve months, although these funds are available for use and, therefore, are classified as available-for-sale.

As of March 31, 2021 and December 31, 2020, we held 78 and 87 debt securities, respectively, that were in an unrealized loss position for less than one year.

We did no t record an allowance for credit losses as of March 31, 2021 and December 31, 2020 related to these securities.

The aggregate fair value of debt securities in an unrealized loss position at March 31, 2021 and December 31, 2020 was $ 248.3 million and $ 299.0 million, respectively.

There were no individual securities that were in a significant unrealized loss position as of March 31, 2021 and December 31, 2020.

As of June 30, 2021 and December 31, 2020, we held 113 and 87 debt securities, respectively, that were in an unrealized loss position for less than one year.

We did no t record an allowance for credit losses as of June 30, 2021 and December 31, 2020 related to these securities.

The aggregate fair value of debt securities in an unrealized loss position at June 30, 2021 and December 31, 2020 was $ 559.3 million and $ 299.0 million, respectively.

There were no individual securities that were in a significant unrealized loss position as of June 30, 2021 and December 31, 2020.

We regularly review the securities in an unrealized loss position and evaluate the current expected credit loss by considering factors such as historical experience, market data, issuer-specific factors, and current economic conditions.

We do not consider these marketable securities to be impaired as of March 31, 2021 and December 31, 2020.

We do not consider these marketable securities to be impaired as of June 30, 2021 and December 31, 2020.

Our building leases are comprised of office and laboratory space under non-cancelable operating leases.

4 unchanged sentences

Three Months Ended

June 30, Six Months Ended

(In millions) 2021 2020 2021 2020

1 unchanged sentence

Cash paid for amounts included in the measurement of operating lease liabilities $ 3.6 $ 3.5 $ 7.2 $ 7.4

We have not entered into any material short-term leases or financing leases as of March 31, 2021.

As of March 31, 2021, undiscounted minimum rental commitments under non-cancelable leases, for each of the next five years and total thereafter were as follows:

We have not entered into any material short-term leases or financing leases as of June 30, 2021.

As of June 30, 2021, undiscounted minimum rental commitments under non-cancelable leases, for each of the next five years and total thereafter were as follows:

(In thousands)

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Operating lease liabilities $ 100,903

In arriving at the operating lease liabilities as of March 31, 2021 and December 31, 2020, we applied the weighted-average incremental borrowing rate of 5.7 % for both periods over a weighted-average remaining lease term of 6.9 years and 7.2 years, respectively.

In arriving at the operating lease liabilities as of June 30, 2021 and December 31, 2020, we applied the weighted-average incremental borrowing rate of 5.7 % for both periods over a weighted-average remaining lease term of 6.7 years and 7.2 years, respectively.

Accrued Expenses

Accrued expenses consist of the following:

(In thousands) March 31,

(In thousands) June 30,

2021 December 31,

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Any options or awards outstanding under the 2007 Plan at the time of adoption of the 2013 Plan remain outstanding and effective.

As of March 31, 2021, the total number of shares reserved under the 2007 Plan and the 2013 Plan was 12,082,101 , and we had 4,382,070 shares available for future issuance under the 2013 Plan.

As of June 30, 2021, the total number of shares reserved under the 2007 Plan and the 2013 Plan was 11,532,771 , and we had 4,814,051 shares available for future issuance under the 2013 Plan.

Stock options

The following table presents stock option activity for the three months ended March 31, 2021:

The following table presents stock option activity for the six months ended June 30, 2021:

Stock Options Weighted-Average

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Forfeited/Expired ( 1,213,538 ) 61.89

Outstanding at March 31, 2021 6,181,953 $ 58.76

Exercisable at March 31, 2021 4,050,765 $ 61.02

Vested and expected to vest at March 31, 2021 6,181,953 $ 58.76

At March 31, 2021, there was approximately $ 67.9 million of total unrecognized compensation expense related to unvested stock option awards, which we expect to recognize over a weighted-average period of approximately 2.7 years.

Outstanding at June 30, 2021 5,251,842 $ 58.87

Exercisable at June 30, 2021 3,412,161 $ 61.00

Vested and expected to vest at June 30, 2021 5,251,842 $ 58.87

At June 30, 2021, there was approximately $ 58.8 million of total unrecognized compensation expense related to unvested stock option awards, which we expect to recognize over a weighted-average period of approximately 2.6 years.

Restricted stock units

The following table presents RSU activity for the three months ended March 31, 2021:

The following table presents RSU activity for the six months ended June 30, 2021:

Stock Units Weighted-Average

4 unchanged sentences

Forfeited ( 510,152 ) 51.84

Unvested shares at March 31, 2021 1,263,094 $ 51.34

As of March 31, 2021, there was approximately $ 54.6 million of total unrecognized compensation expense related to RSUs, which we expect to recognize over a weighted-average period of approximately 2.2 years.

Unvested shares at June 30, 2021 1,185,013 $ 51.60

As of June 30, 2021, there was approximately $ 47.2 million of total unrecognized compensation expense related to RSUs, which we expect to recognize over a weighted-average period of approximately 2.1 years.

Performance-based stock units

The following table presents PSU activity for the three months ended March 31, 2021:

The following table presents PSU activity for the six months ended June 30, 2021:

Stock Units Weighted-Average

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Forfeited ( 24,059 ) 49.49

Unvested shares at March 31, 2021 252,379 $ 55.10

Unvested shares at June 30, 2021 239,170 $ 55.98

Stock-based compensation expense associated with these PSUs is recognized if the underlying performance condition is considered probable of achievement using our management’s best estimates.

As of March 31, 2021, there was no unrecognized compensation expense related to PSUs with performance-based vesting criteria that are considered probable of achievement, and $ 13.9 million of total unrecognized compensation expense related to PSUs with performance-based vesting criteria that are considered not probable of achievement.

As of June 30, 2021, there was no unrecognized compensation expense related to PSUs with performance-based vesting criteria that are considered probable of achievement, and $ 13.4 million of total unrecognized compensation expense related to PSUs with performance-based vesting criteria that are considered not probable of achievement.

Market-based stock units

The following table presents market-based stock unit, or MSU, activity for the three months ended March 31, 2021:

The following table presents market-based stock unit, or MSU, activity for the six months ended June 30, 2021:

Stock Units Weighted-Average

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Unvested shares at December 31, 2020 42,695 $ 41.50

Unvested shares at March 31, 2021 42,695 $ 41.50

Unvested shares at June 30, 2021 42,695 $ 41.50

The fair value of MSUs are estimated using a Monte Carlo simulation model.

Assumptions and estimates utilized in the model include the risk-free interest rate, dividend yield, expected stock volatility and the estimated period to achievement of the market condition.

As of March 31, 2021, there was no remaining unrecognized compensation expense related to MSUs.

As of June 30, 2021, there was no remaining unrecognized compensation expense related to MSUs.

2013 Employee Stock Purchase Plan

In June 2013, our Board of Directors adopted, and in July 2013 our stockholders approved, the 2013 Employee Stock Purchase Plan, or the 2013 ESPP.

We issued and sold 59,401 and 62,694 shares of common stock during the three months ended March 31, 2021 and 2020, respectively, under the 2013 ESPP.

We issued and sold 59,401 and 62,694 shares of common stock during the six months ended June 30, 2021 and 2020, respectively, under the 2013 ESPP.

The 2013 ESPP provides participating employees with the opportunity to purchase up to an aggregate of 1,345,454 shares of our common stock.

As of March 31, 2021, we had 921,043 shares of common stock available for future issuance under the 2013 ESPP.

As of June 30, 2021, we had 921,043 shares of common stock available for future issuance under the 2013 ESPP.

Stock-based compensation expense

1 unchanged sentence

Three Months Ended

June 30, Six Months Ended

(In thousands) 2021 2020 2021 2020

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Three Months Ended

June 30, Six Months Ended

(In thousands) 2021 2020 2021 2020

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Diluted net loss per share is calculated by adjusting the weighted average shares outstanding for the dilutive effect of common stock equivalents outstanding for the period, determined using the treasury stock method.

For purposes of the dilutive net loss per share calculation, stock options, RSUs, PSUs and MSUs for which the performance and market vesting conditions, respectively, have been deemed probable, and 2013 ESPP shares are considered to be common stock equivalents, while PSUs and MSUs with performance and market vesting conditions, respectively, that were not deemed probable as of March 31, 2021 are not considered to be common stock equivalents.

For purposes of the dilutive net loss per share calculation, stock options, RSUs, PSUs and MSUs for which the performance and market vesting conditions, respectively, have been deemed probable, and 2013 ESPP shares are considered to be common stock equivalents, while PSUs and MSUs with performance and market vesting conditions, respectively, that were not deemed probable as of June 30, 2021 are not considered to be common stock equivalents.

We utilize the control number concept in the computation of diluted earnings per share to determine whether potential common stock equivalents are dilutive.

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The following common stock equivalents were excluded from the calculation of diluted net loss per share applicable to common stockholders for the periods indicated because including them would have had an anti-dilutive effect:

Three Months Ended March 31,

Three and Six Months Ended June 30,

Stock options 5,251,842 6,749,373

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Total common stock equivalents 6,466,277 8,132,598

We recorded a provision for income taxes of $ 12.9 million for the three months ended March 31, 2021 and no income tax provision for the three months ended March 31, 2020.

The tax provision has been recorded within discontinued operations as it

relates to the income tax impact on the sale of its oncology business to Servier.

There is no income tax expense recorded in continuing operations for the three months ended March 31, 2021 and 2020, respectively.

Subsequent Events

On March 25, 2021, we announced that our board of directors authorized the repurchase of up to $ 1.2 billion of our outstanding shares of common stock, or the Repurchase Program, using the proceeds from the sale of our oncology business to Servier.

No income tax provision was recorded for the three months ended June 30, 2021.

We recorded a provision for income taxes of $ 12.9 million for the six months ended June 30, 2021.

No income tax provision was recorded for the three and six months ended June 30, 2020.

The tax provision has been recorded within discontinued operations as it relates to the income tax impact on the sale of its oncology business to Servier.

There is no income tax expense recorded in continuing operations for the three and six months ended June 30, 2021 and 2020, respectively.

Cash taxes paid were $ 6.2 million for the six months ended June 30, 2021.

No cash taxes were paid during the six months ended June 30, 2020.

Share Repurchase Program

On March 25, 2021, we announced that our board of directors authorized the Repurchase Program for the repurchase of up to $ 1.2 billion of our outstanding shares of common stock.

On March 31, 2021, in connection with the Repurchase Program, we entered into a definitive share repurchase agreement with BMS to repurchase 7,121,658 shares of our common stock held by certain subsidiaries of BMS for an aggregate purchase price of $ 344.5 million, or $ 48.3785 per share.

This repurchase was completed on April 5, 2021.

Further, on April 2, 2021, in connection with the Repurchase Program, we entered into a Rule 10b5-1 repurchase plan to which we may repurchase up to $ 600 million of shares of our common stock.

As of June 30, 2021, we have repurchased approximately 3.4 million shares of common stock for $ 184.5 million, or $ 54.71 per share, under the plan with approximately $ 415.5 million remaining under the plan for additional repurchases.

In total, as of June 30, 2021, we have repurchased 10.5 million common shares for $ 529.0 million under the Repurchase Program.

Repurchased shares are held as treasury stock until they are retired or re-issued.

Treasury stock purchases are accounted for under the cost method whereby the entire cost of the acquired stock is recorded as treasury stock.

Repurchases of our common stock are accounted for as of the settlement date.

There were no retirements or re-issuances of treasury stock during the three months ended June 30, 2021.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements