What changed in this filing

/stocks — the workspaceLOADING

Item 9A. Controls and Procedures

2022-02-24 compared with 2021-02-25 · 288 added, 715 removed, 767 unchanged (57% of the section changed)

23 unchanged sentences

Other Information

Disclosure Regarding Foreign Jurisdictions that Prevent Inspections

Not applicable.

Directors, Executive Officers and Corporate Governance

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The following documents are included on pages F-1 through F-27 attached hereto and are filed as part of this Annual Report on Form 10-K.

Report of Independent Registered Public Accounting Firm

Report of Independent Registered Public Accounting Firm (PCAOB ID 238)

Consolidated Balance Sheets

Consolidated Statements of Operations

Consolidated Statements of Comprehensive Loss

Consolidated Statements of Comprehensive Income (Loss)

Consolidated Statements of Stockholders’ Equity

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10-Q 001-36014 July 30, 2020 10.2

10.41 Share Repurchase Agreement, dated as of March 31, 2021, by and between the Registrant and Bristol-Myers Squibb Company

10-Q 001-36014 April 29, 2021 10.1

10.42# Letter Agreement, dated as of July 27, 2021, between the Registrant and Chris Bowden, M.D.

10-Q 001-36014 November 3, 2021 10.1

10.43 Sublease Agreement, dated July 27, 2021, between the Registrant and Prime Medicine, Inc.

(38 Sidney Street)

10-Q 001-36014 November 3, 2021 10.2

10.44 Sublease Agreement, dated July 27, 2021, between the Registrant and Prime Medicine, Inc.

(64 Sidney Street)

21.1 Subsidiaries of the Registrant

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† Confidential treatment has been granted as to certain portions, which portions have been omitted and filed separately with the Securities and Exchange Commission.

Description of Exhibit Incorporated by Reference Filed

Date of Filing Exhibit

+ Pursuant to Item 601(6)(2) of Regulation S-K, the disclosure schedules to the Purchase Agreement (identified therein) have been omitted from this Current Report on Form 8-K and will be furnished to the SEC supplementally upon request.

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February 24, 2022

/s/ Jonathan Biller Chief Financial Officer and Head of Legal and Corporate Affairs

/s/ Jonathan Biller Chief Financial Officer and Head of Corporate Affairs

(Principal financial officer)

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Jonathan Biller

/s/ Carman Alenson Vice President of Accounting, Treasury and Tax

Washburn Senior Director of Accounting

(Principal accounting officer)

February 24, 2022

Carman Alenson

Clancy Director February 24, 2022

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Index to Consolidated Financial Statements

Report of Independent Registered Public Accounting Firm

Report of Independent Registered Public Accounting Firm (PCAOB ID 238 )

Consolidated Balance Sheets

Consolidated Statements of Operations

Consolidated Statements of Comprehensive Loss

Consolidated Statements of Comprehensive Income (Loss)

Consolidated Statements of Stockholders’ Equity

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We have audited the accompanying consolidated balance sheets of Agios Pharmaceuticals, Inc.

and its subsidiaries (the “Company”) as of December 31, 2020 and 2019, and the related consolidated statements of operations, of comprehensive loss, of stockholders’ equity and of cash flows for each of the three years in the period ended December 31, 2020, including the related notes (collectively referred to as the “consolidated financial statements”).

and its subsidiaries (the “Company”) as of December 31, 2021 and 2020, and the related consolidated statements of operations, of comprehensive income (loss), of stockholders’ equity and of cash flows for each of the three years in the period ended December 31, 2021, including the related notes (collectively referred to as the “consolidated financial statements”).

We also have audited the Company's internal control over financial reporting as of December 31, 2021, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

1 unchanged sentence

Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2021, based on criteria established in Internal Control - Integrated Framework (2013) issued by the COSO.

Changes in Accounting Principles

As discussed in Note 3 to the consolidated financial statements, the Company changed the manner in which it accounts for leases in 2019 and the manner in which it accounts for revenue from contracts with customers in 2018.

Basis for Opinions

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Critical Audit Matters

The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that (i) relates to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments.

disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments.

The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Liability related to sale of future revenue

As described in Notes 3 and 10 to the consolidated financial statements, on June 11, 2020 the Company sold its tiered, sales-based royalty rights on worldwide net sales of IDHIFA®, as well as rights to receive up to $55 million in regulatory milestone payments from Bristol Myers Squibb to Royalty Pharma (“RPI”) for $255 million.

Management accounted for the sale of future revenue to RPI as a debt financing, as the Company continues to have significant continuing involvement in the generation of the cash flows.

Management applied significant judgment in determining the appropriate accounting treatment for the transaction.

The liability related to sale of future revenue and the related interest expense are based on Management’s current estimates of future royalties expected to be paid over the life of the arrangement.

Management periodically assesses the expected royalty payments using forecasts from external sources.

Th e Company recognized non-cash interest expense for the sale of future revenue of $17.8 million for the year ended December 31, 2020, and the liability related to the sale of future revenue was $261.3 million as of December 31, 2020.

The principal considerations for our determination that performing procedures relating to the liability related to the sale of future revenue is a critical audit matter are the significant judgment by management in determining the appropriate accounting for the transaction and the valuation of the liability related to sale of future revenue.

This in turn led to a high degree of auditor judgment, effort, and subjectivity in performing procedures and evaluating management’s determination of the accounting for the transaction and the assumption related to the current estimates of future royalties expected to be paid over the life of the arrangement.

Discontinued Operations - Expenses Directly Attributable to the Oncology Business

As described in Notes 2 and 3 to the consolidated financial statements, on March 31, 2021, the Company completed the sale of its oncology business, including TIBSOVO®, its clinical-stage product candidates vorasidenib, AG-270 and AG-636, and its oncology research programs, to Servier Pharmaceuticals LLC for a payment of approximately $1.8 billion, a payment of $200 million if, prior to January 1, 2027, vorasidenib is granted new drug application approval from the U.S.

Food and Drug Administration, 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.

Management accounted for the sale of the oncology business as a discontinued operation given the sale of the business represented a strategic shift that had a major effect on the Company’s operations and financial results.

As a result, management has classified the results of the oncology business, including the research and development, marketing, selling and general and administrative expenses incurred directly to solely support the oncology business, as discontinued operations in the consolidated statements of operations for all periods presented.

The Company has included in discontinued operations $41.6 million in research and development expenses and $8.6 million in selling, general and administrative expenses for the year ended December 31, 2021.

The principal consideration for our determination that performing procedures relating to discontinued operations - expenses directly attributable to the oncology business is a critical audit matter is the significant audit effort involved in performing procedures related to management’s determination and classification of the expenses incurred directly to solely support the oncology business as discontinued operations.

Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements.

These procedures included testing the effectiveness of controls relating to management’s determination of the accounting treatment for the transaction, as well as controls over the development of the assumption related to the current estimates of future royalties expected to be paid over the life of the arrangement.

These procedures also included, among others, evaluating whether the transaction has been properly accounted for in accordance with the relevant accounting standards, testing management’s process for determining the valuation of the liability related to the sale of future revenue, testing the completeness and accuracy of underlying data used in determining the valuation of the liability, and evaluating the significant assumption used by management related to the current estimate of future royalties expected to be paid over the life of the arrangement.

Evaluating management’s assumption related to the current estimate of future royalties expected to be paid over the life of the arrangement involved evaluating whether the assumption used by management was reasonable considering the terms of the agreement, consistency with external market and industry data, and consistency with evidence obtained in other areas of the audit.

These procedures included testing the effectiveness of controls relating to discontinued operations, including controls over management’s determination of the expenses incurred directly to solely support the oncology business.

These procedures also included, among others, evaluating management’s process for identifying expenses incurred directly to solely support the oncology business and testing the completeness, accuracy, and classification of operating expenses between discontinued operations and continuing operations in the consolidated financial statements.

/s/ PricewaterhouseCoopers LLP

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Marketable securities 816,892 445,493

Accounts receivable, net 21,328 8,952

Collaboration receivable – related party 2,123 1,539

Collaboration receivable – other 1,948 1,928

Royalty receivable – related party — 2,900

Inventory 14,698 7,331

Other receivable 4,378 —

Prepaid expenses and other current assets 39,835 15,889

Current assets of discontinued operations — 47,859

Total current assets 1,064,231 636,677

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Other non-current assets 2,900 —

Non-current assets of discontinued operations — 2,601

Total assets $ 1,437,736 $ 852,952

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Accrued expenses 31,967 30,801

Deferred revenue – related party — 10,933

Operating lease liabilities 10,828 7,093

Financing lease liabilities 331 317

Current liabilities of discontinued operations — 38,459

Total current liabilities 59,826 94,394

Deferred revenue, net of current portion – related party — 50,580

Operating lease liabilities, net of current portion 85,659 97,458

Financing lease liabilities, net of current portion 276 331

Liability related to the sale of future revenue, net of debt issuance costs 261,269 —

Non-current liabilities of discontinued operations — 261,269

Total liabilities 145,761 453,452

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Common stock, $ 0.001 par value;

125,000,000 shares authorized and 69,293,920 and 68,401,105 shares issued and outstanding at December 31, 2020 and 2019, respectively

125,000,000 shares authorized;

70,550,631 shares issued and 54,334,220 outstanding at December 31, 2021 and 69,293,920 shares issued and outstanding at December 31, 2020

Additional paid-in capital 2,334,348 2,242,801

Accumulated other comprehensive income 105 202

Accumulated other comprehensive (loss) income ( 1,198 ) 105

Accumulated deficit ( 238,760 ) ( 1,843,475 )

Treasury stock, at cost ( 16,216,411 shares at December 31, 2021 and no shares at December 31, 2020)

( 802,486 ) —

Total stockholders’ equity 1,291,975 399,500

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2021 2020 2019

Product revenue, net $ 121,089 $ 59,851 $ 13,841

Collaboration revenue – related party 68,274 39,257 60,661

Collaboration revenue – other 3,571 8,262 12,670

Royalty revenue – related party 10,262 10,542 7,215

Total revenue 203,196 117,912 94,387

Cost and expenses:

Cost of sales 2,805 1,317 1,397

Research and development $ 256,973 $ 220,811 $ 214,262

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Loss from operations ( 378,418 ) ( 335,916 ) ( 316,269 )

Gain on sale of oncology business 6,639 — —

Interest income, net 836 6,611 14,861

Non-cash interest expense for the sale of future revenue ( 17,832 ) — —

Net loss $ ( 327,370 ) $ ( 411,472 ) $ ( 346,028 )

Net loss per share – basic and diluted $ ( 4.74 ) $ ( 6.86 ) $ ( 6.03 )

Weighted-average number of common shares used in computing net loss per share – basic and diluted 68,997,879 59,994,539 57,418,300

Other income, net 14,433 — —

Net loss from continuing operations ( 356,510 ) ( 329,305 ) ( 301,408 )

Net income (loss) from discontinued operations, net of tax 1,961,225 1,935 ( 110,064 )

Net income (loss) $ 1,604,715 $ ( 327,370 ) $ ( 411,472 )

Net loss from continuing operations per share - basic and diluted $ ( 5.90 ) $ ( 4.77 ) $ ( 5.02 )

Net income (loss) from discontinued operations per share - basic and diluted $ 32.45 $ 0.03 $ ( 1.84 )

Net income (loss) per share - basic and diluted $ 26.55 $ ( 4.74 ) $ ( 6.86 )

Weighted-average number of common shares used in computing net loss per share from continuing operations, net income (loss) per share from discontinued operations and net income (loss) per share – basic and diluted 60,447,346 68,997,879 59,994,539

See accompanying Notes to Consolidated Financial Statements.

Agios Pharmaceuticals, Inc.

Consolidated Statements of Comprehensive Loss

Consolidated Statements of Comprehensive Income (Loss)

(In thousands) Years Ended December 31:

2021 2020 2019

Net loss $ ( 327,370 ) $ ( 411,472 ) $ ( 346,028 )

Net income (loss) $ 1,604,715 $ ( 327,370 ) $ ( 411,472 )

Other comprehensive (loss) income:

Unrealized (loss) gain on available-for-sale securities ( 1,303 ) ( 97 ) 2,373

Comprehensive loss $ ( 327,467 ) $ ( 409,099 ) $ ( 346,810 )

Comprehensive income (loss) $ 1,603,412 $ ( 327,467 ) $ ( 409,099 )

See accompanying Notes to Consolidated Financial Statements.

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Income (Loss) Accumulated

Deficit Total

Deficit Treasury Total

Stockholders’

(In thousands, except share amounts) Shares Amount

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

Balance at December 31, 2018 58,218,653 $ 58 $ 1,794,283 $ ( 2,171 ) $ ( 1,104,633 ) — $ — $ 687,537

Unrealized loss on available-for-sale securities — — — ( 782 ) — ( 782 )

Unrealized gain on available-for-sale securities — — — 2,373 — — — 2,373

Net loss — — — — ( 411,472 ) — — ( 411,472 )

Adjustment to beginning accumulated deficit resulting from adoption of ASC 606 — — — — 39,456 39,456

Stock-based compensation expense — — 58,050 — — — — 58,050

1 unchanged sentence

Issuance of common stock for follow-on offering 9,487,500 9 277,192 — — — — 277,201

Other — — ( 391 ) — — ( 391 )

Disposition of oncology business — — 14,323 — — — — 14,323

Balance at December 31, 2019 68,401,105 $ 68 $ 2,156,363 $ 202 $ ( 1,516,105 ) — $ — $ 640,528

Unrealized gain on available-for-sale securities — — — 2,373 — 2,373

Unrealized loss on available-for-sale securities — — — ( 97 ) — — — ( 97 )

Net loss — — — — ( 327,370 ) — — ( 327,370 )

1 unchanged sentence

Issuance of common stock under stock incentive and employee stock purchase plans 892,815 1 11,316 — — — — 11,317

Issuance of common stock for follow-on offering 9,487,500 9 277,192 — — 277,201

Other — — — — — —

Disposition of oncology business — — 13,520 — — — — 13,520

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

Unrealized loss on available-for-sale securities — — — ( 1,303 ) — — — ( 1,303 )

Net loss — — — — ( 327,370 ) ( 327,370 )

Net income — — — — 1,604,715 — — 1,604,715

Stock-based compensation expense — — 53,508 — — — — 53,508

Issuance of common stock under stock incentive and employee stock purchase plans 1,256,711 2 37,294 — — — — 37,296

Issuance of common stock for follow-on offering — — — — — —

Other — — — — — —

Repurchase of common stock — — — — — ( 16,216,411 ) ( 802,486 ) ( 802,486 )

Disposition of oncology business — — 745 — — — — 745

Balance at December 31, 2021 70,550,631 $ 71 $ 2,334,348 $ ( 1,198 ) $ ( 238,760 ) ( 16,216,411 ) $ ( 802,486 ) $ 1,291,975

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Operating activities

Net loss $ ( 327,370 ) $ ( 411,472 ) $ ( 346,028 )

Net income (loss) $ 1,604,715 $ ( 327,370 ) $ ( 411,472 )

Net income (loss) from discontinued operations 1,961,225 1,935 ( 110,064 )

Net loss from continuing operations ( 356,510 ) ( 329,305 ) ( 301,408 )

Adjustments to reconcile net loss to net cash used in operating activities:

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Non-cash operating lease expense 9,537 8,982 8,532

Non-cash interest expense associated with the sale of future revenue 17,832 — —

Non-cash royalty revenue ( 7,294 ) — —

Changes in operating assets and liabilities:

Accounts receivable, net ( 12,376 ) ( 3,876 ) ( 5,076 )

Collaboration receivable – related party ( 584 ) 923 ( 14 )

Collaboration receivable – other ( 20 ) ( 1,258 ) ( 670 )

Royalty receivable – related party 2,900 ( 666 ) ( 1,012 )

Inventory ( 7,367 ) ( 6,462 ) ( 869 )

Other receivables ( 4,378 ) — —

Prepaid expenses and other current and non-current assets ( 26,846 ) ( 3 ) ( 3,751 )

1 unchanged sentence

Accrued expenses 66 6,765 ( 825 )

Deferred revenue – related party ( 61,513 ) ( 31,006 ) ( 31,665 )

Operating lease liabilities ( 7,527 ) ( 8,127 ) ( 6,861 )

Deferred rent — — ( 82 )

Net cash used in operating activities ( 314,086 ) ( 243,944 ) ( 236,156 )

Net cash used in operating activities - discontinued operations ( 93,234 ) ( 46,815 ) ( 134,466 )

Net cash used in operating activities ( 407,320 ) ( 290,759 ) ( 370,622 )

Investing activities

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Purchases of property and equipment ( 5,741 ) ( 14,106 ) ( 12,028 )

Net cash provided by (used in) investing activities 75,746 91,440 ( 273,825 )

Net cash (used in) provided by investing activities ( 554,158 ) 76,549 91,583

Net cash provided by (used in) investing activities - discontinued operations 1,802,936 ( 803 ) ( 143 )

Net cash provided by investing activities 1,248,778 75,746 91,440

Financing activities

Payments on financing lease obligations ( 578 ) ( 336 ) ( 113 )

Purchase of treasury stock ( 802,486 ) — —

Proceeds from public offering of common stock, net of reimbursements — — 277,201

Reimbursement (payment) of public offering costs — — ( 391 )

Proceeds from the sale of future revenue, net of issuance costs 250,537 — —

Net proceeds from stock option exercises and employee stock purchase plan 37,296 11,317 12,523

Net cash provided by financing activities 261,518 289,611 546,024

Net cash (used in) provided by financing activities ( 765,768 ) 10,981 289,611

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

Net cash (used in) provided by financing activities ( 765,768 ) 261,518 289,611

Net change in cash and cash equivalents 75,690 46,505 10,429

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Additions to property and equipment in accounts payable and accrued expenses $ 1,678 $ 465 $ 5,168

Proceeds from stock option exercises in other current assets $ — $ — $ 7

Cash taxes paid $ 16,078 $ — $ —

Operating lease liabilities arising from obtaining operating lease assets $ — $ — $ 42,322

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

We are a biopharmaceutical company committed to transforming patients’ lives through scientific leadership in the field of cellular metabolism and adjacent areas of biology, with the goal of creating differentiated, small molecule medicines 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.

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.

We are located in Cambridge, Massachusetts.

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.

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.

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

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

We are developing vorasidenib for the treatment of IDH mutant-positive low grade glioma and are currently evaluating vorasidenib in clinical trials.

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

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

AG-636 is an inhibitor of the metabolic enzyme dihydroorotate dehydrogenase, or DHODH.

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 during 2021.We are currently evaluating AG-636 in the phase 1 dose-escalation trial in lymphoma.

The lead product candidate in our GDD portfolio, mitapivat, is an activator of both wild-type and mutant pyruvate kinase-R 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 clinical trials.

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.

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

On February 17, 2022, the FDA approved PYRUKYND® for the treatment of hemolytic anemia in adults with pyruvate kinase (PK) deficiency in the United States.

In addition, we are currently evaluating PYRUKYND® for the treatment of thalassemia and sickle cell disease, or SCD, in clinical trials.

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

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.

We are subject to risks common to companies in our industry including, but not limited to, uncertainties relating to conducting clinical research and development, the manufacture and supply of products for clinical and commercial use, obtaining and maintaining regulatory approvals and pricing and reimbursement for our products, market acceptance, managing global growth and operating expenses, availability of additional capital, competition, obtaining and enforcing patents, stock price volatility, dependence on collaborative relationships and third-party service providers, dependence on key personnel, potential litigation, product liability claims and government investigations.

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 remain eligible to receive a $ 25.0 million potential milestone payment for the enasidenib program.

The potential payment is a $ 25.0 million milestone payment 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.

Sale of our Oncology Business to 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 condensed consolidated statements of operation s , for the year ended December 31, 2021.

Reclassifications

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

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

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

On March 31, 2021, in connection with the Repurchase Program, we entered into a definitive share repurchase agreement with Bristol-Myers Squibb Company, or BMS, to repurchase 7.1 million shares of our common stock held by certain subsidiaries of BMS for an aggregate purchase price of $ 344.5 million, or $ 48.38 per share.

This repurchase was completed on April 5, 2021.

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

On October 5, 2021, we terminated our Rule 10b5-1 share repurchase program and on October 13, 2021 entered into a Rule 10b-18 repurchase plan that allows us to conduct open market repurchases over time up to our remaining authorization.

As of December 31, 2021, we have repurchased approximately 9.1 million shares of common stock for $ 458.0 million, or $ 50.35 per share, under the Rule 10b5-1 repurchase plan.

As of December 31, 2021, we have not repurchased any shares under the Rule 10b-18 repurchase plan.

In total, as of December 31, 2021, we have repurchased 16.2 million shares of common stock for $ 802.5 million, or $ 49.49 per share, under the Repurchase Program.

We have paused our share repurchases for the foreseeable future.

On April 30, 2020, we entered into an at-the-market sales agreement, or the 2020 sales agreement, with Cowen & Company LLC, or Cowen, pursuant to which we may offer and sell shares of our common stock having an aggregate offering price of up to $ 250.0 million through Cowen pursuant to a universal shelf registration statement on Form S-3 filed with the SEC on April 30, 2020.

As of December 31, 2021, $ 250.0 million in common stock remained available for future issuance under the 2020 sales agreement.

In November 2019, we completed a public offering of 8,250,000 shares of common at an offering price of $ 31.00 per share.

We received net proceeds from this offering of $ 241.0 million, after deducting underwriting discounts and commissions paid by us.

In addition, we granted the underwriters the right to purchase up to an additional 1,237,500 shares of common stock, which was exercised in November 2019, resulting in additional net proceeds to us of $ 36.2 million, after underwriting discounts and commissions.

After giving effect to the full exercise of the over-allotment option, the number of shares sold by us in the public offering totaled 9,487,500 shares, and net proceeds to us totaled $ 277.2 million, after underwriting discounts and commissions.

As of December 31, 2021, we had cash, cash equivalents and marketable securities of $ 1,286.4 million.

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

If the Company is unable to raise additional funds through equity or debt financings, the Company may be required to delay, limit, reduce or terminate product development or future commercialization efforts or grant rights to develop and market products or product candidates that the Company would otherwise prefer to develop and market itself.

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.

Subject to certain exceptions, we and Servier have agreed to use reasonable best efforts to cause the sale to be completed.

The Purchase Agreement includes certain termination provisions for both Servier and us and provides that, in connection with a

termination of the Purchase Agreement under specified circumstances, we may be required to pay Servier a termination fee of $ 45 million.

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.

If we are unable to raise additional funds through equity or debt financings, we may be required to delay, limit, reduce or terminate product development or future commercialization efforts or grant rights to develop and market products or product candidates that we would otherwise prefer to develop and market ourselves.

Summary of Significant Accounting Policies

Principles of consolidation

The consolidated financial statements include our accounts and the accounts of our wholly owned subsidiaries, Agios Securities Corporation, Agios International Sarl, Agios Germany GmbH, Agios Netherlands B.V., Agios Italy S.R.L., Agios France SARL, and Agios Limited.

The consolidated financial statements include our accounts and the accounts of our wholly owned subsidiaries, Agios Securities Corporation, Agios International Sarl (GmbH), Agios Germany GmbH, Agios Netherlands B.V., Agios Italy S.R.L., Agios France SARL, and Agios Limited.

All intercompany transactions have been eliminated in consolidation.

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

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

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

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

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Marketable securities are recorded at fair value.

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

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

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

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

Credit-related impairment is recognized as an allowance on the balance sheet with a corresponding adjustment to earnings, and noncredit-related impairment is recognized in other comprehensive income, net of taxes.

Evidence considered in this assessment includes reasons for the impairment, compliance with our investment policy, the severity of the impairment, collectibility of the security, and any adverse conditions specifically related to the security, an industry, or geographic area.

Evidence considered in this assessment includes reasons for the impairment, compliance with our investment policy, the severity of the impairment, collectability of the security, and any adverse conditions specifically related to the security, an industry, or geographic area.

Fair value measurements

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We evaluate transfers between levels at the end of each reporting period.

The carrying amounts of collaboration receivable – related party, collaboration receivable – other, royalty receivable – related party, accounts receivable, prepaid expenses and other current assets, accounts payable, and accrued expenses approximate their fair values due to their short-term maturities.

Accounts receivable, net

Our trade accounts receivable arise from product sales and represent amounts due from specialty distributors and specialty pharmacy providers in the U.S.

We monitor the financial performance and creditworthiness of our customers so that we can properly assess and respond to changes in their credit profile.

We reserve against these receivables for estimated losses that may arise from a customer’s inability to pay.

Amounts determined to be uncollectible are charged or written-off against the reserve.

The carrying amounts of other receivable, prepaid expenses and other current assets, accounts payable, and accrued expenses approximate their fair values due to their short-term maturities.

Concentrations of credit risk

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We have no off-balance sheet concentrations of credit risk, such as foreign currency exchange contracts, option contracts, or other hedging arrangements.

We are also subject to credit risk on our receivables, including trade receivables from our customers and collaboration and royalty receivables from Celgene and CStone Pharmaceuticals, or CStone.

Concentrations of credit risk with respect to receivables, which are typically unsecured, are somewhat mitigated due to the number of customers using our products.

Our trade receivables arise from product sales and have standard payment terms that generally require payment within 30 to 60 days.

We have evaluated the creditworthiness of our customers, including Celgene, and determined them to be creditworthy.

To date we have not experienced any losses with respect to our receivables.

Inventory is stated at the lower of cost or estimated net realizable value on a first-in, first-out basis.

Prior to the regulatory approval of our product candidates, we incur expenses for the manufacture of drug product that could potentially be available to support the commercial launch of those products.

Until the date at which regulatory approval has been received or is otherwise considered probable, we record all such costs as research and development expenses.

Upon approval of our wholly owned product, TIBSOVO®, by the FDA on July 20, 2018 for the treatment of adult patients with R/R AML with susceptible IDH1 mutation as detected by an FDA-approved test, we began to capitalize inventories of TIBSOVO®.

We perform an assessment of the recoverability of capitalized inventory during each reporting period and write down any excess and obsolete inventory to its estimated net realizable value in the period in which the impairment is first identified.

Such impairment charges, should they occur, are recorded as a component of cost of sales in the consolidated statements of operations.

The determination of whether inventory costs will be realizable requires the use of estimates by management.

actual market conditions are less favorable than projected by management, additional write-downs of inventory may be required.

Property and equipment

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

Liability related to sale of future revenue

We treat the sale of future revenue to RPI as a debt financing, as we have significant continuing involvement in the generation of the cash flows.

As result, we recorded the proceeds from this transaction as a liability related to the sale of future revenue to be amortized to interest expense using the effective interest rate method over the life of the arrangement.

The liability related to sale of future revenue and the related interest expense are based on our current estimates of future royalties expected to be paid over the life of the arrangement.

We will periodically assess the expected royalty payments using forecasts from external sources.

To the extent our future estimates of royalty payments are greater or less than previous estimates or the estimated timing of such payments is materially different than its previous estimates, we will prospectively recognize related non-cash interest expense.

For further discussion of the sale of future revenue, refer to Note 10, Sale of Future Revenue .

Amortization of issuance costs

We treated the liability related to sale of future revenue as a debt financing.

As such, the long-term liability is initially recorded at its proceeds, net of deferred costs.

Issuance costs, fees directly related to the sale of future revenue, are offset against initial carrying value of the long-term liability and are amortized on a straight-line basis over the remaining patent life of the product to an operating expense.

Revenue from contracts with customers

On January 1, 2018 we adopted ASC 606, Revenue from Contracts with Customers , under the modified retrospective method.

Prior to January 1, 2018 we accounted for the consideration received under the Collaboration Agreements under ASC 605-25, Multiple Element Arrangements.

In adopting ASC 606, we applied the practical expedient that permits aggregating the effect of all contract modifications that occurred prior to January 1, 2018.

No other practical expedients were used.

Similar to the accounting under ASC 605-25, the 2016 Agreement was determined to be a modification of the 2010 Agreement and the AG-881 Agreements with Celgene.

Revenue is recognized when the customer obtains control of promised goods or services, in an amount that reflects the consideration that we expect to receive in exchange for those goods or services.

To determine revenue recognition for arrangements that we determined to be within the scope of ASC 606, we perform the following five steps:

(i) identify the contract(s) with a customer;

(ii) identify the performance obligations in the contract;

(iii) determine the transaction price;

(iv) allocate the transaction price to the performance obligations in the contract;

and (v) recognize revenue when (or as) we satisfy a performance obligation.

We only apply the five-step model to contracts when it is probable that we will collect the consideration we are entitled to in exchange for the goods or services we transfer to the customer.

At contract inception, once the contract is determined to be within the scope of ASC 606, we assess the goods or services promised within each contract and determine those that are performance obligations, and assess whether each promised good or service is distinct.

We will then recognize as revenue the amount of the transaction price that is allocated to the respective performance obligation when (or as) the performance obligation is satisfied.

Product revenue

We sell TIBSOVO®, our wholly owned product, to a limited number of specialty distributors and specialty pharmacy providers, or collectively, the Customers.

The Customers subsequently resell TIBSOVO® to pharmacies or dispense directly to patients.

In addition to distribution agreements with Customers, we enter into arrangements with healthcare providers and payors that provide for government-mandated and/or privately-negotiated rebates, chargebacks and discounts with respect to the purchase of TIBSOVO®.

The performance obligation related to the sale of TIBSOVO® is satisfied and revenue is recognized when the Customer obtains control of the product, which occurs at a point in time, typically upon delivery to the Customer.

Revenues from product sales are recorded at the net sales price, or transaction price, which includes estimates of variable consideration for which reserves are established and result from contractual adjustments, government rebates, returns and other allowances that are offered within the contracts with our Customers, healthcare providers, payors and other indirect customers relating to the sale of our products.

Contractual adjustments.

We generally provide Customers with discounts, including prompt pay discounts, and allowances that are explicitly stated in the contracts and are recorded as a reduction of revenue in the period the related product revenue is recognized.

In addition, we receive sales order management, data and distribution services from certain Customers.

Chargebacks for fees and discounts represent the estimated obligations resulting from contractual commitments to sell products to qualified healthcare providers at prices lower than the list prices charged to Customers who directly purchase the product from us.

Customers charge us for the difference between what they pay for the product and the ultimate selling price to the qualified healthcare providers.

These reserves are estimated using the expected value method, based upon a range of possible outcomes that are probability-weighted for the estimated channel mix and are established in the same period that the related revenue is recognized, resulting in a reduction of product revenue.

Government rebates.

Government rebates include Medicare, TriCare, and Medicaid rebates, which we estimate using the expected value method, based upon a range of possible outcomes that are probability-weighted for the estimated payor mix.

These reserves are recorded in the same period the related revenue is recognized, resulting in a reduction of product revenue.

For Medicare, we also estimate the number of patients in the prescription drug coverage gap for whom we will owe an additional liability under the Medicare Part D program.

We estimate the amount of product sales that may be returned by Customers and record this estimate as a reduction of revenue in the period the related product revenue is recognized.

We currently estimate product return liabilities using the expected value method, based on available industry data, including our visibility into the inventory remaining in the distribution channel.

Collaboration revenue

We apply the provisions of ASC 808, Collaborative Arrangements, when accounting for our collaboration agreements.

We evaluate the presentation of amounts due from our collaborative partners associated with activities in the collaborative arrangement based on the nature of each activity.

For transactions with customers, we have reported revenues and costs in accordance with ASC 606 and ASC 606-10-55-36 through 55-40, Principal versus Agent Considerations .

We recognize revenue when the customer obtains control of promised goods or services, in an amount that reflects the consideration that we expect to receive in exchange for those goods or services.

To determine revenue recognition for arrangements that have been determined to be within the scope of ASC 606, we perform the following five steps:

(i) identify the contract(s) with a customer;

(ii) identify the performance obligations in the contract based on the relative standalone selling prices of the goods or services provided;

(iii) determine the transaction price;

(iv) allocate the transaction price to the performance obligations in the contract;

and (v) recognize revenue when (or as) we satisfy a performance obligation.

We only apply the five-step model to contracts when it is probable that we will collect the consideration we are entitled to in exchange for the goods or services we transfer to the customer.

Once the contract is determined to be within the scope of ASC 606, we assess the goods or services promised within each contract and determine those that are performance obligations, and assess whether each promised good or service is distinct.

We will then recognize as revenue the amount of the transaction price that is allocated to the respective performance obligation when (or as) the performance obligation is satisfied.

The transaction price for each collaboration agreement is determined based on the amount of consideration we expect to be entitled to for satisfying all performance obligations within the agreement.

Significant judgment may be required in determining the amount of variable consideration to be included in the transaction price.

We use the expected value methods to determine variable consideration and will re-evaluate the transaction price in each reporting period and as uncertain events are resolved or other changes in circumstances occur.

As part of the initial accounting for these arrangements, we must develop assumptions that require judgment to determine the standalone selling price, or SSP, for each performance obligation identified in the contract.

We use these key assumptions to determine the SSP, which include forecast of revenues, development timelines, reimbursement rates for personnel costs, discount rates and probabilities of technical and regulatory success.

We recognize the transaction price allocated to upfront license payments as revenue upon delivery of the license to the customer and resulting ability of the customer to use and benefit from the license, if the license is determined to be distinct from the other performance obligations identified in the contract.

If the license is considered to not be distinct from other performance obligations, we exercise judgment to assess the nature of the combined performance obligation to determine whether the combined performance obligation is satisfied (i) at a point in time, but only for licenses determined to be distinct from other performance obligations in the contract, or (ii) over time;

and, if over time, the appropriate method of measuring progress for purposes of recognizing revenue from license payments.

We evaluate the measure of progress each reporting period and, if necessary, adjust the measure of performance and related revenue recognition.

A significant portion of revenue generated from our collaboration agreements with Celgene relates to the provision of research and development services whereby revenue is recognized under an input method using the ratio of effort incurred to date compared to the total estimated effort required to complete the performance obligation.

The calculation of the total estimated effort includes the total amount of forecasted costs associated with the completion of discovery, pre-clinical or clinical trials, as well as the assumed timing of these activities and estimated patient populations.

Such cost estimates include forecasted direct labor and material costs, subcontractor costs, and external contract research organization, or CRO, costs.

Milestone revenue

Many of our collaboration agreements also entitle us to additional payments upon the achievement of performance-based milestones.

These milestones are generally categorized into three types:

development milestones, which are generally based on

the initiation of clinical trials;

regulatory milestones, which are generally based on the submission, filing or approval of regulatory applications such as a new drug application, or NDA, in the U.S.;

and sales-based milestones, which are generally based on meeting specific thresholds of sales in certain geographic areas during a specified period.

Upfront and ongoing development milestones per our collaboration agreements are not subject to refund if the development activities are not successful.

For each collaboration that includes development milestone payments, we evaluate whether it is probable that the consideration associated with each milestone will not be subject to a significant reversal in the cumulative amount of revenue recognized.

Amounts that meet this threshold are included in the transaction price using the most likely amount method, whereas amounts that do not meet this threshold are considered constrained and excluded from the transaction price until they meet this threshold.

Milestones tied to regulatory approval, and therefore not within our control, are considered constrained until such approval is received.

At the end of each subsequent reporting period, we re-evaluate the probability of a significant reversal of the cumulative revenue recognized for our milestones, and, if necessary, adjust our estimate of the overall transaction price.

Any such adjustments are recorded on a cumulative catch-up basis, which would affect revenues from collaborators and loss in the period of adjustment.

For arrangements that include sales-based milestone or royalty payments based on the level of sales, and in which the license is deemed to be the predominant item to which the sales-based milestone or royalties relate to, we recognize revenue in the period in which the sales-based milestone is achieved and in the period in which the sales associated with the royalty occur.

Adoption of ASC 606

We adopted ASC 606 using the modified retrospective method.

Under this method, we recognized the cumulative effect of the change in the opening balance of accumulated deficit in the January 1, 2018 consolidated balance sheet.

In adopting ASC 606, we applied the practical expedient that permits aggregating the effect of all contract modifications that occurred prior to January 1, 2018.

No other practical expedients were used.

The impact of the cumulative effect of the accounting changes upon the adoption of the standard is as follows:

(In thousands) December 31,

2017 Cumulative

Effect January 1,

Deferred revenue – related party, current and net of current portions $ 163,640 $ ( 39,456 ) $ 124,184

Accumulated deficit ( 798,061 ) 39,456 ( 758,605 )

The following tables summarize the effects of adopting ASC 606 on our consolidated financial statements:

Consolidated Balance Sheets December 31, 2018

(In thousands) Under Topic

606 Under Topic

605 Effect of

Accounts receivable, net $ 5,076 $ 5,076 $ —

Collaboration receivable – related party 2,462 2,462 —

Collaboration receivable – other 670 230 440

Total current assets 613,780 613,340 440

Total assets 858,457 858,017 440

Deferred revenue – related party 32,710 29,133 3,577

Total current liabilities 93,503 89,926 3,577

Deferred revenue, net of current portion – related party 59,809 101,180 ( 41,371 )

Total liabilities 170,920 208,714 ( 37,794 )

Accumulated deficit ( 1,104,633 ) ( 1,142,867 ) 38,234

Total stockholders’ equity 687,537 649,303 38,234

Total liabilities and stockholders’ equity 858,457 858,017 440

Consolidated Statements of Operations Year ended December 31, 2018

(In thousands, except per share data) Under Topic

606 Under Topic

605 Effect of

Product revenue, net $ 13,841 $ 13,841 $ —

Collaboration revenue – related party 60,661 58,994 1,667

Collaboration revenue – other 12,670 12,230 440

Total revenue 94,387 92,280 2,107

Research and development expense 341,324 337,995 3,329

Total cost and expenses 456,866 453,537 3,329

Loss from operations ( 362,479 ) ( 361,257 ) ( 1,222 )

Net loss ( 346,028 ) ( 344,806 ) ( 1,222 )

Net loss per share – basic and diluted ( 6.03 ) ( 6.01 ) ( 0.02 )

Consolidated Statements of Comprehensive Loss Year ended December 31, 2018

(In thousands) Under Topic

606 Under Topic

605 Effect of

Net loss $ ( 346,028 ) $ ( 344,806 ) $ ( 1,222 )

Comprehensive loss ( 346,810 ) ( 345,588 ) ( 1,222 )

Consolidated Statements of Cash Flows Year ended December 31, 2018

(In thousands) Under Topic

606 Under Topic

605 Effect of

Net loss $ ( 346,028 ) $ ( 344,806 ) $ ( 1,222 )

Adjustments to reconcile net loss to net cash used in operating activities:

Accounts receivable, net ( 5,076 ) ( 5,076 ) —

Collaboration receivable – related party ( 14 ) ( 14 ) —

Collaboration receivable – other ( 670 ) ( 230 ) ( 440 )

Deferred revenue – related party ( 31,665 ) ( 33,327 ) 1,662

Cost of Sales

Cost of sales consists primarily of manufacturing costs of TIBSOVO®.

Based on our policy to expense costs associated with the manufacturing of our products prior to regulatory approval, certain of the manufacturing costs associated with product shipments of TIBSOVO® r ecorded during the years ended December 31, 2020, 2019, and 2018 were expensed prior to July 20, 2018 and, therefore, are not included in costs of sales during the years ended December 31, 2020, 2019 or 2018.

Research and development costs

Research and development costs, including those accrued as of each balance sheet date, are expensed as incurred.

These costs include salaries and personnel-related costs, consulting fees, fees paid for contract research services, fees paid to contract CROs, and other third parties in connection with clinical trials and preclinical development activities, fees paid to investigative sites in connection with clinical studies, the costs associated with the product manufacturing, development, and distribution of clinical supplies, the costs of laboratory equipment and facilities, and other external costs.

These costs include salaries and personnel-related costs, consulting fees, fees paid for contract research services, fees paid to contract research organizations, or CROs, and other third parties in connection with clinical trials and preclinical development activities, fees paid to investigative sites in connection with clinical studies, the costs associated with the product manufacturing, development, and distribution of clinical supplies, the costs of laboratory equipment and facilities, and other external costs.

Nonrefundable advance payments for goods or services to be received in the future for use in research and development activities are deferred and capitalized.

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Comprehensive income (loss) is defined as the change in equity of a business enterprise during a period from transactions, and other events and circumstances, and currently consists of net loss and unrealized gains and losses on available-for-sale securities.

Accumulated other comprehensive loss consists entirely of unrealized gains and losses from available-for-sale securities as of December 31, 2020 and 2019.

Net loss per share

Basic net loss per share is calculated by dividing net loss by the weighted-average shares outstanding during the period, without consideration for common stock equivalents.

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

For purposes of the dilutive net loss per share calculation, stock options, restricted stock units, or RSUs, performance-based stock units, or PSUs, and market-based stock units, or MSUs, for which the performance vesting conditions have been met, and employee stock purchase plan shares are considered to be common stock equivalents but are excluded from the calculation of diluted net loss per share as their effect would be anti-dilutive.

Accumulated other comprehensive (loss) income consists entirely of unrealized gains and losses from available-for-sale securities as of December 31, 2021 and 2020.

Net income (loss) per share

Basic net income (loss) per share is calculated by dividing net income (loss) by the weighted-average shares outstanding during the period, without consideration for common stock equivalents.

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

For purposes of the dilutive net income (loss) per share calculation, stock options, restricted stock units, or RSUs, performance-based stock units, or PSUs, and market-based stock units, or MSUs, for which the performance vesting conditions have been met, and employee stock purchase plan shares are considered to be common stock equivalents but are excluded from the calculation of diluted net income (loss) per share as their effect would be anti-dilutive.

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

The control number used is loss from continuing operations.

The control number concept requires that the same number of potentially dilutive securities applied in computing diluted earnings per share from continuing operations be applied to all other categories of income or loss, regardless of their anti-dilutive effect on such categories.

Since we had a net loss for continuing operations for all periods presented, no dilutive effect has been recognized in the calculation of income (loss) from discontinued operations per share or net income (loss) per share.

Segment and geographic information

Operating segments are identified as components of an enterprise about which separate discrete financial information is available for evaluation by the chief operating decision maker, or decision-making group, in making decisions on how to allocate resources and assess performance.

allocate resources and assess performance.

Our chief operating decision maker is the chief executive officer.

Our chief operating decision maker and we view our operations and manage our business as one operating segment.

Discontinued Operations

We accounted for the sale of our oncology business in accordance with Accounting Standards Codification, ASC, 205 Discontinued Operations and Accounting Standards Update, ASU, No.

2014-08, Reporting of Discontinued Operations and Disclosures of Disposals of Components of an Entity .

We followed the held-for-sale criteria as defined in ASC 360 and ASC 205.

ASC 205 requires that a component of an entity that has been disposed of or is classified as held for sale and has operations and cash flows that can be clearly distinguished from the rest of the entity be reported as assets held for sale and discontinued operations.

In the period a component of an entity has been disposed of or classified as held for sale, the results of operations for the periods presented are reclassified into separate line items in the consolidated statements of operations.

Assets and liabilities are also reclassified into separate line items on the related consolidated balance sheets for the periods presented.

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

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

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

Due to the sale of the oncology business during the first quarter of 2021, in accordance with ASC 205, Discontinued Operations , we have classified the results of the oncology business as discontinued operations in our consolidated statements of operations and cash flows for all periods presented, see Note 3, Discontinued Operations.

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

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

Treasury Stock

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

Recent accounting pronouncements

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Upon adoption of the standard on January 1, 2019, we recorded operating right of use assets of $ 59.9 million and operating lease liabilities of $ 77.3 million on our consolidated balance sheets.

Prior periods are presented in accordance with ASC 840, Leases .

Other recent accounting pronouncements

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Early adoption is permitted, including adoption in any interim period.

The Company has early adopted this amendment as of January 1, 2019.

The Company has early

adopted this amendment as of January 1, 2019.

There was no material impact to the Company’s consolidated financial position, results of operation, or cash flows.

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All significant subsequent events have been properly disclosed in the consolidated financial statements.

Discontinued Operations

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

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

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

The related assets and liabilities of the oncology business are classified as assets and liabilities of discontinued operations in the consolidated balance sheets and the results of operations from the oncology business as discontinued operations in the consolidated statements of operations.

Applicable amounts in prior years have been recast to conform to this discontinued operations presentation.

We recognized a gain on the sale of the oncology business upon closing.

The following table presents the assets and liabilities of the discontinued operations as of December 31, 2020:

(in thousands) December 31, 2020

Current assets:

Accounts receivable, net $ 21,328

Collaboration receivable – related party 2,123

Collaboration receivable – other 1,948

Inventory 14,698

Prepaid expenses and other current assets 7,762

Total current assets of discontinued operations 47,859

Other non-current assets 2,601

Total assets of discontinued operations $ 50,460

Current liabilities:

Accounts payable $ 9,120

Accrued expenses 29,339

Total current liabilities of discontinued operations 38,459

Liability related to the sale of future revenue, net of debt issuance costs 261,269

Total liabilities of discontinued operations $ 299,728

The following table presents the net liabilities transferred for the sale of the oncology business at March 31, 2021:

(in thousands) March 31, 2021

Current assets:

Accounts receivable, net $ 25,386

Collaboration receivable – related party 2,253

Collaboration receivable – other 2,438

Inventory 16,190

Prepaid expenses and other current assets 7,125

Total current assets of discontinued operations 53,392

Other non-current assets 2,234

Total assets of discontinued operations $ 55,626

Current liabilities:

Accounts payable $ 4,245

Accrued expenses 30,288

Total current liabilities of discontinued operations 34,533

Liability related to the sale of future revenue, net of debt issuance costs 264,281

Total liabilities of discontinued operations 298,814

Net liabilities distributed to Servier $ ( 243,188 )

The following table presents the gain on the sale for the year ended December 31, 2021:

(in thousands) December 31, 2021

Cash proceeds $ 1,802,936

transaction and insurance costs ( 53,573 )

net liabilities distributed, including working capital adjustment 239,770

Gain on sale, pre-tax 1,989,133

Income tax expense ( 12,799 )

Gain on sale, net of tax $ 1,976,334

As of December 31, 2021, there were no assets or liabilities classified as discontinued operations.

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

(in thousands) 2021 2020 2019

Product revenue, net $ 36,909 $ 121,089 $ 59,851

Collaboration revenue – related party 1,350 68,274 39,257

Collaboration revenue – other 491 3,571 8,262

Royalty revenue – related party 2,659 10,262 10,542

Total revenue 41,409 203,196 117,912

Cost and expenses:

Cost of sales 706 2,805 1,317

Research and development 41,564 146,659 196,632

Selling, general and administrative 8,551 33,965 30,027

Total cost and expenses 50,821 183,429 227,976

(Loss) income from discontinued operations ( 9,412 ) 19,767 ( 110,064 )

Non-cash interest expense for the sale of future revenue ( 5,697 ) ( 17,832 ) —

Gain on the sale of the oncology business 1,989,133 —

(Loss) income from discontinued operations, pre-tax 1,974,024 1,935 ( 110,064 )

Income tax expense ( 12,799 ) — —

Net (loss) income from discontinued operations $ 1,961,225 $ 1,935 $ ( 110,064 )

In accordance with ASC 205-20, only expenses specifically identifiable and related to a business to be disposed may be presented in discontinued operations.

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

We have also entered into a Transition Services Agreement with Servier, through which we will provide transitional services related to discovery, clinical development, technical operations, commercial and general and administrative related activities for periods ranging from one month to approximately one year through March 31, 2022.

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

Contingent consideration has been accounted for as a gain contingency in accordance with ASC 450, Contingencies , and will be recognized in earnings in the period when realizable.

Fair Value Measurements

10 unchanged sentences

Total cash equivalents and marketable securities $ 156,229 $ 1,104,791 $ — $ 1,261,020

There were no transfers between Level 1 and Level 2 and we had no financial assets or liabilities that were classified as Level 3, except for the liability related to the sale of future revenue as discussed in Note 10, Sale of Future Revenue , at any point during the year ended December 31, 2020.

There were no transfers between Level 1 and Level 2 and we had no financial assets or liabilities that were classified as Level 3 at any point during the year ended December 31, 2021.

Marketable Securities

43 unchanged sentences

Depreciation expense for the years ended December 31, 2021, 2020 and 2019 was $ 8.8 million, $ 9.4 million and $ 8.0 million, respectively.

Inventory consisted of the following at December 31:

(In thousands) 2020 2019

Raw materials $ 294 $ 180

Work-in-process 13,039 6,808

Finished goods 1,365 343

Total Inventory $ 14,698 $ 7,331

Inventory is related to our approved product, TIBSOVO®.

There were no write downs for excess and obsolete inventory during the years ended December 31, 2020, 2019 or 2018.

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

These lease agreements have remaining lease terms of seven years and contain various clauses for renewal at our option.

These lease agreements have remaining lease terms of six years and contain various clauses for renewal at our option.

The renewal options were not included in the calculation of the operating lease assets and the operating lease liabilities as the renewal option is not reasonably certain of being exercised.

11 unchanged sentences

Cash paid for amounts included in the measurement of operating lease liabilities 14.4 14.4 12.8

Rental expense under these leases, net of tenant improvement reimbursements, amounted to $ 11.4 million, for the year ended December 31, 2018.

In addition to rent, the leases may require us to pay additional amounts for taxes, insurance, maintenance and other operating expenses.

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

In arriving at the operating lease liabilities as of December 31, 2020, we applied the weighted-average incremental borrowing rate of 5.7 % over a weighted-average remaining lease term of 7.2 years.

In arriving at the operating lease liabilities as of December 31, 2021, we applied the weighted-average incremental borrowing rate of 5.7 % from inception over a weighted-average remaining lease term of 6.2 years.

In arriving at the operating lease liabilities as of December 31, 2020, we applied the weighted-average incremental borrowing rate of 5.7 % over a weighted-average remaining lease term of 7.2 years.

8 unchanged sentences

We are not required to maintain any cash collateral for the standby letter of credit.

In August 2021, we entered into a long-term sublease agreement for 13,000 square feet of the office space at 38 Sidney Street Cambridge, Massachusetts.

The term of the lease runs until December 2024.

We recorded operating sublease income of $ 0.5 million for the year ended December 31, 2021 in other income, net in the consolidated statements of operations.

As of December 31, 2021, the future minimum lease payments to be received under the long-term sublease agreement were as follows:

(In thousands)

Total $ 3,456

Accrued Expenses

4 unchanged sentences

Accrued professional fees 2,335 2,897

Accrued revenue-related reserves and other 15,584 4,048

Accrued other 3,834 2,115

Total accrued expenses $ 31,967 $ 30,801

Sale of Future Revenue

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 BMS, to RPI for $ 255.0 million.

The gross proceeds of $ 255.0 million approximate the fair value of the liability related to the sale of future revenue based on a discounted cash flow model.

The fair value for the liability related to the sale of future revenue at December 31, 2020 was based on our current estimates of future royalties expected to be paid to RPI over the remaining patent life of the product, which are considered level 3 inputs.

Under the terms of the purchase agreement with RPI, although we sold all of our rights to receive royalties on worldwide net sales of IDHIFA® and future regulatory milestone payments, we continue to co-promote IDHIFA® and are therefore involved in the generation of these royalties.

Due to our continuing involvement, we will continue to account for any royalties earned as revenue.

We recorded the net proceeds from this transaction as a liability related to sale of future revenue, or the Royalty Obligation, that will be amortized using the effective interest method over the remaining patent life.

Significant judgment was applied in determining the appropriate accounting treatment for the transaction.

As royalties are remitted to RPI from BMS, the balance of the Royalty Obligation will be effectively repaid over the life of the BMS license agreement.

In order to determine the amortization of the Royalty Obligation, we are required to estimate the total amount of future royalty payments to RPI over the life of the BMS license agreement.

The $ 255.0 million recorded will be accreted to the total of these royalty payments as interest expense over the life of the Royalty Obligation.

At December 31, 2020, our estimate of this total interest expense resulted in an effective annual interest rate of approximately 9.5 %.

This estimate contains significant assumptions that impact both the amount recorded at execution and the interest expense that will be recognized over the royalty period.

We will periodically assess the estimated royalty payments to RPI from BMS and to the extent the amount or timing of such payments is materially different than the original estimates, an adjustment will be recorded prospectively to increase or decrease interest expense.

There are a number of factors that could materially affect the amount and timing of royalty payments to RPI from BMS, and correspondingly, the amount of interest expense recorded by us, most of which are not within our control.

Such factors include, but are not limited to, delays or discontinuation of development of enasidenib, regulatory approval, changing standards of care, the introduction of competing products, manufacturing or other delays, generic competition, intellectual property matters, adverse events that result in governmental health authority imposed restrictions on the use of the drug products, significant changes in foreign exchange rates as the royalties remitted to RPI are made in U.S.

dollars (USD) while the underlying sales of enasidenib will be made in currencies other than USD, and other events or circumstances that are not currently foreseen.

Changes to any of these factors could result in increases or decreases to both royalty revenues and interest expense.

The following table shows the activity of the Royalty Obligation since the transaction inception through December 31, 2020:

(in thousands) December 31, 2020

Proceeds from the sale of future revenue $ 255,000

Issuance costs ( 4,463 )

Non-cash royalty related to the sale of future revenue

Non-cash interest expense associated with the sale of future revenue 17,832

Amortization of issuance costs 194

Liability related to the sale of future revenue

During the year ended December 31, 2020, $ 7.3 million of non-cash royalty revenue from net sales of IDHIFA® were recognized.

Commitments and Contingent Liabilities

6 unchanged sentences

We do no t have any ongoing legal proceedings that, based on our estimates, could have a material effect on our consolidated financial statements.

Product Revenue

Upon FDA approval of TIBSOVO® in the U.S., on July 20, 2018, we began generating product revenue from sales of TIBSOVO®.

(In thousands) 2020 2019 2018

Product revenue, net $ 121,089 $ 59,851 $ 13,841

The following table summarizes balances and activity in each of the product revenue allowance and reserve categories for the year ended December 31, 2020:

(In thousands) Contractual

Adjustments Government

Rebates Returns Total

Balance at December 31, 2019 $ 874 $ 1,124 $ 1,798 $ 3,796

Current provisions relating to sales in the current year 14,410 13,627 1,252 29,289

Adjustments relating to prior years ( 3 ) 122 ( 1,404 ) ( 1,285 )

Payments/returns relating to sales in the current year ( 13,112 ) ( 2,987 ) — ( 16,099 )

Payments/returns relating to sales in the prior years ( 653 ) ( 677 ) — ( 1,330 )

Balance at December 31, 2020 $ 1,516 $ 11,209 $ 1,646 $ 14,371

The following table summarizes balances and activity in each of the product revenue allowance and reserve categories for the year ended December 31, 2019:

(In thousands) Contractual

Adjustments Government

Rebates Returns Total

Balance at December 31, 2018 $ 592 $ 325 $ 334 $ 1,251

Current provisions relating to sales in the current year 7,899 2,387 1,464 11,750

Adjustments relating to prior years 8 ( 41 ) — ( 33 )

Payments/returns relating to sales in the current year ( 7,027 ) ( 1,286 ) — ( 8,313 )

Payments/returns relating to sales in the prior years ( 598 ) ( 261 ) — ( 859 )

Balance at December 31, 2019 $ 874 $ 1,124 $ 1,798 $ 3,796

Total revenue-related reserves for the years ended December 31, 2020 and 2019 above, included in our consolidated balance sheets, are summarized as follows:

(In thousands) December 31,

2020 December 31,

Reduction of accounts receivable $ 902 $ 540

Component of accrued expenses 13,469 3,256

Total revenue-related reserves $ 14,371 $ 3,796

The following table presents changes in our contract assets during the year ended December 31, 2020:

(In thousands) December 31,

2019 Additions Deductions December 31,

Contract assets

Accounts receivable, net (1)

$ 8,952 $ 149,207 $ ( 136,831 ) $ 21,328

(1) Additions to accounts receivable, net relate to amounts billed to Customers for product sales and deductions primarily relate to collection of receivables during the reporting period.

The following table presents changes in our contract assets during the year ended December 31, 2019:

(In thousands) December 31,

2018 Additions Deductions December 31,

Contract assets

Accounts receivable, net (1)

$ 5,076 $ 71,542 $ ( 67,666 ) $ 8,952

(1) Additions to accounts receivable, net relate to amounts billed to Customers for product sales and deductions primarily relate to collection of receivables during the reporting period.

Collaboration and License Agreements

Celgene Corporation

To date, our revenue has primarily been generated from our collaboration agreements with Celgene, or collectively, the Collaboration Agreements.

Celgene is a related party through ownership of our common stock.

In April 2010, we entered into a discovery and development collaboration and license agreement focused on cancer metabolism, or the 2010 Agreement.

The 2010 Agreement was amended in October 2011 and July 2014.

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 April 2015, we entered into a joint worldwide development and profit share collaboration and license agreement with Celgene, and our wholly owned subsidiary, Agios International Sarl, entered into a collaboration and license agreement with Celgene International II Sarl, or collectively, the AG-881 Agreements, to establish a worldwide collaboration focused on the development and commercialization of vorasidenib products.

The AG-881 Agreements were terminated effective September 4, 2018.

In May 2016, we entered into a master research and collaboration agreement with Celgene, or the 2016 Agreement.

The initial four-year research term for the 2016 Agreement expired on May 17, 2020.

On March 25, 2020 Celgene declined the option to extend the research agreement.

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, our inhibitor MAT2A, 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.

2016 Agreement

The 2016 Agreement focused on metabolic immuno-oncology, a developing field which aims to modulate the activity of relevant immune cells by targeting critical metabolic nodes, thereby enhancing the immune mediated anti-tumor response.

In addition to new programs identified under the 2016 Agreement, both parties also agreed that all future development and commercialization of two remaining cancer metabolism programs discovered under the 2010 Agreement, including AG-270, would be governed by the 2016 Agreement.

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, our inhibitor of methionine adenosyltransferase 2a, or MAT2A, 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.

As a result of the 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 for the 2016 Agreement.

During the research term of the 2016 Agreement, we conducted research programs focused on discovering compounds that are active against metabolic targets in the immuno-oncology, or IO, field.

For each program under the 2016 Agreement, we could have nominated compounds that meet specified criteria as development candidates and, in limited circumstances, Celgene could also nominate compounds as development candidates for each such program.

Celgene could designate the applicable program for further development following any such nomination, after which we could conduct, at our expense, additional preclinical and clinical development for such program through the completion of an initial phase 1 dose escalation study.

At the end of the research term, Celgene could designate for continued development up to three research programs for which development candidates have yet to be nominated, which are referred to as continuation programs.

We could conduct further research and preclinical and clinical development activities on any continuation program, at our expense, through the completion of an initial phase 1 dose escalation study.

We granted Celgene the right to obtain exclusive options for development and commercialization rights for each program that Celgene designated for further development, and for each continuation program.

Celgene could have exercised each such option beginning on the designation of a development candidate for such program (or on the designation of such program as a continuation program) which ended on the earlier of:

(i) the end of a specified period after we have furnished Celgene with specified information about the initial phase 1 dose escalation study for such program, or (ii) January 1, 2030.

Research programs that have applications in the inflammation or autoimmune, or I&I, field that may result from the 2016 Agreement would also subject to the exclusive options described above.

We retain rights to all program that Celgene did not designate for further development or as to which it did not exercise its option.

Under the terms of the 2016 Agreement, if Celgene had exercised their option, the parties would enter into either a co-development and co-commercialization agreement if such program is in the IO field, or a license agreement if such program is in the I&I field.

Under each co-development and co-commercialization agreement, the two parties would co-develop and co-commercialize licensed products worldwide.

Either we or Celgene would lead development and commercialization of licensed products for the United States, and Celgene would lead development and commercialization of licensed products outside of the United States.

Depending on the country, the parties would each have the right to provide a portion of field-based marketing activities.

Under each license agreement, Celgene would have the sole right to develop and commercialize licensed products worldwide.

Co-development and co-commercialization agreements

Under each co-development and co-commercialization agreement entered into under the 2016 Agreement, if Celgene had exercised their option, the parties would have split all post-option exercise worldwide development costs, subject to specified exceptions, as well as any profits from any net sales of, or commercialization losses related to, licensed products in the IO field.

Celgene had the option to designate one program in the IO field as the 65/35 program, for which Celgene would be the lead party for the United States and would have a 65 % profit or loss share.

For programs in the IO field other than the 65/35 program, we and Celgene would alternate, on a program-by-program basis, being the lead party for the United States, with us having the right to be the lead party for the first such program, and each party will have a 50 % profit or loss share.

The lead party for the United States would book commercial sales of licensed products, if any, in the United States, and Celgene would book commercial sales of licensed products, if any, outside of the United States.

License agreements

Under each license agreement under the 2016 Agreement, Celgene would be responsible for all post-option exercise worldwide development and associated costs, subject to specified exceptions, as well as worldwide commercialization and associated costs, for licensed products in the I&I field.

Financial terms

Under the terms of the 2016 Agreement, we received an initial upfront payment in the amount of $ 200.0 million.

The 2016 Agreement provided specified rights to extend the research term for up to two , or in specified cases, up to four , additional years by paying a $ 40.0 million per-year extension fee.

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.

Celgene was also required to pay an $ 8.0 million designation fee for each program that Celgene designated for further development and for each continuation program.

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

During the year ended December 31, 2017, we received $ 8.0 million from Celgene upon the designation of AG-270 as a development candidate.

For each program as to which Celgene exercised its option to develop and commercialize, subject to antitrust clearance, Celgene would be required to pay an option exercise fee of at least $ 30.0 million for any designated development program and at least $ 35.0 million for any continuation programs.

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.

In certain cases, Celgene could exercise its option to develop and commercialize two early-stage I&I programs, prior to Celgene designating the program for further development, by paying an option exercise fee of $ 10.0 million, which was not exercised during the year ended December 31, 2020.

We were eligible to receive the following milestone-based payments associated with the 2016 Agreement:

Program Milestone Amount

65/35 program in IO field Specified clinical development event $ 25.0 million

65/35 program in IO field Specified regulatory milestone events Up to $ 183.8 million

50/50 program in IO field Specified clinical development event $ 20.0 million

50/50 program in IO field Specified regulatory milestone events Up to $ 148.8 million

I&I field Specified clinical development event $ 25.0 million

I&I field Specified regulatory milestone events Up to $ 236.3 million

I&I field Specified commercial milestone events Up to $ 125.0 million

Additionally, for each licensed program in the I&I field, we were eligible to receive royalties at tiered, low double-digit percentage rates on Celgene’s net sales, if any, of the applicable licensed products.

Opt-out right

Under the 2016 Agreement, we could elect to opt out of the cost and profit share under any co-development and co-commercialization agreement, subject to specified exceptions.

Upon opting out, Celgene would have the sole right to develop, manufacture and commercialize the applicable licensed products throughout the world, at its cost, and we would undertake transitional activities reasonably necessary to transfer the development, manufacture and commercialization of such licensed products to Celgene, at our expense.

Further, in lieu of the profit or loss sharing described above, we would be eligible to receive royalties at tiered, low double-digit percentage rates on Celgene’s net sales, if any, of the applicable licensed products.

However, we would continue to be eligible to receive the developmental and regulatory milestone-based payments described above.

The term of the 2016 Agreement commenced on May 17, 2016 and expired on May 17, 2020 in its entirety.

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 for the 2016 Agreement.

While any of Celgene’s options remained available under the 2016 Agreement, subject to specified exceptions, we could not directly or indirectly develop, manufacture or commercialize, outside of the 2016 Agreement, any therapeutic modality in the IO or I&I field with specified activity against a metabolic target.

During the term of each co-development and co-commercialization agreement and license agreement, subject to specified exceptions, neither we nor Celgene could directly or indirectly develop, manufacture or commercialize outside of such agreement any therapeutic modality in any field with specified activity against the metabolic target that is the focus of the program licensed under such agreement.

Ivosidenib Letter Agreement

On May 17, 2016, we entered into a letter agreement with Celgene regarding ivosidenib, or the Ivosidenib Letter Agreement.

Under the Ivosidenib Letter Agreement, the parties agreed to terminate the 2010 Agreement, effective as of August 15, 2016, as to the program directed to the IDH1 target, for which ivosidenib is the lead development candidate.

Under the 2010 Agreement, Celgene had held development and commercialization rights to the IDH1 program outside of the United States, and we held such rights inside the United States.

As a result of the Ivosidenib Letter Agreement, we obtained global rights to ivosidenib and the IDH1 program.

Neither party will have any further financial obligation, including royalties or milestone payments, to the other concerning ivosidenib or the IDH1 program.

Under the terms of the Ivosidenib Letter Agreement, the parties also agreed to conduct specified transitional activities in connection with the termination.

In addition, pursuant to the Ivosidenib Letter Agreement, the parties are released from their exclusivity obligations under the 2010 Agreement with respect to the IDH1 program.

The Ivosidenib Letter Agreement does not affect the AG-881 Agreements, which were directed to both the IDH1 target and the IDH2 target, and were subsequently terminated in September 2018 as discussed below.

Termination of AG-881 Agreements

We and Celgene terminated the AG-881 Agreements, effective as of September 4, 2018.

From and after September 4, 2018, we obtained sole global rights to vorasidenib.

Neither we nor Celgene will have any further financial obligation under the AG-881 Agreements, including milestones, royalties or other payments, except that (a) Celgene is eligible to receive royalties from us at a low single-digit percentage rate on worldwide net sales of products containing vorasidenib and (b) we and Celgene agreed to split certain agreed-upon worldwide development costs for vorasidenib until December 31, 2018.

In addition, for a specified period and subject to specified exceptions, Celgene and its affiliates are prohibited from developing, manufacturing or commercializing any product that inhibits IDH1 at specified levels of binding for any indication and we are prohibited from developing, manufacturing or commercializing vorasidenib in hematologic indications.

2010 Agreement

The 2010 Agreement, which was entered into in April 2010, was amended in October 2011 and July 2014.

The goal of the collaboration was to discover, develop and commercialize disease-altering therapies in oncology based on our cancer metabolism research platform.

We initially led discovery, preclinical and early clinical development for all cancer metabolism programs under the collaboration.

The discovery phase of the 2010 Agreement expired in April 2016.

Upon agreement to terminate the 2010 Agreement, effective as of August 15, 2016, as to the program directed to the IDH1 target, for which ivosidenib is the lead development candidate, the sole program remaining under the 2010 Agreement is IDHIFA®, a co-commercialized licensed program for which Celgene leads and funds global development and commercialization activities.

We have exercised our right to participate in a portion of commercialization activities in the United States for IDHIFA® in accordance with the applicable commercialization plan.

On August 1, 2017, the FDA granted Celgene approval of IDHIFA® for the treatment of adult patients with R/R AML with an IDH2 mutation as detected by an FDA-approved test.

Under the 2010 Agreement, we received royalties at tiered, low-double digit to mid-teen percentage rates on net sales of IDHIFA®.

Under the 2010 Agreement, we were 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.

Unless terminated earlier by either party, the term of the 2010 Agreement will continue until the expiration of all royalty terms with respect to IDHIFA®.

Celgene may terminate this agreement for convenience in its entirety upon ninety days written notice to us.

If either party is in material breach and fails to cure such breach within the specified cure period, the other party may terminate the 2010 Agreement in its entirety.

Either party may terminate the agreement in the event of specified insolvency events involving the other party.

Collaboration revenue

Performance obligations identified

Upon the adoption of ASC 606 on January 1, 2018, we applied the practical expedient that permits aggregating the effect of all contract modifications that occurred prior to January 1, 2018.

No other practical expedients were used.

Similar to the accounting under ASC 605-25, the 2016 Agreement was determined to be a modification of the 2010 Agreement and the AG-881 Agreements.

In determining the appropriate amount of revenue to be recognized under ASC 606, we perform the following steps:

(i) identified the promised goods or services in the contract;

(ii) determined whether the promised goods or services are performance obligations including whether they are distinct in the context of the contract;

(iii) measured the transaction price, including the constraint on variable consideration;

(iv) allocated the transaction price to the performance obligations;

and (v) recognized revenue when (or as) we satisfied each performance obligation.

The transaction price is calculated as the total amount of consideration to which the Company expects to be entitled to in exchange of transferring the promised goods and services to Celgene, and excludes any amounts of variable consideration that have been constrained (being contingency based development, regulatory and sales based milestones for which the Company cannot assert it is probable that a significant reversal of cumulative revenue recognized will not occur when the uncertainty associated with the milestone is subsequently resolved).

The transaction price upon the adoption of ASC 606 was comprised of all consideration received to date under the agreements, as well as the estimated amount of research and development cost reimbursements that will be received under the agreement.

The transaction price was subsequently allocated to the individual performance obligations based on their relative standalone selling prices.

We developed assumptions that require judgment to determine the SSP for each performance obligation identified in the contract.

We use key assumptions to determine the SSP, which include forecast of revenues, development timelines, reimbursement rates for personnel costs, discount rates and probabilities of technical and regulatory success.

The satisfied and unsatisfied performance obligations at the time of the adoption of ASC 606, each of which are considered by us to be distinct within the context of the contract, their SSP, the method of recognizing the allocated consideration, and the period through which they are expected to be recognized were as follows:

Obligations SSP No.

of Performance

Obligations Recognition

Fully satisfied at time of adoption

Licenses (1) $ 86.7 million 4 Fully satisfied;

recognized upon adoption of ASC 606

Research and development services (2) $ 350.7 million 10 Fully satisfied;

recognized upon adoption of ASC 606

Partially satisfied at time of adoption

Research and development services (2) $ 266.6 million 6 Proportionally as services are delivered over the performance period, expected to be through September 2023 (3)

(1) The SSP was developed by probability weighting multiple cash flow scenarios using the income approach.

Our management estimates within the models include the expected, probability-weighted net profits from estimated future sales, an estimate of the direct cost incurred to generate future cash flows, a discount rate and other business forecast factors.

There are significant judgments and estimates inherent in the determination of the SSP of these performance obligations.

These judgments and estimates include assumptions regarding future operating performance, the timelines of the clinical trials and regulatory approvals, and other factors.

If different reasonable assumptions are utilized, the SSP and revenue recognized would vary.

(2) The SSP was developed using our management’s best estimate of the cost of obtaining these services at arm’s length from a third-party provider and using internal full time equivalent costs to support the development services.

(3) We determined that recognizing revenue on a proportional basis using the ratio of effort incurred to date compared to the total estimated effort required to complete the performance obligation best depicts the satisfaction of our obligations under the Collaboration Agreements.

Remaining performance obligations

As of December 31, 2020, there are no remaining performance obligations under the 2016 Agreement.

As of December 31, 2020, the aggregate amount of the transaction price allocated to performance obligations under the 2010 Agreement that are remaining was $ 3.9 million.

This amount is expected to be recognized as performance obligations are satisfied through September 2023.

Revenue recognition

During the years ended December 31, we recognized the following collaboration revenue:

(In thousands) 2020 2019 2018

Services performed that were considered performance obligations upon the adoption of ASC 606

Licenses $ — $ — $ 15,000

On-going research and development services 64,347 35,954 40,575

Committee participation — — —

Services performed that were not considered performance obligations as of the adoption of ASC 606

Development activities — — 1,342

Commercialization Activities 3,927 3,303 3,744

Total collaboration revenue - related party $ 68,274 $ 39,257 $ 60,661

The following table presents changes in our contract assets and liabilities during the year ended December 31, 2020:

(In thousands) December 31,

2019 Additions Deductions December 31,

Contract assets

Collaboration receivable – related party (1)

$ 1,539 $ 5,610 $ ( 6,141 ) $ 1,008

Unbilled receivable – related party (2)

— 1,821 ( 706 ) 1,115

Royalty receivable – related party (3)

2,900 5,015 ( 7,915 ) —

Contract liabilities

Deferred revenue – related party, current and non-current portions (4)

61,513 2,421 ( 63,934 ) —

(1) Additions to collaboration receivables - related party relate to amounts billed to Celgene for reimbursable costs incurred by us during the reporting period.

Deductions to receivables relate to collection of receivables during the reporting period.

(2) Unbilled receivables - related party amounts relate to future reimbursable costs to Celgene.

(3) Additions to royalty receivables - related party relate to amounts billed to Celgene during the reporting period.

Deductions to receivables relate to collection of receivables during the reporting period.

(4) Additions to deferred revenue - related party relate to consideration from Celgene during the reporting period.

Deductions relate to deferred revenue recognized as revenue during the reporting period.

The following table presents changes in our contract assets and liabilities during the year ended December 31, 2019:

(In thousands) December 31,

2018 Additions Deductions December 31,

Contract assets

Collaboration receivable – related party (1)

$ 2,462 $ 8,253 $ ( 9,176 ) $ 1,539

Royalty receivable – related party (2)

2,234 10,542 ( 9,876 ) 2,900

Contract liabilities

Deferred revenue – related party, current and non-current portions (3)

92,519 4,948 ( 35,954 ) 61,513

(1) Additions to collaboration receivables - related party relate to amounts billed to Celgene for reimbursable costs incurred by us during the reporting period.

Deductions to receivables relate to collection of receivables during the reporting period.

(2) Additions to receivables relate to amounts billed to Celgene during the reporting period.

Deductions to receivables relate to collection of receivables during the reporting period.

(3) Additions to deferred revenue relate to consideration from Celgene during the reporting period.

Deductions relate to deferred revenue recognized as revenue during the reporting period.

During the years ended December 31, 2020, 2019 and 2018, we recognized the following as revenue due to changes in the contract liability balances:

(In thousands) 2020 2019 2018

Amounts included in the contract liability at the beginning of the period $ 61,513 $ 31,605 $ 37,590

Performance obligations satisfied in previous periods — — 469

Royalty revenue

During the years ended December 31, 2020, 2019 and 2018, we recognized the following as royalty revenue:

(In thousands) 2020 2019 2018

Royalty revenue – related party $ 10,262 $ 10,542 $ 7,215

As the underlying performance obligation, or delivery of the enasidenib license, had been satisfied as of June 2014, royalty revenue is recognized as the related sales occur.

For further discussion of the sale of future revenue, refer to Note 10, Sale of Future Revenue .

Milestone revenue (variable consideration)

At each reporting period we evaluate whether milestones are considered probable of being reached and, to the extent that a significant reversal would not occur in future periods, estimate the amount to be included in the transaction price using the most likely amount method.

Milestone payments that are not within our control, such as regulatory approvals, are not considered probable of being achieved and are excluded from the transaction price until those approvals are received.

During the years ended December 31, 2020, and 2019 we did no t receive any milestone payments related to our Collaboration Agreements, and all variable consideration relating to the remaining development, regulatory and sales-based milestones that can be earned under the terms of the 2010 Agreement remain fully constrained.

For further discussion of the sale of future revenue, refer to Note 10, Sale of Future Revenue .

During the year ended December 31, 2018, Celgene submitted an MAA to the EMA for IDHIFA® for IDH2 mutant-positive R/R AML.

As a result of the filing, we determined that a $ 15.0 million milestone payment for the filing of a first new drug application equivalent in an ex-U.S.

country was considered probable of being reached and that a significant reversal of revenue would not occur in future periods.

As the underlying performance obligation, or delivery of the license to IDHIFA®, had been satisfied as of June 2014, the milestone payment was recognized in full as collaboration revenue.

The next potential milestone expected to be achieved under our 2010 Agreement is the achievement of a specified ex-U.S.

commercial milestone event.

Achievement of this event will result in a milestone payment of $ 25.0 million under the 2010 Agreement.

We remain eligible to receive this milestone payment under our purchase agreement with RPI.

CStone Pharmaceuticals

In June 2018, we entered into an exclusive license agreement with CStone, or the CStone Agreement, to grant CStone specified intellectual property licenses to enable CStone to develop and commercialize certain products containing ivosidenib in mainland China, Hong Kong, Macau, Singapore, and Taiwan, or the CStone Territory.

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

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

Pursuant to the CStone Agreement, CStone will initially be responsible for the development and commercialization of ivosidenib in AML, cholangiocarcinoma, and, at our discretion, brain cancer indications.

Pursuant to the CStone Agreement, we received an initial upfront payment in the amount of $ 12.0 million and are entitled to receive up to an additional $ 407.0 million in milestone payments upon the achievement of certain development, regulatory and sales milestone events.

Approximately one third of the milestone payments are related to development and regulatory milestones, half of which are related to ivosidenib in AML and cholangiocarcinoma and the other half are related to brain cancer indications, including glioma.

We will also be entitled to receive tiered royalties, ranging from 15 % to 19 % percent, on annual net sales, if any, of ivosidenib.

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 our case, in the CStone Territory.

Unless earlier terminated, the CStone Agreement will expire upon the expiration of the last royalty term for the last licensed product within the scope of the CStone Agreement.

At any time after CStone has obtained regulatory approval in mainland China in R/R AML and the last patient has been enrolled in a specified clinical trial (or, if earlier, at any time that CStone acquires or is acquired by an entity with a competing or restricted product), CStone may terminate the CStone Agreement in its entirety by providing us with prior written notice.

Either party may, subject to specified cure periods, terminate the CStone Agreement in the event of the other party’s uncured material breach.

Either party may terminate the CStone Agreement under specified circumstances relating to the other party’s insolvency.

We have the right to terminate the CStone Agreement immediately if CStone or its affiliates or sublicensees or subcontractors challenges the validity, patentability, or enforceability of certain patent rights that relate to ivosidenib and are owned by or licensed to us or our affiliates.

Collaboration revenue

Performance obligations identified

We developed assumptions that require judgment to determine the SSP for each performance obligation identified in the contract.

We use key assumptions to determine the SSP, which include forecast of revenues, development timelines, reimbursement rates, discount rates and probabilities of technical and regulatory success.

The satisfied and unsatisfied performance obligations, each of which are considered by us to be distinct within the context of the contract, their SSP, the method of recognizing the allocated consideration, and the period through which they are expected to be recognized are as follows:

Obligations SSP No.

of Performance Obligation(s) Recognition

Licenses (1) $ 16.4 million 1 Fully satisfied;

recognized upon delivery of license

Other services (2) $ 1.7 million 1 As services are delivered, expected to be through September 2021

(1) The SSP was developed by probability weighting multiple cash flow scenarios using the income approach.

Our management estimates within the models include the expected, probability-weighted net profits from estimated future sales, an estimate of the direct costs incurred to generate future cash flows, a discount rate and other business forecast factors.

There are significant judgments and estimates inherent in the determination of the SSP of this performance obligation.

These judgments and estimates include assumptions regarding future operating performance, the timelines of the clinical trials and regulatory approvals, and other factors.

If different reasonable assumptions are utilized, the SSP and revenue recognized would vary.

(2) The SSP was developed using our management’s best estimate of the cost of obtaining these services at arm’s length from a third-party provider.

As of December 31, 2020, the aggregate amount of the transaction price allocated to performance obligations that are partially unsatisfied was $ 0.5 million.

This amount is expected to be recognized as performance obligations are satisfied through September 2021.

Revenue recognition

During the years ended December 31, we recognized the following collaboration revenue:

(In thousands) 2020 2019 2018

Services performed that were considered performance obligations upon contract inception

Licenses $ — $ 5,000 $ 12,440

Other services 192 235 —

Services performed that were not considered performance obligations upon contract inception

Other services 3,379 3,027 230

Total collaboration revenue – other $ 3,571 $ 8,262 $ 12,670

The following table presents changes in our contract assets during the year ended December 31, 2020:

(In thousands) December 31,

2019 Additions Deductions December 31

Contract assets

Collaboration receivable – other (1)

$ 1,928 $ 3,571 $ ( 3,551 ) $ 1,948

(1) Additions to contract assets relate to receivables from CStone and deductions to contract assets relate to collection of receivables during the reporting period.

The following table presents changes in our contract assets during the year ended December 31, 2019:

(In thousands) December 31

2018 Additions Deductions December 31,

Contract assets

Collaboration receivable – other (1)

$ 670 $ 8,262 $ ( 7,004 ) $ 1,928

(1) Additions to contract assets relate to receivables from CStone and deductions to contract assets relate to collection of receivables during the reporting period.

Royalty revenue

The license was determined to be the predominant item to which sales-based royalties and sales-based milestones relate.

As the license was delivered in June 2018, we will recognize royalty revenue when the related sales occur.

To date, no royalties have been received under the CStone Agreement.

Milestone revenue (variable consideration)

During the year ended December 31, 2020, no milestone payments were received.

During the year ended December 31, 2019, upon the dosing of the first patient in a local study in a hematological indication in mainland China, we earned and received a milestone payment of $ 5.0 million, which was recognized as collaboration revenue.

Aurigene Discovery Technologies Limited

In April 2017, we entered into a global license agreement with Aurigene Discovery Technologies Limited, or Aurigene, to research, develop and commercialize small molecule inhibitors for DHODH, or the Aurigene Agreement.

Under the terms of the Aurigene Agreement, Aurigene will provide us exclusive rights to its portfolio of novel small molecules for DHODH.

Financial terms of the Aurigene Agreement include a $ 3.0 million upfront payment and potential future milestone payments of up to $ 15.0 million if we achieve certain development and regulatory milestones.

Aurigene is also eligible to receive low single-digit royalties on net product sales, if any.

We will conduct preclinical studies and, if successful, fund further global research and development, as well as regulatory and commercial activities.

The term of the Aurigene Agreement will continue until the earlier of:

(a) termination for convenience at our sole discretion upon 90 days prior written notice, (b) termination by either party for material breach, or (c) the expiration of the last-to-expire of all payment obligations hereunder with respect to all licensed products under the Aurigene Agreement.

Initial payment

The $ 3.0 million upfront payment was incurred in the year ended December 31, 2017 and recorded as research and development expense.

Costs incurred and milestone payments due to Aurigene prior to regulatory approval are recognized as expenses in the period incurred.

Payments due to Aurigene upon or subsequent to regulatory approval will be capitalized and amortized over the shorter of the remaining license or product patent life.

Milestone payments

During the year ended December 31, 2020, no milestone payments were made.

During the year ended December 31, 2019, we achieved the milestone relating to the initiation of the first phase 1 clinical trial for DHODH, and we made a payment of $ 2.0 million.

During the year ended December 31, 2018, no milestone payments were made.

We are authorized to issue 125,000,000 shares of our common stock.

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

The 2013 Plan became effective upon the closing of our initial public offering and provides for the grant of incentive stock options, non-qualified stock options, stock appreciation rights, restricted stock awards, RSUs, PSUs, and other stock-based awards to employees, non-employees and non-employee directors.

The 2013 Plan became effective upon the closing of our initial public offering and provides for the grant of incentive stock options, non-qualified stock options, stock appreciation rights, restricted stock awards, restricted stock units, or RSUs, performance-based share units, or PSUs, and other stock-based awards to employees, non-employees and non-employee directors.

Following the adoption of the 2013 Plan, we granted no further stock options or other awards under the 2007 Stock Incentive Plan, or the 2007 Plan.

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

As of December 31, 2020, the total number of shares reserved under the 2007 Plan and the 2013 Plan are 10,584,232 , and we had 2,971,884 shares available for future issuance under the 2013 Plan.

As of December 31, 2021, the total number of shares reserved under the 2007 Plan and the 2013 Plan was 11,422,409 , and we had 5,343,905 shares available for future issuance under the 2013 Plan.

The 2013 Plan provides for an annual increase, to be added on the first day of each fiscal year, beginning with the fiscal year ending December 31, 2014 and continuing until the expiration of the 2013 Plan, equal to the lesser of (i) 2,000,000 shares of common stock, (ii) 4 % of the outstanding shares of common stock on such date or (iii) an amount determined by our Board of Directors.

28 unchanged sentences

Granted 141,000 54.20

Vested ( 78,920 ) 54.82

Forfeited ( 49,170 ) 54.08

2 unchanged sentences

As of December 31, 2021, there was no unrecognized compensation expense related to PSUs with performance-based vesting criteria that are considered probable of achievement that we expect to recognize.

There is $ 5.9 million of total unrecognized compensation expense related to PSUs

with performance-based vesting criteria that are considered not probable of achievement.

There is $ 12.7 million of total unrecognized compensation expense related to PSUs with performance-based vesting criteria that are considered not probable of achievement.

Market-based stock units

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

On January 1, 2022, the annual increase for the 2013 ESPP resulted in an additional 509,091 shares authorized for issuance.

We issued 94,888 shares and 120,293 shares during the years ended December 31, 2021 and 2020, respectively, under the 2013 ESPP.

The 2013 ESPP provides participating employees with the opportunity to purchase up to an aggregate of 836,363 shares of our common stock.

The 2013 ESPP provides participating employees with the opportunity to purchase up to an

aggregate of 1,345,454 shares of our common stock.

As of December 31, 2021, we had 885,556 shares available for future issuance under the 2013 ESPP.

On January 1, 2021, the annual increase for the 2013 ESPP resulted in an additional 509,091 shares authorized for issuance.

Stock-based compensation expense

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We utilize this method due to lack of historical data and the plain-vanilla nature of our share-based awards.

We use a weighted-average of expected volatility based on the volatilities of a representative group of publicly traded biopharmaceutical companies, including ourselves.

The expected volatility has been determined using a weighted-average of the historical volatilities of the representative group of companies for a period equal to the expected term of the option grant.

The expected volatility has been determined using Agios' historical volatilities for a period equal to the expected term of the option grant.

Risk-free rate

3 unchanged sentences

We account for forfeitures as they occur and, therefore, do not estimate forfeitures.

The domestic and foreign components of loss before income taxes are as follows:

The domestic and foreign components of loss from continuing operations before income taxes are as follows:

(In thousands) 2021 2020 2019

18 unchanged sentences

Net operating loss carryforwards $ 39,186 $ 310,841

Deferred revenue — 14,372

Tax credit carryforwards 152,128 163,589

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As of December 31, 2021, we had net operating loss carryforwards, or NOLs, available to reduce federal, state and foreign income taxes of approximately $ 22.1 million, $ 420.0 million and $ 65.2 million, respectively.

If not utilized, these NOLs begin to expire in 2033 (for pre-2018 NOLs), 2032 and 2024, respectively.

Approximately $ 738.2 million of federal NOLs can be carried forward indefinitely.

At December 31, 2020, we also had available research and development tax credits for federal and state income tax purposes of approximately $ 36.9 million and $ 18.4 million, respectively.

If not utilized, the credits begin to expire in 2027 for both federal and state income tax purposes, respectively.

The federal NOLs have an indefinite life, however, if not utilized, the state and foreign NOLs begin to expire in 2035 and 2024, respectively.

At December 31, 2021, we also had available research and development tax credits for federal and state income tax purposes of

approximately $ 13.5 million and $ 24.0 million, respectively.

If not utilized, the credits begin to expire in 2029 and 2027 for federal and state income tax purposes.

We engaged in clinical testing activities and incurred expenses that qualify for the federal orphan drug tax credit.

2 unchanged sentences

As provided by Section 382 of the Internal Revenue Code of 1986, or Section 382, and similar state provisions, utilization of NOLs and tax credit carryforwards may be subject to substantial annual limitations due to ownership change limitations that have previously occurred or that could occur in the future.

Ownership changes may limit the amount of NOLs and tax credit

carryforwards that can be utilized annually to offset future taxable income and tax, respectively.

Ownership changes may limit the amount of NOLs and tax credit carryforwards that can be utilized annually to offset future taxable income and tax, respectively.

In general, an ownership change, as defined by Section 382, results from transactions that increase the ownership of five percent stockholders in the stock of a corporation by more than 50 percent in the aggregate over a three year period.

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Based on the weight of available evidence, both positive and negative, we recorded a valuation allowance of $ 236.5 million and $ 594.8 million as of December 31, 2021 and December 31, 2020, respectively, because we have determined that it is more likely than not that these assets will not be fully realized.

The valuation allowance decreased by $ 358.3 million for the year ended December 31, 2021 primarily due to the utilization of net operating losses and tax credits and increased by $ 92.5 million for the year ended December 31, 2020 primarily due to the generation of net operating losses.

The following table presents our change in valuation allowance for the years ended December 31, 2021 and, 2020:

1 unchanged sentence

Valuation allowance at the beginning of the year $ 594,752 $ 502,209

Increase for the current period 92,543 111,456

(Decrease) Increase for the current period ( 358,274 ) 92,543

Valuation allowance at the end of the year $ 236,478 $ 594,752

In December 2019, the FASB issued Accounting Standards Update No.

2019-12 – Income Taxes (Topic 740) Simplifying the Accounting for Income Taxes, as part of its initiative to reduce complexity in the accounting standards.

The amendments in ASU 2019-12 eliminate certain exceptions related to the approach for intraperiod tax allocation, the methodology for calculating income taxes in an interim period and the recognition of deferred tax liabilities for outside basis differences.

ASU 2019-12 also clarifies and simplifies other aspects of the accounting for income taxes.

The amendments in ASU 2019-12 are effective for the fiscal years beginning after December 15, 2020.

Early adoption is permitted, including adoption in any interim period.

The Company has early adopted this amendment as of January 1, 2019.

There was no material impact to the Company’s consolidated financial position, results of operation, or cash flows.

As of December 31, 2021, the unremitted earnings of our foreign subsidiaries are not material.

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As of December 31, 2021 and 2020, we had no accrued interest or penalties related to uncertain tax positions and no such amounts have been recognized.

If all of the Company’s unrecognized tax benefits as of December 31, 2020 were to become recognizable in the future, we would record a $ 21.1 million of unrecognized tax benefits.

Upon close of the proposed sale to Servier, we will evaluate the tax impact of the transaction.

If all of the Company’s unrecognized tax benefits as of December 31, 2021 were to become recognizable in the future, we would record $ 24.2 million of unrecognized tax benefits.

The uncertain tax position does not impact our effective income tax rate due to the full valuation allowance.

1 unchanged sentence

The statute of limitations for assessment by the IRS and state tax authorities is open for tax years ending December 31, 2021, 2020, 2019, and 2018, although carryforward attributes that were generated for tax years prior to 2018 may still be adjusted upon examination by the IRS or state tax authorities if they either have been, or will be, used in a future period.

The statute of limitations for assessment in Switzerland remains open for tax year ending December 31, 2020, 2019, 2018, and 2017.

The Company’s subsidiaries in the Netherlands and Germany were incorporated in 2019 and therefore the statute of limitations for assessment that remain open in these jurisdictions are for the tax year ending December 31, 2020 and 2019.

The Company’s subsidiaries in the Italy and France were incorporated in 2020 and therefore the statute of limitations for assessment that remain open in these jurisdictions are for the tax year ending December 31, 2020.

The statute of limitations for assessment in Switzerland remains open for tax years ending December 31, 2021, 2020, 2019, and 2018.

The Company’s subsidiaries in Italy and France were incorporated in 2020 and therefore the statute of limitations for assessment that remain open in these jurisdictions are for the tax years ending December 31, 2021 and 2020.

There are currently no federal, state or foreign audits in progress.

As of December 31, 2021, we have an income tax receivable of $ 2.9 million recorded within prepaid expenses and other assets.

There was no income tax receivable at December 31, 2020.

Defined Contribution Benefit Plan

2 unchanged sentences

We will make matching contributions equal to 100 % of the employee’s contributions, subject to a maximum of 4 % of eligible compensation.

Net Loss per Share

Net Income (Loss) per Share

Basic net loss per share is calculated by dividing net loss by the weighted-average shares outstanding during the period, without consideration for common stock equivalents.

1 unchanged sentence

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

Since we had a net loss for all periods presented, the effect of all potentially dilutive securities is anti-dilutive.

Accordingly, basic and diluted net loss per share was the same for the years ended December 31, 2020, 2019 and 2018.

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

The control number used is loss from continuing operations.

Since we had a net loss for continuing operations for all periods presented, no dilutive effect has been recognized in the calculation of income from discontinued operations per share.

Basic and diluted net loss per share was the same for all periods presented.

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

6 unchanged sentences

Total 5,841,614 7,473,863 7,089,902

Share Repurchase Program

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

On March 31, 2021, in connection with the Repurchase Program, we entered into a definitive share repurchase agreement with BMS to repurchase 7.1 million shares of our common stock held by certain subsidiaries of BMS for an aggregate purchase price of $ 344.5 million, or $ 48.38 per share.

This repurchase was completed on April 5, 2021.

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

As of December 31, 2021, we have repurchased

approximately 9.1 million shares of common stock for $ 458.0 million, or $ 50.35 per share, under the Rule 10b5-1 repurchase plan.

In total, as of December 31, 2021, we have repurchased 16.2 million shares of common stock for $ 802.5 million, or $ 49.49 per share, under the Repurchase Program.

On October 5, 2021, we terminated our Rule 10b5-1 share repurchase plan and on October 13, 2021 we entered into a Rule 10b-18 repurchase plan that allows us to conduct open market repurchases over time up to our remaining authorization under the Repurchase Program.

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

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

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

There were no retirements or re-issuances of treasury stock during the year ended December 31, 2021.

Selected Quarterly Financial Data (Unaudited)

4 unchanged sentences

Quarter Fourth

Total revenue $ 87,098 $ 37,347 $ 34,706 $ 44,045

Loss from operations ( 43,192 ) ( 90,196 ) ( 90,327 ) ( 92,434 )

Net loss ( 40,256 ) ( 90,478 ) ( 98,979 ) ( 97,657 )

Net loss per share – basic and diluted ( 0.59 ) ( 1.31 ) ( 1.43 ) ( 1.41 )

Loss from continuing operations $ ( 90,877 ) $ ( 82,790 ) $ ( 84,259 ) $ ( 98,584 )

Net income (loss) from discontinued operations, net of tax 1,965,202 ( 3,427 ) ( 4,507 ) 3,957

Net income (loss) 1,874,325 ( 86,217 ) ( 88,766 ) ( 94,627 )

Net loss from continuing operations per share - basic and diluted ( 1.31 ) ( 1.36 ) ( 1.48 ) ( 1.81 )

Net income (loss) from discontinued operations per share - basic and diluted 28.26 ( 0.06 ) ( 0.08 ) 0.07

Net income (loss) per share - basic and diluted 26.95 ( 1.41 ) ( 1.56 ) ( 1.74 )

2020 (in thousands, except per share data)

2 unchanged sentences

Quarter Fourth

Total revenue $ 30,227 $ 26,221 $ 26,024 $ 35,440

Loss from operations ( 97,483 ) ( 113,861 ) ( 109,060 ) ( 105,929 )

Net loss ( 93,078 ) ( 109,871 ) ( 106,173 ) ( 102,350 )

Net loss per share – basic and diluted ( 1.59 ) ( 1.87 ) ( 1.81 ) ( 1.60 )

Loss from continuing operations $ ( 84,094 ) $ ( 81,495 ) $ ( 79,175 ) $ ( 84,541 )

Net income (loss) from discontinued operations, net of tax 43,838 ( 8,983 ) ( 19,804 ) ( 13,116 )

Net income (loss) ( 40,256 ) ( 90,478 ) ( 98,979 ) ( 97,657 )

Net loss from continuing operations per share - basic and diluted ( 1.23 ) ( 1.18 ) ( 1.15 ) ( 1.22 )

Net income (loss) from discontinued operations per share - basic and diluted 0.64 ( 0.13 ) ( 0.29 ) ( 0.19 )

Net income (loss) per share - basic and diluted ( 0.59 ) ( 1.31 ) ( 1.43 ) ( 1.41 )

Subsequent Events

On February 17, 2022, the FDA approved PYRUKYND® for the treatment of hemolytic anemia in adults with pyruvate kinase (PK) deficiency in the United States.

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

What changed 10-K

Item 9A. Controls and Procedures