What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2022-11-03 compared with 2022-08-04 · 105 added, 80 removed, 438 unchanged (30% of the section changed)

3 unchanged sentences

(In thousands, except share and per share data)

September 30,

2022 December 31,

26 unchanged sentences

25,000,000 shares authorized;

no shares issued or outstanding at June 30, 2022 and December 31, 2021

no shares issued or outstanding at September 30, 2022 and December 31, 2021

Common stock, $ 0.001 par value;

125,000,000 shares authorized;

71,031,792 shares issued and 54,815,381 shares outstanding at June 30, 2022, and 70,550,631 shares issued and 54,334,220 shares outstanding at December 31, 2021

71,110,442 shares issued and 54,894,031 shares outstanding at September 30, 2022, and 70,550,631 shares issued and 54,334,220 shares outstanding at December 31, 2021

Additional paid-in capital 2,374,755 2,334,348

Accumulated other comprehensive loss ( 15,083 ) ( 1,198 )

Treasury stock, at cost ( 16,216,411 shares at June 30, 2022 and December 31, 2021)

Treasury stock, at cost ( 16,216,411 shares at September 30, 2022 and December 31, 2021)

( 802,486 ) ( 802,486 )

5 unchanged sentences

Condensed Consolidated Statements of Operations

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

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

(In thousands, except share and per share data)

3 unchanged sentences

Total revenue 3,516 — 9,930 —

Cost and expenses:

Operating expenses:

Cost of sales $ 517 $ — $ 1,291 $ —

1 unchanged sentence

Selling, general and administrative 29,123 27,152 88,902 89,917

Total cost and expenses 103,222 91,222 205,199 182,439

Total operating expenses 94,606 91,152 299,805 273,591

Loss from operations ( 91,090 ) ( 91,152 ) ( 289,875 ) ( 273,591 )

Royalty income from gain on sale of oncology business 4,443 1,996 9,851 3,996

Interest income (expense), net 1,793 ( 92 ) 2,487 248

Interest income, net 3,818 256 6,305 504

Other income, net 1,082 4,641 5,392 11,165

9 unchanged sentences

Condensed Consolidated Statements of Comprehensive (Loss) Income

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

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

(In thousands)

25 unchanged sentences

Balance at June 30, 2022 71,031,792 $ 71 $ 2,362,327 $ ( 10,502 ) $ ( 425,340 ) ( 16,216,411 ) $ ( 802,486 ) $ 1,124,070

Common stock issued under stock incentive plan and ESPP 78,650 — 1,272 — — — — 1,272

Stock-based compensation expense — — 11,156 — — — — 11,156

Other comprehensive loss — — — ( 4,581 ) — — — ( 4,581 )

Net loss — — — — ( 81,747 ) — — ( 81,747 )

Balance at September 30, 2022 71,110,442 $ 71 $ 2,374,755 $ ( 15,083 ) $ ( 507,087 ) ( 16,216,411 ) $ ( 802,486 ) $ 1,050,170

Common Stock Additional

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

Common stock issued under stock incentive plan and ESPP 110,554 1 4,008 — — — — 4,009

Stock-based compensation expense — — 12,148 — — — — 12,148

Repurchase of common stock — — — — — ( 5,306,184 ) ( 254,391 ) ( 254,391 )

Other comprehensive loss — — — ( 54 ) — — — ( 54 )

Net loss — — — — ( 88,766 ) — — ( 88,766 )

Balance at September 30, 2021 70,515,336 $ 71 $ 2,322,460 $ ( 198 ) $ ( 144,133 ) ( 15,800,152 ) $ ( 783,438 ) $ 1,394,762

See accompanying Notes to Condensed Consolidated Financial Statements.

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Condensed Consolidated Statements of Cash Flows

Six Months Ended

Nine Months Ended

September 30,

(In thousands) 2022 2021

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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 leadership in the field of cellular metabolism, with the goal of creating differentiated, small molecule medicines for genetically defined diseases, or GDDs.

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

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On February 17, 2022, the U.S.

Food and Drug Administration, or 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 the treatment of adults with PK deficiency in the European Union.

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

We expect a regulatory decision by the end of 2022.

Food and Drug Administration, or FDA, approved PYRUKYND® for the treatment of hemolytic anemia in adults with 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 the treatment of adults with PK deficiency in the European Union, or EU.

In September 2022, the Committee for Medicinal Products for Human Use of the EMA, or CHMP, adopted a positive opinion recommending the granting of a marketing authorization for PYRUKYND®.

In October 2022, we submitted a marketing authorization application in Great Britain for PYRUKYND® under the European Commission Decision Reliance Procedure.

We expect to receive a decision from both the EU and Great Britain regulatory authorities by the end of 2022.

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

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

In addition to the aforementioned development programs, we continue to prioritize investment in advancing our late lead-optimization research programs – a branched chain amino acid aminotransferase-2, or BCAT2, inhibitor, for the treatment of propionic and methylmalonic acidemia, or MMA, and a phenylalanine hydroxylate, or PAH, stabilizer, for the treatment of phenylketonuria, or PKU.

We are also developing AG-946, a novel PK activator, for the potential treatment of lower-risk myelodysplastic syndrome, hemolytic anemias and other indications.

In addition to the aforementioned development programs, we continue to prioritize investment in advancing our late lead-optimization research.

We believe this combination of assets represents an attractive portfolio of programs that aligns with our strategy and core expertise in non-malignant hematology and inborn errors of metabolism, and leaves room for continued growth of our pipeline.

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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.

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

We recorded income from royalties of approximately $ 4.4 million and $ 2.0 million on U.S.

net sales of TIBSOVO® by Servier in the royalty income from gain on sale of oncology business line item within the condensed consolidated statements of operations, for the three months ended June 30, 2022 and 2021, respectively, and $ 5.4 million and $ 2.0 million for the six months ended June 30, 2022 and 2021, respectively.

net sales of TIBSOVO® by Servier in the royalty income from gain on sale of oncology business line item within the condensed consolidated statements of operations, for the three months ended September 30, 2022 and 2021, respectively, and $ 9.9 million and $ 4.0 million for the nine months ended September 30, 2022 and 2021, respectively.

As discussed below in Note 12, Subsequent Events , on October 27, 2022, we sold our rights to the royalty on U.S.

net sales of TIBSOVO® to entities affiliated with Sagard Healthcare Partners, or Sagard, for $ 131.8 million.

We retained our rights to the potential milestone payment and royalties from Servier if vorasidenib is approved by the FDA.

Basis of presentation

The condensed consolidated balance sheet as of June 30, 2022, the condensed consolidated statements of operations, comprehensive (loss) income and stockholders' equity for the three and six months ended June 30, 2022 and 2021, and the condensed consolidated statements of cash flows for the six months ended June 30, 2022 and 2021 are unaudited.

The unaudited condensed consolidated financial statements have been prepared on the same basis as the annual financial statements and, in the opinion of our management, reflect all adjustments, which include only normal recurring adjustments, necessary to fairly state our financial position as of June 30, 2022, our results of operations and stockholders' equity for the three and six months ended June 30, 2022 and 2021, and cash flows for the six months ended June 30, 2022 and 2021.

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

The results of operations for the three and six months ended June 30, 2022 are not necessarily indicative of the results to be expected for the year ending December 31, 2022 or for any other future annual or interim period.

The condensed consolidated balance sheet as of September 30, 2022, the condensed consolidated statements of operations, comprehensive (loss) income and stockholders' equity for the three and nine months ended September 30, 2022 and 2021, and the condensed consolidated statements of cash flows for the nine months ended September 30, 2022 and 2021 are unaudited.

The unaudited condensed consolidated financial statements have been prepared on the same basis as the annual financial statements and, in the opinion of our management, reflect all adjustments, which include only normal recurring adjustments, necessary to fairly state our financial position as of September 30, 2022, our results of operations and stockholders' equity for the three and nine months ended September 30, 2022 and 2021, and cash flows for the nine months ended September 30, 2022 and 2021.

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

The results of operations for the three and nine months ended September 30, 2022 are not necessarily indicative of the results to be expected for the year ending December 31, 2022 or for any other future annual or interim period.

The condensed consolidated balance sheet data as of December 31, 2021 was derived from our audited financial statements, but does not include all disclosures required by U.S.

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On October 5, 2021, we terminated our Rule 10b5-1 share repurchase program 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.

As of June 30, 2022 and 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.

As of June 30, 2022, we have no t repurchased any shares under the Rule 10b-18 repurchase plan.

In total, as of June 30, 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 not repurchased any shares of common stock in fiscal year 2022 and 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.

As of September 30, 2022, we have no t repurchased any shares under the Rule 10b-18 repurchase plan.

In total, as of September 30, 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 for the foreseeable future.

As of June 30, 2022, we had cash, cash equivalents and marketable securities of $ 1.1 billion.

As of September 30, 2022, we had cash, cash equivalents and marketable securities of $ 1.0 billion.

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

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Cost of sales consists primarily of manufacturing costs 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® r ecorded during the three and six months ended June 30, 2022 were expensed prior to February 17, 2022 and, therefore, are not included in costs of sales during the three and six months ended June 30, 2022 .

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® r ecorded during the three and nine months ended September 30, 2022 were expensed prior to February 17, 2022 and, therefore, are not included in costs of sales during the three and nine months ended September 30, 2022 .

There have been no other material changes to the significant accounting policies previously disclosed in our Annual Report on Form 10-K for the year ended December 31, 2021.

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

The following table summarizes our cash equivalents and marketable securities measured at fair value and by level on a recurring basis as of June 30, 2022:

The following table summarizes our cash equivalents and marketable securities measured at fair value and by level on a recurring basis as of September 30, 2022:

(In thousands) Level 1 Level 2 Level 3 Total

9 unchanged sentences

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

After completing our validation procedures, we did not adjust or override any fair value measurements provided by the pricing services as of June 30, 2022.

There have been no changes to the valuation methods during the six months ended June 30, 2022, and we had no financial assets or liabilities that were classified as Level 3 at any point during the six months ended June 30, 2022.

After completing our validation procedures, we did not adjust or override any fair value measurements provided by the pricing services as of September 30, 2022.

There have been no changes to the valuation methods during the nine months ended September 30, 2022, and we had no financial assets or liabilities that were classified as Level 3 at any point during the nine months ended September 30, 2022.

Marketable Securities

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

There were no material realized gains or losses on marketable securities for the three and six months ended June 30, 2022 or 2021.

Marketable securities at June 30, 2022 consisted of the following:

There were no material realized gains or losses on marketable securities for the three and nine months ended September 30, 2022 or 2021.

Marketable securities at September 30, 2022 consisted of the following:

(In thousands) Amortized

23 unchanged sentences

Total marketable securities $ 1,084,465 $ 4 $ ( 1,202 ) $ 1,083,267

As of June 30, 2022 and December 31, 2021, we held both current and non-current investments.

As of September 30, 2022 and December 31, 2021, we held both current and non-current investments.

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

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

As of June 30, 2022 and December 31, 2021, we held 270 and 294 debt securities, respectively, that were in an unrealized loss position for less than one year.

We did no t record an allowance for credit losses as of June 30, 2022 and December 31, 2021 related to these securities.

The aggregate fair value of debt securities in an unrealized loss position at June 30, 2022 and December 31, 2021 was $ 968.1 million and $ 950.5 million, respectively.

There were no individual securities that were in a significant unrealized loss position as of June 30, 2022 and December 31, 2021.

As of September 30, 2022 and December 31, 2021, we held 257 and 294 debt securities, respectively, that were in an unrealized loss position for less than one year.

We did no t record an allowance for credit losses as of September 30, 2022 and December 31, 2021 related to these securities.

The aggregate fair value of debt securities in an unrealized loss position at September 30, 2022 and December 31, 2021 was $ 881.6 million and $ 950.5 million, respectively.

There were no individual securities that were in a significant unrealized loss position as of September 30, 2022 and December 31, 2021.

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

We do not consider these marketable securities to be impaired as of June 30, 2022 and December 31, 2021.

We do not consider these marketable securities to be impaired as of September 30, 2022 and December 31, 2021.

Inventory, which consists of commercial supply of PYRUKYND®, consisted of the following:

(In thousands) June 30,

(In thousands) September 30,

2022 December 31,

4 unchanged sentences

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

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

These lease agreements have remaining lease terms of approximately five 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 options are not reasonably certain of being exercised.

2 unchanged sentences

Three Months Ended

June 30, Six Months Ended

(In millions) 2022 2021 2022 2021

September 30, Nine Months Ended

September 30,

(In thousands) 2022 2021 2022 2021

Operating lease costs $ 3,807 $ 3,807 $ 11,420 $ 11,423

Cash paid for amounts included in the measurement of operating lease liabilities $ 4,420 $ 3,614 $ 12,610 $ 10,773

We have not entered into any material short-term leases or financing leases as of June 30, 2022.

In arriving at the operating lease liabilities as of June 30, 2022 and December 31, 2021, we applied the weighted-average incremental borrowing rate of 5.7 % for both periods over a weighted-average remaining lease term of 5.7 years and 6.2 years, respectively.

As of June 30, 2022, undiscounted minimum rental commitments under non-cancelable leases, for each of the next five years and total thereafter were as follows:

We have not entered into any material short-term leases or financing leases as of September 30, 2022.

In arriving at the operating lease liabilities as of September 30, 2022 and December 31, 2021, we applied the weighted-average incremental borrowing rate of 5.7 % for both periods over a weighted-average remaining lease term of 5.4 years and 6.2 years, respectively.

As of September 30, 2022, undiscounted minimum rental commitments under non-cancelable leases, for each of the next five years and total thereafter were as follows:

(In thousands)

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In April 2022, we entered into a long-term sublease agreement for 27,000 square feet of the office space at 64 Sidney Street, Cambridge, Massachusetts, with the term of the lease running through April 2025.

We recorded operating sublease income of $ 1.3 million and $ 1.7 million for the three and six months ended June 30, 2022, respectively, in other income, net in the condensed consolidated statements of operations.

We recorded operating sublease income of $ 1.0 million and $ 2.7 million for the three and nine months ended September 30, 2022, respectively, in other income, net in the condensed consolidated statements of operations.

We received a security deposit from our sublessee of approximately $ 1.1 million which is recorded within other non-current assets on our condensed consolidated balance sheet.

As of June 30, 2022, the future minimum lease payments to be received under the long-term sublease agreements were as follows:

As of September 30, 2022, the future minimum lease payments to be received under the long-term sublease agreements were as follows:

(In thousands)

3 unchanged sentences

Accrued expenses consisted of the following:

(In thousands) June 30,

(In thousands) September 30,

2022 December 31,

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Product revenue, net, were as follows:

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

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

(In thousands) 2022 2021 2022 2021

14 unchanged sentences

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.

The following table summarizes balances and activity in each of the product revenue allowance and reserve categories for the six months ended June 30, 2022:

The following table summarizes balances and activity in each of the product revenue allowance and reserve categories for the nine months ended September 30, 2022:

(In thousands) Contractual Adjustments Government Rebates Returns Total

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Payments/returns relating to sales in the prior years — — — —

Balance at June 30, 2022 $ 75 $ 250 $ 44 $ 369

Balance at September 30, 2022 $ 63 $ 355 $ 83 $ 501

Total revenue-related reserves above, included in our condensed consolidated balance sheets, are summarized as follows:

(In thousands) June 30, 2022 December 31, 2021

(In thousands) September 30, 2022 December 31, 2021

Reduction of accounts receivable $ 53 $ —

1 unchanged sentence

Total revenue-related reserves $ 501 $ —

The following table presents changes in our contract assets during the six months ended June 30, 2022:

(In thousands) December 31, 2021 Additions Deductions June 30, 2022

The following table presents changes in our contract assets during the nine months ended September 30, 2022:

(In thousands) December 31, 2021 Additions Deductions September 30, 2022

Contract assets (1)

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

As of June 30, 2022, the total number of shares reserved under the 2007 Plan and the 2013 Plan was 12,989,404 , and we had 6,000,638 shares available for future issuance under the 2013 Plan.

As of September 30, 2022, the total number of shares reserved under the 2007 Plan and the 2013 Plan was 12,967,465 , and we had 5,268,971 shares available for future issuance under the 2013 Plan.

Stock options

The following table presents stock option activity for the six months ended June 30, 2022:

The following table presents stock option activity for the nine months ended September 30, 2022:

Stock Options Weighted-Average

4 unchanged sentences

Forfeited/Expired ( 714,236 ) 63.40

Outstanding at June 30, 2022 5,374,171 $ 52.00

Exercisable at June 30, 2022 3,473,922 $ 58.44

Vested and expected to vest at June 30, 2022 5,374,171 $ 52.00

At June 30, 2022, there was approximately $ 41.7 million of total unrecognized compensation expense related to unvested stock option awards, which we expect to recognize over a weighted-average period of approximately 2.5 years.

Outstanding at September 30, 2022 5,909,087 $ 48.81

Exercisable at September 30, 2022 3,478,806 $ 57.97

Vested and expected to vest at September 30, 2022 5,909,087 $ 48.81

At September 30, 2022, there was approximately $ 45.3 million of total unrecognized compensation expense related to unvested stock option awards, which we expect to recognize over a weighted-average period of approximately 2.8 years.

Restricted stock units

The following table presents RSU activity for the six months ended June 30, 2022:

The following table presents RSU activity for the nine months ended September 30, 2022:

Stock Units Weighted-Average

4 unchanged sentences

Forfeited ( 199,564 ) 41.02

Unvested shares at June 30, 2022 1,240,486 $ 40.06

As of June 30, 2022, there was approximately $ 36.3 million of total unrecognized compensation expense related to RSUs, which we expect to recognize over a weighted-average period of approximately 1.9 years.

Unvested shares at September 30, 2022 1,264,377 $ 38.85

As of September 30, 2022, there was approximately $ 31.6 million of total unrecognized compensation expense related to RSUs, which we expect to recognize over a weighted-average period of approximately 1.9 years.

Performance-based stock units

The following table presents PSU activity for the six months ended June 30, 2022:

The following table presents PSU activity for the nine months ended September 30, 2022:

Stock Units Weighted-Average

4 unchanged sentences

Forfeited ( 35,190 ) 45.20

Unvested shares at June 30, 2022 331,414 $ 43.43

Unvested shares at September 30, 2022 482,335 $ 38.19

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

As of June 30, 2022, there was no unrecognized compensation expense related to PSUs with performance-based vesting criteria that are considered probable of achievement, and $ 14.4 million of total unrecognized compensation expense related to PSUs with performance-based vesting criteria that are considered not probable of achievement.

As of September 30, 2022, there was no unrecognized compensation expense related to PSUs with performance-based vesting criteria that are considered probable of achievement, and $ 18.4 million of total unrecognized compensation expense related to PSUs with performance-based vesting criteria that are considered not probable of achievement.

Market-based stock units

The following table presents market-based stock unit, or MSU, activity for the six months ended June 30, 2022:

The following table presents market-based stock unit, or MSU, activity for the nine months ended September 30, 2022:

Stock Units Weighted-Average

1 unchanged sentence

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

Unvested shares at June 30, 2022 42,695 $ 41.50

Unvested shares at September 30, 2022 42,695 $ 41.50

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

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

As of June 30, 2022, there was no remaining unrecognized compensation expense related to MSUs.

As of September 30, 2022, there was no remaining unrecognized compensation expense related to MSUs.

2013 Employee Stock Purchase Plan

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

We issued and sold 48,156 and 59,401 shares of common stock during the six months ended June 30, 2022 and 2021, respectively, under the 2013 ESPP.

We issued and sold 104,867 and 94,888 shares of common stock during the nine months ended September 30, 2022 and 2021, respectively, under the 2013 ESPP.

The 2013 ESPP provides participating employees with the opportunity to purchase up to an aggregate of 1,854,545 shares of our common stock.

As of June 30, 2022, we had 1,346,491 shares of common stock available for future issuance under the 2013 ESPP.

As of September 30, 2022, we had 1,289,780 shares of common stock available for future issuance under the 2013 ESPP.

Stock-based compensation expense

1 unchanged sentence

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

(In thousands) 2022 2021 2022 2021

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Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

(In thousands) 2022 2021 2022 2021

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

For purposes of the dilutive net loss per share calculation, stock options, RSUs, PSUs and MSUs for which the performance and market vesting conditions, respectively, have been deemed probable, and 2013 ESPP shares are considered to be common stock equivalents, while PSUs and MSUs with performance and market vesting conditions, respectively, that were not deemed probable as of June 30, 2022 are not considered to be common stock equivalents.

For purposes of the dilutive net loss per share calculation, stock options, RSUs, PSUs and MSUs for which the performance and market vesting conditions, respectively, have been deemed probable, and 2013 ESPP shares are considered to be common stock equivalents, while PSUs and MSUs with performance and market vesting conditions, respectively, that were not deemed probable as of September 30, 2022 are not considered to be common stock equivalents.

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

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

Three and Six Months Ended June 30,

Three and Nine Months Ended September 30,

Stock options 5,909,087 5,032,591

3 unchanged sentences

Total common stock equivalents 7,183,967 6,121,543

We recorded no provision for income taxes for the three months ended June 30, 2022 or three months ended June 30, 2021, and recorded no provision for income taxes for the six months ended June 30, 2022 and $ 12.9 million for the six months ended June 30, 2021.

The tax provision for the six months ended June 30, 2021 was recorded within discontinued operations as it related to the income tax impact on the sale of our oncology business to Servier.

There is no income tax expense recorded in continuing operations for the three and six months ended June 30, 2022 and 2021, respectively.

Cash taxes paid were $ 1.8 million and $ 6.2 million for the six months ended June 30, 2022 and 2021, respectively.

We recorded no provision for income taxes for the three months ended September 30, 2022 and a provision of $ 3.9 million for the three months ended September 30, 2021, and recorded no provision for income taxes for the nine months ended September 30, 2022 and $ 16.8 million for the nine months ended September 30, 2021.

The tax provision for the nine months ended September 30, 2021 was recorded within discontinued operations as it related to the income tax impact on the sale of our oncology business to Servier.

There is no income tax expense recorded in continuing operations for the three and nine months ended September 30, 2022 and 2021.

Cash taxes paid were $ 1.9 million and $ 8.9 million for the nine months ended September 30, 2022 and 2021, respectively.

Subsequent Events

On October 27, 2022, we entered into an agreement with entities affiliated with Sagard Healthcare Partners, or Sagard, and sold our rights to the royalty on U.S.

net sales of TIBSOVO® for $ 131.8 million.

This royalty was part of the consideration for our March 31, 2021 sale of our oncology business to Servier.

We received payment from Sagard on October 27, 2022.

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

What changed 10-Q

Item 1. Financial Statements