What changed in this filing

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Item 2. Management’s Discussion and Analysis

2021-07-29 compared with 2021-04-29 · 92 added, 64 removed, 171 unchanged (48% of the section changed)

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Forward-looking Information

The following discussion of our financial condition and results of operations should be read with our unaudited condensed consolidated financial statements as of March 31, 2021 and for the three months ended March 31, 2021 and 2020, and related notes included in Part I, Item 1 of this Quarterly Report on Form 10-Q, as well as the audited consolidated financial statements and notes and Management’s Discussion and Analysis of Financial Condition and Results of Operations, included in our Annual Report on Form 10-K for the year ended December 31, 2020 filed with the SEC on February 25, 2021.

The following discussion of our financial condition and results of operations should be read with our unaudited condensed consolidated financial statements as of June 30, 2021 and for the three and six months ended June 30, 2021 and 2020, and related notes included in Part I, Item 1 of this Quarterly Report on Form 10-Q, as well as the audited consolidated financial statements and notes and Management’s Discussion and Analysis of Financial Condition and Results of Operations, included in our Annual Report on Form 10-K for the year ended December 31, 2020 filed with the SEC on February 25, 2021.

This Management’s Discussion and Analysis of Financial Condition and Results of Operations contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.

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We undertake no obligation to revise the forward-looking statements contained herein to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events, except as required by law.

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.

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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A more complete description of our business prior to the consummation of the transaction is included in Item 1.

“Business”, in Part I of the Annual Report on Form

10-K for the year ended December 31, 2020 that was previously filed with the Securities and Exchange Commission (“SEC”) on February 25, 2021.

“Business”, in Part I of the Annual Report on Form 10-K for the year ended December 31, 2020 that was previously filed with the Securities and Exchange Commission (“SEC”) on February 25, 2021.

Our primary focus in the GDD area relates to therapeutic categories where we believe we have differentiated expertise and demonstrated capabilities (e.g-enzyme stabilizers, pyruvate kinase, phenylalanine hydroxylase).

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• ACTIVATE-T, a single arm, global, pivotal trial of mitapivat in regularly-transfused patients with PK deficiency.

This trial has completed enrollment and we are conducting an extension study for previously enrolled patients, which is designed to evaluate the long-term safety, tolerability and efficacy of treatment with mitapivat.

• ACTIVATE, a 1:1 randomized, placebo-controlled, global, pivotal trial of mitapivat in patients with PK deficiency who do not receive regular transfusions.

• Pivotal trials in pediatric PK deficiency, which we expect to initiate in 2022.

• ENERGIZE and ENERGIZE-T, phase 3 trials of mitapivat in not-regularly-transfused and regularly-transfused adults with thalassemia, which we expect to initiate in the second half of 2021.

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We have worldwide development and commercial rights to mitapivat and expect to fund the future development and commercialization costs related to this program.

The FDA and European Medicines Agency, or EMA, granted orphan drug designations for mitapivat for the treatment of patients with PK deficiency, and the FDA granted orphan drug designation for mitapivat for the treatment of patients with thalassemia.

We anticipate filing for regulatory approval for mitapivat in adults with PK deficiency in the U.S.

in the second quarter of 2021 and in the European Union in mid-2021, with a potential commercial launch in both geographies in 2022 if we receive regulatory approvals.

In June 2021, we submitted an NDA for mitapivat to the FDA for the treatment of adults with PK deficiency in the United States and a marketing authorization application, or MAA, to the EMA for the treatment of adults with PK deficiency the European Union.

We anticipate a potential commercial launch of mitapivat in the United States and the European Union in 2022 if we receive regulatory approvals.

We also expect to continue to grow our U.S.

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Impact of COVID-19 on our Business

As of March 31, 2021, we have not experienced a significant financial or supply chain impact directly related to the COVID-19 pandemic but have experienced some disruptions to clinical operations, including timelines to complete patient enrollment in some of our clinical trials, as further described below.

We are continuing to serve our customers while taking precautions to

provide a safe work environment for our employees and customers.

Our lab-based employees who need to be onsite to fulfill their job responsibilities have been onsite since late May 2020, and since September 2020 we have opened our Cambridge office to limited numbers of employees who prefer to work onsite.

As of June 30, 2021, we have not experienced a significant financial or supply chain impact directly related to the COVID-19 pandemic but have experienced some disruptions to clinical operations, including timelines to complete patient enrollment in some of our clinical trials, as further described below.

We are continuing to serve our customers while taking precautions to provide a safe work environment for our employees and customers.

Our lab-based employees who need to be onsite to fulfill their job responsibilities have been onsite since late May 2020, and we have opened our Cambridge office to employees who prefer to work onsite.

Our field-based employees engage with healthcare providers and other third parties remotely and, where local regulations allow, on a limited in-person basis.

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The extent of the pandemic’s effect on our operational and financial performance will depend in large part on future developments, which cannot be predicted with confidence at this time.

Future developments include changes in the duration, scope and severity of the pandemic, the actions taken to contain or mitigate its impact, the impact on governmental programs and budgets, the supply and distribution of vaccines, and the resumption of widespread economic activity.

Future developments include changes in the duration, scope and severity of the pandemic, including and variant strains of the COVID-19 virus, the actions taken to contain or mitigate its impact, the impact on governmental programs and budgets, the supply, distribution and efficacy of vaccines, and the resumption of widespread economic activity.

Any prolonged material disruption of our employees, suppliers, manufacturing, or customers could negatively impact our consolidated financial position, consolidated results of operations and consolidated cash flows.

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Through March 31, 2021, we have financed our operations primarily through proceeds from the sale of our royalty rights, commercial sales of TIBSOVO®, funding received from our collaboration agreements, private placements of our preferred stock, our initial public offering of our common stock and concurrent private placement of common stock to an affiliate of Celgene, and our follow-on public offerings.

Following the sale of our oncology business to Servier on March 31, 2021, we expect to finance our operations primarily through cash on hand, and, potentially, collaborations, strategic alliances, licensing arrangements and other nondilutive strategic transactions.

Following the sale of our oncology business to Servier on March 31, 2021, we expect to finance our operations primarily through cash on hand, royalty payments from Servier with respect to U.S.

net sales of TIBSOVO®, a potential milestone payment from Servier if vorasidenib is approved by the FDA, and future potential sales of mitapivat if approved for marketing by regulatory authorities and successfully launched by us and, potentially, collaborations, strategic alliances, licensing arrangements and other nondilutive strategic transactions.

We have historically incurred operating losses.

Our net income for the three months ended March 31, 2021 was $1.9 billion and our net loss for the three months ended March 31, 2020 was $40.3 million.

As of March 31, 2021, we had retained earnings of $30.9 million.

The net income we generated in the three months ended March 31, 2021 was primarily due to the sale of our oncology business to Servier, which was consummated on March 31, 2021.

Our net income for the six months ended June 30, 2021 was $1,788.1 million and our net loss for the six months ended June 30, 2020 was $130.7 million.

As of June 30, 2021, we had an accumulated deficit of $55.4 million.

The net income we generated in the six months ended June 30, 2021 was primarily due to the sale of our oncology business to Servier, which was consummated on March 31, 2021.

Following the consummation of the sale of our oncology business, we expect to incur significant expenses and net losses until such time we are able to report profitable results.

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The trial has completed enrollment.

We reported in January 2021 that this trial met its primary endpoint of a statistically significant and clinically meaningful reduction in transfusion burden.

We reported in June 2021, in a full analysis of updated data, that this trial met its primary endpoint of a statistically significant and clinically meaningful reduction in transfusion burden and that improvements were also observed for certain patient reported outcomes.

• ACTIVATE, a 1:1 randomized, placebo-controlled, global, pivotal trial of mitapivat in patients with PK deficiency who do not receive regular transfusions.

The trial has completed enrollment.

We reported in December 2020 that this trial met its primary endpoint of a statistically significant, sustained increase in hemoglobin compared to placebo.

In addition, data from the trial demonstrated that treatment with mitapivat showed statistically significant improvement in key pre-specified secondary endpoints including patient reported outcomes.

We reported in June 2021, in a full analysis of updated data, that this trial met its primary endpoint of a statistically significant, sustained increase in hemoglobin compared to placebo.

In addition, data from the trial demonstrated that treatment with mitapivat showed statistically significant improvement in key pre-specified secondary endpoints including patient reported outcomes This trial has completed enrollment and we are conducting an extension study for previously enrolled patients, which is designed to evaluate the long-term safety, tolerability and efficacy of treatment with mitapivat.

• A phase 2, open-label safety and efficacy clinical trial of mitapivat in adult patients with non-transfusion-dependent α- and β-thalassemia.

The trial has completed enrollment.

The trial has completed enrollment We reported in June 2020 that this trial met its primary endpoint of hemoglobin increase of greater than or equal to 1.0 gram per deciliter from baseline at one or more assessments during weeks 4-12 of the trial.

• In collaboration with the National Institutes of Health, or NIH, we are evaluating mitapivat in a phase 1 trial in patients with SCD pursuant to a cooperative research and development agreement.

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We expect to initiate two phase 3 trials of mitapivat, ENERGIZE and ENERGIZE-T, in not regularly transfused and regularly transfused adults with thalassemia in the second half of 2021, and we expect to initiate a phase 2/3 trial of mitapivat in patients with SCD by the end of 2021.

We expect to initiate pivotal trials in pediatric PK deficiency in 2022.

Next-generation PKR Activator

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Other significant costs include facility related costs not otherwise included in research and development expenses, legal fees relating to patent and corporate matters, and fees for accounting and consulting services.

We anticipate that our selling, general and administrative expenses will increase in the future to support continued research and development activities and future commercialization activities related to our GDD portfolio, including the potential

commercialization of our product candidates.

These increases will likely include increased costs related to the hiring of additional personnel and fees to outside consultants, lawyers and accountants, among other expenses.

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Certain amounts in prior periods have been reclassified to reflect the impact of the discontinued operations treatment of the oncology business in order to conform to the current period presentation.

Comparison of the three months ended March 31, 2021 and 2020

Comparison of the three and six months ended June 30, 2021 and 2020

Total Operating Expenses

Three Months Ended March 31,

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

(In thousands) 2021 2020 2021 2020

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Total Operating Expenses $ 91,222 $ 83,264 $ 182,439 $ 170,294

Total Operating Expenses - First Quarter of 2021 vs.

First Quarter of 2020 - The increase in total operating expenses of $4.2 million for the three months ended March 31, 2021 compared to the three months ended March 31, 2020 was primarily due an increase in research and development expenses of $2.3 million which is described below under Research and Development Expenses, and an increase in selling, general and administrative expenses of $1.9 million was due to ex-U.S.

workforce related expenses.

Total Operating Expenses - Three Months ended June 30, 2021 vs.

Three Months ended June 30, 2020 - The increase in total operating expenses of $8.0 million for the three months ended June 30, 2021 compared to the three months ended June 30, 2020 was primarily due an increase in research and development expenses of $7.9 million which is described below under Research and Development Expenses.

Included in selling, general and administrative expenses is approximately $2.1 million of reimbursable transition related services we provided to Servier related to the sale of the oncology business.

Total Operating Expenses - Six Months ended June 30, 2021 vs.

Six Months ended June 30, 2020 - The increase in total operating expenses of $12.1 million for the six months ended June 30, 2021 compared to the six months ended June 30, 2020 was primarily due an increase in research and development expenses of $10.2 million which is described below under Research and Development Expenses.

Included in selling, general and administrative expenses is approximately $2.1 million of reimbursable transition related services we provided to Servier related to the sale of the oncology business.

Research and Development Expenses

Our research and development expenses, by major program, are outlined in the table below:

Three Months Ended March 31,

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

(In thousands) 2021 2020 2021 2020

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Facilities and IT related expenses & other 11,539 11,781 24,104 24,904

Other expenses - transition services 4,404 — 4,404 —

Total indirect research and development expenses 38,339 37,817 77,657 77,875

Total research and development expense $ 62,007 $ 54,086 $ 119,674 $ 109,445

Total Research and Development Expenses - First Quarter of 2021 vs.

First Quarter of 2020 - The increase in total research and development expenses of $2.3 million for the three months ended March 31, 2021 compared to the three months ended March 31, 2020 was primarily due to a $2.6 million increase in mitapivat costs due to start up costs for the planned phase 3 trials of mitapivat, ENERGIZE and ENERGIZE-T, and the planned phase 2/3 trial of mitapivat in patients with SCD.

Interest Income and Expense

Three Months Ended March 31,

Total Research and Development Expenses - Three Months ended June 30, 2021 vs.

Three Months ended June 30, 2020 - The increase in total research and development expenses of $7.9 million for the three months ended June 30, 2021 compared to the three months ended June 30, 2020 was primarily due to a $6.0 million increase in mitapivat costs due to start up costs for the planned phase 3 trials of mitapivat, ENERGIZE and ENERGIZE-T, the planned phase 2/3 trial of mitapivat in patients with SCD, and filing and launch preparation activities which includes $0.5 million in filing fees.

Included in total indirect research and development expenses was $4.4 million of reimbursable transition related services we provided to Servier related to the sale of the oncology business for discovery, clinical development, technical operations, and commercial related activities which will continue for periods ranging from one month to approximately one year after March 31, 2021.

Total Research and Development Expenses - Six Months ended June 30, 2021 vs.

Six Months ended June 30, 2020 - The increase in total research and development expenses of $10.2 million for the six months ended June 30, 2021 compared to the six months ended June 30, 2020 was primarily due to a $8.6 million increase in mitapivat costs due to start up costs for the planned phase 3 trials of mitapivat, ENERGIZE and ENERGIZE-T, the planned phase 2/3 trial of mitapivat in patients with SCD, and filing and launch preparation activities which includes $0.5 million in filing fees.

Included in total indirect research and development expenses was $4.4 million of reimbursable transition related services we provided to Servier related to the sale of the oncology business related to discovery, clinical development, technical operations, and commercial related activities which will continue for periods ranging from one month to approximately one year after March 31, 2021.

Other Income and Expense

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

(In thousands) 2021 2020 2021 2020

Interest income, net $ 340 $ 2,936

Interest Income and Expense- First Quarter of 2021 vs.

First Quarter of 2020 - The decrease in interest income, net is primarily attributable to the decrease in interest rates at the end of the first quarter of 2020, which reduced the interest rates earned by 0.50% to 1.50% from prior periods and the decrease in our outstanding marketable securities balance for the three months ended March 31, 2021.

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 —

Other Income and Expense- Three Months ended June 30, 2021 vs.

Three Months ended June 30, 2020 - The increase in other income, net primarily relates to approximately $6.5 million of reimbursable transition related services and fees for the sale of the oncology business.

The increase in gain on sale of oncology business primarily relates to income from royalties on U.S.

net sales of TIBSOVO® by Servier of approximately $2.0 million in the second quarter of 2021.

The decrease in interest income, net is primarily attributable to a decrease in interest rates.

Other Income and Expense- Six Months ended June 30, 2021 vs.

Six Months ended June 30, 2020 - The increase in other income, net primarily relates to approximately $6.5 million of reimbursable transition related services and fees for the sale of the oncology business in the second quarter of 2021.

The increase in gain on sale of oncology business primarily relates to income from royalties on U.S.

net sales of TIBSOVO® by Servier of approximately $2.0 million in the second quarter of 2021.

The decrease in interest income, net is primarily attributable to a decrease in interest rates.

Loss from Operations and Net Income (Loss)

Three Months Ended March 31,

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

(In thousands) 2021 2020 2021 2020

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

Net income from discontinued operations 1,965,202 43,838

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

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

Loss from Operations and Net Income (Loss) – First Quarter of 2021 vs.

First Quarter of 2020 – The increase in loss from continuing operations for the three months ended March 31, 2021 compared to the three months ended March 31, 2020 was primarily driven by the higher research and development expenses discussed above under Research and Development Expenses, and higher selling, general and administrative expenses discussed above under Total Operating Expenses.

The change in net income from discontinued operations and net income (loss) for the three months ended March 31, 2021 compared to the three months ended March 31, 2020 was primarily driven by the sale of our oncology business to Servier for approximately $1.8 billion in cash in the first quarter of 2021, which is included within net income from discontinued operations.

Loss from Operations and Net Income (Loss) – Three Months ended June 30, 2021 vs.

Three Months ended June 30, 2020 – The increase in net loss from continuing operations for the three months ended June 30, 2021 compared to the three months ended June 30, 2020 was primarily driven by the higher research and development expenses discussed above under Research and Development Expenses, partially offset by $6.5 million of reimbursable transition related services and fees related to the sale of the oncology business and a $2.0 million gain on sale of oncology business related to income from royalties on U.S.

net sales of TIBSOVO® by Servier, both occurring in the second quarter of 2021.

The change in net loss from discontinued operations for the three months ended June 30, 2021 compared to the three months ended June 30, 2020 was primarily driven by the sale of our oncology business to Servier in the first quarter of 2021, which significantly reduced revenues and expenses related to our oncology programs.

The decrease in net income (loss) for the three months ended June 30, 2021 compared to the three months ended June 30, 2020 was primarily driven by the increase in net loss from continuing operations discussed above, partially offset by a lower net loss from discontinued operations for the three months ended June 30, 2021 on the sale of the oncology business discussed above.

Loss from Operations and Net Income (Loss) – Six Months ended June 30, 2021 vs.

Six Months ended June 30, 2020 – The increase in loss from continuing operations for the six months ended June 30, 2021 compared to the six months ended June 30, 2020 was primarily driven by the higher research and development expenses discussed above under Research and Development Expenses, partially offset by $6.5 million of reimbursable transition related services and fees related to the sale of the oncology business and a $2.0 million gain on sale of oncology business related to income from royalties on U.S.

net sales of TIBSOVO® by Servier, both occurring in the second quarter of 2021.

The change in net income from discontinued operations and net income (loss) for the six months ended June 30, 2021 compared to the six months ended June 30, 2020 was primarily driven by the sale of our oncology business to Servier for approximately $1.8 billion in cash in the first quarter of 2021, which is included within net income from discontinued operations.

Liquidity and Capital Resources

Sources of liquidity

Since our inception, and through March 31, 2021, we have funded our operations through commercial sales of TIBSOVO®, upfront, milestone, extension, cost reimbursement and royalty payments related to our collaboration agreements, product sales, proceeds from the sale of our royalty rights, proceeds received from our issuance of preferred stock, our initial public offering and concurrent private placement of common stock to an affiliate of Celgene, and our follow-on public offerings.

As of March 31, 2021, we had cash, cash equivalents and marketable securities of $2.4 billion, which includes the $1.8 billion in cash received from the completion of the sale of our oncology business to Servier.

Since our inception, and through June 30, 2021, we have funded our operations through proceeds from the sale of our oncology business, commercial sales of TIBSOVO®, upfront, milestone, extension, cost reimbursement and royalty payments related to our collaboration agreements, product sales, proceeds from the sale of our royalty rights, proceeds received from our issuance of preferred stock, our initial public offering and concurrent private placement of common stock to an affiliate of Celgene, and our follow-on public offerings.

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

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.

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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.

We expect to conduct the remaining repurchases under the Repurchase program over 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 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 addition to our existing cash, cash equivalents and marketable securities, under the purchase agreement we are eligible to receive a $200 million milestone payment upon regulatory approval of vorasidenib and royalty payments with respect to U.S.

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Whether the regulatory approval milestone for vorasidenib will be achieved is subject to various risks and uncertainties, many of which are outside our control, including adverse clinical developments with respect to vorasidenib.

Furthermore, we cannot predict what success, if any, Servier may have in the United States with respect to sales of TIBSOVO® and, if approved, vorasidenib and consequently we cannot estimate the amount of royalty payments that we can expect to receive from Servier under the Purchase Agreement prior to the loss of exclusivity of these products.

The following table provides information regarding our cash flows for the three months ended March 31, 2021 and 2020:

Three Months Ended March 31,

Furthermore, we cannot predict what success, if any, Servier may have in the United States with respect to sales of TIBSOVO®

and, if approved, vorasidenib and consequently we cannot estimate the amount of royalty payments that we can expect to receive from Servier under the purchase agreement prior to the loss of exclusivity of these products.

The following table provides information regarding our cash flows for the six months ended June 30, 2021 and 2020:

Six Months Ended June 30,

(In thousands) 2021 2020

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Net cash provided by investing activities 1,575,928 130,594

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

Net cash used in operating activities.

Cash used in operating activities of $120.7 million during the three months ended March 31, 2021, of which $90.2 million was used by continuing operations and $30.5 million was used by discontinued operations,

was primarily due to cash received of $39.5 million from sales of TIBSOVO®, and $1.2 million in cost reimbursements related to our Collaboration Agreements with Celgene, These amounts were offset by operating expenses driven by research and development costs described above under Research and Development Expenses and selling, general and administrative costs described above under Total Operating Expenses.

Cash used in operating activities of $105.4 million during the three months ended March 31, 2020, of which $78.8 million was used by continuing operations and $26.6 million was used by discontinued operations, was primarily due to cash received $22.1 million from sales of TIBSOVO®, $5.2 million in cost reimbursements and royalty payments under our Collaboration Agreements with Celgene, $2.9 million in interest received, and $0.9 million in cost reimbursement related to our Collaboration agreement with CStone.

These amounts were offset by increased operating expenses that relate to increased staffing needs due to our expanding operations and expanded facilities and IT related costs.

Cash used in operating activities of $238.0 million during the six months ended June 30, 2021, of which $159.2 million was used by continuing operations and $78.8 million was used by discontinued operations, was primarily due to cash received of $39.5 million from sales of TIBSOVO®, and $1.2 million in cost reimbursements related to our collaboration agreements with Celgene.

These amounts were offset by operating expenses primarily driven by research and development costs described above under Research and Development Expenses.

Cash used in operating activities of $173.2 million during the six months ended June 30, 2020, of which $136.2 million was used by continuing operations and $37.0 million was used by discontinued operations, was primarily due to cash received $52.3 million from sales of TIBSOVO®, $9.6 million in royalty payments and cost reimbursements under our collaboration agreements with Celgene, $4.8 million in interest received, and $1.8 million in cost reimbursement related to our collaboration agreement with CStone.

These amounts were offset by decreased operating expenses driven by lower research and development costs described above in Research and Development Expenses partially offset by increased staffing needs due to our expanding operations.

Net cash provided by investing activities .

Cash provided by investing activities of $1.9 billion for the three months ended March 31, 2021, of which $71.1 million was provided by operating activities and $1.8 billion was provided by discontinued operations, was primarily due to the approximately $1.8 billion in cash proceeds received from the sale of our oncology business to Servier that was completed on March 31, 2021.

We also received higher proceeds from maturities and sales of marketable securities than purchases of marketable securities.

Cash provided by investing activities of $108.1 million for three months ended March 31, 2020, of which $108.4 million was provided by operating activities and $0.3 million was used by discontinued operations, was primarily the result of higher proceeds from maturities and sales of marketable securities than purchases of marketable securities, offset by $4.5 million in purchases of property and equipment.

Net cash provided by financing activities .

Cash provided by financing activities for the three months ended March 31, 2021 was primarily the result of the $7.3 million of proceeds received from stock option exercises and purchases made pursuant to our 2013 ESPP.

Cash provided by financing activities for the three months ended March 31, 2020 was primarily the result of the $5.5 million of proceeds received from stock option exercises and purchases made pursuant to our 2013 ESPP.

Cash provided by investing activities of $1.6 billion for the six months ended June 30, 2021, of which $227.0 million was used by operating activities and $1.8 billion was provided by discontinued operations, was primarily due to the approximately $1.8 billion in cash proceeds received from the sale of our oncology business to Servier that was completed on March 31, 2021, partially offset by lower proceeds from maturities and sales of marketable securities than purchases of marketable securities.

Cash provided by investing activities of $130.6 million for six months ended June 30, 2020, of which approximately all was provided by operating activities and $348.0 thousand was used by discontinued operations, was primarily the result of higher proceeds from maturities and sales of marketable securities than purchases of marketable securities, offset by $8.7 million in purchases of property and equipment.

Net cash (used in) provided by financing activities .

Cash used in financing activities for the six months ended June 30, 2021, of which all was provided by operating activities and none was used by discontinued operations, was primarily the result of $529.0 million in common stock repurchases in the second quarter of 2021 under our Repurchase Program, partially offset by the $33.0 million of proceeds received from stock option exercises and purchases made pursuant to our 2013 ESPP.

Cash provided by financing activities for the six months ended June 30, 2020, of which $7.0 million was provided by continuing operations and $250.5 million was provided by discontinued operations, was primarily the result of net proceeds of $250.5 million from the sale of our tiered, sales-based royalty rights on worldwide net sales of IDHIFA® (enasidenib) and our ex-US regulatory milestones to Royalty Pharma in June 2020 and $7.1 million of proceeds received from stock option exercises and purchases made pursuant to our 2013 ESPP.

Funding requirements

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If we obtain marketing approval for any of our product candidates, we expect to incur significant commercialization expenses related to product sales, marketing, manufacturing and distribution.

We expect that our existing cash, cash equivalents and marketable securities as of March 31, 2021, together with anticipated interest income, future product sales and TIBSOVO® royalties, but excluding any transaction-specific milestone payments, will be sufficient to fund operations through major catalysts and to cash-flow positivity without the need to raise additional equity.

We expect that our existing cash, cash equivalents and marketable securities as of June 30, 2021, will enable us to execute our operating plan through major catalysts and to cash-flow positivity without the need to raise additional equity.

Our future capital requirements will depend on many factors, including:

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• the costs of preparing, filing and prosecuting patent applications, maintaining and enforcing our intellectual property rights and defending intellectual property-related claims;

• the costs and timing of future commercialization activities, including product manufacturing, sales, marketing and distribution, for any of our product candidates for which we may receive marketing approval;

• the amount and timing of revenue, if any, received from commercial sales of our product candidates for which we receive marketing approval;

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• the extent to which we acquire or in-license, or monitor or out-license, other medicines and technologies.

Until such time, if ever, as we can generate substantial product revenue, we expect to finance our cash needs primarily through cash on hand and, potentially, collaborations, strategic alliances, licensing arrangements and other nondilutive strategic transactions.

Until such time, if ever, as we can generate substantial product revenue, we expect to finance our cash needs primarily through cash on hand, royalty payments from Servier with respect to U.S.

net sales of TIBSOVO®, a potential milestone payment from Servier if vorasidenib is approved by the FDA and, potentially, collaborations, strategic alliances, licensing arrangements and other nondilutive strategic transactions.

In addition, in connection with potential future strategic transactions, we may pursue opportunistic debt offerings, and equity or equity-linked offerings.

We do not have any committed external source of funds other than the potential milestone and royalty payments that we are eligible to receive under our purchase agreement with Servier.

To the extent that we raise additional capital through the sale of equity or convertible debt securities, the ownership interest of our stockholders will be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect the rights of our

common stockholders.

Debt financing, if available, may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends.

6 unchanged sentences

These contractual obligations are cancelable at any time by us, generally upon prior written notice to the vendor.

During the three months ended March 31, 2021, there were no significant changes to our contractual obligations and commitments described under Management’s Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report on Form 10-K for the year ended December 31, 2020.

During the three and six months ended June 30, 2021, there were no significant changes to our contractual obligations and commitments described under Management’s Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report on Form 10-K for the year ended December 31, 2020.

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 2. Management’s Discussion and Analysis