What changed in this filing

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Item 1. Business

2022-02-24 compared with 2021-02-25 · 336 added, 688 removed, 516 unchanged (66% of the section changed)

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 in the areas of genetically defined diseases, or GDDs, and, until the completion of the sale of our oncology business to 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.

Proposed Sale of Oncology Business to Servier Pharmaceuticals, LLC (Servier)

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

The Purchase Agreement provides for the sale of our commercial, clinical and research-stage oncology portfolio assets and pipeline, or oncology business, for a payment of $1.8 billion in cash at the closing, subject to certain adjustments for working capital of the oncology business at the closing and amounts for a representation and warranty insurance policy, 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.

Food and Drug Administration, or FDA, with an approved label that permits vorasidenib’s use as a single agent for the adjuvant treatment of patients with Grade 2 glioma that have an isocitrate dehydrogenase 1 or 2, or IDH1 or IDH2, mutation (and, to the extent required by such approval, the vorasidenib companion diagnostic test is granted an FDA premarket approval), as well as a royalty of 5% of U.S.

net sales of TIBSOVO® from the close of the transaction through loss of exclusivity of TIBSOVO® and a royalty of 15% of U.S.

net sales of vorasidenib from the first commercial sale of vorasidenib through loss of exclusivity of vorasidenib.

The transaction includes the proposed sale of our oncology business, including TIBSOVO®, our clinical-stage product candidates vorasidenib, AG-270 and AG-636, and our oncology research programs.

Servier will also acquire our co-commercialization rights for Bristol Myers Squibb’s IDHIFA®, the $25.0 million potential milestone payment, and conduct certain clinical development activities within the IDHIFA® development program.

The proposed sale has been approved by our Board of Directors.

The parties’ obligations to consummate the proposed sale are subject to customary conditions, including the approval of the sale by the holders of at least a majority of our outstanding shares of common stock, the expiration or termination of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and the receipt of required regulatory approvals in Germany.

Our Board of Directors may cause us to terminate the Purchase Agreement in order to enter into a definitive agreement relating to a superior proposal, subject to complying with certain conditions set forth in the Purchase Agreement, including giving Servier the opportunity to negotiate changes to the terms of the Purchase Agreement so that such superior proposal no longer constitutes a superior proposal.

If we terminate the Purchase Agreement in order to enter into a definitive agreement with respect to a superior proposal, we may be required to pay to Servier a termination fee of $45 million prior to or concurrently with such termination.

We currently expect to complete the transaction at the end of the first quarter of or in the beginning of the second quarter of 2021, although we cannot assure completion by any particular date, if at all.

If the transaction is completed, we will no longer operate the oncology business and our Board of Directors expects to use the proceeds from the completion of the transaction to focus on advancing our GDD business and returning a significant portion of the proceeds to our stockholders.

Notwithstanding this present expectation, our Board may use the proceeds of the transaction for other purposes for the benefit of us and our stockholders, and in connection therewith may find it necessary or advisable to use portions of the proceeds from the transaction for different or presently non-contemplated purposes.

The discussion of our business in his Annual Report on Form 10-K reflects our business as it exists on the date hereof and does not give effect to the proposed sale of our oncology business to Servier.

If the transaction closes, we will be a smaller, less diversified company with a more limited business concentrated on GDDs.

As a result, we may be more susceptible to changing market conditions, including fluctuations and risks particular to the markets for patients with GDDs, than a more diversified company, which could adversely affect our business, financial condition and results of operations.

In addition, the diversification of our revenues, costs and cash flows will diminish following the transaction, such that our results of operations, cash flows, working capital and financing requirements may be subject to increased volatility and our ability to fund capital expenditures and investments or satisfy other financial commitments may be diminished.

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, while cultivating connections with patient communities, healthcare professionals, partners and colleagues to discover, develop and deliver potential therapies for genetically defined diseases, or GDDs.

Sale of Oncology Business to Servier Pharmaceuticals, LLC (Servier)

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.

Food and Drug Administration, or FDA, with an approved label that permits vorasidenib’s use as a single agent for the adjuvant treatment of patients with Grade 2 glioma that have an isocitrate dehydrogenase 1 or 2 mutation (and, to the extent required by such approval, the vorasidenib companion diagnostic test is granted an FDA premarket approval), as well as a royalty of 5% of U.S.

net sales of TIBSOVO® from the close of the transaction through loss of exclusivity, and a royalty of 15% of U.S.

net sales of vorasidenib from the first commercial sale of vorasidenib through loss of exclusivity.

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, or Celgene, and following the sale Servier is responsible for conducting certain clinical development activities within the IDHIFA® development program.

We recorded income from royalties of approximately $6.6 million on U.S.

net sales of TIBSOVO® by Servier in the gain on sale of oncology business line item within the consolidated statements of operation s for the year ended December 31, 2021.

Business Overview

Hematologic Malignancies and Solid Tumors

Our wholly-owned product, TIBSOVO® (ivosidenib) is an oral targeted inhibitor of the mutated isocitrate dehydrogenase 1, or IDH1 enzyme.

TIBSOVO® is the first and only U.S.

Food and Drug Administration, or FDA-approved therapy for the treatment of adult patients with (i) relapsed or refractory acute myeloid leukemia, or R/R AML, with a susceptible IDH1 mutation as detected by an FDA-approved test (approved by the FDA in July 2018) and (ii) newly diagnosed AML with a susceptible IDH1 mutation as detected by an FDA-approved test who are at least 75 years old or who have comorbidities that preclude use of intensive induction chemotherapy (approved by the FDA in May 2019).

In December 2018, we submitted a Marketing Authorization Application, or MAA, to the European Medicines Agency, or EMA, for TIBSOVO® for the treatment of adult patients with R/R AML with an IDH1 mutation.

In October 2020, we announced the withdrawal of the MAA based on feedback from the EMA's Committee for Medicinal Products for Human Use (CHMP) that the available clinical data from our single arm, uncontrolled Phase 1 trial did not sufficiently support a positive benefit-risk balance for the proposed indication.

In addition, we are currently evaluating ivosidenib in the clinical trials described below.

Our other marketed product is IDHIFA® (enasidenib), an oral targeted inhibitor of the mutated isocitrate dehydrogenase 2, or IDH2 enzyme and the first and only FDA-approved therapy for patients with R/R AML and an IDH2 mutation.

In August 2017, the FDA granted our collaboration partner Celgene approval of IDHIFA® for the treatment of adult patients with R/R AML and an IDH2, mutation as detected by an FDA-approved test.

We were eligible to receive royalties at tiered low-double digit to mid-teen percentage rates on any net sales of IDHIFA® and have exercised our rights to provide up to one-third of the field-based commercialization efforts in the United States.

In June 2018, Celgene submitted an MAA to the EMA for IDHIFA® for IDH2 mutant-positive AML which it subsequently withdrew in December 2019.

On June 11, 2020 we sold our tiered, sales-based royalty rights on worldwide net sales of IDHIFA®, as well as our rights to receive up to $55.0 million in outstanding regulatory milestone payments from Bristol Myers Squibb, or BMS, to Royalty Pharma, or RPI, for $255.0 million.

In addition, we and Celgene are currently evaluating enasidenib in the clinical trials described below.

Our pre-commercial clinical cancer product candidates are vorasidenib and AG-270.

We are developing vorasidenib for the treatment of IDH mutant-positive low grade glioma.

Vorasidenib is an orally available, selective brain-penetrant pan-IDH mutant inhibitor.

We are currently evaluating vorasidenib in the clinical trials described below.

We are developing AG-270 for the treatment of cancers carrying a methylthioadenosine phosphorylase, or MTAP, deletion, which is present in approximately 15 percent of all cancers.

AG-270 is an orally available selective potent inhibitor of methionine adenosyltransferase 2a, or MAT2A.

On March 25, 2020, Celgene declined to exercise its right to opt into co-development and co-commercialization for AG-270, our MAT2A inhibitor development program, under our 2016 global research and collaboration agreement with Celgene, or the 2016 Agreement.

We are currently evaluating AG-270 in a phase 1 dose-escalation and expansion trial in multiple tumor types carrying a MTAP, deletion, described below.

In the first quarter of 2020, we made the decision to cease the internal development of AG-636 for the treatment of hematologic malignancies, including lymphoma due to limited enrollment in our phase 1 trial in lymphoma.

AG-636 is an inhibitor of the metabolic enzyme dihydroorotate dehydrogenase, or DHODH , licensed by us from Aurigene Discovery Technologies Limited, or Aurigene.

Genetically defined diseases

The lead product candidate in our genetically defined disease, or GDD, portfolio, mitapivat, is an activator of both wild-type and mutant pyruvate kinase-R, or PKR, for the potential treatment of hemolytic anemias.

We are currently evaluating mitapivat for the treatment of pyruvate kinase, or PK, deficiency, thalassemia and sickle cell disease, or SCD, in the clinical trials described below.

We are also developing AG-946, a next-generation PKR activator, for the potential treatment of hemolytic anemias and other indications.

In addition to the aforementioned development programs, we are seeking to advance a number of early-stage discovery programs in our focus areas of GDDs, malignant hematology and solid tumors based on our scientific leadership in the field of cellular metabolism and adjacent areas of biology.

Our approach to drug discovery involves collaboration across our core capabilities in bioinformatics, functional genomics, proteomics and metabolomics.

The lead product in our genetically defined disease, or GDD, portfolio, PYRUKYND® (mitapivat), is an activator of both wild-type and a variety of mutant pyruvate kinase, or PK, enzymes, for the potential treatment of hemolytic anemias.

In February 2022, the FDA approved PYRUKYND® for the treatment of hemolytic anemia in adults with pyruvate kinase (PK) deficiency in the United States and we expect to commercially launch PYRUKYND® in the first quarter of 2022.

In June 2021, we submitted a marketing authorization application, or MAA, to the EMA for PYRUKYND® for the treatment of adults with PK deficiency in the European Union.

The MAA has passed validation, and the regulatory review process is ongoing.

In addition, we are currently evaluating PYRUKYND® for the treatment of α- and β-thalassemia and sickle cell disease, or SCD, in the ongoing clinical trials described below and we intend to evaluate PYRUKYND® in pediatric patients with PK deficiency in the planned clinical trials described below.

We are also developing AG-946, a novel, next-generation PK activator, for the potential treatment of hemolytic anemias and other indications, including SCD and anemia associated with low- to intermediate-risk myelodysplastic syndrome, or L-IR MDS.

In addition to the aforementioned development programs, we foster a productive research engine and are seeking to advance multiple novel, investigational therapies in clinical and preclinical development in our focus area of GDDs, based on our scientific leadership in the field of cellular metabolism and adjacent areas of biology.

With nearly 15 years of focused study in cellular metabolism, we have a deep understanding of this biology, which is involved in the healthy functioning of nearly every system in the body.

Building on this expertise, our focus on GDDs has enabled expansion of our research and promising biological insights based on highly translatable work from murine and cell-based models recapitulating human disease.

Our laboratory capabilities are specialized to enable complex GDD studies.

Our approach to drug discovery involves collaboration across all parts of our research, development and commercial teams, and favors targets that may impact an array of diseases or mutations, yielding a potential “pipeline within a mechanism”.

We leverage these capabilities to identify under-researched targets, validate these targets using genetic and chemical approaches, and advance them rapidly into and through drug discovery.

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Our Strategy and Long-term Goals

As part of our long term strategy, we have developed and articulated a strategic vision that delineates our expected evolution in light of our expected singular focus on accelerating and expanding our GDD business and our proposed sale of our oncology business to Servier.

As part of our long-term strategy, we have developed and articulated a strategic vision that delineates our expected evolution in light of our singular focus on accelerating and expanding our GDD business.

We aim to build a sustainable, multi-product company, based on our expertise in cellular metabolism and adjacent biology, that creates differentiated, small molecule medicines for patients.

Key elements of our strategy include:

• Building a preeminent independent biopharmaceutical company by aggressively pursuing the discovery, development and commercialization of novel medicines to transform the lives of patients.

• Maintaining our focus on bio-marker driven drug discovery and development for defined patient subsets with high unmet need.

• Collaborating closely with the FDA and other regulatory bodies to aggressively pursue early registration potential for our product candidates.

Specifically, our plan includes (i) obtaining regulatory approvals for mitapivat in PK deficiency, thalassemia and SCD, (ii) advancing at least five internally discovered molecules in clinical development spanning ten indications, (iii) fostering a robust research pipeline enabling us to submit IND applications every 12-24 months, and (iv) funding our operations through major catalysts as we approach cash-flow positivity without the need for additional follow-on equity offerings.

Our Guiding Principles

We are driven by a disciplined focus on developing medicines that transform the lives of patients.

We maintain a culture of high integrity that embraces the following guiding principles, which we believe will provide long-term benefits for all our stakeholders:

• Follow the science based on our chosen focus and do what is right for patients.

• Maintain a culture of incisive decision-making driven by deep scientific interrogation and respectful irreverence.

• Foster a collaborative spirit that includes all employees regardless of function or level.

• Leverage deep strategic relationships with our academic and commercial partners to continuously improve the quality of our discovery and development efforts.

Our five-year vision includes (i) obtaining regulatory approvals for PYRUKYND® in PK deficiency, thalassemia and SCD, (ii) advancing at least five internally discovered molecules in clinical development spanning at least ten indications, (iii) fostering a robust research pipeline enabling us to submit investigational new drug, or IND, applications every 12-24 months, and (iv) achieving cash-flow positivity.

Our Core Values

Our company’s values cultivate an environment that promotes collaboration, contribution, engagement and high regard for others’ points of view.

This foundation helps our people push the boundaries of our science and create transformative medicines, which we believe will provide long-term benefits for all our stakeholders.

Our connections – with each other and with external parties – fuel the development of new therapies for the people who need them.

Our core values include:

We set the bar high for ourselves, and we keep working to raise it.

At our core, we’re guided by a deep respect for the science and a commitment always to act with the utmost integrity.

• Come Together:

We grow supportive relationships with patients and caregivers.

We build trusting connections with collaborators.

Together, we make a bigger impact than we ever could alone.

• Embrace Differences:

Because opportunities and insights come from anywhere and anyone, we honor all voices and encourage honest dialogue.

We learn equally from success and failure, bringing an open mind and a flexible approach to everything we do.

• Bring Your Whole Self:

We know we make the biggest impact when each of us can contribute and lead in our own way.

• Blaze New Trails:

We ask the tough questions that can lead to groundbreaking scientific advances.

We nurture a creative mindset and resourceful approach that spark life-changing innovations for patients.

Cellular Metabolism

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Enzymes catalyze quick and efficient reactions, serve as key regulators of metabolic pathways, and respond to changes in the cell’s environment or signals from other cells.

We believe our deep understanding of metabolic pathways within normal cells enables us to identify altered metabolic pathways within abnormal cells such as in rapidly-proliferating GDDs, hematologic malignancies, and solid tumors.

Cancer and cancer metabolism

Cancer is a disease characterized by unregulated cell growth.

Cancer typically develops when the repair of genetic material in normal cells begins to fail and genes that regulate cell growth become altered.

Carcinogens, or cancer causing agents, such as radiation, chemicals and hormones, can trigger changes to the genetic material of a cell, increasing the rate of new genetic alterations and thus promoting cancer.

Cancer cells can spread to other areas of the body, or metastasize, and form tumors, which can destroy normal tissue or organs.

Risk factors for cancer include family history, age, diet, and exogenous factors, such as exposure to ultraviolet sunlight and smoking.

Cancers can be classified in stages to document disease severity, measured in stages of I to IV, generally based on tumor size, involvement of lymph nodes, and metastases.

The most common methods of treating patients with cancer are surgery, radiation and drug therapy.

A cancer patient often receives treatment with a combination of these methods.

These treatment regimens are often associated with severe side effects, including fatigue, infection, nausea and vomiting and pain.

Surgery and radiation therapy are particularly effective in patients in whom the disease is localized.

Physicians generally use systemic drug therapies in situations in which the cancer has spread beyond the primary site or cannot otherwise be treated through surgery.

The goal of drug therapy is to kill cancer cells or to damage cellular components required for rapid growth and survival of cancer cells.

Historically, cancer drug development focused on design of cytotoxic drugs, which kill rapidly proliferating cells and are efficacious because of the unregulated cell growth that is characteristic of cancers.

These drugs such as Cytoxan ® and Adriamycin ® have been effective in the treatment of some cancers, and remain in use today, but they act in an indiscriminate manner, killing healthy as well as cancerous cells.

Due to their mechanism of action, many cytotoxic drugs have a narrow dose range, above which the toxicity causes unacceptable or even fatal levels of damage, and below which the drugs are not effective in eradicating cancer cells.

In many cases, drug therapy entails the administration of several different drugs, known as combination chemotherapy.

Over the past several decades, drug therapy has evolved from non-specific drugs that kill both healthy and cancerous cells to drugs that target specific molecular pathways involved in cancer.

These newer therapies include:

targeted therapies that inhibit the activity of specific enzymes that are mutated in specific subsets of cancers;

drugs that stimulate the normal immune system to attack the cancer, also known as immuno-oncology;

chimeric antigen receptor and T cell receptor technologies to genetically engineer T cells to recognize and kill cancer cells;

antibody drug conjugates, for example Kadcyla ® , that carry a powerful chemotherapy payload that is only released into the cancer cell;

and drugs that target the changes in gene activity that occurs in cancer cells, also known as epigenetics.

Emerging areas

Next generation targeted therapies.

Targeted therapies, where the therapy is effective in a discrete subset of cancer patients who have specific cancer-causing mutations, have become an important component of cancer therapeutics.

These drugs are designed to attack oncogenes, which are targets that are genetically altered in cancer cells, where the genetic alteration in the target causes uncontrolled growth of cancer cells.

Examples of effective oncogene-targeted therapies include Herceptin®, Avastin® and Zelboraf®.

Initial oncogene-targeted therapies were directed against mutant forms of cell surface receptors or enzymes

involved in cellular signaling and cell growth control.

Recently, the breadth of targets that have been drugged has been expanded to include other classes of mutant enzymes, including epigenetic enzymes, such as genetically altered forms of EZH2, and metabolic enzymes, such as genetically altered forms of IDH1 and IDH2.

As a class, oncogene-targeted therapies have proven effective in treating patients with the appropriate oncogene mutation, but only a fraction of cancer patients have mutations in these readily druggable targets.

Targeted therapies for patients that do not currently benefit from oncogene-targeted therapies are a critical need, and we believe that synthetic lethal strategies are an important emerging approach to this problem.

Synthetic lethal targets are targets that are more essential for the growth or survival of cancers with genetic alteration in a gene other than the target itself.

In synthetic lethal approaches, the genetic alteration in the cancer creates a vulnerability to a second target.

Poly (ADP-ribose) polymerase, or PARP, inhibitors in breast cancer gene, or BRCA-mutant cancers are an example of a synthetic lethal-targeted therapy.

We believe that there are additional druggable targets that have synthetic lethal relationships with prevalent genetic alterations in cancer, and we continue to apply our research platform to identify and drug such targets, including MTAP-deleted cancers.

Synthetic lethal targets are an important emerging class of precision medicines.

Next generation immuno-oncology therapies.

In addition to unregulated growth pathways in the cells within a tumor, the growth and survival of the tumor also requires that the tumor is not recognized and attacked by the patient’s immune system.

Tumors employ a variety of strategies to avoid detection and killing by the immune system, and therapies that interfere with these strategies have recently been shown to be effective in multiple types of cancer.

These therapies, such as Keytruda®, Opdivo® and Yervoy®, known as ‘immune checkpoint’ therapies, block the inactivation of endogenous T cells and allow them to attack the tumor.

While highly effective in some patients, these therapies work in a minority of all cancers.

A critical emerging area is the discovery of next-generation immuno-oncology therapies that, alone or in combination, will enhance immune-mediated killing of tumors.

There is increasing evidence that there are additional immune checkpoints that have not yet been discovered or have not yet been therapeutically targeted.

This includes evidence that specific metabolites can act locally in the tumor microenvironment as immuno-suppressants.

We are leveraging our capabilities in bioinformatics, functional genomics, proteomics and metabolomics to identify, validate and drug novel immuno-oncology targets in metabolism and adjacent biology areas, and our efforts in this field were governed by our 2016 Agreement, which expired in May 2020, described in more detail below.

We believe our deep understanding of metabolic pathways within normal cells enables us to identify altered metabolic pathways within abnormal cells.

Genetically defined diseases

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As these conditions are by nature congenital and frequently hereditary, they are often detected either by genetic testing or phenotypic diagnosis in newborns or in early childhood.

A typical course of many such diseases is inexorable deterioration until death or to significant irreversible life-long disability and or suffering.

A typical course of many such diseases is inexorable deterioration until death or significant irreversible life-long disability and/or suffering.

Many of these diseases carry severe or life-threatening features.

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Many GDDs are likely to be under-diagnosed given the lack of available therapies or diagnostics, the rarity of the condition, or limited understanding of how the disease genetics relate to disease phenotype.

Through the study or GDDs, and other conditions, it has been shown that small molecule therapies able to specifically correct genetic deficiencies and their associated organ dysfunction may have application in conditions that arise independent of patient genetics but for which identical organ dysfunction occurs.

For example, a treatment for an hereditary hemolytic anemia may find direct application in the treatment of a secondarily acquired hemolytic anemia.

Through the study of GDDs, and other conditions, it has been shown that small molecule therapies able to specifically correct genetic deficiencies and their associated organ dysfunction may have application in conditions that arise independent of patient genetics but for which identical organ dysfunction occurs.

For example, a treatment for a hereditary hemolytic anemia may find direct application in the treatment of a secondarily acquired hemolytic anemia.

Current treatment options for these disorders are generally limited.

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Despite the promising progress made for patients with a small group of these diseases, the majority of patients with GDDs have few therapeutic options, and the standard of care for many such conditions is palliative, meaning treatment of symptoms with no effect on underlying disease mechanisms.

Our goal is to develop mechanistically specific, small molecule approaches with the potential to have disease modifying and long

term rather than palliative effects.

Our goal is to develop mechanistically specific, small molecule approaches with the potential to have disease modifying and long-term rather than palliative effects.

We are taking a novel small molecule approach to correct the defects within diseased cells with a goal of developing transformative medicines for patients.

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• a rigorous validation of the target, based upon a detailed mutational, structural, cell biological and biochemical analysis, to determine if a small molecule approach to correcting or significantly modifying the disease is both safe and feasible in newborn to elderly patients.

Precision Medicine Approach

We will generally progress our drug candidates forward into phase 1 clinical trials if we have the ability to select patients who are most likely to respond to a given therapy based on biomarkers, for example, genetic or metabolic markers.

To increase the probability of discovering and developing such precision medicines, we utilize translational science approaches throughout the research process, and we typically begin our efforts to identify novel targets by first specifying a biomarker-identifiable subset of disease with a high unmet need, and then conducting target identification and validation studies to identify targets that will be particularly well suited to that biomarker-identifiable population.

In other words, we begin our research with specific, defined subsets of patients in mind.

While many factors are considered critical to maximize the probability of technical success in the drug development process, perhaps none is more important than identifying highly specific and selective molecules aimed at the best possible targets for therapy coupled with the patients most likely to respond to that therapy.

Our goal is to develop increasing confidence in the target and the patient population prior to entering human clinical trials, and then initiate those first human trials in a patient population that has been selected based on target dependence using a genetic marker and/or biomarker.

This approach, known as personalized or precision medicine, is used in the industry to lead to the potential for clear proof of concept in early human trials, along with the potential for accelerated approval.

Our Development Programs

We believe that leveraging our core capabilities in cellular metabolism combined with a precision medicine approach has significantly enhanced our ability to build a research and development engine that is focused in our therapeutic areas.

This engine has permitted us to discover proprietary first-in-class orally-available small molecules as potential lead product candidates for each of several novel programs in development.

All of our lead programs focus on diagnostically identified patient populations with the potential for establishing early clinical proof of concept and accelerated approval paths.

The following summarizes our products and most advanced product candidates as of February 1, 2021, each of which is described in further detail below.

As noted above, upon the completion of the sale of our oncology business to Servier we will have a singular focus on accelerating and expanding our development programs in GDDs.

Targeting Mutated IDH for the Treatment of Cancer

The IDH protein is a critical enzyme in the citric acid cycle, also known as the tricarboxylic acid cycle or Krebs cycle.

The Krebs cycle is centrally important to many biochemical pathways and is one of the earliest established components of cellular metabolism.

The Krebs cycle converts an essential cellular metabolite called isocitrate into another metabolite, alpha-ketoglutarate (a-ketoglutarate), both of which are critically important for cellular function and the creation of energy.

In humans, there are three forms of the IDH enzyme, IDH1, IDH2, and IDH3, but only IDH1 and IDH2 appear to be mutated in cancers.

IDH1 and IDH2 catalyze the same reaction but in different cellular compartments:

IDH1 is found in the cytoplasm of the cell and IDH2 in the mitochondria.

Tumor cells are generally observed to carry either an IDH1 or IDH2 mutation.

Using our proprietary metabolic platform, we and our collaborators examined the mutated pathway and discovered that the mutated IDH enzymes had adopted a novel “gain of function” activity that allows only the mutated IDH enzyme to produce large amounts of a metabolite called 2-hydroxygluturate, or 2HG.

We have shown that the excessive levels of the metabolite 2HG produced by the tumor fuel cancer growth and survival via multiple cellular changes that lead to a block in cell maturation, or differentiation.

We have also shown that inhibition of these mutated proteins can lead to clinical benefit for the

subset of cancer patients whose tumors carry these mutations.

By reducing elevated 2HG levels, our IDH inhibitors reverse the block in cellular differentiation, allowing tumorous cells to differentiate into normally functioning cells in patients with AML.

We have identified selective development candidates that separately target and inhibit the mutated forms of IDH1 and IDH2.

To date, our clinical data with ivosidenib and enasidenib, our lead inhibitors of mutant IDH1 and IDH2, respectively, demonstrate evidence of cellular differentiation, normalization of cell counts and mutational clearance in the bone marrow and blood, a mechanism of response that is consistent with preclinical studies, including substantial reduction of plasma 2HG levels.

This targeted differentiation effect is distinct from that seen with traditional cytotoxic chemotherapeutics, commonly used to treat cancer, which lead to cell death.

Our goal is to establish our IDH mutation inhibitors as a cornerstone of AML therapy spanning all treatment lines, and to leverage our understanding of IDH mutation inhibition to develop our IDH mutation inhibitors to treat solid tumors such as low grade glioma and cholangiocarcinoma.

To date, IDH1 and IDH2 mutations have been found to be prevalent in a broad range of advanced hematologic malignancies and solid tumors.

The following table summarizes our current estimates on the occurrence of IDH1 and IDH2 mutations in certain hematologic and solid tumors.

We believe our estimates may expand as more cancer treatment centers screen for these IDH mutations.

Mutation Indications % with IDH mutations

IDH1 AML ~6-10%

Cholangiocarcinoma ~10-14%

Low grade glioma ~80%

Myelodysplastic Syndromes (MDS) / Myeloproliferative neoplasms (MPN) ~3%

IDH2 AML ~9-13%

Based on literature analysis;

estimates will continue to evolve with additional future data.

Ivosidenib (mutant IDH1 inhibitor)

We are developing ivosidenib for the treatment of IDH1 mutant-positive cancers.

Ivosidenib is an orally available, selective, potent inhibitor of the mutated IDH1 protein, making it a highly targeted therapy for the treatment of patients with cancers that harbor IDH1 mutations.

We hold worldwide development and commercial rights to ivosidenib and have licensed certain development and commercialization rights to ivosidenib in mainland China, Hong Kong, Macau, Singapore and Taiwan to CStone, pursuant to an exclusive license agreement with CStone, or the CStone Agreement, discussed more fully below.

We are required to fund the future development and commercialization costs related to this program with the exception of development and commercialization activities of CStone under the CStone Agreement.

Mutations in IDH1 have been identified in difficult to treat hematologic and solid tumor cancers, including AML, MDS, cholangiocarcinoma and low grade glioma, where both the treatment options and prognosis for patients are poor.

The FDA has approved TIBSOVO® for the treatment of adult patients with R/R AML and a susceptible IDH1 mutation and for the treatment of patients with newly diagnosed AML with a susceptible IDH1 mutation as detected by an FDA-approved test who are at least 75 years old or who have comorbidities that preclude use of intensive induction chemotherapy.

In December 2018, we submitted a MAA to the EMA for TIBSOVO® for the treatment of adult patients with IDH1 mutant-positive R/R AML.

In October 2020, we withdrew the MAA based on feedback from the EMA's CHMP that the available clinical data from our single arm, uncontrolled Phase 1 trial did not sufficiently support a positive benefit-risk balance for the proposed indication.

The FDA granted orphan drug designation for ivosidenib for the treatment of cholangiocarcinoma, granted Breakthrough Therapy designation for ivosidenib in combination with azacitidine for the treatment of newly diagnosed AML with an IDH1 mutation in adult patients who are at least 75 years old or who have comorbidities that preclude use of intensive induction chemotherapy, and granted Breakthrough Therapy designation for ivosidenib for the treatment of adult patients with relapsed or refractory MDS with a susceptible IDH1 mutation as detected by an FDA-approved test.

We continue to evaluate ivosidenib in the following clinical trials:

Hematologic Malignancies

• A phase 1b, multicenter, international, open-label clinical trial, to evaluate safety and clinical activity of ivosidenib or enasidenib in combination with induction and consolidation therapy in patients with newly diagnosed AML with an IDH1 or IDH2 mutation who are eligible for intensive chemotherapy.

This trial has completed enrollment.

• A phase 1/2 frontline combination clinical trial, conducted by Celgene, of either ivosidenib or enasidenib in combination with VIDAZA® (azacitidine) in newly diagnosed AML patients not eligible for intensive chemotherapy.

The trial has completed enrollment.

• AGILE, a global, registration-enabling phase 3 clinical trial, combining ivosidenib and VIDAZA® (azacitidine) in newly diagnosed AML patients with an IDH1 mutation who are ineligible for intensive chemotherapy.

The trial is enrolling patients.

Although we experienced disruptions related to the COVID-19 pandemic, we expect to complete enrollment in 2021.

• HO150/AMLSG29, an intergroup sponsored, global, registration-enabling phase 3 trial, supported in collaboration with Celgene, combining ivosidenib or enasidenib with standard induction and consolidation chemotherapy in frontline AML patients with an IDH1 or IDH2 mutation.

The trial is currently enrolling patients, although we experienced disruptions related to the COVID-19 pandemic.

• A phase 1 multicenter, open-label, dose-escalation and expansion clinical trial, designed to assess its safety, clinical activity and tolerability as a single agent in patients with advanced hematologic malignancies with an IDH1 mutation.

The trial reopened enrollment of its relapsed or refractory MDS arm and although we experienced disruptions related to the COVID-19 pandemic, we expect to complete enrollment in 2021.

The trial has completed enrollment.

• ClarIDHy, a registration-enabling phase 3, multicenter, randomized, double-blind, placebo-controlled clinical trial of ivosidenib in previously-treated patients with nonresectable or metastatic cholangiocarcinoma with an IDH1 mutation.

The trial has completed enrollment.

The primary endpoint of the trial of progression-free survival was met and, although we experienced disruptions related to the COVID-19 pandemic, we expect to file an sNDA with the FDA for TIBSOVO® in cholangiocarcinoma in the first quarter of 2021.

• A phase 1 multi-center, open-label clinical trial of ivosidenib in patients with advanced IDH1 mutant-positive solid tumors, including glioma.

The trial has completed enrollment.

• A perioperative study with ivosidenib and vorasidenib in low grade glioma to further investigate their effects on brain tumor tissue.

The trial has completed enrollment.

Enasidenib (mutant IDH2 inhibitor)

Celgene, pursuant to our collaboration with Celgene focused on cancer metabolism, or the 2010 Agreement, is developing enasidenib for the treatment of IDH2 mutant-positive hematologic malignancies.

Enasidenib is an orally available, selective, potent inhibitor of the mutated IDH2 protein, making it a highly targeted therapeutic candidate for the treatment of patients with cancers that harbor IDH2 mutations, including those with AML, who have a historically poor prognosis.

The FDA has granted Celgene approval of IDHIFA® for the treatment of adult patients with R/R AML and an IDH2 mutation.

Celgene maintains worldwide development and commercial rights to enasidenib and will fund the future development and commercialization costs related to this program.

Under the 2010 Agreement, we were eligible to receive royalties at tiered low-double digit to mid-teen percentage rates on any net sales of IDHIFA® and exercised our rights to provide up to one-third of the field-based commercialization efforts in the United States.

On June 11, 2020, we sold our tiered, sales-based royalty rights on worldwide net sales of IDHIFA® (enasidenib), as well as our rights to receive up to $55.0 million in outstanding regulatory milestone payments from BMS, to RPI for $255.0 million.

Under the 2010 Agreement, we are eligible to receive a $25.0 million potential milestone payment for the enasidenib program upon achievement of a specified ex-U.S.

commercial milestone event, as well as reimbursement for costs incurred for our co-commercialization efforts and development activities.

In addition to the clinical trials discussed above, enasidenib is also being evaluated by Celgene in IDHENTIFY, an international phase 3, multi-center, open-label, randomized clinical trial designed to compare the efficacy and safety of enasidenib versus conventional care regimens in patients 60 years or older with IDH2 mutant-positive AML that is refractory to or relapsed after second- or third-line therapy.

This trial has completed enrollment.

In August 2020, BMS announced that the trial did not meet the primary endpoint of overall survival in patients with IDH2 mutant positive AML.

brain penetrant pan-IDH program

We are developing vorasidenib for the treatment of IDH mutant-positive low grade glioma.

Vorasidenib is an orally available, selective, brain-penetrant, pan-IDH mutant inhibitor.

Celgene is eligible to receive royalties from us at a low single-digit percentage rate on worldwide net sales of products containing vorasidenib.

We continue to evaluate vorasidenib in the following clinical trials:

• A phase 1 multi-center, open-label clinical trial of vorasidenib in patients with advanced IDH1 or IDH2 mutant-positive solid tumors, including glioma.

The trial has completed enrollment.

• The above mentioned perioperative study with ivosidenib and vorasidenib in low grade glioma to further investigate their effects on brain tumor tissue.

The trial has completed enrollment.

• INDIGO, a registration-enabling phase 3 clinical trial of vorasidenib in low-grade (grade 2) glioma with an IDH1 or IDH 2 mutation.

The trial is enrolling patients, although we experienced disruptions related to the COVID-19 pandemic.

PKR Activator Program

We believe that leveraging our core capabilities in cellular metabolism combined with our singular focus on GDDs has significantly enhanced our ability to build a rich and sustainable research and development engine, which has permitted us to discover new therapeutic approaches and multiple proprietary first-in-class orally available small molecules.

The following summarizes our approved product and most advanced clinical product candidates as of February 17, 2022, each of which is described in further detail below.

PK Activator Program

PK is the enzyme involved in the second to last reaction in glycolysis — the conversion of glucose into lactic acid.

This enzyme has several tissue-specific isoforms (PKR, PKL, PKM1 and PKM2).

PKR is the isoform of PK that is present in red blood cells, or RBCs.

Pyruvate kinase-R, or PKR, is the isoform of PK that is present in red blood cells, or RBCs.

Mutations in PKR cause defects in RBC glycolysis and lead to a hematological GDD known as PK deficiency.

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PK deficiency is a rare genetic disorder and disease understanding is still evolving.

We estimate that the prevalence of PK deficiency is between approximately 3,000 and 8,000 individuals in the United States and European Union, and we believe that the disease is likely under-diagnosed.

We estimate that the prevalence of PK deficiency is between approximately 3,000 and 8,000 individuals in the United States and the EU5 and we believe that the

disease is likely under-diagnosed.

PK deficiency leads to a shortened life span for RBCs and is the most common form of non-spherocytic hemolytic anemia in humans.

There is no currently known unique ethnic or geographic representation of the disease.

There is currently no known unique ethnic or geographic representation of the disease.

The disease manifests by mild to severe forms of anemia caused by the excessive premature destruction of RBCs.

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Thalassemia is a hereditary blood disorder in which mutations in the α- or β-globin chains of hemoglobin lead to globin chain precipitates and aggregates that disturb the RBC membrane and induce oxidative stress, leading to decreased survival of RBC precursors, ineffective erythropoiesis, hemolysis of mature RBCs, and anemia.

We estimate that the prevalence of thalassemia is between 18,000 and 23,000 individuals in the United States and European Union.

We estimate that the prevalence of thalassemia is between 18,000 and 23,000 individuals in the United States and EU5.

In addition to anemia, patients with thalassemia can experience enlarged spleen, bone deformities, iron overload, fatigue, and infection.

Current treatment strategies for thalassemia include blood transfusion and bone marrow transplantation, as well as recently improved therapies such as Reblozyl® for the treatment of beta thalassemia.

Current treatment strategies for thalassemia include blood transfusion and bone marrow transplantation, as well as recently improved therapies such as Reblozyl® for the treatment of thalassemia.

We believe that the activation of wild-type PKR may increase ATP production and improve red cell fitness and survival of thalassemic RBCs, by increasing the clearance globin chain aggregates through ATP-dependent proteolytic mechanisms.

In December 2019, we announced preliminary clinical data from our ongoing phase 2 trial of mitapivat in patients with non-transfusion-dependent α- and β-thalassemia demonstrating proof of concept that

activation of wild-type PKR has the potential to convey clinical benefit in thalassemia by increasing hemoglobin levels and reducing hemolysis in trial subjects.

Sickle Cell Disease

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Reducing the level of 2,3-DPG in RBCs would increase the oxygenation state of hemoglobin to reduce sickling, while increasing the levels of ATP may improve RBC hydration status which would also inhibit the sickling process.

PKR activator

We are developing mitapivat for the treatment of PK deficiency and other hemolytic anemias such as thalassemia and SCD.

Mitapivat is an orally available small molecule and a potent activator of the wild-type and mutated PKR enzymes.

To date, we have demonstrated in clinical trials that treatment with mitapivat can lead to durable sustained increases in hemoglobin in patients with amenable mutations in the PKR gene and a statistically significant and clinically meaningful reduction in transfusion burden in regularly-transfused patients with PK deficiency, and we have observed early signs of improvements in hemoglobin in thalassemia patients who have wild-type PKR.

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

Mitapivat has been granted orphan drug designation for the treatment of PK deficiency by the FDA and the EMA.

Additionally, mitapivat has received orphan drug designation from the FDA for the treatment of thalassemia and sickle cell disease.

We are evaluating mitapivat in the following clinical trials:

• DRIVE PK, a global phase 2, first-in-patient, open-label safety and efficacy clinical trial of mitapivat in adult, transfusion-independent patients with PK deficiency.

This trial has completed enrollment.

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

The trial has completed enrollment.

Although we experienced disruptions related to the COVID-19 pandemic, we reported in January 2021 that this trial met its primary endpoint of a statistically significant and clinically meaningful reduction in transfusion burden.

• 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.

Although we experienced disruptions related to the COVID-19 pandemic, 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 regarding patient reported outcomes.

• 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.

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

The trial is ongoing and enrolling patients, although the NIH experienced disruptions related to the COVID-19 pandemic.

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 EU in mid-2021, with a potential 2022 commercial launch in both geographies.

We will continue to grow our US commercial infrastructure and evaluate all options for the commercialization and continued development of mitapivat outside of the United States in order to maximize the benefit to patients and value to our shareholders, including through exploring potential partnership opportunities.

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.

We expect to initiate a phase 2/3 trial of mitapivat in patients with SCD by year-end 2021.

Next-Generation PKR Activator

We are developing AG-946, a next-generation PKR activator, for the potential treatment of hemolytic anemias.

Low- to Intermediate-Risk MDS

MDS is a heterogeneous group of rare hematological malignancies characterized by dysfunctional hematopoiesis (or formation of blood cells) , progressive cytopenia (or lower-than-normal number of blood cells) and an increased risk of progression to acute myeloid leukemia.

The most common type of MDS is L-IR MDS, but many existing therapies and therapies under development focus on high risk MDS.

Among patients with L-IR MDS, which is less likely to progress to acute myeloid leukemia, the primary concern is symptomatic anemia.

We estimate that the prevalence of L-IR MDS in the United States is approximately 50,000 individuals.

We believe that activation of wild-type PK in L-IR MDS patients may improve deficient PK activity in MDS erythrocytes.

Current treatment options for L-IR MDS often require in-office visits and transfusions, and erythropoiesis stimulating agents and Reblozyl® (luspatercept-aamt) are the only approved therapies to treat anemia in a subset of patients.

Despite approved therapies in subsets of patients, L-IR MDS associated anemia remains a disease with high unmet medical need.

PYRUKYND® (m itapivat):

First-in-Class PK Activator

We are developing PYRUKYND® for the treatment of PK deficiency and other hemolytic anemias such as thalassemia and SCD.

PYRUKYND® is an orally available small molecule and a potent activator of the wild-type and mutated PKR enzymes.

To date, we have demonstrated in clinical trials that treatment with PYRUKYND® can lead to durable sustained increases in hemoglobin in patients with amenable mutations in the PKR gene and a statistically significant and clinically meaningful reduction in transfusion burden in regularly transfused patients with PK deficiency, and we have observed in clinical trials of PYRUKYND® durable improvements in hemoglobin concentration and markers of hemolysis and ineffective erythropoeiesis in both α- and β- halassemia patients and reductions in 2,3-DPG and increases in ATP in SCD patients.

In February 2022, the FDA approved PYRUKYND® for the treatment of hemolytic anemia in adults with pyruvate kinase (PK) deficiency in the United States.

In June 2021 , we submitted a marketing authorization application, or MAA, to the EMA for the treatment of adults with PK deficiency the European Union.

The MAA has passed validation, and the regulatory review process is ongoing.

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

PYRUKYND® has been granted orphan drug designation for the treatment of PK deficiency by the FDA and the EMA.

Additionally, PYRUKYND® has received orphan drug designation from the FDA for the treatment of thalassemia and sickle cell disease.

We have built our US commercial infrastructure to support the commercial launch of PYRUKYND in the US and continue to evaluate all options for the commercialization and continued development of PYRUKYND® outside of the United States in order to maximize the benefit to patients and value to our shareholders, including through exploring potential partnership opportunities.

We are evaluating PYRUKYND® in the following clinical trials:

• ENERGIZE, a phase 3, double-blind, randomized, placebo-controlled multicenter study evaluating the efficacy and safety of PYRUKYND® as a potential treatment for adults with non-transfusion-dependent α- or β-thalassemia, defined as ≤5 RBC units during the 24-week period before randomization and no RBC transfusions ≤8 weeks before providing informed consent or during the screening period.

The primary endpoint of the trial is percentage of patients with hemoglobin response, defined as a ≥1.0 g/dL increase in average hemoglobin concentration from Week 12 through Week 24 compared with baseline.

Secondary endpoints include markers of hemolysis and ineffective erythropoiesis, as well as patient-reported outcome measures.

This trial is enrolling patients, and we expect to enroll a meaningful portion of the patients by the end of 2022.

• ENERGIZE-T, a phase 3, double-blind, randomized, placebo-controlled multicenter study evaluating the efficacy and safety of PYRUKYND® as a potential treatment for adults with transfusion-dependent α- or β-thalassemia, defined as 6 to 20 RBC units transfused and ≤6-week transfusion-free period during the 24-week period before randomization.

The primary endpoint of the trial is percentage of patients with transfusion reduction response, defined as a ≥50% reduction in transfused RBC units with a reduction of ≥2 units of transfused RBCs in any consecutive 12-week period through Week 48 compared with baseline.

Secondary endpoints include additional transfusion reduction measures and percentage of participants with transfusion-independence.

This trial is enrolling patients, and we expect to enroll a meaningful portion of the patients by the end of 2022.

• RISE UP, a phase 2/3 study evaluating the efficacy and safety of PYRUKYND® in SCD patients who are 16 years of age or older, have had between two and 10 sickle cell pain crises in the past 12 months, and have hemoglobin within the range of 5.5 to 10.5 g/dL during screening.

The phase 2 portion of the trial, which has initiated, includes a 12-week randomized, placebo-controlled period in which participants will be randomized in a 1:1:1 ratio to receive 50 mg PYRUKYND® twice daily, 100 mg PYRUKYND® twice daily or matched placebo.

The primary endpoints are hemoglobin response, defined as ≥1 g/dL increase in average hemoglobin concentration from Week 10 through Week 12 compared to baseline, and safety.

These data will be used to establish a clear dosing paradigm for the phase 3 portion.

The phase 3 portion includes a 52-week randomized, placebo-controlled period in which participants will be randomized in a 2:1 ratio to receive the recommended PYRUKYND® dose level or placebo.

The primary endpoints are hemoglobin response, defined as ≥1 g/dL increase in average hemoglobin from baseline to Week 52, and annualized rate of sickle cell pain crises.

Participants who complete either the phase 2 or phase 3 portion will have the option to move into a 216-week open-label extension period to continue to receive PYRUKYND®.

The phase 2 portion of this trial is enrolling patients, and we expect to complete enrollment in the phase 2 portion of the trial by the end of 2022.

• An extension study evaluating the long-term safety, tolerability and efficacy of treatment with PYRUKYND® in patients from ACTIVATE and ACTIVATE-T, our completed pivotal trials of PYRUKYND® in not regularly transfused and regularly transfused patients with PK deficiency.

• An extension study evaluating the long-term safety, tolerability and efficacy of treatment with PYRUKYND® in patients from DRIVE PK, our completed global phase 2, first-in-patient, open-label safety and efficacy clinical trial of PYRUKYND® in adult, not regularly transfused patients with PK deficiency.

• An extension study evaluating the safety, tolerability and efficacy of treatment with PYRUKYND® in patients from our completed phase 2, open-label safety and efficacy clinical trial of PYRUKYND® in adults with not-transfusion-dependent α- and β-thalassemia.

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

The core trial period has completed.

The long-term extension study is ongoing.

In June 2020, clinical proof of concept was established based on a preliminary analysis of the data from this trial.

• In collaboration with UMC Utrecht, or UMC, we are evaluating PYRUKYND® in patients with SCD pursuant to an investigator sponsored trial agreement.

The trial is ongoing and enrolling patients, although UMC experienced disruptions related to the COVID-19 pandemic.

We expect to initiate two phase 3 trials of PYRUKYND®, ACTIVATE-kids and ACTIVATE-kidsT, in not regularly transfused and regularly transfused pediatric patients with PK deficiency in mid-2022.

Novel, Next-Generation PK Activator

We are developing AG-946, a novel, next-generation PKR activator, for the potential treatment of hemolytic anemias.

We are evaluating AG-946, in a phase 1 trial of AG-946 in healthy volunteers and in patients with SCD.

The trial is currently enrolling healthy volunteers, although we experienced disruptions related to the COVID-19 pandemic.

Targeting MAT2A for the treatment of MTAP-deleted cancers

AG-270, an orally available selective potent inhibitor of MAT2A, is our development candidate focused on MTAP-deleted cancers.

MTAP is a metabolic gene that is deleted in approximately 15 percent of all cancers.

We have shown in preclinical studies that MTAP deletion predicts sensitivity to inhibition of a subset of enzymes involved in the synthesis or utilization of the methyl donor S-adenosylmethionine, or SAM.

Among this subset of enzymes, we have targeted MAT2A, the enzyme responsible for the synthesis of SAM in tumor cells.

We have discovered small molecule inhibitors of MAT2A, including AG-270, that reduce SAM production and cause MTAP-null antiproliferative effects in cancer cell lines in vitro and in MTAP-deleted tumor models in vivo.

MTAP deletion is readily detected by a genomic or immunohistochemistry test, thus allowing the selection of patients predicted to be sensitive to the therapy.

On April 10, 2020 Celgene notified us that they declined to elect any program as a continuation program under the 2016 Agreement.

In March 2017, we previously announced that Celgene designated AG-270 as a development candidate under the 2016 Agreement and Celgene paid us an $8.0 million designation fee upon this designation.

Exploratory research, drug discovery and early development of AG-270 is led by us, and Celgene had an an opt-in right on AG-270 up through phase 1 dose escalation for at least a $30.0 million fee.

On March 25, 2020, Celgene declined to exercise its right to opt into co-development and co-commercialization for AG-270.

As a result of these decisions we are no longer eligible for up to $168.8 million in clinical and regulatory milestone payments under the 2016 Agreement.

We are evaluating AG-270 in a phase 1 trial in multiple tumor types carrying an MTAP deletion.

The first part of the trial, was a dose-escalation of AG-270 and is complete.

The next part of the trial consists of two arms evaluating AG-270 in combination with taxanes.

One arm of the trial will test AG-270 in combination with docetaxel in MTAP-deleted non-small cell lung cancer and the other arm will test AG-270 in combination with nab-paclitaxel and gemcitabine in MTAP-deleted pancreatic ductal adenocarcinoma.

Both combination arms are enrolling patients, although we experienced disruptions related to the COVID-19 pandemic.

Targeting DHODH for the treatment of hematologic malignancies

We have discovered a lineage-specific dependence on DHODH in hematologic malignancies, particularly AML and diffuse large B-cell lymphoma.

DHODH catalyzes a critical step in the biosynthesis of pyridimidines, which are critical for the production of RNA and DNA.

We believe that DHODH inhibition will be differentiated from standard-of-care therapies, both by exhibiting activity in cancers that are resistant to standard-of-care chemotherapeutics and through a mechanism of anti-tumor effect that combines cell growth arrest and cellular differentiation.

We were evaluating AG-636, an inhibitor of DHODH, licensed to us from Aurigene in a phase 1 dose-escalation trial in subjects with advanced lymphomas.

In the first quarter of 2020, we made the decision to halt internal development of AG-636, due to limited enrollment in this trial, and will continue to wind down the trial until the close of the proposed sale to Servier.

Collaborations with Celgene

In November 2019, the acquisition of Celgene was completed by BMS, and Celgene became a wholly-owned subsidiary.

We will continue to refer to our collaboration agreements with Celgene throughout this Form 10-K as being with Celgene Corporation.

Since December 31, 2019, there have been no material changes to the key terms of our collaboration or license agreements.

For further information on the terms and conditions of our existing collaboration and license agreements, please see Item 1, Business included in our Annual Report on Form 10-K for the year ended December 31, 2019.

2016 Agreement

In May 2016, we entered into the 2016 Agreement focused on metabolic immuno-oncology.

The initial four-year research term expired on May 17, 2020.

On March 25, 2020 Celgene declined the option to extend the research agreement for up to two, or in specified cases, up to four additional one-year terms which would have required the payment of a $40.0 million extension fee.

Further, on April 10, 2020 Celgene notified us that they declined to elect any program as a continuation program under the 2016 Agreement.

Celgene had designated AG-270 as a development candidate under the 2016 Agreement.

On March 25, 2020, Celgene notified us of their decision to decline their option to enter into a development & commercialization agreement with respect to the MAT2A program under the 2016 Agreement which would have required the payment of a $30.0 million fee to us.

As a result of these decisions, the research services were fully satisfied as of May 17, 2020, no additional performance

obligations remain under the 2016 Agreement and we are no longer eligible for any milestone payments under the 2016 Agreement.

2010 Agreement

Under the 2010 Agreement, we are eligible to receive a $25.0 million potential milestone payment for the enasidenib program upon achievement of a specified ex-U.S.

commercial milestone event, as well as reimbursement for costs incurred for our co-commercialization efforts and development activities.

Further information on the terms and conditions of our existing collaboration and license agreements is included within Note 13:

Collaboration and License Agreements ” of the consolidated financial statements in this Annual Report on this Form 10-K.

CStone Agreement

In June 2018, we entered into the CStone Agreement for the development and commercialization of certain products containing ivosidenib in mainland China, Hong Kong, Macau, Singapore, and Taiwan, the CStone Territory, for therapeutic uses in humans, excluding brain cancer, unless added by us in our sole discretion.

On March 2, 2020, we amended the CStone Agreement to include Singapore as part of the CStone Territory.

We retain development and commercialization rights for the rest of the world.

Pursuant to the CStone Agreement, CStone will initially be responsible for the development and commercialization of ivosidenib in AML and cholangiocarcinoma, as well as other indications that the parties mutually agree to in the future;

we serve as co-sponsor with CStone for local studies of ivosidenib in AML.

CStone will also be responsible, at our discretion, for the development and commercialization of ivosidenib in brain cancer indications.

We granted CStone specified intellectual property licenses to enable CStone to perform its obligations and exercise its rights under the CStone Agreement, including license grants to enable CStone to conduct development and commercialization activities pursuant to the terms of the CStone Agreement.

CStone is responsible for all costs it incurs in developing, obtaining regulatory approval of, and commercializing ivosidenib in the Cstone Territory, as well as certain costs incurred by us.

During the term of the CStone Agreement, each party and its affiliates are prohibited from developing or commercializing any other compound or product that inhibits IDH1 mutations at specified levels of binding, in the case of CStone, anywhere in the world, and in the case of us, the CStone Territory.

Subject to specified exceptions, CStone and its affiliates are also prohibited from developing or commercializing certain other compounds or products that directly or indirectly treat AML, cholangiocarcinoma or, if applicable, glioma in patients who have an IDH1 mutation.

Pursuant to the CStone Agreement, we have entered into a clinical supply agreement and pharmacovigilance agreement with CStone, and may enter into further ancillary agreements, including commercial supply agreements.

The trial is currently enrolling healthy volunteers, and we expect to initiate the SCD patient cohort of this trial in the first half of 2022.

We expect to initiate a phase 2a study of AG-946 in adults with L-IR MDS by year-end 2022.

Intellectual Property

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We may also choose to rely on trade secrets to protect certain aspects of our business that are not suitable or appropriate for patent protection.

We file, or may collaborate with third parties to file, patent applications directed to our key product candidates, including TIBSOVO® (ivosidenib), IDHIFA® (enasidenib), vorasidenib, mitapivat, AG-946, and AG-270 and AG-636, in addition to related compounds and potential back-up compounds, in an effort to establish intellectual property positions to protect these new chemical entities as well as methods of using these compounds in the treatment of diseases, formulations, solid state forms, and manufacturing processes.

We may also seek patent protection for certain biomarkers that may be useful in selecting the right patient population for therapies with our product candidates.

As part of our patent portfolio, as of February 1, 2021 we own or license 50 US issued patents as well as 483 issued patents in certain foreign countries and have pending patent applications in the US and in various foreign jurisdictions.

The foreign issued patents and pending applications are in a number of jurisdictions, including Argentina, Australia, Austria, Belgium, Brazil, Canada, China, the Czech Republic, Denmark,

Finland, France, Germany, Greece, Hungary, Ireland, Italy, Japan, Lithuania, Mexico, the Netherlands, Norway, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden, Switzerland, Turkey, and the United Kingdom.

The intellectual property portfolios for our most advanced programs as of February 1, 2021 are summarized below.

Prosecution is a lengthy process, during which the scope of the claims initially submitted for examination by the U.S.

Patent and Trademark Office, or USPTO, can be significantly narrowed by the time they issue, if they issue at all.

We expect this could be the case with respect to some of our pending patent applications referred to below.

IDH mutant inhibitor programs

The patent portfolio for our IDH mutant inhibitor programs contains issued patents and pending patent applications directed to compositions of matter for our key product compounds TIBSOVO®, IDHIFA®, and vorasidenib, as well as to related compounds, methods of use, various solid state forms of these product compounds, formulations, manufacturing processes and diagnostic methods for detecting various IDH1 and/or IDH2 mutations.

As of February 1, 2021, we owned approximately 38 issued U.S.

patents and 310 issued foreign patents and have pending patent applications in the US and in various foreign jurisdictions.

The patents that have issued or will issue for our IDH mutant product candidates will have a statutory expiration date of at least 2033 to 2039.

Patent term adjustments or patent term extensions could result in later expiration dates.

In some cases, the term of a US patent can be shortened by the filing of a terminal disclaimer which operates to reduce the term of a patent to that of an earlier expiring patent.

We file, or may collaborate with third parties to file, patent applications directed to our key products and product candidates, including PYRUKYND® and AG-946, in addition to related compounds and potential back-up compounds, in an effort to establish intellectual property positions to protect these new chemical entities as well as methods of using these compounds in the treatment of diseases, formulations, solid state forms, and manufacturing processes.

We may also seek patent protection for certain biomarkers that may be useful in identifying the appropriate patient population for therapies with our product candidates.

PK activator program

The patent portfolio for our PK activator program contains issued patents and pending patent applications directed to compositions of matter for mitapivat, as well as to related compounds, various solid state forms of mitapivat, compositions of matter for second generation PKR activators, such as AG-946, as well as methods of use for these novel compounds.

The patent portfolio for our PK activator program contains issued patents and pending patent applications directed to compositions of matter for PYRUKYND®, as well as to related compounds, various solid state forms of PYRUKYND®, compositions of matter for second generation PKR activators, such as AG-946, as well as methods of use for these novel compounds.

As of February 1, 2022, we owned approximately 9 issued U.S.

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In some cases, the term of a US patent can be shortened by the filing of a terminal disclaimer which operates to reduce the term of a patent to that of an earlier expiring patent.

MTAP-deleted cancer program

The intellectual property portfolio for our MTAP-deleted cancer program contains issued patents and pending patent applications directed to compositions of matter for AG-270, as well as to related compounds and other chemotypes including potential back-up compounds, as well as methods of use, combination therapies, and diagnostic methods for detecting MTAP deletions.

As of February 1, 2021, we owned approximately 2 issued U.S.

patents and 1 issued foreign patent and have pending patent applications in the US and in various foreign jurisdictions.

The patents that have issued or will issue for our MTAP-deleted cancer program will have a statutory expiration date of at least 2036 to 2040.

Patent term adjustments or patent term extensions could result in later expiration dates.

In some cases, the term of a US patent can be shortened by the filing of a terminal disclaimer which operates to reduce the term of a patent to that of an earlier expiring patent.

DHODH inhibitor program

The patent portfolio for our DHODH inhibitor program contains issued patents and pending patent applications, exclusively licensed to us by Aurigene, directed to compositions of matter for AG-636, as well as to related compounds and other chemotypes, as well as to methods of use for these novel compounds.

The patent portfolio for our DHODH inhibitor program further contains patent applications, assigned solely to Agios, that are directed to solid state forms and formulations of AG-636 and to methods of use for these forms of AG-636, other methods of use for AG-636 and methods of use and diagnostic methods relating to AG-636 and other DHODH inhibitors.

As of February 1, 2021, we exclusively licensed or independently filed approximately 4 issued U.S.

patents and 44 issued foreign patents and have pending patent applications in the US and in various foreign jurisdictions.

The patents that have issued or will issue for our DHODH inhibitor program will have a statutory expiration date of at least 2030 to 2039.

Patent term adjustments or patent term extensions could result in later expiration dates.

In some cases, the term of a US patent can be shortened by the filing of a terminal disclaimer which operates to reduce the term of a patent to that of an earlier expiring patent.

The foreign issued patents and pending patent applications are in a number of jurisdictions, including Argentina, Australia, Austria, Belgium, Brazil, Canada, China, the Czech Republic, Denmark, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Japan, Lebanon, Lithuania, Mexico, the Netherlands, Norway, Poland, Portugal, Romania, Russia, Saudi Arabia, Slovakia, Slovenia, Spain, Sweden, Switzerland, Turkey, and the United Kingdom.

Prosecution is a lengthy process, during which the scope of the claims initially submitted for examination by the U.S.

Patent and Trademark Office, or USPTO, can be significantly narrowed by the time they issue, if they issue at all.

We expect this could be the case with respect to some of our pending patent applications referred to above.

The term of individual patents depends upon the legal term for patents in the countries in which they are obtained.

In most countries, including the United States, the patent term is 20 years from the earliest filing date of a non-provisional patent application, although term extensions may be available.

In the United States, a patent’s term may be lengthened by patent term adjustment, which compensates a patentee for administrative delays by the USPTO in examining and granting a patent, or may be shortened if a patent is terminally disclaimed over an earlier filed patent.

The term of a patent that covers a drug or biological product may also be eligible for patent term extension when FDA approval is granted, provided statutory and regulatory

requirements are met.

In the United States, a patent’s term may be lengthened by patent term

adjustment, which compensates a patentee for administrative delays by the USPTO in examining and granting a patent, or may be shortened if a patent is terminally disclaimed over an earlier filed patent.

The term of a patent that covers a drug or biological product may also be eligible for patent term extension when FDA approval is granted, provided statutory and regulatory requirements are met.

The extension of the term of foreign patents varies, in accordance with local law.

Although certain of the patents granted by the regulatory authorities of the EU may expire at specific dates, the terms of patents granted in certain European countries may extend beyond such EU patent expiration date if we were to obtain a supplementary protection certificate.

In addition, because of the extensive time required for clinical development and regulatory review of a product candidate we may develop, it is possible that, before any of our product candidates can be commercialized, any related patent may expire or remain in force for only a short period following commercialization, thereby reducing any advantage of any such patent.

In the future, if and when our product candidates receive approval by the FDA or foreign regulatory authorities, we expect to apply for patent term extensions on issued patents covering those products, depending upon the length of the clinical trials for each medicine and other factors.

There can be no assurance that any of our pending patent applications will issue or that we will benefit from any patent term extension or favorable adjustment to the term of any of our patents.

As with other biotechnology and pharmaceutical companies, our ability to maintain and solidify our proprietary and intellectual property position for our product candidates and technologies will depend on our success in obtaining effective patent claims and enforcing those claims if granted.

Additional Considerations

As with other biotechnology and pharmaceutical companies, our ability to maintain and solidify our proprietary and intellectual property position for our product, product candidates and technologies will depend on our success in obtaining effective patent claims and enforcing those claims if granted.

However, patent applications that we may file or license from third parties may not result in the issuance of patents.

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Any issued patents that we may receive in the future may be challenged, invalidated or circumvented.

For example, we cannot be certain of the priority of inventions covered by pending third-party patent applications.

If third parties prepare and file patent applications in the United States that also claim technology or therapeutics to which we have rights, we may have to participate in interference proceedings in the USPTO to determine priority of invention, which could result in substantial costs to us, even if the eventual outcome is favorable to us.

For example, a third party can challenge the patentability of one or more of the claims of an issued patent in a post-grant proceeding before the USPTO or a foreign patent office such as the European Patent Office, which can result in the loss of certain claims or the loss of an entire patent.

In addition, it is possible that a third party has filed a patent application in the United States, or abroad, that claims the same technology or chemical structures that are claimed in our own patent applications or patents.

In such cases, we may have to participate in legal proceedings or enter into a licensing arrangement, which could result in substantial costs to us, even if the eventual outcome is favorable to us.

In addition to patent protection, we also rely upon unpatented confidential information, including confidential technical information, know-how and continuing technological innovation to develop and maintain our competitive position.

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While we believe that our technology, development experience and scientific knowledge provide us with competitive advantages, we face potential competition from many different sources, including major pharmaceutical, specialty pharmaceutical and biotechnology companies, academic institutions and governmental agencies and public and private research institutions.

Any product candidates that we successfully develop and commercialize will compete with existing therapies and new therapies that may become available in the future.

We compete in the areas of pharmaceutical, biotechnology and other related markets that address hematologic malignancies, solid tumors and GDDs.

There are other companies working to develop therapies in the fields of hematologic malignancies, solid tumors and GDDs.

These companies include divisions of large pharmaceutical companies and biotechnology companies of various sizes.

Malignant Hematology and Solid Tumors .

In the fields of malignant hematology and solid tumors, our principal competitors include AbbVie Inc., or AbbVie;

Astellas Pharma Inc., or ASLAN;

Bayer AG, or Bayer;

BeiGene Ltd.;

Clear Creek Bio;

Daiichi Sankyo Company, Ltd., or Daiichi Sankyo;

Eli Lilly and Company;

Forma Therapeutics Holdings, LLC, or Forma;

GlaxoSmithKline plc;

Jazz Pharmaceuticals plc, or Jazz;

Merck & Co., or Merck;

Novartis International AG, or Novartis;

Pfizer, Inc., or Pfizer;

and Roche Holdings, Inc., or Roche, and its subsidiary Genentech, Inc.

The most common methods of treating patients with hematologic malignancies and solid tumors are surgery, radiation and drug therapy, including chemotherapy, hormone therapy and targeted drug therapy, and there are a variety of available drug therapies marketed for these cancer types.

For example, other than TIBSOVO® and IDHIFA®, recently-approved treatments for AML include Venclexta® from AbbVie (in collaboration with Roche);

Xospata® from Astellas;

Rydapt® from Novartis;

Vyxeos® from Jazz;

and Daurismo® and Mylotarg® from Pfizer and Onureg® from BMS.

Recently approved treatments for solid tumors

include Keytruda® from Merck, Rozlytrek® from Genentech and Vitrakvi® from Bayer (in collaboration with Loxo Oncology, Inc.), and in some cases, these drugs are administered in combination to enhance efficacy.

While our products and product candidates may compete with many existing drug and other therapies, to the extent they are ultimately used in combination with or as an adjunct to these therapies, our product candidates may not be competitive with them.

Some of the currently approved drug therapies are branded and subject to patent protection, and others are available on a generic basis.

Many of these approved drugs are well-established therapies and are widely accepted by physicians, patients and third-party payors.

In general, although there has been considerable progress over the past few decades in the treatment of cancer and the currently marketed therapies provide benefits to many patients, these therapies all are limited to some extent in their efficacy and frequency of adverse events and none are successful in treating all patients.

As a result, the level of morbidity and mortality from cancer remains high.

In addition to currently marketed therapies, there are also a number of medicines, including immuno-oncology therapies in clinical development to treat hematologic malignancies and solid tumors.

Bayer, Daiichi Sankyo and Forma are conducting phase 1 clinical trials of their IDH mutant inhibitors, BAY1436032, DS-1001b and FT-2102, respectively, in patients with hematologic and solid tumors, including AML, MDS and glioma;

ASLAN, Bayer, Clear Creek Bio, and PTC Therapeutics, Inc.

are conducting clinical trials of their DHODH inhibitors in hematologic malignancies;

and IDEAYA Biosciences, Inc., or IDEAYA, is developing a MAT2A inhibitor for the treatment of MTAP-deleted solid tumors.

These medicines in development may provide efficacy, safety, convenience and other benefits that are not provided by currently marketed therapies.

As a result, they may provide significant competition for any of our product candidates for which we obtain market approval.

Genetically defined diseases .

In the field of GDDs, our competitors include:

Acceleron Pharma Inc., or Acceleron;

PYRUKYND® and any product candidates that we successfully develop and commercialize will compete with existing therapies and new therapies that may become available in the future.

We compete in the areas of pharmaceutical, biotechnology and other related markets that address GDDs.

There are other companies working to develop therapies in the field of GDDs, including divisions of large pharmaceutical companies and biotechnology companies of various sizes.

Our competitors include:

Bristol-Myers Squibb Company, or BMS;

BioMarin Pharmaceutical, Inc., or BioMarin;

bluebird bio, Inc., or bluebird;

Merck & Co., Inc., or Merck;

Novartis International AG, or Novartis;

Pfizer, Inc., or Pfizer;

Global Blood Therapeutics, or Global Blood;

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Rocket Pharma LTD, or Rocket Pharma;

and Vertex Pharmaceuticals Incorporated, or Vertex.

The most common methods for treating patients with GDDs are dietary restriction, dietary supplementation or replacement, treatment of symptoms and complications, gene therapy, blood transfusions, organ transplant and enzyme replacement therapies.

Vertex Pharmaceuticals Incorporated, or Vertex, Emmaus Life Sciences, or Emmaus, Fibrogen, Inc., or Fibrogen, and Geron Corporation, or Geron.

The most common methods for treating GDD patients with PKU and hemolytic anemias are dietary restriction, dietary supplementation or replacement, treatment of symptoms and complications, gene therapy, blood transfusions, organ transplant and enzyme replacement therapies.

There are a number of marketed therapies available for treating patients with GDDs.

For example, recently-approved treatments for thalassemia, SCD, and phenylketonuria include Reblozyl® from Acceleron (in collaboration with BMS);

For example, recently approved treatments for thalassemia, SCD, low-risk MDS and phenylketonuria include Reblozyl® from Merck (formerly Acceleron);

Revlimid® from BMS;

Lentiglobin® from bluebird;

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Oxbryta® from Global Blood;

and Kuvan® and Palynziq® from BioMarin.

While our product candidates may compete with existing medicines and other therapies, to the extent they are ultimately used in combination with or as an adjunct to these therapies, our product candidates may not be competitive with them.

Kuvan® and Palynziq® from BioMarin and Endari® from Emmaus.

While our product and product candidates may compete with existing medicines and other therapies, to the extent they are ultimately used in combination with or as an adjunct to these therapies, our product or product candidates may not be competitive with them.

In addition to currently marketed therapies, there are also a number of products that are either small molecules, enzyme replacement therapies or gene therapies in various stages of clinical development to treat GDDs.

For example, Rocket Pharma is conducting a clinical trial of a gene therapy targeting PK deficiency and Forma is developing a PKR activator for the treatment of hemolytic anemias, including PK deficiency and SCD, and Vertex is developing a gene therapy targeting SCD.

For example, Rocket Pharma is conducting a clinical trial of a gene therapy targeting PK deficiency, Forma is developing a PKR activator for the treatment of hemolytic anemias, including PK deficiency, thalassemia, SCD and MDS, Fibrogen is developing Roxadustat for the treatment of anemia in MDS patients;

Geron is developing imetelstat for the treatment of low-risk MDS, and Vertex is developing a gene therapy targeting SCD.

These products in development may provide efficacy, safety, convenience and other benefits that are not provided by currently marketed therapies.

As a result, they may provide competition for any of our product candidates for which we obtain market approval.

As a result, they may provide competition for any of our product or product candidates for which we obtain market approval.

Many of our competitors may have significantly greater financial resources and expertise in research and development, manufacturing, preclinical testing, conducting clinical trials, obtaining regulatory approvals and marketing approved medicines than we do.

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Smaller or early stage companies may also prove to be significant competitors, particularly through collaborative arrangements with large and established companies.

The key competitive factors affecting the success of all of our product candidates, if approved, are likely to be their efficacy, safety, convenience, price, the effectiveness of companion diagnostics in guiding the use of related therapeutics where appropriate, the level of generic competition and the availability of reimbursement from government and other third-party payors.

The key competitive factors affecting the success of PYRUKYND® and any of our product candidates that we develop, if approved, are likely to be their efficacy, safety, convenience, price, the effectiveness of companion diagnostics in guiding the use of related therapeutics where appropriate, the level of generic competition and the availability of reimbursement from government and other third-party payors.

Our commercial opportunity could be reduced or eliminated if our competitors develop and commercialize medicines that are safer, more effective, have fewer or less severe side effects, are more convenient or are less expensive than any medicines that we may develop.

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In addition, our ability to compete may be affected in many cases by insurers or other third-party payors seeking to encourage the use of generic or other branded medicines.

There are many generic medicines currently on the market for the indications that we are pursuing, and additional medicines are expected to become available on a generic basis over the

coming years.

If our therapeutic product candidates are approved, we expect that they will be priced at a significant premium over competitive generic medicines.

There are many generic medicines currently on the market for the indications that we are pursuing, and additional medicines are expected to become available on a generic basis over the coming years.

We expect that PYRKYND® and any of our product candidates that may receive marketing approval, we expect that they will be priced at a significant premium over competitive generic medicines.

Manufacturing

We do not own or operate, and currently have no plans to establish, any manufacturing facilities.

We currently rely, and expect to continue to rely, on third parties for the manufacture of our product candidates for preclinical and clinical testing, as well as for commercial manufacture of any products that we may commercialize.

To date, we have obtained materials for ivosidenib, enasidenib, vorasidenib, mitapivat, AG-270, AG-636 and AG-946 for our ongoing and planned clinical testing from third-party manufacturers.

Although we have long-term supply arrangements in place for the commercial supply of TIBSOVO®, we primarily obtain our supplies from these manufacturers on a purchase order basis.

To date, we have obtained materials for PYRUKYND® and AG-946 for our ongoing and planned clinical testing from third-party manufacturers.

Although we have long-term supply arrangements in place for the commercial supply of PYRUKYND®, we primarily obtain our supplies from these manufacturers on a purchase order basis.

Due to the volatility of the raw material supply network globally, we have gained regulatory approval for redundant supply of raw materials, and have an ongoing program to ensure this risk mitigation remains effective.

We do not currently have arrangements in place for redundant supply for bulk drug substance and drug product, but maintain a broad safety stock program.

As we have done for TIBSOVO®, for all of our other product candidates we intend to identify and qualify additional manufacturers to provide the active pharmaceutical ingredient and fill-and-finish services prior to submission of a NDA to the FDA.

Ivosidenib, enasidenib, vorasidenib, mitapivat, AG-270, AG-636 and AG-946 are organic compounds of low molecular weight, generally called small molecules.

We do not currently have arrangements in place for redundant supply for drug product, but maintain a broad safety stock program.

As we have done for PYRUKYND®, for all of our other product candidates we intend to identify and qualify additional manufacturers to provide the active pharmaceutical ingredient and fill-and-finish services prior to submission of an NDA to the FDA.

PYRUKYND® and AG-946 are organic compounds of low molecular weight, generally called small molecules.

They can be manufactured in reliable and reproducible synthetic processes from readily available starting materials.

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We expect to continue to develop drug candidates that can be produced cost-effectively at contract manufacturing facilities.

We expect to rely on third parties for the manufacture and sale of any companion diagnostics we develop.

Government Regulation and Product Approvals

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• approval by an independent institutional review board, or IRB, representing each clinical site before each clinical trial may be initiated;

• performance of adequate and well-controlled human clinical trials to establish the safety, potency and purity of the product candidate for each proposed indication, in accordance with current good clinical practices, or GCP;

• performance of adequate and well-controlled human clinical trials to establish the safety and efficacy of the product candidate for each proposed indication, in accordance with current good clinical practices, or GCP;

• preparation and submission to the FDA of a NDA for a drug product which includes not only the results of the clinical trials, but also, detailed information on the chemistry, manufacture and quality controls for the product candidate and proposed labeling for one or more proposed indication(s);

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Preclinical tests include laboratory evaluations of product chemistry, formulation and stability, as well as other studies to evaluate, among other things, the toxicity of the product candidate.

The conduct of the preclinical tests and formulation of the compounds for testing must comply with federal regulations and requirements, including GLP regulations and standards.

The conduct of the preclinical tests and formulation of the compounds for testing must comply with federal regulations and requirements, including GLP regulations and standards, and the United States Department of Agriculture’s Animal Welfare Act, if applicable.

The results of the preclinical tests, together with manufacturing information and analytical data, are submitted to the FDA as part of an IND.

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This group provides authorization as to whether or not a trial may move forward at designated check points based on access that only the group maintains to available data from the study.

Suspension or

termination of development during any phase of clinical trials can occur if it is determined that the participants or patients are being exposed to an unacceptable health risk.

Other reasons for suspension or termination may be made by us based on evolving business objectives and/or competitive climate.

Information about clinical trials must be submitted within specific timeframes to the NIH for public dissemination on its ClinicalTrials.gov website.

Suspension or termination of development during any phase of clinical trials can occur if it is determined that the participants or patients are being exposed to an unacceptable health risk.

Other reasons for suspension or termination may be made based on evolving business objectives and/or competitive climate.

Reporting Clinical Trial Results

Under the Public Health Service Act, sponsors of clinical trials of certain FDA-regulated products, including prescription drugs and biologics, are required to register and disclose certain clinical trial information on a public registry (clinicaltrials.gov) maintained by the U.S.

National Institutes of Health, or NIH.

Information related to the product, patient population, phase of investigation, study sites and investigators and other aspects of the clinical trial is made public as part of the registration of the clinical trial.

The NIH and the FDA have recently signaled the government’s willingness to begin enforcing these requirements against non-compliant clinical trial sponsors.

The failure to submit clinical trial information to clinicaltrials.gov is also a prohibited act under the FDCA with violations subject to potential civil monetary penalties of up to $10,000 for each day the violation continues.

Violations may also result in injunctions and/or criminal prosecution or disqualification from federal grants.

Expanded Access to an Investigational Drug for Treatment Use

Expanded access, sometimes called “compassionate use,” is the use of investigational new drug products outside of clinical trials to treat patients with serious or immediately life-threatening diseases or conditions when there are no comparable or satisfactory alternative treatment options.

The rules and regulations related to expanded access are intended to improve access to investigational drugs for patients who may benefit from investigational therapies.

The rules and regulations related to expanded access are intended to improve access

to investigational drugs for patients who may benefit from investigational therapies.

FDA regulations allow access to investigational drugs under an IND by the company or the treating physician for treatment purposes on a case-by-case basis for:

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and the expanded use of the investigational drug for the requested treatment will not interfere initiation, conduct, or completion of clinical investigations that could support marketing approval of the product or otherwise compromise the potential development of the product.

Sponsors are required to make policies for evaluating and responding to requests for expanded access for patients policies publicly available upon the earlier of initiation of a Phase 2 or Phase 3 clinical trial, or 15 days after the drug or biologic receives designation as a breakthrough therapy, fast track product, or regenerative medicine advanced therapy.

In addition to and separate from expanded access, on May 30, 2018, the Right to Try Act was signed into law.

The law, among other things, provides a federal framework for certain patients to access certain investigational new drug products that have completed a Phase I clinical trial and are undergoing investigation for FDA approval.

While there is no obligation to make investigational products available for expanded access, sponsors are required to make policies for evaluating and responding to requests for expanded access publicly available upon the earlier of initiation of a Phase 2 or Phase 3 clinical trial, or 15 days after the drug or biologic receives designation as a breakthrough therapy, fast track product, or regenerative medicine advanced therapy.

In addition, the Right to Try Act, among other things, provides a federal framework for certain patients to access certain investigational new drug products that have completed a Phase 1 clinical trial and are undergoing investigation for FDA approval.

Under certain circumstances, eligible patients can seek treatment without enrolling in clinical trials and without obtaining FDA permission under the FDA expanded access program.

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Human clinical trials are typically conducted in three sequential phases, but the phases may overlap or be combined.

Additional studies may also be required after approval.

Phase 1 clinical trials are initially conducted in a limited population to test the product candidate for safety, including adverse effects, dose tolerance, absorption, metabolism, distribution, excretion and pharmacodynamics in healthy humans or in patients.

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Phase 3 clinical trials are undertaken within an expanded patient population to further evaluate dosage, provide substantial evidence of clinical efficacy, and further test for safety in an expanded and diverse patient population at multiple, geographically dispersed clinical trial sites.

A well-controlled, statistically robust Phase 3 clinical

trial may be designed to deliver the data that regulatory authorities will use to decide whether or not to approve, and, if approved, how to appropriately label a drug;

such Phase 3 studies are referred to as “pivotal.”

The FDA may require more than one Phase 3 clinical trial to support approval of a product candidate.

A well-controlled, statistically robust Phase 3 clinical trial may be designed to deliver the data that regulatory authorities will use to decide whether or not to approve, and, if approved, how to appropriately label a drug;

such Phase 3 clinical trials are referred to as “pivotal.” A phase 2 clinical trial can be a “pivotal” trial if the design provides a well-controlled and reliable assessment of clinical benefit, particularly in an area of unmet medical need.

A company’s designation of the phase of a trial is not necessarily indicative that the trial will be sufficient to satisfy the FDA requirements of that phase.

In some cases, the FDA may approve an NDA for a product candidate but require the sponsor to conduct additional clinical trials to further assess the product candidate’s safety and effectiveness after approval.

Such post-approval trials are typically referred to as Phase 4 clinical trials.

These studies are used to gain additional experience from the treatment of a larger number of patients in the intended treatment group and to further document a clinical benefit in the case of drugs approved under accelerated approval regulations.

These trials are used to gain additional experience from the treatment of a larger number of patients in the intended treatment group and to further document a clinical benefit in the case of drugs approved under

accelerated approval regulations.

Failure to exhibit due diligence with regard to conducting Phase 4 clinical trials could result in withdrawal of approval for products.

Progress reports detailing the results of the clinical trials must be submitted at least annually to the FDA and more frequently if serious adverse events occur.

Progress reports detailing the results of clinical trials must be submitted at least annually to the FDA and more frequently if serious adverse events occur.

In addition, IND safety reports must be submitted to the FDA for any of the following:

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Phase 1, Phase 2 and Phase 3 clinical trials may not be completed successfully within any specified period, or at all.

Furthermore, the FDA or the sponsor may suspend or terminate a clinical trial at any time on various grounds, including a finding that the research subjects are being exposed to an unacceptable health risk.

Similarly, an IRB can suspend or terminate approval of a clinical trial at its institution, or an institution it represents, if the clinical trial is not being conducted in accordance with the IRB’s requirements or if the product has been associated with unexpected serious harm to patients.

The FDA will typically inspect one or more clinical sites to assure compliance with GCP and the integrity of the clinical data submitted.

Review and Approval of an NDA

In order to obtain approval to market a drug product in the United States, a marketing application must be submitted to the FDA that provides sufficient data establishing the safety, purity and potency of the proposed drug product for its intended indication.

The application includes all relevant data available from pertinent preclinical and clinical trials, including negative or ambiguous results as well as positive findings, together with detailed information relating to the product’s chemistry, manufacturing, controls and proposed labeling, among other things.

In order to obtain approval to market a drug product in the United States, a marketing application must be submitted to the FDA that provides sufficient data establishing the safety and efficacy of the proposed drug product for its intended indication.

The application must include all relevant data available from pertinent preclinical and clinical trials, including negative or ambiguous results as well as positive findings, together with detailed information relating to the product’s chemistry, manufacturing, controls and proposed labeling, among other things.

Data can come from company-sponsored clinical trials intended to test the safety and effectiveness of a use of a product, or from a number of alternative sources, including studies initiated by investigators.

To support marketing approval, the data submitted must be sufficient in quality and quantity to establish the safety, purity and potency of the drug product to the satisfaction of the FDA.

To support marketing approval, the data submitted must be sufficient in quality and quantity to establish the safety and efficacy of the drug product to the satisfaction of the FDA.

The NDA is a vehicle through which applicants formally propose that the FDA approve a new product for marketing and sale in the United States for one or more indications.

Every new drug product candidate must be the subject of an approved NDA before it may be commercialized in the United States.

Under federal law, the submission of most NDAs is subject to an application user fee, which for federal fiscal year 2021 is $2,875,842 for an application requiring clinical data.

The sponsor of an approved NDA is also subject to an annual program fee, which for fiscal year 2021 is $336,432.

Under federal law, the submission of most NDAs is subject to an application user fee, which for federal fiscal year 2022 is approximately $3.1 million.

The sponsor of an approved NDA is also subject to an annual program fee, which for fiscal year 2022 is approximately $369,000 per product.

Certain exceptions and waivers are available for some of these fees, such as an exception from the application fee for products with orphan designation and a waiver for certain small businesses.

Following submission of an NDA, the FDA conducts a preliminary review of the application generally within 60 calendar days of its receipt and strives to inform the sponsor by the 74 th day after the FDA’s receipt of the submission whether the application is sufficiently complete to permit substantive review.

Following submission of an NDA, the FDA conducts a preliminary review of the application generally within 60 calendar days of its receipt and must inform the sponsor at that time or before whether the application is sufficiently complete to permit substantive review.

The FDA may request additional information rather than accept the application for filing.

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Once the submission is accepted for filing, the FDA begins an in-depth substantive review.

The FDA has agreed to specified performance goals in the review process of NDAs.

Under that agreement, 90% of applications seeking approval of New Molecular Entities, or NMEs, are meant to be reviewed within ten months from the date on which the FDA accepts the application for filing, and 90% of applications for NMEs that have been designated for “priority review” are meant to be reviewed within six months of the filing date.

For applications seeking approval of products that are not NMEs, the ten-month and six-month review periods run from the date that the FDA receives the application.

The review process and the Prescription Drug User Fee Act goal date may be extended by the FDA for three additional months to consider new information or clarification provided by the applicant to address an outstanding deficiency identified by the FDA following the original submission.

Under the goals and policies agreed to by the FDA under the Prescription Drug User Fee Act, or PDUFA, applications seeking approval of New Molecular Entities, or NMEs, are meant to be reviewed within ten months from the date on which the FDA accepts the application for filing.

The review process and the PDUFA goal date may be extended by the FDA for three additional months to consider new information or clarification provided by the applicant to address an outstanding deficiency identified by the FDA following the original submission.

Before approving an application, the FDA typically will inspect the facility or facilities where the product is or will be manufactured.

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The FDA will not approve an application unless it determines that the manufacturing processes and facilities are in compliance with cGMP requirements and adequate to assure consistent production of the product within required specifications.

Additionally, before approving an NDA, the FDA will typically inspect one or more clinical sites to assure compliance with GCP.

Under the FDA Reauthorization Act of 2017, the FDA must implement a protocol to expedite review of responses to inspection reports pertaining to certain

applications, including applications for products in shortage or those for which approval is dependent on remediation of conditions identified in the inspection report.

Under the FDA Reauthorization Act of 2017, the FDA must implement a protocol to expedite review of responses to inspection reports pertaining to certain applications, including applications for products in shortage or those for which approval is dependent on remediation of conditions identified in the inspection report.

In addition, as a condition of approval, the FDA may require an applicant to develop a REMS.

REMS use risk minimization strategies beyond the professional labeling to ensure that the benefits of the product outweigh the potential risks.

REMS could include medication guides, communication plans for health care professionals, and elements to assure safe use, including special training or certification for prescribing or dispensing, dispensing only under certain circumstances, special monitoring and the use of patent registries.

To determine whether a REMS is needed, the FDA will consider the size of the population likely to use the product, seriousness of the disease, expected benefit of the product, expected duration of treatment, seriousness of known or potential adverse events and whether the product is a NME.

The FDA may refer an application for a novel product to an advisory committee or explain why such referral was not made.

The FDA may refer an application for a novel product which presents difficult questions of safety or efficacy to an advisory committee or explain why such referral was not made.

Typically, an advisory committee is a panel of independent experts, including clinicians and other scientific experts, that reviews, evaluates and provides a recommendation as to whether the application should be approved and under what conditions.

The FDA is not bound by the recommendations of an advisory committee, but it considers such recommendations carefully when making decisions.

The FDA is not bound by the recommendations of an advisory committee, but it considers such recommendations when making decisions.

Fast Track, Breakthrough Therapy, Priority Review and Regenerative Advanced Therapy Designations

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These programs are referred to as Fast Track designation, Breakthrough Therapy designation, priority review designation and regenerative advanced therapy designation.

Specifically, the FDA may designate a product for Fast Track review if it is intended, whether alone or in combination with one or more other products, for the treatment of a serious or life-threatening disease or condition, and it demonstrates the potential to address unmet medical needs for such a disease or condition.

• Fast Track Designation .

The FDA may designate a product for Fast Track review if it is intended, whether alone or in combination with one or more other products, for the treatment of a serious or life-threatening disease or condition, and it demonstrates the potential to address unmet medical needs for such a disease or condition.

For Fast Track products, sponsors may have greater interactions with the FDA and the FDA may initiate review of sections of a Fast Track product’s application before the application is complete.

This rolling review may be available if the FDA determines, after preliminary evaluation of clinical data submitted by the sponsor, that a Fast Track product may be effective.

The sponsor must also provide, and the FDA must approve, a schedule for the submission of the remaining information and the sponsor must pay applicable user fees.

This rolling review process may be available if the FDA determines, after preliminary evaluation of clinical data submitted by the sponsor, that a Fast Track product may be effective.

However, the FDA’s time period goal for reviewing a Fast Track application does not begin until the last section of the application is submitted.

In addition, the Fast Track designation may be withdrawn by the FDA if the FDA believes that the designation is no longer supported by data emerging in the clinical trial process.

Second, a product may be designated as a Breakthrough Therapy if it is intended, either alone or in combination with one or more other products, to treat a serious or life-threatening disease or condition and preliminary clinical evidence indicates that the product may demonstrate substantial improvement over existing therapies on one or more clinically significant endpoints, such as substantial treatment effects observed early in clinical development.

• Breakthrough Therapy Designation .

A product may be designated as a Breakthrough Therapy if it is intended, either alone or in combination with one or more other products, to treat a serious or life-threatening disease or condition and preliminary clinical evidence indicates that the product may demonstrate substantial improvement over existing therapies on one or more clinically significant endpoints.

The FDA may take certain actions with respect to Breakthrough Therapies, including:

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and taking other steps to design the clinical trials in an efficient manner.

Third, the FDA may designate a product for priority review if it is a product that treats a serious condition and, if approved, would provide a significant improvement in safety or effectiveness.

The FDA determines, on a case-by-case basis, whether the proposed product represents a significant improvement when compared with other available therapies.

• Priority Review .

The FDA may designate a product for priority review if it is a product that treats a serious condition and, if approved, would provide a significant improvement in safety or effectiveness when compared with other available therapies.

Significant improvement may be illustrated by evidence of increased effectiveness in the treatment of a condition, elimination or substantial reduction of a treatment-limiting product reaction, documented enhancement of patient compliance that may lead to improvement in serious outcomes, and evidence of safety and effectiveness in a new subpopulation.

A priority designation is intended to direct overall attention and resources to the evaluation of such applications, and to shorten the FDA’s goal for taking action on a marketing application from ten months to six months.

With passage of the 21st Century Cures Act, or the Cures Act, in December 2016, Congress authorized the FDA to accelerate review and approval of products designated as regenerative advanced therapies.

A product is eligible for this designation if it is a regenerative medicine therapy that is intended to treat, modify, reverse or cure a serious or life-threatening disease or condition, and preliminary clinical evidence indicates that the product has the potential to address unmet medical needs for such disease or condition.

A priority designation is intended to direct overall attention and resources to the evaluation of such applications, and to shorten the FDA’s goal for review of a marketing application from ten months to six months.

• Regenerative Advanced Therapy Designation .

A product is eligible for regenerative advanced therapies designation if it is a regenerative medicine therapy that is intended to treat, modify, reverse or cure a serious or life-threatening disease or condition, and preliminary clinical evidence indicates that the product has the potential to address unmet medical needs for such disease or condition.

The benefits of a regenerative advanced therapy designation include early interactions with FDA to expedite development and review, benefits available to breakthrough therapies, potential eligibility for priority review and accelerated approval based on surrogate or intermediate endpoints.

Accelerated Approval Pathway

The FDA may grant accelerated approval to a product for a serious or life-threatening condition that provides meaningful therapeutic advantage to patients over existing treatments based upon a determination that the product has an effect on a surrogate endpoint that is reasonably likely to predict clinical benefit.

The FDA may also grant accelerated approval for such a condition when the product has an effect on an intermediate clinical endpoint that can be measured earlier than an effect on irreversible morbidity or mortality, or IMM, and that is reasonably likely to predict an effect on IMM or other clinical benefit,

taking into account the severity, rarity or prevalence of the condition and the availability or lack of alternative treatments.

Products granted accelerated approval must meet the same statutory standards for safety and effectiveness as those granted traditional approval.

For the purposes of accelerated approval, a surrogate endpoint is a marker, such as a laboratory measurement, radiographic image, physical sign or other measure that is thought to predict clinical benefit, but is not itself a measure of clinical benefit.

Surrogate endpoints can often be measured more easily or more rapidly than clinical endpoints.

An intermediate clinical endpoint is a measurement of a therapeutic effect that is considered reasonably likely to predict the clinical benefit of a drug, such as an effect on IMM.

The FDA has limited experience with accelerated approvals based on intermediate clinical endpoints, but has indicated that such endpoints generally may support accelerated approval where the therapeutic effect measured by the endpoint is not itself a clinical benefit and basis for traditional approval, if there is a basis for concluding that the therapeutic effect is reasonably likely to predict the ultimate clinical benefit of a product.

The accelerated approval pathway is most often used in settings in which the course of a disease is long and an extended period of time is required to measure the intended clinical benefit of a product, even if the effect on the surrogate or intermediate clinical endpoint occurs rapidly.

Thus, accelerated approval has been used extensively in the development and approval of products for treatment of a variety of cancers in which the goal of therapy is generally to improve survival or decrease morbidity, and the duration of the typical disease course requires lengthy and sometimes large trials to demonstrate a clinical or survival benefit.

Thus, the benefit of accelerated approval derives from the potential to receive approval based on surrogate endpoints sooner than possible for trials with clinical or survival endpoints, rather than deriving from any explicit shortening of the FDA approval timeline, as is the case with priority review.

The accelerated approval pathway is usually contingent on a sponsor’s agreement to conduct, in a diligent manner, additional post-approval confirmatory studies to verify and describe the product’s clinical benefit.

As a result, a product candidate approved on this basis is subject to rigorous post-marketing compliance requirements, including the completion of Phase 4 or post-approval clinical trials to confirm the effect on the clinical endpoint.

Failure to conduct required post-approval studies, or confirm a clinical benefit during post-marketing studies, would allow the FDA to initiate expedited proceedings to withdraw approval of the product.

All promotional materials for product candidates approved under accelerated regulations are subject to prior review by the FDA.

Real-Time Oncology Review of Supplemental NDAs

Through its Oncology Center for Excellence, or OCE, the FDA has established two pilot programs allowing for real-time review of sNDAs for previously approved oncology products.

This approach will allow FDA to evaluate clinical data as soon as the results of a clinical trial become available with the objective of reviewing and approving a new indication soon after an applicant files the sNDA.

The first of these pilot programs, Real-Time Oncology Review, or RTOR, focuses on early submission of data that are the most relevant to assessing the product’s safety and effectiveness.

RTOR allows the FDA to review much of the data earlier, after the clinical trial results become available and the database is locked, but before the information is formally submitted to the agency.

The FDA has established several criteria to determine whether a sNDA may be selected for RTOR.

Those criteria include whether:

the drug is likely to demonstrate substantial improvements over available therapy;

the study design is straight forward, as determined by the review division and the OCE;

the endpoints can be easily interpreted.

SNDAs with chemistry, manufacturing and control formulation changes and supplements with pharmacology/toxicology data are excluded from RTOR.

In addition, submissions with greater complexity, including those with companion diagnostics, may also be excluded for the purposes of the pilot program.

On the basis of these criteria, the appropriate FDA review division and OCE management will jointly decide whether the application can be selected for the RTOR pilot program.

If the FDA determines that RTOR is an appropriate review pathway, the applicant can send pre-submission data to the agency under the original NDA two to four weeks after all patient data have been entered and locked in the database, and the applicant is ready to request FDA approval.

The package should also include key raw and derived datasets, including safety/efficacy tables and figures, study protocol and amendments, and a draft of the package insert.

The applicant must also submit key results, analysis, and datasets for other disciplines, if applicable.

The FDA will then evaluate these materials for sufficiency and integrity so that it can analyze the data to properly address key regulatory questions.

By the time the applicant submits the application to the FDA, the review team will have completed the analysis and be familiar with the data, and can conduct a more efficient, timely, and thorough review.

Drug or biologic products studied for their safety and effectiveness in treating serious or life-threatening illnesses and that provide meaningful therapeutic benefit over existing treatments may receive accelerated approval.

Accelerated approval means that a product candidate may be approved on the basis of adequate and well controlled clinical trials establishing that the product candidate has an effect on a surrogate endpoint that is reasonably likely to predict a clinical benefit, or on the basis of an effect on a clinical endpoint other than survival or irreversible morbidity or mortality or other clinical benefit, taking into account the severity, rarity and prevalence of the condition and the availability or lack of alternative treatments.

As a condition of approval, the FDA may require that a sponsor of a drug or biologic product candidate receiving accelerated approval perform adequate and well controlled post-marketing clinical trials.

In addition, the FDA currently requires as a condition for accelerated approval pre-approval of promotional materials.

The FDA’s Decision on an NDA

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An approval letter authorizes commercial marketing of the product with specific prescribing information for the approved indications.

A complete response letter generally outlines the deficiencies in the submission and may require substantial additional testing or information in order

for the FDA to reconsider the application.

If and when those deficiencies have been addressed to the FDA’s satisfaction in a resubmission of the NDA, the FDA will issue an approval letter.

A complete response letter generally indicates that the review cycle is complete and outlines the deficiencies in the submission and may require substantial additional testing or information in order for the FDA to reconsider the application.

An applicant has one year to respond to the deficiencies identified in the complete response letter.

The FDA has committed to reviewing such resubmissions in two or six months depending on the type of information included.

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If the FDA approves a new product, it may limit the approved indications for use of the product.

The agency may also require testing and surveillance programs to monitor the product after commercialization, or impose other conditions, including distribution restrictions or other risk management mechanisms, including REMS, to help ensure that the benefits of the product outweigh the potential risks.

REMS can include medication guides, communication plans for health care professionals, and elements to assure safe use, or ETASU.

ETASU can include, but are not limited to, special training or certification for prescribing or dispensing, dispensing only under certain circumstances, special monitoring and the use of patent registries.

The FDA may prevent or limit further marketing of a product based on the results of post-market studies or surveillance programs.

The FDA may also require contraindications, warnings or precautions be included in the product labeling, require post-approval trials, require testing and surveillance programs to monitor the product after commercialization, or impose other conditions, including distribution and use restrictions or other risk management mechanisms, including REMS,to help ensure that the benefits of the product outweigh the potential risks.

The FDA may prevent or limit further marketing of a product based on the results of post-marketing trials or surveillance programs.

After approval, many types of changes to the approved product, such as adding new indications, manufacturing changes and additional labeling claims, are subject to further testing requirements and FDA review and approval.

Under the Ensuring Innovation Act, signed into law in 2021, the FDA must publish action packages summarizing its decisions to approve new drugs within 30 days or approval of such drugs.

Post-Approval Regulation

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If a company is found to have promoted off-label uses, it may become subject to adverse public relations and administrative and judicial enforcement by the FDA, the DOJ, or the Office of the Inspector General of the Department of Health and Human Services, as well as state authorities.

This could subject a company to a range of penalties that could have a significant commercial impact, including civil and criminal fines and agreements that materially restrict the manner in which a company promotes or distributes drug products.

promotes or distributes drug products.

The federal government has levied large civil and criminal fines against companies for alleged improper promotion, and has also requested that companies enter into consent decrees or permanent injunctions under which specified promotional conduct is changed or curtailed.

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Section 505(b)(2) NDAs

NDAs for most new drug products are based on two full clinical studies which must contain substantial evidence of the safety and efficacy of the proposed new product for the proposed use.

NDAs for most new drug products are based on two full clinical trials which must contain substantial evidence of the safety and efficacy of the proposed new product for the proposed use.

These applications are submitted under Section 505(b)(1) of the FDCA.

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Specifically, Section 505(b)(2) applies to NDAs for a drug for which the investigations made to show whether or not the drug is safe for use and effective in use and relied upon by the applicant for approval of the application “were not conducted by or for the applicant and for which the applicant has not obtained a right of reference or use from the person by or for whom the investigations were conducted.”

Thus, Section 505(b)(2) authorizes the FDA to approve an NDA based on safety and effectiveness data that were not developed by the applicant.

Section 505(b)(2) authorizes the FDA to approve an NDA based on safety and effectiveness data that were not developed by the applicant.

NDAs filed under Section 505(b)(2) may provide an alternate and potentially more expeditious pathway to FDA approval for new or improved formulations or new uses of previously approved products.

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The FDA may then approve the new drug candidate for all or some of the label indications for which the referenced product has been approved, as well as for any new indication sought by the Section 505(b)(2) applicant.

Abbreviated New Drug Applications for Generic Drugs

In 1984, with passage of the Hatch-Waxman Amendments to the FDCA, Congress established an abbreviated regulatory scheme authorizing the FDA to approve generic drugs that are shown to contain the same active ingredients as, and to be bioequivalent to, drugs previously approved by the FDA pursuant to NDAs known as the reference listed drugs, or RLDs.

Abbreviated new drug applications, or ANDAs, generally do not include preclinical and clinical data to demonstrate safety and effectiveness.

Generic Drugs and Regulatory Exclusivity

Such previously approved drugs are known as the reference listed drugs, or RLDs.

Abbreviated new drug applications, or ANDAs, for generic drugs generally do not include preclinical and clinical data to demonstrate safety and effectiveness.

Instead, the applicant may rely on the preclinical and clinical testing previously conducted for the RLD.

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Under the statute, a generic drug is bioequivalent to an RLD if “the rate and extent of absorption of the drug do not show a significant difference from the rate and extent of absorption of the listed drug.” Upon approval of an ANDA, the FDA indicates whether the generic product is “therapeutically equivalent” to the RLD in its publication “Approved Drug Products with Therapeutic Equivalence Evaluations,” also referred to as the “Orange Book.” Physicians and pharmacists consider a therapeutic equivalent generic drug to be fully substitutable for the RLD.

In addition, by operation of certain state laws and numerous health insurance programs, the FDA’s designation of therapeutic equivalence often results in substitution of the generic drug without the knowledge or consent of either the prescribing physician or patient.

Under the Hatch-Waxman Amendments, the FDA may not approve an ANDA until any applicable period of non-patent exclusivity for the RLD has expired.

Under the Hatch-Waxman Act, the FDA may not approve an ANDA or 505(b)(2) application until any applicable period of non-patent exclusivity for the RLD has expired.

The FDCA provides a period of five years of non-patent data exclusivity for a new drug containing a new chemical entity, or NCE.

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An active moiety is the molecule or ion responsible for the physiological or pharmacological action of the drug substance.

In cases where such NCE exclusivity has been granted, an ANDA may not be filed with the FDA until the expiration of five years unless the submission is accompanied by a Paragraph IV certification, in which case the applicant may submit its application four years following the original product approval

In cases where such NCE exclusivity has been granted, a generic or follow-on drug application may not be filed with the FDA until the expiration of five years unless the submission is accompanied by a Paragraph IV certification, in which case the applicant may submit its application four years following the original product approval.

The FDCA also provides for a period of three years of exclusivity if the NDA includes reports of one or more new clinical investigations, other than bioavailability or bioequivalence studies, that were conducted by or for the applicant and are essential to the approval of the application.

This three-year exclusivity period often protects changes to a previously approved drug product, such as a new dosage form, route of administration, combination or indication.

Three-year exclusivity would be available for a drug product that contains a previously approved active moiety, provided the statutory requirement for a new clinical investigation is satisfied.

Unlike five-year NCE exclusivity, an award of three-year exclusivity does not block the FDA from accepting ANDAs seeking approval for generic versions of the drug as of the date of approval of the original drug product.

The FDA typically makes decisions about awards of data exclusivity shortly before a product is approved.

Hatch-Waxman Patent Certification and the 30-Month Stay

Upon approval of an NDA or a supplement thereto, NDA sponsors are required to list with the FDA each patent with claims that cover the applicant’s product or an approved method of using the product.

Each of the patents listed by the NDA sponsor is published in the Orange Book.

When an ANDA applicant files its application with the FDA, the applicant is required to certify to the FDA concerning any patents listed for the reference product in the Orange Book, except for patents covering methods of use for which the ANDA applicant is not seeking approval.

This three-year exclusivity period often protects changes to a previously approved drug product, such as new indications, dosage forms, route of administration, combination of ingredients.

Three-year exclusivity would be available for a drug product that contains a previously approved active moiety, provided the statutory requirement for

a new clinical investigation is satisfied.

Unlike five-year NCE exclusivity, an award of three-year exclusivity does not block the FDA from accepting ANDAs or 505(b)(2) NDAs seeking approval for generic versions of the drug as of the date of approval of the original drug product;

rather, this three-year exclusivity covers only the conditions of use associated with the new clinical investigations and, as a general matter, does not prohibit the FDA from approving follow-on applications for drugs containing the original active ingredient.

Upon submission of an NDA or a supplement thereto, NDA sponsors are required to list with the FDA each patent with claims that cover the applicant’s product or an approved method of using the product.

Upon approval of a new drug, each of the patents listed by the NDA sponsor is published in the Orange Book.

When an ANDA applicant files its application with the FDA, the applicant is required to certify to the FDA concerning any patents listed for the reference product in the Orange Book.

Specifically, the applicant must certify:

(i) the required patent information has not been filed, (ii) the listed patent has expired, (iii) the listed patent has not expired, but will expire on a particular date and approval is sought after patent expiration or (iv) the listed patent is invalid, unenforceable or will not be infringed by the new product.

To the extent that the Section 505(b)(2) applicant is relying on studies conducted for an already approved product, the applicant is required to certify to the FDA concerning any patents listed for the approved product in the Orange Book to the same extent that an ANDA applicant would.

Specifically, the applicant must certify with respect to each patent that:

• the required patent information has not been filed;

• the listed patent has expired;

• the listed patent has not expired, but will expire on a particular date and approval is sought after patent expiration;

• the listed patent is invalid, unenforceable or will not be infringed by the new product.

A certification that the new product will not infringe the already approved product’s listed patents or that such patents are invalid or unenforceable is called a Paragraph IV certification.

If the applicant does not challenge the listed patents or indicates that it is not seeking approval of a patented method of use, the application will not be approved until all the listed patents claiming the referenced product have expired (other than method of use patents involving indications for which the applicant is not seeking approval).

If the ANDA applicant has provided a Paragraph IV certification to the FDA, the applicant must also send notice of the Paragraph IV certification to the NDA and patent holders once the ANDA has been accepted for filing by the FDA.

The NDA and patent holders may then initiate a patent infringement lawsuit in response to the notice of the Paragraph IV certification.

The filing of a patent infringement lawsuit within 45 days after the receipt of a Paragraph IV certification automatically prevents the FDA from approving the ANDA until the earlier of 30 months after the receipt of the Paragraph IV notice, expiration of the patent, or a decision in the infringement case that is favorable to the ANDA applicant.

As a result, approval of a Section 505(b)(2) NDA can be stalled until all the listed patents claiming the referenced product have expired, until any non-patent exclusivity, such as exclusivity for obtaining approval of an NCE, listed in the Orange Book for the referenced product has expired, and, in the case of a Paragraph IV certification and subsequent patent infringement suit, until the earlier of 30 months, settlement of the lawsuit or a decision in the infringement case that is favorable to the Section 505(b)(2) applicant.

If the applicant does not challenge the listed patents, the ANDA or 505(b)(2) NDA will not be approved until all the listed patents claiming the referenced product have expired.

If the ANDA applicant or the 505(b)(2) applicant has provided a Paragraph IV certification to the FDA, the applicant must also send notice of the Paragraph IV certification to the NDA owner and patent holders once the ANDA or 505(b)(2) NDA has been accepted for filing by the FDA.

The NDA owner and patent holders may then initiate a patent infringement lawsuit in response to the notice of the Paragraph IV certification.

The filing of a patent infringement lawsuit within 45 days after the receipt of a Paragraph IV certification automatically prevents the FDA from approving the ANDA or 505(b)(2) NDA until the earlier of 30 months after the receipt of the Paragraph IV notice, expiration of the patent, or a decision in the infringement case that is favorable to the ANDA or 505(b)(2) applicant.

Pediatric Studies

Under the Pediatric Research Equity Act of 2003, an NDA or supplement thereto must contain data that are adequate to assess the safety and effectiveness of the product for the claimed indications in all relevant pediatric subpopulations, and to support dosing and administration for each pediatric subpopulation for which the product is safe and effective.

Under the Pediatric Research Equity Act of 2003, or PREA, an NDA or supplement thereto must contain data that are adequate to assess the safety and effectiveness of the product for the claimed indications in all relevant pediatric subpopulations, and to support dosing and administration for each pediatric subpopulation for which the product is safe and effective.

Sponsors must also submit pediatric study plans prior to the assessment data.

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The FDA may, on its own initiative or at the request of the applicant, grant deferrals for submission of some or all pediatric data until after approval of the product for use in adults, or full or partial waivers from the pediatric data requirements.

Additional requirements and procedures relating to deferral requests and requests for extension of deferrals are contained in the Food and Drug Administration Safety and Innovation Act.

The FDA maintains a list of diseases that are exempt from the requirements of the Pediatric Research Equity Act, or PREA, due to low prevalence of disease in the pediatric population.

Under the amended section 505B of the FDA Reauthorization Act of 2017, beginning on August 18, 2020, the submission of a pediatric assessment, waiver or deferral will be required for certain molecularly targeted cancer indications with the submission of an NDA application or supplement to an NDA application.

Previously, drugs that had been granted orphan drug designation were exempt from the requirements of the PREA.

The FDA Reauthorization Act of 2017 established new requirements to govern certain molecularly targeted cancer indications.

Any company that submits an NDA three years after the date of enactment of that statute must submit pediatric assessments with the NDA if the drug is intended for the treatment of an adult cancer and is directed at a molecular target that the FDA determines to be substantially relevant to the growth or progression of a pediatric cancer.

The investigation must be designed to yield clinically meaningful pediatric study data regarding the dosing, safety and preliminary efficacy to inform pediatric labeling for the product.

A deferral may be granted for several reasons, including a finding that the product or therapeutic candidate is ready for approval for use in adults before pediatric trials are complete or that additional safety or effectiveness data needs to be collected before the pediatric trials begin.

Unless otherwise required by regulation, the pediatric data requirements do not apply to products with orphan designation, although FDA has recently taken steps to limit what it considers abuse of this statutory exemption in PREA by announcing that it does not intend to grant any additional orphan drug designations for rare pediatric subpopulations of what is otherwise a common disease.

The FDA maintains a list of diseases that are exempt from the requirements of the PREA.

Pediatric Exclusivity

Pediatric exclusivity is another type of non-patent marketing exclusivity in the United States and, if granted, provides for the attachment of an additional six months of marketing protection to the term of any existing regulatory exclusivity, including the non-patent and orphan exclusivity.

Pediatric exclusivity is another type of non-patent marketing exclusivity in the United States and, if granted, provides for the attachment of an additional six months of marketing protection to the term of any existing patent or regulatory exclusivity, including the non-patent and orphan exclusivity.

This six-month exclusivity may be granted if an NDA sponsor submits pediatric data that fairly respond to a written request from the FDA for such data.

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rather, if the clinical trial is deemed to fairly respond to the FDA’s request, the additional protection is granted.

If reports of requested pediatric studies are submitted to and accepted by the FDA within the statutory time limits, whatever statutory or regulatory periods of exclusivity or patent protection cover the product are extended by six months.

by six months.

This is not a patent term extension, but it effectively extends the regulatory period during which the FDA cannot approve another application.

With regard to patents, the six-month pediatric exclusivity period will not attach to any patents for which a generic (ANDA or 505(b)(2) NDA) applicant submitted a paragraph IV patent certification, unless the NDA sponsor or patent owner first obtains a court determination that the patent is valid and infringed by a proposed generic product.

With regard to patents, the six-month pediatric exclusivity period will not attach to any patents for which a generic (ANDA or 505(b)(2) NDA) applicant submitted a Paragraph IV certification, unless the NDA sponsor or patent owner first obtains a court determination that the patent is valid and infringed by a proposed generic product.

Orphan Drug Designation and Exclusivity

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This is the case despite an earlier court opinion holding that the Orphan Drug Act unambiguously required the FDA to recognize orphan exclusivity regardless of a showing of clinical superiority.

The requirement for a product to show clinical superiority applies to product candidates that received orphan drug designation before the enactment of amendments to the FDCA in 2017 but have not been approved by the FDA.

It is unclear how the FDA will implement a recent court decision concluding that orphan drug exclusivity applies to the entire designated disease or condition rather than the “indication or use”.

Patent Term Restoration and Extension

A patent claiming a new drug product may be eligible for a limited patent term extension under the Hatch-Waxman Act, which permits a patent restoration of up to five years for patent term lost during product development and the FDA regulatory review.

The restoration period granted on a patent covering a product is typically one-half the time between the effective date of when a clinical investigation involving human beings has begun and the submission date of an application, plus the time between the submission date of an application and the ultimate approval date.

Patent term restoration cannot be used to extend the remaining

term of a patent past a total of 14 years from the product’s approval date.

A patent claiming a new drug product, its method of use or its method of manufacture may be eligible for a limited patent term extension under the Hatch-Waxman Act, which permits a patent restoration of up to five years for patent term lost during product development and the FDA regulatory review.

The restoration period granted on a patent covering a product is typically one-half the time between the effective date of when a clinical investigation involving human beings has begun and the submission date of an application for approval, plus the time between the submission date of an application and the ultimate approval date.

Patent term restoration cannot be used to extend the remaining term of a patent past a total of 14 years from the product’s approval date.

Only one patent applicable to an approved product is eligible for the extension, and the application for the extension must be submitted prior to the expiration of the patent in question.

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The USPTO reviews and approves the application for any patent term extension or restoration in consultation with the FDA.

FDA Approval and Regulation of Companion Diagnostics

If safe and effective use of a therapeutic depends on an in vitro diagnostic, then the FDA generally will require approval or clearance of that diagnostic, known as a companion diagnostic, at the same time that the FDA approves the therapeutic product.

In August 2014, the FDA issued final guidance clarifying the requirements that will apply to approval of therapeutic products and in vitro companion diagnostics.

According to the guidance, for novel drugs, a companion diagnostic device and its corresponding therapeutic should be approved or cleared contemporaneously by the FDA for the use indicated in the therapeutic product’s labeling.

If the FDA determines that a companion diagnostic device is essential to the safe and effective use of a novel therapeutic product or indication, the FDA generally will not approve the therapeutic product or new therapeutic product indication if the companion diagnostic device is not approved or cleared for that indication.

Approval or clearance of the companion diagnostic device will ensure that the device has been adequately evaluated and has adequate performance characteristics in the intended population.

The guidance also explains that a companion diagnostic device used to make treatment decisions in clinical trials of a biologic product candidate generally will be considered an investigational device, unless it is employed for an intended use for which the device is already approved or cleared.

If used to make critical treatment decisions, such as patient selection, the diagnostic device generally will be considered a significant risk device under the FDA’s Investigational Device Exemption, or IDE, regulations.

Thus, the sponsor of the diagnostic device will be required to comply with the IDE regulations.

According to the guidance, if a diagnostic device and a drug are to be studied together to support their respective approvals, both products can be studied in the same investigational study, if the study meets both the requirements of the IDE regulations and the IND regulations.

The guidance provides that depending on the details of the study plan and subjects, a sponsor may seek to submit an IND alone, or both an IND and an IDE.

In July 2016, the FDA issued a draft guidance document intended to further assist sponsors of therapeutic products and sponsors of in vitro companion diagnostic devices on issues related to co-development of these products.

Under the FDCA, in vitro diagnostics, including companion diagnostics, are regulated as medical devices.

In the United States, the FDCA and its implementing regulations, and other federal and state statutes and regulations govern, among other things, medical device design and development, preclinical and clinical testing, premarket clearance or approval, registration and listing, manufacturing, labeling, storage, advertising and promotion, sales and distribution, export and import, and post-market surveillance.

Unless an exemption applies, diagnostic tests require marketing clearance or approval from the FDA prior to commercial distribution.

The two primary types of FDA marketing authorization applicable to a medical device are premarket notification, also called 510(k) clearance, and premarket approval, or PMA approval.

The PMA process, including the gathering of clinical and preclinical data and the submission to and review by the FDA, can take several years or longer.

It involves a rigorous premarket review during which the applicant must prepare and provide the FDA with reasonable assurance of the device’s safety and effectiveness, and information about the device and its components regarding, among other things, device design, manufacturing and labeling.

PMA applications are subject to an application fee.

For federal fiscal year 2021, the standard fee is $365,657 and the small business fee is $91,414.

In addition, PMAs for certain devices must generally include the results from extensive preclinical and adequate and well-controlled clinical trials to establish the safety and effectiveness of the device for each indication for which FDA approval is sought.

In particular, for a diagnostic, a PMA application typically requires data regarding analytical and clinical validation studies.

As part of the PMA review, the FDA will typically inspect the manufacturer’s facilities for compliance with the Quality System Regulation, which imposes elaborate testing, control, documentation and other quality assurance requirements.

PMA approval is not guaranteed, and the FDA may ultimately respond to a PMA submission with a not approvable determination based on deficiencies in the application, and require additional clinical trial or other data that may be expensive and time-consuming to generate and that can substantially delay approval.

If the FDA’s evaluation of the PMA application is favorable, the FDA typically issues an approvable letter requiring the applicant’s agreement to specific conditions, such as changes in labeling, or specific additional information, such as submission of final labeling, in order to secure final approval of the PMA.

If the FDA’s evaluation of the PMA or manufacturing facilities is not favorable, the FDA will deny approval of the PMA or issue a not approvable letter.

A not approvable letter will outline the deficiencies in the application and, where practical, will identify what is necessary to make the PMA approvable.

The FDA may also determine that additional clinical trials are necessary, in which case the PMA approval may be delayed for several months or years while the trials are conducted and the data submitted in an amendment to the PMA.

If the FDA concludes that the applicable criteria have been met, the FDA

will issue a PMA for the approved indications, which can be more limited than those originally sought by the applicant.

The PMA can include post-approval conditions that the FDA believes necessary to ensure the safety and effectiveness of the device, including, among other things, restrictions on labeling, promotion, sale and distribution.

Once granted, PMA approval may be withdrawn by the FDA if a manufacturer fails to comply with applicable regulatory requirements.

Health Care Law and Regulation

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• the federal Anti-Kickback Statute, which prohibits, among other things, persons and entities from knowingly and willfully soliciting, offering, paying, receiving or providing remuneration, directly or indirectly, in cash or in kind, to induce or reward either the referral of an individual for, or the purchase, order or recommendation of, any good or service, for which payment may be made, in whole or in part, under a federal health care program such as Medicare and Medicaid;

• the federal civil and criminal false claims laws, including the civil False Claims Act, and civil monetary penalties laws, which prohibit individuals or entities from, among other things, knowingly presenting, or causing to be presented, to the federal government, claims for payment that are false, fictitious or fraudulent or knowingly making, using or causing to made or used a false record or statement to avoid, decrease or conceal an obligation to pay money to the federal government.

made or used a false record or statement to avoid, decrease or conceal an obligation to pay money to the federal government;

• the federal Health Insurance Portability and Accountability Act of 1996, or HIPAA, which created additional federal criminal laws that prohibit, among other things, knowingly and willfully executing, or attempting to execute, a scheme to defraud any health care benefit program or making false statements relating to health care matters;

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officials for the purpose of obtaining or retaining business or otherwise seeking favorable treatment;

• the federal transparency requirements known as the federal Physician Payments Sunshine Act, under the Patient Protection and Affordable Care Act, as amended by the Health Care Education Reconciliation Act, or the ACA, which requires certain manufacturers of drugs, devices, biologics and medical supplies to report annually to the Centers for Medicare & Medicaid Services, or CMS, within the United States Department of Health and Human Services, information related to payments and other transfers of value made by that entity to physicians and teaching hospitals, as well as ownership and investment interests held by physicians and their immediate family members;

• the federal transparency requirements known as the federal Physician Payments Sunshine Act, under the Patient Protection and Affordable Care Act, as amended by the Health Care Education Reconciliation Act, or the ACA, which requires certain manufacturers of drugs, devices, biologics and medical supplies to report annually to the Centers for Medicare & Medicaid Services, or CMS, within the United States Department of Health and Human Services, information related to payments and other transfers of value made by that entity to physicians, other healthcare providers and teaching hospitals, as well as ownership and investment interests held by physicians, other healthcare providers and their immediate family members;

• analogous state and foreign laws and regulations, such as state anti-kickback and false claims laws, which may apply to health care items or services that are reimbursed by non-government third-party payors, including private insurers.

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State and foreign laws also govern the privacy and security of health information in some circumstances, many of which differ from each other in significant ways and often are not preempted by HIPAA, thus complicating compliance efforts.

Violations of these laws are punishable by criminal and/or civil sanctions, including, in some instances, exclusion from participation in federal and state health care programs, such as Medicare and Medicaid.

Pharmaceutical Insurance Coverage and Health Care Reform

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Significant uncertainty exists as to the coverage and reimbursement status of products approved by the FDA and other government authorities.

Thus, even if a product candidate is approved, sales of the product will depend, in part, on the extent to which third-party payors, including government health programs in the United States such as Medicare and Medicaid, commercial health insurers and managed care organizations, provide coverage and establish adequate reimbursement levels for

The process for determining whether a payor will provide coverage for a product may be separate from the process for setting the price or reimbursement rate that the payor will pay for the product once coverage is approved.

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A Joint Select Committee on Deficit Reduction, tasked with recommending a targeted deficit reduction of at least $1.2 trillion for the years 2013 through 2021, was unable to reach required goals, thereby triggering the legislation’s automatic reduction to several government programs.

This includes aggregate reductions of Medicare payments to providers up to 2% per fiscal year, which went into effect in April 2013 and, due to subsequent legislative amendments, will remain in effect through 2030 pursuant to the CARES Act.

In January 2013, President Obama signed into law the American Taxpayer Relief Act of 2012, which, among

other things, further reduced Medicare payments to several providers, including hospitals, imaging centers and cancer treatment centers, and increased the statute of limitations period for the government to recover overpayments to providers from three to five years.

This includes aggregate reductions of Medicare payments to providers up to 2% per fiscal year, which will remain in effect through 2031.

However, pursuant to the Coronavirus Aid, Relief and Economic Security Act and subsequent legislation, these Medicare reductions are suspended through the end of March 2022 and from April 2022 through June 2022, a 1% cut will be in effect, with the full 2% cut resuming thereafter.

Since enactment of the ACA, there have been, and continue to be, numerous legal challenges and Congressional actions to repeal and replace provisions of the law.

For example, with enactment of the Tax Cuts and Jobs Act of 2017, which was signed by the President on December 22, 2017, Congress repealed the “individual mandate.” The repeal of this provision, which requires most Americans to carry a minimal level of health insurance, became effective in 2019.

Additionally, the 2020 federal spending package permanently eliminated, effective January 1, 2020, the ACA-mandated “Cadillac” tax on high-cost employer-sponsored health coverage and the medical device tax and, effective January 1, 2021, also eliminated the health insurer tax.

Further, the Bipartisan Budget Act of 2018, among other things, amended the ACA, effective January 1, 2019, to increase from 50 percent to 70 percent the point-of-sale discount that is owed by pharmaceutical manufacturers who participate in Medicare Part D and to close the coverage gap in most Medicare drug plans, commonly referred to as the “donut hole.” Congress may consider other legislation to replace elements of the ACA during the next Congressional session.

The Trump Administration also took executive actions to undermine or delay implementation of the ACA.

During his term, President Trump signed two Executive Orders designed to delay the implementation of certain provisions of the ACA or otherwise circumvent some of the requirements for health insurance mandated by the ACA.

One Executive Order directs federal agencies with authorities and responsibilities under the ACA to waive, defer, grant exemptions from, or delay the implementation of any provision of the ACA that would impose a fiscal or regulatory burden on states, individuals, healthcare providers, health insurers, or manufacturers of pharmaceuticals or medical devices.

The second Executive Order terminates the cost-sharing subsidies that reimburse insurers under the ACA.

On January 28, 2021, however, President Biden issued a new Executive Order which directs federal agencies to reconsider rules and other policies that limit Americans’ access to health care, and consider actions that will protect and strengthen that access.

For example, with enactment of the Tax Cuts and Jobs Act of 2017 on December 22, 2017, Congress repealed the “individual mandate.” The repeal of this provision, which requires most Americans to carry a minimal level of health insurance, became effective in 2019.

On November 10, 2020, the Supreme Court heard oral arguments as to whether the individual mandate portion of the ACA is an essential and inseverable feature of the ACA, and therefore because the mandate was repealed as part of the Tax Cuts and Jobs Act of 2017, the remaining provisions of the ACA are invalid as well.

On June 17, 2021, the Supreme Court dismissed this action after finding that the plaintiffs did not have standing to challenge the ACA’s minimum essential coverage provision at issue in the case.

Litigation and legislation over the ACA are likely to continue, with unpredictable and uncertain results.

The Trump Administration also took executive actions to undermine or delay implementation of the ACA, including directing federal agencies with authorities and responsibilities under the ACA to waive, defer, grant exemptions from, or delay the implementation of any provision of the ACA that would impose a fiscal or regulatory burden on states, individuals, healthcare providers, health insurers, or manufacturers of pharmaceuticals or medical devices.

On January 28, 2021, however, President

Biden rescinded those orders issued a new executive order which directs federal agencies to reconsider rules and other policies that limit Americans’ access to health care, and consider actions that will protect and strengthen that access.

Under this executive order, federal agencies are directed to re-examine:

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policies that undermine the Health Insurance Marketplace or other markets for health insurance;

policies that make it more difficult to enroll in Medicaid and the ACA;

policies that make it more difficult to enroll in Medicaid and under the ACA;

and policies that reduce affordability of coverage or financial assistance, including for dependents.

On November 10, 2020, the Supreme Court heard oral arguments as to whether the individual mandate portion of the ACA is an essential and inseverable feature of the ACA, and therefore because the mandate was repealed as part of the Tax Cuts and Jobs Act, the remaining provisions of the ACA are invalid as well.

On February 10, 2021, the Biden Administration withdrew DOJ’s support for this lawsuit.

A ruling by the Supreme Court is expected sometime this year.

Litigation and legislation over the ACA are likely to continue, with unpredictable and uncertain results.

The costs of prescription pharmaceuticals have also been the subject of considerable discussion in the United States.

To date, there have been several recent U.S.

congressional inquiries, as well as proposed and enacted state and federal legislation designed to, among other things, bring more transparency to drug pricing, review the relationship between pricing and manufacturer patient programs, reduce the costs of drugs under Medicare and reform government program reimbursement methodologies for drug products.

To those ends, President Trump issued five executive orders intended to lower the costs of prescription drug products but it is unclear whether, and to what extent, these orders will remain in force under the Biden Administration.

Further, on September 24, 2020, the Trump Administration finalized a rulemaking allowing states or certain other non-federal government entities to submit importation program proposals to the FDA for review and approval.

Applicants are required to demonstrate that their importation plans pose no additional risk to public health and safety and will result in significant cost savings for consumers.

The FDA has issued draft guidance that would allow manufacturers to import their own FDA-approved drugs that are authorized for sale in other countries (multi-market approved products).

congressional inquiries, as well as proposed and enacted state and federal legislation designed to, among other things, bring more transparency to drug pricing, review the relationship between pricing and manufacturer patient programs, and reduce the costs of drugs under Medicare and Medicaid.

To those ends, President Trump issued several executive orders intended to lower the costs of prescription drug products.

Certain of these orders are reflected in recently promulgated regulations, including an interim final rule implementing a most favored nation model for prices that would tie Medicare Part B payments for certain physician-administered pharmaceuticals to the lowest price paid in other economically advanced countries, effective January 1, 2021, but such rule has been subject to a nationwide preliminary injunction.

In December 2021, the CMS issued a final rule to rescind it.

With issuance of this rule, CMS stated that it will explore all options to incorporate value into payments for Medicare Part B pharmaceuticals and improve beneficiaries' access to evidence-based care.

In November 2020, the Department of Health and Human Services, or HHS, finalized a regulation removing safe harbor protection for price reductions from pharmaceutical manufacturers to plan sponsors under Part D, either directly or through pharmacy benefit managers, unless the price reduction is required by law.

The implementation of the rule has been delayed by the Biden administration from January 1, 2022 to January 1, 2023 in response to ongoing litigation.

The rule also creates a new safe harbor for price reductions reflected at the point-of-sale, as well as a new safe harbor for certain fixed fee arrangements between pharmacy benefit managers and manufacturers, the implementation of which have also been delayed by the Biden administration until January 1, 2023.

In addition, in response to an executive order from President Biden, the HHS recently released a plan to reduce pharmaceutical prices.

At the state level, individual states are increasingly aggressive in passing legislation and implementing regulations designed to control pharmaceutical and biological product pricing, including price or patient reimbursement constraints, discounts, restrictions on certain product access and marketing cost disclosure and transparency measures, and, in some cases, designed to encourage importation from other countries and bulk purchasing.

For example, HHS and the FDA published a final rule allowing states and other entities to develop a Section 804 Importation Program, or SIP, to import certain prescription drugs from Canada into the United States.

The final rule is currently the subject of ongoing litigation, but at least six states (Vermont, Colorado, Florida, Maine, New Mexico and New Hampshire) have passed laws allowing for importation from Canada with the intent of developing SIPs for review and approval by the FDA.

A number of states have also required drug manufacturers and other entities in the drug supply chain, including health carriers, pharmacy benefit managers and wholesale distributors, to disclose information about pricing of pharmaceuticals.

In addition, regional health care authorities and individual hospitals are increasingly using bidding procedures to determine what pharmaceutical products and which suppliers will be included in their prescription drug and other health care programs.

These measures could reduce the ultimate demand for our products, once approved, or put pressure on our product pricing.

We expect that additional state and federal healthcare reform measures will be adopted in the future, any of which could limit the amounts that federal and state governments will pay for healthcare products and services, which could result in reduced demand for our product candidates or additional pricing pressures.

Review and Approval of Medicinal Products in the European Union

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Whether or not it obtains FDA approval for a product, an applicant will need to obtain the necessary approvals by the comparable non-U.S.

regulatory authorities before

it can commence clinical trials or marketing of the product in those countries or jurisdictions.

regulatory authorities before it can commence clinical trials or marketing of the product in those countries or jurisdictions.

Specifically, the process governing approval of medicinal products in the EU generally follows the same lines as in the United States.

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Clinical Trial Approval

The Clinical Trials Directive 2001/20/EC, the Directive 2005/28/EC on Good Clinical Practice, or GCP, and the related national implementing provisions of the individual EU Member States govern the system for the approval of clinical trials in the EU.

Under this system, an applicant must obtain prior approval from the competent national authority of the EU Member States in which the clinical trial is to be conducted.

The Clinical Trials Directive 2001/20/EC, the Directive 2005/28/EC on GCP and the related national implementing provisions of the individual EU Member States govern the system for the approval of clinical trials in the EU.

Under this system, an applicant must obtain prior approval from the competent national authority of the EU Member States in which the clinical trial

is to be conducted.

Furthermore, the applicant may only start a clinical trial at a specific study site after the competent ethics committee has issued a favorable opinion.

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and a harmonized procedure for the assessment of applications for clinical trials, which is divided in two parts.

Part I is assessed by the appointed reporting Member State, whose assessment report is submitted for review by the sponsor and all other competent authorities of all EU Member States in which an application for authorization of a clinical trial has been submitted, or Concerned Member States.

Part I is assessed by the competent authorities of all EU Member States in which an application for authorization of a clinical trial has been submitted, or Concerned Member States.

Part II is assessed separately by each Concerned Member State.

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However, overall related timelines will be defined by the Clinical Trial Regulation.

The Clinical Trial Regulation will be directly applicable in all the EU Member States, repealing the current Clinical Trials Directive 2001/20/EC and replacing any national legislation that was put in place to implement the Clinical Trials Directive.

Conduct of all clinical trials performed in the EU will continue to be bound by currently applicable provisions until the new Clinical Trial Regulation becomes applicable.

The extent to which on-going clinical trials will be governed by the Clinical Trial Regulation will depend on when the Clinical Trial Regulation becomes applicable and on the duration of the individual clinical trial.

If a clinical trial continues for more than three years from the day on which the Clinical Trial Regulation becomes applicable the Clinical Trial Regulation at that time will begin to apply to the clinical trial.

In January 2020, the website of the European Commission reported that the implementation of the Clinical Trial Regulation was dependent on the development of a fully functional clinical trials portal and database, which would be confirmed by an independent audit which was conducted in December 2020, and that the new legislation would come into effect six months after the European Commission publishes a notice of this confirmation.

The Clinical Trial Regulation becomes applicable six months after the European Commission publishes notice of this confirmation and has published an expected system “go live” in December 2021.

When the Clinical Trial Regulation becomes applicable, the existing Clinical Trial Directive and national legislation put in place to implement the Directive will be repealed.

Following implementation of the Clinical Trial Regulation, a transitional period will be in effect for one year where new clinical trial applications can be submitted either under the existing Clinical Trials Directive or under the new Clinical Trial Regulation.

The Clinical Trial Regulation came into application on January 31, 2022 and is directly applicable in all the EU Member States, repealing the current Clinical Trials Directive 2001/20/EC.

Conduct of all clinical trials performed in the EU were bound by previously applicable provisions until the new Clinical Trial Regulation became applicable.

If a clinical trial continues for more than three years from the day on which the Clinical Trial Regulation became applicable, the Clinical Trial Regulation will begin to apply to the clinical trial as of the time of its effectiveness.

Parties conducting certain clinical trials must, as in the United States, post clinical trial information in the EU at the EudraCT website:

https://eudract.ema.europa.eu.

PRIME Designation in the EU

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The priority medicines, or PRIME, scheme is intended to encourage drug development in areas of unmet medical need and provides accelerated assessment of products representing substantial innovation reviewed under the centralized procedure.

Products from small- and medium-sized enterprises, or SMEs, may qualify for earlier entry into the PRIME scheme than larger companies.

Products from small- and medium-sized enterprises may qualify for earlier entry into the PRIME scheme than larger companies.

Many benefits accrue to sponsors of product candidates with PRIME designation, including but not limited to, early and proactive regulatory dialogue with the EMA, frequent discussions on clinical trial designs and other development program elements, and accelerated marketing authorization application assessment once a dossier has been submitted.

Importantly, a dedicated Agency contact and rapporteur from the CHMP or Committee for Advanced Therapies, or CAT, are appointed early in the PRIME scheme facilitating increased understanding of the product at EMA’s Committee level.

A kick-off meeting initiates these relationships and includes a team of multidisciplinary experts at the EMA to provide guidance on the overall development and regulatory strategies.

Importantly, a dedicated Agency contact and rapporteur from the Committee for Human Medicinal Products, or CHMP, or Committee for Advanced Therapies are appointed early in the PRIME scheme facilitating increased understanding of the product at EMA’s Committee level.

Marketing Authorization

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or mutual recognition procedure.

A marketing authorization may be granted only to an applicant established in the EU.

Regulation (EC) No 1901/2006 provides that prior to obtaining a marketing authorization in the EU, applicants have to demonstrate compliance with all measures included in an EMA-approved Paediatric Investigation Plan, or PIP, covering all subsets of the pediatric population, unless the EMA has granted:

(1) a product-specific waiver;

(2) a class waiver;

or (3) a deferral for one or more of the measures included in the PIP.

The centralized procedure provides for the grant of a single marketing authorization by the European Commission that is valid across the European Economic Area (i.e., the EU as well as Iceland, Liechtenstein and Norway).

Pursuant to Regulation (EC) No 726/2004, the centralized procedure is compulsory for specific products, including for medicines produced by certain biotechnological processes, products designated as orphan medicinal products, advanced therapy medicinal products, or ATMPs, and products with a new active substance indicated for the treatment of certain diseases, including products for the treatment of cancer.

The centralized procedure provides for the grant of a single marketing authorization by the EMA that is valid in all EU Member States, as well as Iceland, Liechtenstein and Norway.

The centralized procedure is compulsory for specific products, including for medicines produced by certain biotechnological processes, products designated as orphan medicinal products, advanced therapy medicinal products, and products with a new active substance indicated for the treatment of certain diseases.

For products with a new active substance indicated for the treatment of other diseases and products that are highly innovative or for which a centralized process is in the interest of patients, the centralized procedure may be optional.

The centralized procedure may at the request of the applicant also be used in certain other cases.

We anticipate that the centralized procedure will be mandatory for the product candidates we are developing.

Under the centralized procedure, the CHMP is also responsible for several post-authorization and maintenance activities, such as the assessment of modifications or extensions to an existing marketing authorization.

Under the centralized procedure in the EU, the maximum timeframe for the evaluation of an MAA is 210 days, excluding clock stops, when additional information or written or oral explanation is to be provided by the applicant in response to questions of the CHMP.

Accelerated evaluation might be granted by the CHMP in exceptional cases, when a medicinal product is of major interest from the point of view of public health and from the viewpoint of therapeutic innovation.

If the CHMP accepts such request, the time limit of 210 days will be reduced to 150 days, but it is possible that the CHMP can revert to the standard time limit for the centralized procedure if it considers that it is no longer appropriate to conduct an accelerated assessment.

At the end of this period, the CHMP provides a scientific opinion on whether or not a marketing authorization should be granted in relation to a medicinal product.

Within 15 calendar days of receipt of a final opinion from the CHMP, the European Commission must prepare a draft decision concerning an application for marketing authorization.

This draft decision must take the opinion and any relevant provisions of EU law into account.

Before arriving at a final decision on an application for centralized authorization of a medicinal product, the European Commission must consult the Standing Committee on Medicinal Products for Human Use, or Standing Committee.

The Standing Committee is composed of representatives of the EU Member States and chaired by a non-voting European Commission representative.

The European Parliament also has a related “droit de regard”.

The European Parliament's role is to ensure that the European Commission has not exceeded its powers in deciding to grant or refuse to grant a marketing authorization.

The European Commission may grant a so-called “marketing authorization under exceptional circumstances”.

Such authorization is intended for products for which the applicant can demonstrate that it is unable to provide comprehensive data on the safety and efficacy under normal conditions of use, because the indications for which the product in question is intended are encountered so rarely that the applicant cannot reasonably be expected to provide comprehensive evidence, or in the present state of scientific knowledge, comprehensive information cannot be provided, or it would be contrary to generally accepted principles of medical ethics to collect such information.

Consequently, marketing authorization under exceptional circumstances may be granted subject to certain specific obligations, which may include the following:

• the applicant must complete an identified program of studies within a time period specified by the competent authority, the results of which form the basis of a reassessment of the benefit/risk profile;

• the medicinal product in question may be supplied on medical prescription only and in certain cases be administered only under strict medical supervision, possibly in a hospital and in the case of a radiopharmaceutical, by an authorized person;

• the package leaflet and any medical information must draw the attention of the medical practitioner to the fact that the particulars available concerning the medicinal product in question are as yet inadequate in certain specified respects.

A marketing authorization under exceptional circumstances is subject to annual review to reassess the risk-benefit balance in an annual reassessment procedure.

Continuation of the authorization is linked to the annual reassessment, and a negative assessment could potentially result in the marketing authorization being suspended or revoked.

The renewal of a marketing authorization of a medicinal product under exceptional circumstances, however, follows the same rules as a “normal” marketing authorization.

Thus, a marketing authorization under exceptional circumstances is granted for an initial five years, after which the authorization will become valid indefinitely, unless the EMA decides that safety grounds merit one additional five-year renewal.

The centralized procedure is optional for products that represent a significant therapeutic, scientific or technical innovation, or whose authorization would be in the interest of public health.

Under the centralized procedure, the maximum timeframe for the evaluation of an MAA is 210 days, excluding clock stops, when additional information or written or oral explanation is to be provided by the applicant in response to questions of the CHMP.

Accelerated assessment might be granted by the CHMP in exceptional cases, when a medicinal product is of major interest from the point of view of public health and from the viewpoint of therapeutic innovation.

The timeframe for the evaluation of an MAA under the accelerated assessment procedure is 150 days, excluding stop clocks.

There are also two other possible routes to authorize medicinal products in several EU countries, which are available for investigational medicinal products that fall outside the scope of the centralized procedure:

• Decentralized procedure .

Using the decentralized procedure, an applicant may apply for simultaneous authorization in more than one EU country of medicinal products that have not yet been authorized in any EU country and that do not fall within the mandatory scope of the centralized procedure.

The applicant may choose a member state as the reference member state to lead the scientific evaluation of the application.

• Mutual recognition procedure .

In the mutual recognition procedure, a medicine is first authorized in one EU Member State (which acts as the reference member state), in accordance with the national procedures of that country.

Following this, further marketing authorizations can be progressively sought from other EU countries in a procedure whereby the countries concerned agree to recognize the validity of the original, national marketing authorization produced by the reference member state.

Under the above-described procedures, before granting the marketing authorization, the EMA or the competent authorities of the Member States of the European Economic Area make an assessment of the risk-benefit balance of the product on the basis of scientific criteria concerning its quality, safety and efficacy.

Conditional Approval

The European Commission may also grant a so-called “conditional marketing authorization” prior to obtaining the comprehensive clinical data required for an application for a full marketing authorization.

Such conditional marketing authorizations may be granted for product candidates (including medicines designated as orphan medicinal products), if (i) the risk-benefit balance of the product candidate is positive;

(ii) it is likely that the applicant will be in a position to provide the required comprehensive clinical trial data;

(iii) the product fulfills an unmet medical need;

and (iv) the benefit to public health of the immediate availability on the market of the medicinal product concerned outweighs the risk inherent in the fact that additional data are still required.

Such conditional marketing authorizations may be granted for product candidates (including medicines designated as orphan medicinal products), if (i) the product candidate is intended for the treatment, prevention or medical diagnosis of seriously debilitating or life-threatening diseases, (ii) the risk-benefit balance of the product candidate is positive;

(iii) it is likely that the applicant will be in a position to provide the required comprehensive clinical trial data;

(iv) the product fulfills an unmet medical need;

and (v) the benefit to public health of the immediate availability on the market of the medicinal product concerned outweighs the risk inherent in the fact that additional data are still required.

A conditional marketing authorization may contain specific obligations to be fulfilled by the marketing authorization holder, including obligations with respect to the completion of ongoing or new studies, and with respect to the collection of pharmacovigilance data.

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The timelines for the centralized procedure described above also apply with respect to the review by the CHMP of applications for a conditional marketing authorization.

The EU medicines rules expressly permit the EU Member States to adopt national legislation prohibiting or restricting the sale, supply or use of any medicinal product containing, consisting of or derived from a specific type of human or animal cell, such as embryonic stem cells.

While the products we have in development do not make use of embryonic stem cells, it is possible that the national laws in certain EU Member States may prohibit or restrict us from commercializing our products, even if they have been granted an EU marketing authorization.

Unlike the centralized authorization procedure, the decentralized marketing authorization procedure requires a separate application to, and leads to separate approval by, the competent authorities of each EU Member State in which the product is to be marketed.

This application is identical to the application that would be submitted to the EMA for authorization through the centralized procedure.

The reference EU Member State prepares a draft assessment and drafts of the related materials within 120 days after receipt of a valid application.

The resulting assessment report is submitted to the concerned EU Member States who, within 90 days of receipt, must decide whether to approve the assessment report and related materials.

If a concerned EU Member State cannot approve the assessment report and related materials due to concerns relating to a potential serious risk to public health, disputed elements may be referred to the European Commission, whose decision is binding on all EU Member States.

The mutual recognition procedure similarly is based on the acceptance by the competent authorities of the EU Member States of the marketing authorization of a medicinal product by the competent authorities of other EU Member States.

The holder of a national marketing authorization may submit an application to the competent authority of an EU Member State requesting that this authority recognize the marketing authorization delivered by the competent authority of another EU Member State.

Regulatory Data Protection in the EU

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Pediatric Studies and Exclusivity

Prior to obtaining a marketing authorization in the EU, applicants must demonstrate compliance with all measures included in an EMA-approved PIP covering all subsets of the pediatric population, unless the EMA has granted a product-specific waiver, a class waiver, or a deferral for one or more of the measures included in the PIP.

Prior to obtaining a marketing authorization in the EU, applicants must demonstrate compliance with all measures included in an EMA-approved Pediatric Investigation Plan, or PIP, covering all subsets of the pediatric population, unless the EMA has granted a product-specific waiver, a class waiver, or a deferral for one or more of the measures included in the PIP.

The respective requirements for all marketing authorization procedures are laid down in Regulation (EC) No 1901/2006, the so-called Pediatric Regulation.

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The Pediatric Committee of the EMA, or PDCO, may grant deferrals for some medicines, allowing a company to delay development of the medicine for children until there is enough information to demonstrate its effectiveness and safety in adults.

The PDCO may also grant waivers when development of a medicine for children is not needed or is not appropriate, such as for diseases that only affect the elderly population.

The PDCO may also grant waivers when development of a medicine for children is not needed or is not appropriate, such as for diseases that only affect the adult population.

Before an MAA can be filed or an existing marketing authorization can be amended, the EMA requests that companies comply with the agreed studies and measures listed in each relevant PIP.

If an applicant obtains a marketing authorization in all EU Member States, or a marketing authorization granted in the centralized procedure by the European Commission, and the study results for the pediatric population are included in the product information, even when negative, the medicine is then eligible for an additional six month period of qualifying patent protection through extension of the term of the Supplementary Protection Certificate.

Orphan Drug Designation and Exclusivity

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The period of market exclusivity may, in addition, be reduced to six years if it can be demonstrated on the basis of available evidence that the original orphan medicinal product is sufficiently profitable not to justify maintenance of market exclusivity.

Patent Term Extensions

The European Union also provides for patent term extension through SPCs.

The rules and requirements for obtaining a SPC are similar to those in the United States.

An SPC may extend the term of a patent for up to five years after its originally scheduled expiration date and can provide up to a maximum of fifteen years of marketing exclusivity for a drug.

In certain circumstances, these periods may be extended for six additional months if pediatric exclusivity is obtained.

Although SPCs are available throughout the European Union, sponsors must apply on a country by country basis.

Similar patent term extension rights exist in certain other foreign jurisdictions outside the European Union.

Regulatory Requirements after a Marketing Authorization has been Obtained

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• The manufacturing of authorized medicinal products, for which a separate manufacturer’s license is mandatory, must also be conducted in strict compliance with the applicable EU laws, regulations and guidance, including Directive 2001/83/EC, Directive 2003/94/EC, Regulation (EC) No 726/2004 and the European Commission Guidelines for Good Manufacturing Practice.

These requirements include compliance with EU cGMP standards when manufacturing medicinal products and active pharmaceutical ingredients, including the manufacture of active pharmaceutical ingredients outside of the EU with the intention to import the active pharmaceutical ingredients into the EU.

These requirements include compliance with EU cGMP standards when manufacturing

medicinal products and active pharmaceutical ingredients, including the manufacture of active pharmaceutical ingredients outside of the EU with the intention to import the active pharmaceutical ingredients into the EU.

• The marketing and promotion of authorized drugs, including industry-sponsored continuing medical education and advertising directed toward the prescribers of drugs and/or the general public, are strictly regulated in the EU notably under Directive 2001/83EC, as amended, and EU Member State laws.

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The collection, use, disclosure, transfer, or other processing of personal data regarding individuals in the EU, including personal health data, is subject to the EU General Data Protection Regulation, or GDPR, which became effective on May 25, 2018.

GDPR is wide-ranging in scope and imposes numerous requirements on companies that process personal data, including requirements relating to processing health and other sensitive data, obtaining consent of the individuals to whom the personal data relates, providing information to individuals regarding data processing activities, implementing safeguards to protect the security and confidentiality of personal data, providing notification of data breaches, and taking certain measures when engaging third-party processors.

The GDPR is wide-ranging in scope and imposes numerous requirements on companies that process personal data, including requirements relating to processing health and other sensitive data, obtaining consent of the individuals to whom the personal data relates, providing information to individuals regarding data processing activities, implementing safeguards to protect the security and confidentiality of personal data, providing notification of data breaches, and taking certain measures when engaging third-party processors.

The GDPR also imposes strict rules on the transfer of personal data to countries outside the EU, including the United States, and permits data protection authorities to impose large penalties for violations of the GDPR, including potential fines of up to €20 million or 4% of annual global revenues, whichever is greater.

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Compliance with the GDPR will be a rigorous and time-intensive process that may increase the cost of doing business or require companies to change their business practices to ensure full compliance.

Brexit and the Regulatory Framework in the United Kingdom

On June 23, 2016, the electorate in the United Kingdom voted in favor of leaving the EU, commonly referred to as Brexit.

Following protracted negotiations, the United Kingdom left the EU on January 31, 2020.

On December 24, 2020, the United Kingdom and the European Union entered into a Trade and Cooperation Agreement, which sets out certain procedures for approval and recognition of medical products in each jurisdiction.

Since the regulatory framework for pharmaceutical products in the United Kingdom covering quality, safety and efficacy of pharmaceutical products, clinical trials, marketing authorization, commercial sales and distribution of pharmaceutical products is derived from EU directives and regulations, Brexit could materially impact the future regulatory regime that applies to products and the approval of product candidates in the United Kingdom.

Furthermore, while the Data Protection Act of 2018 in the United Kingdom that “implements” and complements the EU’s GDPR, is now effective in the United Kingdom, it is still unclear whether transfer of data from the European Economic Area, or EEA, to the United Kingdom will remain lawful under GDPR.

The Trade and Cooperation Agreement provides for a transitional period during which the United Kingdom will be treated like an EU Member State in relation to processing and transfers of personal data for four months from January 1, 2021.

This may be extended by two further months.

After such period, the United Kingdom will be a “third country” under the GDPR unless the European Commission adopts an adequacy decision in respect of transfers of personal data to the United Kingdom.

The United Kingdom has already determined that it considers all of the EU and EEA member states to be adequate for the purposes of data protection, ensuring that data flows from the United Kingdom to the EU and EEA remain unaffected.

In July 2020, the Court of Justice of the European Union, or the CJEU, invalidated the EU-U.S.

Privacy Shield framework, one of the mechanisms used to legitimize the transfer of personal data from the EEA to the United States.

The CJEU decision also drew into question the long-term viability of an alternative means of data transfer, the standard contractual clauses, for transfers of personal data from the EEA to the United States.

Following the withdrawal of the U.K.

from the EU, the U.K.

Data Protection Act 2018 applies to the processing of personal data that takes place in the U.K.

and includes parallel obligations to those set forth by GDPR.

Pricing Decisions for Approved Products

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Accordingly, we have determined that we operate in one operating segment.

The composition of our revenues for the years ended December 31, 2020, 2019, and 2018 consisted of the following:

2020 2019 2018

Collaboration and royalty revenues - Celgene 39 % 42 % 72 %

Collaboration revenue - CStone 2 % 7 % 13 %

Product revenue, net 59 % 51 % 15 %

Our product sales to one specialty distributor, McKesson, and one specialty pharmacy, Biologics, each accounted for more than 10% of our consolidated revenues for the years ended December 31, 2020 and 2019.

No customers accounted for more than 10% of our consolidated revenues for year ended December 31, 2018.

Refer to Note 12.

Product Revenue and Note 13.

Collaboration and License Agreements to the consolidated financial statements in this Annual Report on Form 10-K for additional information.

Our Scientific Advisors

Scientific Advisors

We have assembled a world-class scientific advisory board that includes renowned experts in cancer metabolism, oncology, drug discovery and translational medicine.

We have assembled a world-class scientific advisory board that includes renowned experts in cellular metabolism, drug discovery and translational medicine.

These advisors work in close collaboration with our scientists to identify new research directions and accelerate our target validation and drug discovery programs.

Name Primary affiliation

Joan Brugge, Ph.D.

Harvard Medical School

Scott Biller, Ph.D.

Former Chief Scientific Officer of Agios Pharmaceuticals

Cantley, Ph.D.

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University of Toronto and the Campbell Family Institute for Breast Cancer Research

Charles Sawyers, M.D.

Memorial Sloan-Kettering Cancer Center

Shin-San Michael Su, Ph.D.

Decibel Therapeutics

Former Chief Scientific Officer of Decibel Therapeutics

Marc Tessier-Lavigne, Ph.D.

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Employees and Human Capital

As of December 31, 2020, we had 562 full-time employees.

Of these employees, 552 were based in the United States and 10 were based in international locations and 108 held Ph.D., Pharm.D.

As of December 31, 2021, we had 390 full-time employees and 2 part-time employees, all based in the United States and of which 120 held Ph.D., Pharm.D.

None of our employees are represented by a labor union or covered under a collective bargaining agreement.

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We prioritize our employee experience and we are proud of our strong employee and contractor relations.

We understand that attracting, retaining, engaging and supporting our talented team and maintaining a diverse and inclusive organization is critical to our success and to increase the value we can provide for patients, shareholders and all stakeholders.

We understand that attracting, retaining, engaging and supporting our talented team and maintaining a diverse and inclusive organization is critical to our success and our ability to increase the value we can provide for patients, shareholders and all stakeholders.

We strive to cultivate a positive, respectful and fair work environment guided by the following three pillars:

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We provide flexible work arrangements which results in happier, more engaged and more productive employees.

We encourage a culture that promotes different perspectives, work styles, health and wellness, care of families and productivity.

We encourage a culture that promotes different perspectives, different work styles, health and wellness, care of families and productivity.

• Psychological safety:

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As of December 31, 2021, 30% of our workforce were ethnically diverse.

However, we recognize that there is still important progress to be made, particularly as relates to Black and Latino representation at our company, and this remains an area of continued emphasis for us.

However, we recognize that there is still important progress to be made, particularly as it relates to Black and Latino representation at our company, and this remains an area of continued emphasis for us.

We regularly evaluate the effectiveness of our human capital management practices through employee surveys and fostering a culture of ongoing feedback and two-way dialogue.

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Voluntary and involuntary turnover rates across all levels (executives/ senior managers, mid-level managers and professionals) are in alignment with, or lower than, the industry average.

In 2020, the onset of the COVID-19 pandemic provided an opportunity and an imperative to demonstrate our commitment to the health and wellbeing of our employees, our patients and our community.

We immediately implemented an action plan that took into consideration local and national public health guidelines and input from our employees.

In response to COVID-19, we took the following actions:

• In the early stages of the pandemic, we temporarily closed our offices and labs and eliminated in-person interactions between our field staff and physicians.

• We implemented a deliberate, phased approach to returning to on-site work under a set of operating procedures designed to protect the health and wellbeing of our team and communities.

• We developed a plan for primary employees who have critical on-site work – such as those who work in our labs – to return to our Cambridge headquarters, and for our field staff to safely interact with physicians on a case-by-case basis.

• We instituted – and continue to follow – many measures to ensure the safety of those who are working on-site, including daily health screenings, requiring the use of masks, clear signage to ensure social distancing can be maintained and providing support to enable employees to commute without using public transit.

• We also partnered with Project Beacon and One Medical to facilitate regular on-site testing for employees in the office, and with Everlywell to help with testing our field-based team members for COVID-19.

• We adjusted our approach to employee communications to maintain our culture in a mostly virtual environment, such as through a dedicated intranet site (called the Stay-at-Home Hub), more frequent and virtual companywide meetings, and expanded resources such as a partnership with Out School, an online learning company, and offering LinkedIn online learning.

Throughout the pandemic, we believe our ability to embrace flexibility has helped us maintain productivity to deliver for patients.

The COVID-19 pandemic evolved throughout 2021 and we continued to demonstrate our commitment to the health and wellbeing of our employees, our patients and our community.

We regularly monitored local and national public health data and guidelines and adjusted our practices accordingly, while maintaining operational productivity.

During 2021, we were able to eliminate our onsite testing requirements and temporarily relax our mask wearing policy.

We also implemented a mandatory

vaccination policy for all employees, regardless of their role or work locations, subject to limited exceptions.

Thoughtful management of our COVID-19 response continues to be a priority for our leadership team.

We have continued the employee communication approach we implemented during 2020 with frequent virtual/hybrid meetings and the use of our dedicated intranet site to provide regular, transparent updates on the company’s COVID-19 response.

We also implemented a new “Re-imagining Work” policy providing employees whose roles do not require an onsite or in field presence with an opportunity to choose the right working arrangement or them -- whether remote, hybrid with time split between home or the office, or primarily onsite in our Cambridge office.

As we have continued to navigate the ever-changing environment of the pandemic, we believe our ability to embrace change and our long-standing culture of flexibility have helped us maintain productivity to deliver for patients.

Our Corporate Information

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What changed 10-K

Item 1. Business