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Item 2. Management’s Discussion and Analysis

2022-05-05 compared with 2021-11-03 · 162 added, 159 removed, 111 unchanged (74% of the section changed)

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Forward-looking Information

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

The following discussion of our financial condition and results of operations should be read in conjunction with our unaudited condensed consolidated financial statements as of March 31, 2022 and for the three months ended March 31, 2022 and 2021, and related notes included in Part I, Item 1 of this Quarterly Report on Form 10-Q, as well as the audited consolidated financial statements and notes and Management’s Discussion and Analysis of Financial Condition and Results of Operations, included in our Annual Report on Form 10-K for the year ended December 31, 2021 filed with the SEC on February 24, 2022.

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

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

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 GDDs.

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

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

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

We are also developing AG-946, a novel, next-generation 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.

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.

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.

On March 31, 2021, we completed the sale of our oncology business to Servier Pharmaceuticals, LLC, or Servier, which represented a discontinued operation.

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 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, and following the sale Servier will conduct certain clinical development activities within the IDHIFA® development program.

The oncology business met the criteria within Accounting Standards Codification 205-20 to be reported as discontinued operations because the transaction was a strategic shift in business that had a major effect on our operations and financial results.

Therefore, we have reported the historical results of the oncology business including the results of operations and cash flows as discontinued operations, and related assets and liabilities were retrospectively reclassified as assets and liabilities of discontinued operations for all periods presented herein.

Unless otherwise noted, applicable amounts in the prior year have been recast to conform to this discontinued operations presentation.

Refer to Note 3 of our condensed consolidated financial statements included in this Quarterly Report on Form 10-Q for additional information.

Unless otherwise indicated, the following information relates to our continuing operations following the sale to Servier.

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

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

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

As a result, we expect the new therapies that we plan to advance through the discovery, development and commercialization stages to be in the areas of non-malignant hematology and inborn errors of metabolism, though our future efforts may not be limited to these categories.

The lead product candidate in our GDD portfolio, mitapivat, targets pyruvate kinase-R, or PKR, for the treatment of pyruvate kinase, or PK, deficiency and other hemolytic anemias including thalassemia and sickle cell disease, or SCD.

Mitapivat is an orally available small molecule and a potent activator of the wild-type (normal) and mutated PKR enzymes, which has resulted in restoration of adenosine triphosphate levels and a decrease in 2,3-diphosphoglycerate levels in blood sampled from patients with PK deficiency and treated ex-vivo with mitapivat.

PK deficiency is a rare genetic disorder that often results in severe hemolytic anemia, jaundice and lifelong conditions associated with chronic anemia and secondary complications due to inherited mutations in the pyruvate kinase enzyme within red blood cells.

We are currently developing mitapivat for the treatment of patients with PK deficiency, thalassemia and SCD in the following ongoing or planned pivotal clinical trials:

Pyruvate Kinase Deficiency:

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

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

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

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

• ENERGIZE and ENERGIZE-T, phase 3 trials of mitapivat in not-regularly-transfused and regularly-transfused adults with thalassemia, have been initiated.

• RISE UP, a phase 2/3 trial of mitapivat in patients with SCD, is expected to initiate by the end of 2021.

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

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

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

Our NDA was accepted with priority review and granted a Prescription Drug User Fee Act, or PDUFA, action date of February 17, 2022.

The MAA has passed validation, and both regulatory review processes are ongoing.

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

commercial infrastructure and evaluate all options to maximize the patient impact and value of mitapivat globally, including strategic transactions.

We are also developing AG-946, a novel activator of both the PKR and PKM2 isoforms of pyruvate kinase, in an ongoing phase 1 trial which is currently enrolling healthy volunteers.

PKR activation is specific to red blood cells and hemolytic anemias, while PKM2 activation occurs in other tissues which express this isoform, and is potentially important in a variety of disease indications.

In addition to these development programs, we are seeking to advance a number of early-stage discovery programs for GDDs.

Drug candidates for PK activation and other mechanisms, while primarily targeting GDD may also have utility in nongenetically defined disease, or non-GDD indications.

Where differentiated, nonclinical proof of concept emerges for these non-GDD indications, appropriate partnership may be used to drive the best patient benefit.

Critical Accounting Policies and Estimates

Our critical accounting policies are those policies which require the most significant judgments and estimates in the preparation of our condensed consolidated financial statements.

We have determined that our most critical accounting policies are those relating to accrued research and development expenses and stock-based compensation.

Except those that have been disclosed in Note 2, Summary of Significant Accounting Policies, of the notes to our condensed consolidated financial statements included in this Quarterly Report on Form 10-Q, there have been no significant changes to our existing critical accounting policies discussed in our Annual Report on Form 10-K for the year ended December 31, 2020.

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 will conduct certain clinical development activities within the IDHIFA® development program.

Financial Operations Overview

Impact of COVID-19 on our Business

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

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

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

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

As of March 31, 2022, we have not experienced a significant financial or supply chain impact directly related to the COVID-19 pandemic but have experienced some disruptions to clinical operations, including timelines to complete patient enrollment in some of our clinical trials, and we may in the future experience further such disruptions.

In addition, we have experienced disruptions to certain research activities at our contract research organizations, or CROs, based in China, due to the recent COVID-19 surge in China.

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

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

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

We are conducting our return to work program under strict guidelines as required by federal, state, and local authorities.

Effective November 8, 2021, we will require all employees, regardless of role or work location, to be fully vaccinated against COVID-19, as defined by the Center of Disease Control and Prevention's guidelines, subject to limited exceptions.

We have been monitoring our supply chain network for disruptions due to the COVID-19 pandemic, and our third-party manufacturers remain largely unaffected, with any campaign delays experienced to date being limited to a few days in duration.

Effective November 8, 2021, we require all employees, regardless of role or work location, to be fully vaccinated against COVID-19, as defined by the Center of Disease Control and Prevention's guidelines, subject to limited exception.

We have been monitoring our supply chain network for disruptions due to the COVID-19 pandemic, and our third-party manufacturers, other than the China-based CROs discussed above, remain largely unaffected, with any campaign delays experienced to date being limited to a few days in duration.

Although global shipping continues to be disrupted due to the pandemic, we have not experienced a supply impact.

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

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

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

As a result, we may have to take further actions that we determine are in the best interests of our employees or as required by federal, state, or local authorities.

Since inception, our operations have primarily focused on organizing and staffing our company, business planning, raising capital, assembling our core capabilities in cellular metabolism, identifying potential product candidates, undertaking preclinical studies, conducting clinical trials, establishing a commercial infrastructure and, prior to the sale of our oncology business to Servier on March 31, 2021, marketing our approved products.

Since inception, our operations have primarily focused on organizing and staffing our company, business planning, raising capital, assembling our core capabilities in cellular metabolism, identifying potential product candidates, undertaking preclinical studies, conducting clinical trials, establishing a commercial infrastructure, preparing for the commercial launch of PYRUKYND® and, prior to the sale of our oncology business to Servier on March 31, 2021, marketing TIBSOVO® and IDHIFA®.

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

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

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

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

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

We have historically incurred operating losses.

Our net income for the nine months ended September 30, 2021 was $1,699.3 million and our net loss for the nine months ended September 30, 2020 was $229.7 million.

As of September 30, 2021, we had an accumulated deficit of $144.1 million.

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

Our net loss for the three months ended March 31, 2022 was $94.8 million and our net income for the three months ended March 31, 2021 was $1,874.3 million.

As of March 31, 2022, we had an accumulated deficit of $333.5 million.

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

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

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We expect that we will continue to incur significant expenses as we continue to advance and expand clinical development activities for our lead programs:

mitapivat, and AG-946;

PYRUKYND®, and AG-946;

continue to discover and validate novel targets and drug product candidates;

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and hire additional commercial, development and scientific personnel.

Our wholly owned product, PYRUKYND®, received approval from the FDA on February 17, 2022, for the treatment of hemolytic anemia in adults with PK deficiency in the United States.

Upon FDA approval of PYRUKYND® in the United States, we began generating product revenue from sales of PYRUKYND®.

We sell PYRUKYND® to a limited number of specialty distributors and specialty pharmacy providers, or collectively, the Customers.

These Customers subsequently resell PYRUKYND® 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 PYRUKYND®.

For further discussion of our revenue recognition policy, see Note 2, Summary of Significant Accounting Polices and Note 8, Product Revenue, to the condensed consolidated financial statements in this Form 10-Q.

In the future, we expect to continue to generate revenue from a combination of product sales, royalties on product sales, cost reimbursements, milestone payments, and upfront payments to the extent we enter into future collaborations or licensing agreements.

Cost of Sales

Cost of sales consists primarily of manufacturing costs for sales of PYRUKYND®.

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 PYRUKYND® recorded during the three months ended March 31, 2022 were expensed prior to February 17, 2022, and, therefore, are not included in costs of sales during the three months ended March 31, 2022.

Research and development expenses

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As such, at this time, we cannot reasonably estimate or know the nature, timing and estimated costs of the efforts that will be necessary to complete the remainder of the development and to commercialize these product candidates.

We are also unable to predict when future net cash inflows will commence from

mitapivat, AG-946 or any of our other product candidates.

We are unable to predict the amount of net cash inflows from PYRUKYND®

or any of our product candidates.

This is due to the numerous risks and uncertainties associated with developing medicines, including the uncertainty of:

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• employee-related expenses, including salaries, benefits and stock-based compensation expense;

• expenses incurred under agreements with third parties, including contract research organizations, or CROs, that conduct research and development and both preclinical and clinical activities on our behalf, and the cost of consultants;

• expenses incurred under agreements with third parties, including CROs, that conduct research and development and both preclinical and clinical activities on our behalf, and the cost of consultants;

• the cost of lab supplies and acquiring, developing and manufacturing preclinical and clinical study materials;

• facilities, depreciation, and other expenses, which include direct and allocated expenses for rent and the maintenance of facilities, insurance and other operating costs.

The following summarizes the clinical development activities related to our most advanced programs.

The timing of trial and site initiations, enrollment and data readouts may be impacted depending on the duration, scope and severity of the COVID-19 pandemic :

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

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

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

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

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

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

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

We reported in June 2021 that this trial met its primary endpoint of hemoglobin increase of greater than or equal to 1.0 gram per deciliter from baseline at one or more assessments during weeks 4-12 of the trial.

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

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

Enrollment has been completed in the core trial period, and patients are enrolling in an ongoing long-term extension study.

The following summarizes our most advanced programs:

PYRUKYND® (mitapivat):

First-in-Class PK Activator

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

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

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

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

In June 2021 , we submitted an MAA to the EMA for the treatment of adults with PK deficiency the European Union.

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

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

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

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

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

We are evaluating PYRUKYND® in the following clinical trials:

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

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

Secondary endpoints include markers of hemolysis and ineffective

erythropoiesis, as well as patient-reported outcome measures.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

• An extension study evaluating the safety, tolerability and efficacy of treatment with PYRUKYND® in patients from our completed phase 2, open-label safety and efficacy clinical trial of PYRUKYND® in adults with non-transfusion-dependent α- and β-thalassemia.

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

The core trial period has completed.

The long-term extension study is ongoing.

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

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

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

In the third quarter of 2021, we initiated two phase 3 trials of mitapivat, ENERGIZE and ENERGIZE-T, in not regularly transfused and regularly transfused adults with thalassemia.

We expect to initiate RISE UP, a phase 2/3 trial of mitapivat in patients with SCD, by the end of 2021.

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

Novel PK Activator

• A phase 1 trial of AG-946 in healthy volunteers and in patients with SCD.

The trial is currently enrolling healthy volunteers.

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

The trial has completed enrollment and patient follow-up is ongoing, and a 2-year extension study has been activated for patients who complete the follow-up period.

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

Novel, Next-generation PKR Activator

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

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

The trial has completed the healthy volunteer cohort, and we have initiated the SCD patient cohort of this trial.

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

Other research and platform programs

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

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

We anticipate that our selling, general and administrative expenses will increase in the future to support continued research and development activities and ongoing and future commercialization activities related to our GDD portfolio, including the commercialization of PYRUKYND® and any of our other product candidates.

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

Critical Accounting Estimates

Our critical accounting estimates are those which require the most significant judgments and estimates in the preparation of our condensed consolidated financial statements.

We have determined that our most critical accounting estimates are those relating to revenue recognition, accrued research and development expenses and stock-based compensation.

Except those that have been disclosed in Note 2, Summary of Significant Accounting Policies , of the notes to our condensed consolidated financial statements included in this Quarterly Report on Form 10-Q, there have been no significant changes to our existing critical accounting estimates discussed in Part II, Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2021.

Results of Operations

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

Comparison of the three and nine months ended September 30, 2021 and 2020

Comparison of the three months ended March 31, 2022 and 2021

Three Months Ended March 31,

(In thousands) 2022 2021

Product revenue, net $ 832 $ —

Total revenue $ 832 $ —

Total Revenue – First Quarter of 2022 vs.

First Quarter of 2021 – The increase in total revenue of $0.8 million for the three months ended March 31, 2022 compared to the three months ended March 31, 2021 was due to product revenue associated with PYRUKYND®, which was approved in February 2022.

Total Operating Expenses

Three Months Ended September 30, Nine Months Ended September 30,

Three Months Ended March 31,

(In thousands) 2022 2021

Cost and expenses:

Cost of sales $ 339 $ —

Research and development 70,123 57,667

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Total Operating Expenses $ 101,977 $ 91,217

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

Three Months ended September 30, 2020 - The increase in total operating expenses of $10.9 million for the three months ended September 30, 2021 compared to the three months ended September 30, 2020 was primarily due to an increase in research and development expenses of $12.1 million which is described below under Research and Development Expenses.

Included in selling, general and administrative expenses is approximately $1.3 million of reimbursable transition related services we provided to Servier related to the sale of the oncology business.

Total Operating Expenses - Nine Months ended September 30, 2021 vs.

Nine Months ended September 30, 2020 - The increase in total operating expenses of $23.0 million for the nine months ended September 30, 2021 compared to the nine months ended September 30, 2020 was primarily due to an increase in research and development expenses of $22.3 million which is described below under Research and Development Expenses.

Total Operating Expenses - First Quarter of 2022 vs.

First Quarter of 2021 - The increase in total operating expenses of $10.8 million for the three months ended March 31, 2022 compared to the three months ended March 31, 2021 was primarily due an increase in research and development expenses of $12.5 million which is described below under Research and Development Expenses, partially offset by a decrease in selling, general and administrative expenses of $2.0 million due to a reduction in workforce-related expenses.

Included in selling, general and administrative expenses is approximately $1.1 million of reimbursable transition related services we provided to Servier related to the sale of the oncology business.

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

Three Months Ended September 30, Nine Months Ended September 30,

Three Months Ended March 31,

(In thousands) 2022 2021

Mitapivat (PKR activator) $ 20,130 $ 10,634 $ 49,543 $ 31,410

AG-946 (Novel PK activator) 2,820 2,357 6,849 7,195

PK activator (PYRUKYND®) $ 17,204 $ 12,364

Novel PK activator (AG-946) 3,437 1,771

Other research and platform programs 7,914 4,214

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Total research and development expense $ 70,123 $ 57,667

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

Three Months ended September 30, 2020 - The increase in total research and development expenses of $12.1 million for the three months ended September 30, 2021 compared to the three months ended September 30, 2020 was primarily due to a $9.5 million increase in mitapivat costs due to start up costs for the initiated phase 3 trials of mitapivat, ENERGIZE and ENERGIZE-T, and the planned phase 2/3 trial of mitapivat in patients with SCD, RISE UP, and launch preparation activities.

The increase in other research and platform programs of $2.6 million was primarily driven by planned increased activity on various exploratory and discovery activities.

Included in total indirect research and development expenses was $3.2 million of reimbursable transition related services we provided to Servier related to the sale of the oncology business for discovery, clinical development, technical operations, and commercial related activities which will continue for periods ranging from one month to approximately one year after March 31, 2021.

Total Research and Development Expenses - Nine Months ended September 30, 2021 vs.

Nine Months ended September 30, 2020 - The increase in total research and development expenses of $22.3 million for the nine months ended September 30, 2021 compared to the nine months ended September 30, 2020 was primarily due to a $18.1 million increase in mitapivat costs due to start up costs for the initiated phase 3 trials of mitapivat, ENERGIZE and ENERGIZE-T, the planned phase 2/3 trial of mitapivat in patients with SCD, RISE UP, and filing and launch preparation activities which includes $0.5 million in filing fees.

The increase in other research and platform programs of $5.2 million was primarily driven by planned increased activity on various exploratory and discovery activities.

Included in total indirect research and development expenses was $7.6 million of reimbursable transition related services we provided to Servier related to the sale of the oncology business related to discovery, clinical development, technical operations, and commercial related activities which will continue for periods ranging from one month to approximately one year after March 31, 2021.

Total Research and Development Expenses - First Quarter of 2022 vs.

First Quarter of 2021 - The increase in total research and development expenses of $12.5 million for the three months ended March 31, 2022 compared to the three months ended March 31, 2021 was primarily due to a $10.2 million increase in our direct expenses.

The increase in direct expenses was primarily due to a $4.8 million increase in PYRUKYND® costs and a $3.7 million increase in other research and platform programs.

The increase in PYRUKYND® costs was primarily due to startup costs for the initiated phase 3 trials of PYRUKYND® in patients with thalassemia, ENERGIZE and ENERGIZE-T, and the phase 2/3 trial of PYRUKYND® in patients with SCD, RISE UP, offset by closeouts of ACTIVATE and ACTIVATE-T studies.

The increase in other research and platform programs was primarily driven by planned increased activity on various exploratory activities.

Included in total indirect research and development expenses was $1.5 million of reimbursable transition related services we provided to Servier related to the sale of the oncology business for discovery, clinical development, technical operations, and related activities which were completed during the three months ended March 31, 2022.

Other Income and Expense

Three Months Ended September 30, Nine Months Ended September 30,

Three Months Ended March 31,

(In thousands) 2022 2021

Gain on sale of oncology business

$ 1,996 $ — $ 3,996 $ —

Royalty income from gain on sale of oncology business $ 2,704 $ —

Interest income, net 694 340

Other income, net 2,973 —

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

Three Months ended September 30, 2020 - The increase in other income, net primarily relates to approximately $4.5 million of reimbursable transition related services for the sale of the oncology business for the three months ended September 30, 2021.

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

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

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

Other Income and Expense- Nine Months ended September 30, 2021 vs.

Nine Months ended September 30, 2020 - The increase in other income, net primarily relates to approximately $11.0 million of reimbursable transition related services and fees for the sale of the oncology business for the nine months ended September 30, 2021.

The increase in gain on sale of oncology business

primarily relates to income from royalties on U.S.

net sales of TIBSOVO® by Servier of approximately $4.0 million for the nine months ended September 30, 2021.

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

Other Income and Expense - First Quarter of 2022 vs.

First Quarter of 2021 - The increase in other income, net in the three months ended March 31, 2022 compared to the three months ended March 31, 2021 primarily relates to approximately $2.6 million of reimbursable transition related services and fees for the sale of the oncology business for the three months ended March 31, 2022.

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

net sales of TIBSOVO® by Servier of approximately $2.7 million for the three months ended March 31, 2022.

The increase in interest income, net is primarily attributable to an increase in interest rates.

Loss from Operations and Net (Loss) Income

Three Months Ended September 30, Nine Months Ended September 30,

Three Months Ended March 31,

(In thousands) 2022 2021

Net loss from continuing operations $ (94,774) $ (90,877)

Net (loss) income from discontinued operations (4,507) (19,804) 1,957,268 15,051

Net income from discontinued operations — 1,965,202

Net (loss) income (94,774) 1,874,325

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

Three Months ended September 30, 2020 – The increase in net loss from continuing operations for the three months ended September 30, 2021 compared to the three months ended September 30, 2020 was primarily driven by the higher research and development expenses discussed above under Research and Development Expenses, partially offset by $4.5 million of reimbursable transition related services related to the sale of the oncology business and a $2.0 million gain on sale of oncology business related to income from royalties on U.S.

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

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

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

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

Nine Months ended September 30, 2020 – The increase in loss from continuing operations for the nine months ended September 30, 2021 compared to the nine months ended September 30, 2020 was primarily driven by the higher research and development expenses discussed above under Research and Development Expenses, partially offset by $11.0 million of reimbursable transition related services and fees related to the sale of the oncology business and a $4.0 million gain on sale of oncology business related to income from royalties on U.S.

net sales of TIBSOVO® by Servier, both occurring in the nine months ended September 30, 2021.

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

Loss from Operations and Net Income (Loss) – First Quarter of 2022 vs.

First Quarter of 2021 – The increase in net loss from continuing operations for the three months ended March 31, 2022 compared to the three months ended March 31, 2021 was primarily driven by the higher research and development expenses discussed above under Research and Development Expenses, partially offset by approximately $2.6 million of reimbursable transition related services and fees for the sale of the oncology business and $2.7 million of royalty income from gain on sale of oncology business related to income from royalties on U.S.

net sales of TIBSOVO® by Servier.

The change in net income from discontinued operations and net (loss) income for the three months ended March 31, 2022 compared to the three months ended March 31, 2021 was primarily driven by the sale

of our oncology business to Servier for approximately $1.8 billion in cash in the first quarter of 2021, which is included within net income from discontinued operations.

Liquidity and Capital Resources

Sources of liquidity

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

As of September 30, 2021, we had cash, cash equivalents and marketable securities of $1.4 billion.

Since our inception, and through March 31, 2022, we have funded our operations through proceeds from the sale of our royalty rights, commercial sales of TIBSOVO®, funding received from our collaboration agreements, private placements of our preferred stock, our initial public offering of our common stock and concurrent private placement of common stock to an affiliate of Celgene, and our follow-on public offerings.

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

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

On March 31, 2021, we completed the sale of our oncology business to 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 $200.0 million in cash, if, prior to January 1, 2027, vorasidenib is granted NDA approval from the 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, and following the sale Servier is responsible for conducting certain clinical development activities within the IDHIFA® development program.

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

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

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.

As of September 30, 2021, we have repurchased approximately 8.7 million shares of common stock for $438.9 million, or $50.57 per share, under the plan.

Further, on April 2, 2021, in connection with the Repurchase Program, we entered into a Rule 10b5-1 repurchase plan pursuant to which we could repurchase up to $600.0 million of shares of our common stock.

As of December 31, 2021, we 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.

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 under the Repurchase Program.

We have paused our share repurchases and for the foreseeable future, we expect that our capital allocation will be prioritized towards

opportunities to accelerate programs in our development pipeline and/or pursue potential complementary business development opportunities.

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

net sales of TIBSOVO® and, if approved, vorasidenib.

Our right to such payments from Servier is our only committed potential external source of funds.

In total, as of December 31, 2021 and March 31, 2022, we 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 and for the foreseeable future, we expect that our capital allocation will be prioritized towards opportunities to accelerate programs in our development pipeline and/or pursue potential complementary business development opportunities.

In addition to our existing cash, cash equivalents and marketable securities, we are eligible to receive a $200.0 million milestone payment and royalty payments under our transaction agreement with Servier.

Our right to such payments under our transaction agreement with Servier is our only committed potential external source of funds.

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

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

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

Nine Months Ended September 30,

The following table provides information regarding our cash flows for the three months ended March 31, 2022 and 2021:

Three Months Ended March 31,

(In thousands) 2022 2021

Net cash used in operating activities $ (97,735) $ (120,749)

Net cash provided by investing activities 1,343,197 4,350

Net cash (used in) provided by financing activities (747,182) 260,936

Net cash (used in) provided by investing activities (26,573) 1,874,077

Net cash provided by financing activities 1,208 7,261

Net change in cash and cash equivalents $ (123,100) $ 1,760,589

Net cash used in operating activities.

Cash used in operating activities of $323.2 million during the nine months ended September 30, 2021, of which $234.1 million was used by continuing operations and $89.1 million was used by discontinued operations, was primarily driven by research and development costs described above under Research and Development Expenses, offset by cash received of $39.5 million from sales of TIBSOVO®, and $1.2 million in cost reimbursements related to our collaboration agreements with Celgene.

Cash used in operating activities of $241.4 million during the nine months ended September 30, 2020, of which $192.8 million was used by continuing operations and $48.6 million was used by discontinued operations, was primarily due to operating expenses driven by research and development costs described above in Research and Development Expenses and increased staffing needs due to our expanding operations, offset by cash received of $83.3 million from sales of TIBSOVO®, $12.6 million in royalty payments and cost reimbursements under our collaboration agreements with Celgene, $6.1 million in interest received, and $2.7 million in cost reimbursement related to our collaboration agreement with CStone Pharmaceuticals.

Net cash provided by investing activities .

Cash provided by investing activities of $1.3 billion for the nine months ended September 30, 2021, of which $459.7 million was used by continuing operations and $1.8 billion was provided by discontinued operations, was primarily due to the approximately $1.8 billion in cash proceeds received from the sale of our oncology business to Servier that was completed on March 31, 2021, partially offset by lower proceeds from maturities and sales of marketable securities than purchases of marketable securities.

Cash provided by investing activities of $4.4 million for nine months ended September 30, 2020, of which approximately all was provided by continuing operations and $348.0 thousand was used by discontinued operations, was primarily the result of higher proceeds from maturities and sales of marketable securities than purchases of marketable securities, offset by $13.9 million in purchases of property and equipment.

Net cash (used in) provided by financing activities .

Cash used in financing activities of $747.2 million for the nine months ended September 30, 2021, of which all was provided by continuing operations and none was used by discontinued operations, was primarily the result of $783.4 million in common stock repurchases in the nine months ended September 30, 2021 under our Repurchase Program, partially offset by the $37.0 million of proceeds received from stock option exercises and purchases made pursuant to our 2013 ESPP.

Cash provided by financing activities of $260.9 million for the nine months ended September 30, 2020, of which $10.4 million was provided by continuing operations and $250.5 million was provided by discontinued operations, was primarily the result of net proceeds of $250.5 million from the sale of our tiered, sales-based royalty rights on worldwide net sales of IDHIFA® (enasidenib) and our ex-US regulatory milestones to Royalty Pharma in June 2020 and $10.6 million of proceeds received from stock option exercises and purchases made pursuant to our 2013 ESPP.

Cash used in operating activities of $97.7 million during the three months ended March 31, 2022, of which all was used by continuing operations, was primarily due to operating expenses driven by research and development costs described above under Research and Development Expenses, offset by cash received of $4.4 million from Servier for reimbursable transition related services and fees, and royalties on U.S.

net sales of TIBSOVO®.

Cash used in operating activities of $120.7 million during the three months ended March 31, 2021, of which $90.2 million was used by continuing operations and $30.5 million was used by discontinued operations, was primarily due to operating expenses driven by research and development costs described above under Research and Development Expenses and selling, general and administrative costs described above under Total Operating Expenses.

These amounts were offset by cash received of $39.5 million from sales of TIBSOVO®, and $1.2 million in cost reimbursements related to our collaboration agreements with Celgene.

Net cash (used in) provided by investing activities .

Cash used in investing activities of $26.6 million during the three months ended March 31, 2022, of which all was used by continuing operations, was primarily due to higher purchases of marketable securities than proceeds from maturities and sales of marketable securities.

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

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

Net cash provided by financing activities .

Cash provided by financing activities for the three months ended March 31, 2022, of which all was provided by continuing operations, was primarily the result of the $1.3 million of proceeds received from stock option exercises and purchases made pursuant to our 2013 Employee Stock Purchase Plan, or 2013 ESPP.

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

Funding requirements

Although we expect our expenses to decrease following the completion of the sale of our oncology business to Servier on March 31, 2021, we anticipate that this decrease will be offset as we transition our operations to focus solely on GDDs, particularly as we continue the research, development and clinical trials of, seek marketing approvals for, and commercialize our product candidates.

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

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

Although our expenses decreased following the completion of the sale of our oncology business to Servier on March 31, 2021, we anticipated that this decrease will be offset as we continue the research, development and clinical trials of, seek marketing approvals for, and commercialize our product candidates in our GDD portfolio, including as we commercialize PYRUKYND®.

If we obtain marketing approval for PYRUKYND® in other indications outside of the United States or for any of our product candidates, we expect to incur significant commercialization expenses related to product sales, marketing, manufacturing and distribution.

We expect that our existing cash, cash equivalents and marketable securities as of March 31, 2022, will enable us to execute our operating plan through major catalysts and to cash-flow positivity without the need to raise additional equity.

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

• the amount of contingent consideration we ultimately receive in connection with the sale of our oncology business to Servier;

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

• the costs and timing of our ongoing commercialization activities, including product manufacturing, sales, marketing and distribution for PYRUKYND® for the treatment of hemolytic anemia in adults with PK deficiency;

• the scope, progress, results and costs of drug discovery, preclinical development, laboratory testing and clinical trials for our product candidates;

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

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

• our ability to establish and maintain collaborations on favorable terms, if at all;

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

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

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

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

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

Off-Balance Sheet Arrangements

We did not have, during the periods presented, and we do not currently have, any off-balance sheet arrangements, as defined under applicable SEC rules.

Contractual Obligations

We have entered into agreements in the normal course of business with CROs for clinical trials and contract manufacturing organizations for supply manufacturing and with vendors for preclinical research studies and other services and products for operating purposes.

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

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

During the three months ended March 31, 2022, there were no significant changes to our contractual obligations and commitments described under Management’s Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report on Form 10-K for the year ended December 31, 2021.

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

What changed 10-Q

Item 2. Management’s Discussion and Analysis