What changed in this filing

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Item 9A. Controls and Procedures

2023-02-23 compared with 2022-02-24 · 418 added, 387 removed, 668 unchanged (55% of the section changed)

17 unchanged sentences

Our management assessed the effectiveness of our internal control over financial reporting as of December 31, 2022.

In making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in its 2013 Internal Control – Integrated Framework.

In making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway

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Commission (COSO) in its 2013 Internal Control – Integrated Framework.

Based on our assessment, our management has concluded that, as of December 31, 2022, our internal control over financial reporting is effective based on those criteria.

5 unchanged sentences

Not applicable.

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Directors, Executive Officers and Corporate Governance

1 unchanged sentence

Executive Compensation

The information required by this Item 11 will be included in our definitive proxy statement to be filed with the SEC with respect to our 2022 Annual Meeting of Stockholders and is incorporated herein by reference.

The information required by this Item 11 will be included in our definitive proxy statement to be filed with the SEC with respect to our 2023 Annual Meeting of Stockholders and, other than the information required by Item 402(v) of Regulation S-K, is incorporated herein by reference.

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

4 unchanged sentences

The information required by this Item 14 will be included in our definitive proxy statement to be filed with the SEC with respect to our 2023 Annual Meeting of Stockholders and is incorporated herein by reference.

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Exhibits and Financial Statement Schedules

4 unchanged sentences

Consolidated Statements of Operations

Consolidated Statements of Comprehensive Income (Loss)

Consolidated Statements of Comprehensive (Loss) Income

Consolidated Statements of Stockholders’ Equity

3 unchanged sentences

Schedules have been omitted since they are either not required or not applicable or the information is otherwise included herein.

Description of Exhibit Incorporated by Reference Filed

Date of Filing Exhibit

Description of Exhibit

Incorporated by Reference

Date of Filing

2.1 Purchase and Sale Agreement, dated as of December 20, 2020, by and among the Registrant, Servier Pharmaceuticals, LLC, and, solely for purposes of guaranteeing certain obligations of the Purchaser, Servier S.A.S

8-K 001-36014 December 22, 2020 2.1

3.1 Restated Certificate of Incorporation of the Registrant

8-K 001-36014 July 30, 2013 3.1

December 22, 2020

Purchase and Sale Agreement, dated October 27, 2022, by and among the Registrant, Sagard Healthcare Royalty Partners, LP and S agard Healthcare Partners Co-Invest Designated Activity Company

3.1 R estated Certificate of Incorproation of the Registrant

July 30, 2013

Second Amended and Restated By-Laws

8-K 001-36014 December 19, 2018 3.1

December 19, 2018

Specimen Stock Certificate evidencing the shares of common stock

S-1 333-189216 June 24, 2013 4.1

June 24, 2013

Description of Securities Registered Under Section 12 of the Securities Exchange Act of 1934

10-K 001-36014 February 19, 2020 4.3

February 19, 2020

2007 Stock Incentive Plan

S-1 333-189216 June 10, 2013 10.1

June 10, 2013

Form of Incentive Stock Option Agreement under 2007 Stock Incentive Plan

S-1 333-189216 June 10, 2013 10.2

June 10, 2013

Form of Nonstatutory Stock Option Agreement under 2007 Stock Incentive Plan

S-1 333-189216 June 10, 2013 10.3

June 10, 2013

2013 Stock Incentive Plan

S-1 333-189216 June 24, 2013 10.4

June 24, 2013

Form of Incentive Stock Option Agreement under 2013 Stock Incentive Plan

S-1 333-189216 June 24, 2013 10.5

June 24, 2013

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Form of Nonstatutory Stock Option Agreement under 2013 Stock Incentive Plan

S-1 333-189216 June 24, 2013 10.6

June 24, 2013

2013 Employee Stock Purchase Plan

S-1 333-189216 June 24, 2013 10.7

Description of Exhibit Incorporated by Reference Filed

Date of Filing Exhibit

June 24, 2013

Form of Indemnification Agreement between the Registrant and each of its Executive Officers and Directors

S-1 333-189216 July 11, 2013 10.12

July 11, 2013

Letter Agreement, dated as of April 1, 2014, between the Registrant and Christopher Bowden, Ph.D.

10-K 001-36014 February 26, 2016 10.13

10.10† Discovery and Development Collaboration and License Agreement, dated as of April 14, 2010, as amended on October 3, 2011, between the Registrant and Celgene Corporation

S-1 333-189216 July 16, 2013 10.14

10.11† Third Amendment to Discovery and Development Collaboration and License Agreement, dated July 14, 2014 between the Registrant and Celgene Corporation

10-K 001-36014 February 24, 2015 10.15

10.12 Common Stock Purchase Agreement, dated as of July 16, 2013, between the Registrant and Celgene Alpine Investment Co., LLC

S-1 333-189216 July 16, 2013 10.15

February 26, 2016

Lease, dated as of September 15, 2014, between the Registrant and Forest City 88 Sidney, LLC

8-K 001-36014 September 19, 2014 10.1

September 19, 2014

First Amendment to Lease for 88 Sidney Street, dated as of November 21, 2014, between the Registrant and Forest City 88 Sidney, LLC

8-K 001-36014 November 26, 2014 10.1

November 26, 2014

Summary Description of Annual Cash Incentive Program

10-Q 001-36014 May 11, 2015 10.1

Second Amendment to Lease for 88 Sidney Street, dated July 20, 2015, by and between the Registrant and Forest City 88 Sidney Street, LLC

8-K 001-36014 July 23, 2015 10.1

10.17† Collaboration and License Agreement by and between the Registrant and Celgene Corporation Re:

AGI-23088 for the US Territory, dated as of April 27, 2015

10-Q 001-36014 August 7, 2015 10.1

10.18† Collaboration and License Agreement by and between Agios International Sarl and Celgene International II Sarl Re:

AGI-23088 for the ROW Territory, dated as of April 27, 2015

10-Q 001-36014 August 7, 2015 10.2

July 23, 2015

Form of Performance Share Unit Agreement under 2013 Stock Incentive Plan

10-K 001-36014 February 26, 2016 10.25

10.20# Severance Benefits Plan

8-K 001-36014 April 22, 2016 10.1

10.21† Master Research and Collaboration Agreement, dated May 17, 2016, by and among the Registrant, Celgene Corporation and Celgene RIVOT Ltd.

10-Q 001-36014 August 8, 2016 10.1

10.22# Letter Agreement between the Registrant and Andrew Hirsch, effective August 11, 2016

8-K 001-36014 August 16, 2016 99.2

February 26, 2016

Lease, dated as of November 17, 2017, between the Registrant and UP 64 Sidney Street, LLC

8-K 001-36014 November 22, 2017 10.1

Description of Exhibit Incorporated by Reference Filed

Date of Filing Exhibit

November 22, 2017

Third Amendment to Lease for 88 Sidney Street, dated November 17, 2017, by and between the Registrant and Forest City 88 Sidney Street, LLC

8-K 001-36014 November 22, 2017 10.2

November 22, 2017

First Amendment of Lease, dated April 11, 2018, by and between UP 64 Sidney Street, LLC and Agios Pharmaceuticals.

8-K 001-36014 April 13, 2018 10.1

April 13, 2018

Form of Restricted Stock Unit Agreement under 2013 Stock Incentive Plan (for employees)

10-Q 001-36014 May 4, 2018 10.1

10.27† License Agreement, dated June 25, 2018, by and between Agios Pharmaceuticals, Inc.

and CStone Pharmaceuticals

10-Q 001-36014 August 2, 2018 10.2

10.28# Amended and Restated Letter Agreement, dated as of August 30, 2018, between the Registrant and David P.

Schenkein, M.D.

10-Q 001-36014 November 1, 2018 10.1

Letter Agreement, dated as of August 30, 2018, between the Registrant and Jacqualyn A.

10-Q 001-36014 November 1, 2018 10.2

November 1, 2018

Form of Restricted Stock Unit Agreement under 2013 Stock Incentive Plan (for directors)

10-K 001-36014 February 14, 2019 10.32

February 14, 2019

Lease, dated as of April 11, 2019, by and between the Registrant and Thirty-Eight Sidney Street Limited LLC

10-Q 001-36014 August 1, 2019 10.1

August 1, 2019

Fourth Amendment to Lease, dated as of April 11, 2019, by and between the Registrant and Forest City 88 Sidney Street, LLC

10-Q 001-36014 August 1, 2019 10.2

August 1, 2019

Third Amendment of Lease, dated as of April 11, 2019, by and between the Registrant and UP 64 Sidney Street, LLC

10-Q 001-36014 August 1, 2019 10.3

August 1, 2019

Letter Agreement, dated as of September 17, 2019, between the Registrant and Jonathan Biller

10-K 001-36014 February 19, 2020 10.35

February 19, 2020

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Letter Agreement, dated as of October 7, between the Registrant and Bruce Car

10-Q 001-36014 April 30, 2020 10.1

10.36† Amendment to Master Research and Collaboration Agreement, dated as of February 5, 2020, by and among the Registrant, Celgene Corporation and Celgene RIVOT Ltd

10-Q 001-36014 April 30, 2020 10.2

10.37† Amendment I to License Agreement, dated as of March 2, 2020, by and between the Registrant and CStone Pharmaceuticals

10-Q 001-36014 April 30, 2020 10.3

10.38† Amendment II to License Agreement, dated as of March 2, 2020, by and between the Registrant and CStone Pharmaceuticals

10-Q 001-36014 April 30, 2020 10.4

April 30, 2020

Sales Agreement, dated April 30, 2020, by and between the Registrant and Cowen and Company, LLC

S-3ASR 333-237930 April 30, 2020 1.2

Description of Exhibit Incorporated by Reference Filed

Date of Filing Exhibit

10.40† Royalty Purchase Agreement, dated as of June 11, 2020, by and between the Registrant and RPI 2019 Intermediate Finance Trust

10-Q 001-36014 July 30, 2020 10.2

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

10-Q 001-36014 April 29, 2021 10.1

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

10-Q 001-36014 November 3, 2021 10.1

April 30, 2020

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

(38 Sidney Street)

10-Q 001-36014 November 3, 2021 10.2

November 3, 2021

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

(64 Sidney Street)

February 24, 2022

Letter Agreement, dated July 8, 2022, between the Registrant and Brian Goff

August 4, 2022

Form of Inducement Stock Option Agreement for Brian Goff

August 4, 2022

Form of Inducement Restricted Stock Unit Agreement for Brian Goff

August 4, 2022

10.32#** Form of Inducement Performance Stock Unit Agreement for Brian Goff

August 4, 2022

Letter Agreement, dated as of September 16, 2022, between the Registrant and Cecilia Jones

November 3, 2022

Form of Inducement Stock Option Agreement for Cecilia Jones

September 26, 2022

Form of Inducement Restricted Stock Unit Agreement for Cecilia Jones

September 26, 2022

Form of Inducement Performance Stock Unit Agreement for Cecilia Jones

September 26, 2022

Amended and Restated Severance Benefits Plan

October 7, 2022

Letter Agreement, dated as of December 5, 2022, between the Registrant and Tsveta Milanova

Form of Inducement Stock Option Agreement for Tsveta Milanova

January 3, 2023

Form of Inducement Restricted Stock Unit Agreement for Tsveta Milanova

January 3, 2023

Form of Inducement Performance Stock Unit Agreement for Tsveta Milanova

January 3, 2023

10.42# Consulting Agreement, dated May 23, 2022, by and between the Registrant and Bruce Car

10-Q 001-36014 August 4, 2022 10.1

10.43# Consulting Agreement, dated January 1, 2023, by and between the Registrant and Richa Poddar

Subsidiaries of the Registrant

1 unchanged sentence

Certification of principal executive officer pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934, as amended

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Certification of principal financial officer pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934, as amended.

3 unchanged sentences

§1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101.INS XBRL Instance Document X

101.SCH XBRL Taxonomy Extension Schema Document X

101.CAL XBRL Taxonomy Calculation Linkbase Document X

101.DEF XBRL Taxonomy Extension Definition Linkbase Document X

101.LAB XBRL Taxonomy Label Linkbase Document X

101.PRE XBRL Taxonomy Presentation Linkbase Document X

104 Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) X

XBRL Instance Document

XBRL Taxonomy Extension Schema Document

XBRL Taxonomy Calculation Linkbase Document

XBRL Taxonomy Extension Definition Linkbase Document

XBRL Taxonomy Label Linkbase Document

XBRL Taxonomy Presentation Linkbase Document

Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

Indicates management contract or compensatory plan or arrangement.

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

Description of Exhibit Incorporated by Reference Filed

Date of Filing Exhibit

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

This certification will not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or the Exchange Act, or otherwise subject to the liability of that section.

Such certification will not be deemed to be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act, except to the extent specifically incorporated by reference into such filing.

Portions of this exhibit have been omitted pursuant to Item 601(b)(10)(iv) of Regulation S-K.

Form 10-K Summary

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Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

1 unchanged sentence

February 23, 2023 By:

/s/ Jacqualyn A.

/s/ Brian Goff

Chief Executive Officer

1 unchanged sentence

Signature Title Date

/s/ Jacqualyn A.

Chief Executive Officer

/s/ Brian Goff Chief Executive Officer

(Principal executive officer)

February 23, 2023

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

/s/ Cecilia Jones Chief Financial Officer

(Principal financial officer)

February 23, 2023

Jonathan Biller

Washburn Senior Director of Accounting

Cecilia Jones

Washburn Vice President, Controller

(Principal accounting officer)

February 23, 2023

/s/ Jacqualyn A.

Fouse Chair of the Board of Directors February 23, 2023

/s/ Rahul Ballal Director February 23, 2023

Rahul Ballal, Ph.D.

Clancy Director February 23, 2023

/s/ Ian Clark Director February 24, 2022

/s/ Kaye Foster Director February 23, 2023

7 unchanged sentences

Schenkein, M.D.

/s/ Cynthia Smith Director February 23, 2023

Cynthia Smith

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Agios Pharmaceuticals, Inc.

3 unchanged sentences

Consolidated Statements of Operations

Consolidated Statements of Comprehensive Income (Loss)

Consolidated Statements of Comprehensive (Loss) Income

Consolidated Statements of Stockholders’ Equity

1 unchanged sentence

Notes to Consolidated Financial Statements

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Report of Independent Registered Public Accounting Firm

28 unchanged sentences

The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that (i) relates to accounts or

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

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

Discontinued Operations - Expenses Directly Attributable to the Oncology Business

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

Food and Drug Administration, a royalty of 5% of U.S.

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

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

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

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

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

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

Accounting for the Sagard agreement

As described in Note 1 to the consolidated financial statements, the consideration for the sale of the Company’s oncology business to Servier includes a royalty of 5% of U.S.

net sales of TIBSOVO® from the close of the transaction through loss of exclusivity, referred to as contingent payments.

The Company recognizes the contingent payments in the royalty income from gain on sale of oncology business line item in the consolidated statement of operations in the period when realizable.

On October 27, 2022, the Company sold their rights to future contingent payments, to entities affiliated with Sagard Healthcare Partners, or Sagard, and recognized income of $127.9 million within the gain on sale of contingent payments line item in the consolidated statement of operations for the year ended December 31, 2022.

The principal considerations for our determination that performing procedures relating to accounting for the Sagard agreement is a critical audit matter are (i) the significant judgment by management when determining the appropriate accounting for the sale of the rights to future contingent payments, and (ii) a high degree of auditor judgment and effort in performing procedures and evaluating audit evidence related to management’s assessment of the accounting analysis and conclusions for the Sagard agreement.

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

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

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

These procedures included testing the effectiveness of controls related to management’s accounting analysis and conclusions, including controls over management’s assessment of the terms and conditions of the Sagard agreement.

These procedures also included, among others, (i) reviewing the terms and conditions in the Sagard agreement, and (ii) evaluating management’s assessment of the accounting analysis and conclusions, including evaluating the impact of legal considerations.

/s/ PricewaterhouseCoopers LLP

2 unchanged sentences

We have served as the Company’s auditor since 2017.

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Agios Pharmaceuticals, Inc.

Consolidated Balance Sheets

(In thousands) December 31:

(In thousands, except share and per share data) December 31:

Current assets:

1 unchanged sentence

Marketable securities 643,860 816,892

Accounts receivable, net 2,206 —

Other receivable — 4,378

Inventory 8,492 —

Prepaid expenses and other current assets 38,955 39,835

Current assets of discontinued operations — 47,859

Total current assets 832,772 1,064,231

4 unchanged sentences

Other non-current assets 3,956 2,900

Non-current assets of discontinued operations — 2,601

Total assets $ 1,238,718 $ 1,437,736

5 unchanged sentences

Financing lease liabilities — 331

Current liabilities of discontinued operations — 38,459

Total current liabilities 62,629 59,826

1 unchanged sentence

Financing lease liabilities, net of current portion — 276

Non-current liabilities of discontinued operations — 261,269

Other non-current liabilities 3,279 —

Total liabilities 137,904 145,761

7 unchanged sentences

Additional paid-in capital 2,386,325 2,334,348

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

Accumulated other comprehensive loss ( 12,535 ) ( 1,198 )

Accumulated deficit ( 470,561 ) ( 238,760 )

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

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

( 802,486 ) ( 802,486 )

2 unchanged sentences

See accompanying Notes to Consolidated Financial Statements.

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Agios Pharmaceuticals, Inc.

2 unchanged sentences

2022 2021 2020

Cost and expenses:

Product revenue, net $ 11,740 $ — $ —

Milestone revenue 2,500 — —

Total revenue 14,240 — —

Operating expenses

Cost of sales $ 1,704 $ — $ —

Research and development 279,910 256,973 220,811

Selling, general and administrative 121,673 121,445 115,105

Total cost and expenses 378,418 335,916 316,269

Total operating expenses 403,287 378,418 335,916

Loss from operations ( 389,047 ) ( 378,418 ) ( 335,916 )

Gain on sale of oncology business 6,639 — —

Gain on sale of contingent payments 127,853 — —

Royalty income from gain on sale of oncology business 9,851 6,639 —

Interest income, net 12,793 836 6,611

1 unchanged sentence

Net loss from continuing operations ( 231,801 ) ( 356,510 ) ( 329,305 )

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

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

Net income from discontinued operations, net of tax — 1,961,225 1,935

Net (loss) income $ ( 231,801 ) $ 1,604,715 $ ( 327,370 )

Net loss from continuing operations per share - basic and diluted $ ( 4.23 ) $ ( 5.90 ) $ ( 4.77 )

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

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

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

Net income from discontinued operations per share - basic and diluted $ — $ 32.45 $ 0.03

Net (loss) income per share - basic and diluted $ ( 4.23 ) $ 26.55 $ ( 4.74 )

Weighted-average number of common shares used in computing net loss per share from continuing operations, net income per share from discontinued operations and net (loss) income per share – basic and diluted 54,789,435 60,447,346 68,997,879

See accompanying Notes to Consolidated Financial Statements.

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Agios Pharmaceuticals, Inc.

Consolidated Statements of Comprehensive Income (Loss)

Consolidated Statements of Comprehensive (Loss) Income

(In thousands) Years Ended December 31:

2022 2021 2020

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

Net (loss) income $ ( 231,801 ) $ 1,604,715 $ ( 327,370 )

Other comprehensive (loss) income

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

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

Unrealized loss on available-for-sale securities ( 11,337 ) ( 1,303 ) ( 97 )

Comprehensive (loss) income $ ( 243,138 ) $ 1,603,412 $ ( 327,467 )

See accompanying Notes to Consolidated Financial Statements.

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Agios Pharmaceuticals, Inc.

8 unchanged sentences

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

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

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

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

1 unchanged sentence

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

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

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

1 unchanged sentence

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

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

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

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

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

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

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

1 unchanged sentence

Unrealized loss on available-for-sale securities — — — ( 11,337 ) — — — ( 11,337 )

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

Net loss — — — — ( 231,801 ) — — ( 231,801 )

Stock-based compensation expense — — 49,296 — — — — 49,296

Issuance of common stock under stock incentive and employee stock purchase plans 705,487 — 2,681 — — — — 2,681

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

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

Balance at December 31, 2022 71,256,118 $ 71 $ 2,386,325 $ ( 12,535 ) $ ( 470,561 ) ( 16,216,411 ) $ ( 802,486 ) $ 1,100,814

See accompanying Notes to Consolidated Financial Statements.

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Agios Pharmaceuticals, Inc.

3 unchanged sentences

Operating activities

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

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

Net (loss) income $ ( 231,801 ) $ 1,604,715 $ ( 327,370 )

Net income from discontinued operations — 1,961,225 1,935

Net loss from continuing operations ( 231,801 ) ( 356,510 ) ( 329,305 )

2 unchanged sentences

Stock-based compensation expense 49,296 53,508 61,602

Net amortization of premium (accretion of discount) on marketable securities 6,949 3,022 ( 3,195 )

Loss on disposal of property and equipment 12 — 1,052

Net (accretion of discount) amortization of premium on marketable securities ( 1,198 ) 6,949 3,022

Gain on sale of contingent payments ( 127,853 ) — —

(Gain) loss on disposal of property and equipment ( 48 ) 12 —

Non-cash operating lease expense 9,995 9,537 8,982

Changes in operating assets and liabilities:

Accounts receivable, net ( 2,206 ) — —

Inventory ( 8,492 ) — —

Other receivables 447 ( 4,378 ) —

3 unchanged sentences

Operating lease liabilities ( 10,828 ) ( 7,527 ) ( 8,127 )

Other liabilities 3,003 — —

Net cash used in operating activities ( 309,478 ) ( 314,086 ) ( 243,944 )

4 unchanged sentences

Proceeds from maturities and sales of marketable securities 1,146,175 829,804 647,685

Proceeds from sale of contingent payments 131,784 — —

Purchases of property and equipment ( 4,881 ) ( 5,741 ) ( 14,106 )

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

Proceeds from sale of equipment 964 — —

Net cash provided by (used in) investing activities 243,261 ( 554,158 ) 76,549

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

3 unchanged sentences

Purchase of treasury stock — ( 802,486 ) —

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

Net proceeds from stock option exercises and employee stock purchase plan 2,681 37,296 11,317

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

Net cash provided by (used in) financing activities 2,350 ( 765,768 ) 10,981

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

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

Net cash provided by (used in) financing activities 2,350 ( 765,768 ) 261,518

Net change in cash and cash equivalents ( 63,867 ) 75,690 46,505

4 unchanged sentences

Cash taxes paid $ — $ 16,078 $ —

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

Financing lease liabilities arising from obtaining financing lease assets $ — $ 511 $ —

See accompanying Notes to Consolidated Financial Statements.

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Agios Pharmaceuticals, Inc.

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

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

We take a systems biology approach to deeply understand disease states, drive the discovery and validation of novel therapeutic targets, and define patient selection strategies, thereby increasing the probability that our experimental medicines will have the desired therapeutic effect, while cultivating connections with patient communities, healthcare professionals, partners and colleagues to discover, develop and deliver potential therapies for genetically defined diseases, or GDDs.

We are 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 rare diseases.

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.

We accelerate the impact of our portfolio by cultivating connections with patient communities, healthcare professionals, partners and colleagues to discover, develop and deliver potential therapies for rare diseases.

We are located in Cambridge, Massachusetts.

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

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

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

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

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

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

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

In November 2022, we received marketing authorization from the European Commission for PYRUKYND® for the treatment of PK deficiency in adult patients in the European Union, or EU.

In December 2022, we received marketing authorization in Great Britain for PYRUKYND® for the treatment of PK deficiency in adult patients under the European Commission Decision Reliance Procedure.

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 PK activator, for the potential treatment of lower-risk myelodysplastic syndrome, or LR MDS, and hemolytic anemias.

In addition to the aforementioned clinical development programs, we continue to invest in our late-stage research program focused on advancing a phenylalanine hydroxylase, or PAH, stabilizer for the treatment of phenylketonuria, or PKU.

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

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 $ 200.0 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, or Celgene, and following the sale Servier is responsible for conducting certain clinical development activities within the IDHIFA® development program.

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

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

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.

We recorded income from royalties of approximately $ 9.9 million and $ 6.6 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 consolidated statements of operation s , for the years ended December 31, 2022 and December 31, 2021, respectively.

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Sale of Contingent Payments

The consideration for the sale of our oncology business to Servier includes a royalty of 5 % of U.S.

net sales of TIBSOVO® from the close of the transaction through loss of exclusivity, referred to as contingent payments.

We recognize the contingent payments in the royalty income from gain on sale of oncology business line item in our consolidated statement of operations in the period when realizable.

On October 27, 2022, we sold our rights to future contingent payments to entities affiliated with Sagard Healthcare Partners, or Sagard, and recognized income of $ 127.9 million within the gain on sale of contingent payments line item in our consolidated statements of operations for the year ended December 31, 2022.

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

Reclassifications

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This repurchase was completed on April 5, 2021.

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

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

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

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

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

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.

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 under the Repurchase Program.

We have not repurchased any shares of common stock in fiscal year 2022 and as of December 31, 2022 we have repurchased approximately 9.1 million shares of common stock for $ 458.0 million, or $ 50.35 per share, under the Rule 10b5-1 repurchase plan.

As of December 31, 2022, we have no t repurchased any shares under the Rule 10b-18 repurchase plan.

In total, as of December 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 for the foreseeable future.

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As of December 31, 2022, $ 250.0 million in common stock remained available for future issuance under the 2020 sales agreement.

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

On February 15, 2023, we delivered written notice to Cowen that we were terminating the 2020 sales agreement, effective on February 22, 2023.

As of the termination of the 2020 sales agreement, we had not sold any shares of our common stock under the 2020 sales agreement.

As of December 31, 2022, we had cash, cash equivalents and marketable securities of $ 1.1 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 to be sufficient to fund current operations for at least the next twelve months from the issuance of the financial statements.

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Use of estimates

The preparation of financial statements in conformity with U.S.

GAAP requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period.

The preparation of our consolidated financial statements requires us to make estimates, judgments and assumptions that may affect the reported amounts of assets, liabilities, equity, revenues and expenses and related disclosure of contingent assets and liabilities.

On an ongoing basis we evaluate our estimates, judgments and methodologies.

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

We base our estimates on historical experience and on various other assumptions that we believe are reasonable, the results of which form the basis for making

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judgments about the carrying values of assets, liabilities and equity and the amount of revenues and expenses.

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

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Cash equivalents are stated at fair value.

Accounts receivable, net

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

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

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

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

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

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

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

Upon approval of our wholly owned product, PYRUKYND®, by the FDA on February 17, 2022 for the treatment of hemolytic anemia in adults with PK deficiency in the United States, we began to capitalize inventories of PYRUKYND®.

Revenue recognition

Under Accounting Standards Codification 606, Revenue from Contracts with Customers , or ASC 606, revenue is recognized when the customer obtains control of promised goods or services, in an amount that reflects the consideration that we expect to receive in exchange for those goods or services.

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

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

(ii) identify the performance obligations in the contract;

(iii) determine the transaction price;

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

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

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

This standard applies to all contracts with customers, except for contracts that are within the scope of other standards, such as leases, insurance, collaboration arrangements and financial instruments.

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

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

Product Revenue

We generate product revenue from sales of 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®.

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

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allowances that are offered within the contracts with our Customers, healthcare providers, payors and other indirect customers relating to the sale of our products.

Contractual Adjustments .

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

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

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

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

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

Government Rebates .

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

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

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

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

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

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 twelve months ended December 31, 2022 were expensed prior to February 17, 2022 and, therefore, are not included in costs of sales during the twelve months ended December 31, 2022.

Marketable securities

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We determine the appropriate classification of the securities at the time they are acquired and evaluate the appropriateness of such classifications at each balance sheet date.

We classify our marketable securities as available-for-sale pursuant to Accounting Standards Codification, or ASC, 320, Investments – Debt and Equity Securities .

We classify our marketable securities as available-for-sale pursuant to ASC 320, Investments – Debt and Equity Securities .

Marketable securities are recorded at fair value.

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

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

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

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

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

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

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Fair value measurements

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After completing our validation procedures, we did not adjust or override any fair value measurements provided by the pricing services as of December 31, 2022 or 2021.

Fair value information for these assets, including their classification in the fair value hierarchy is included in Note 4.

Fair Value Measurements .

Fair value information for these assets, including their classification in the fair value hierarchy is included in Note 3 , Fair Value Measurements .

There have been no changes to the valuation methods during the years ended December 31, 2022 and 2021.

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

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

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

Concentrations of credit risk

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Potential impairment is assessed when there is evidence that events or changes in circumstances indicate that the carrying amount of an asset may not be recovered.

Recoverability of these assets is assessed based on the undiscounted expected future cash flows from the assets, considering a number of factors, including past operating results, budgets and economic projections, market trends and product development cycles.

Recoverability of these assets is assessed based on the undiscounted expected future cash flows from the assets, considering a number of factors, including past operating results, budgets and

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economic projections, market trends and product development cycles.

If impairments are identified, assets are written down to their estimated fair value.

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We account for stock-based compensation awards in accordance with ASC 718, Compensation –Stock Compensation , or ASC 718.

For stock-based awards granted to employees and to members of the board of directors for their services and for participation in our employee stock purchase plan, we primarily estimate the grant date fair value of each option award using the Black-Scholes option-pricing model.

For stock-based awards granted to employees, non-employees and members of the board of directors for their services and for participation in our employee stock purchase plan, we estimate the grant date fair value of each option award using the Black-Scholes option-pricing model.

The use of the Black-Scholes option-pricing model requires us to make assumptions with respect to the expected term of the option, the expected volatility of the common stock consistent with the expected life of the option, risk-free interest rates and expected dividend yields of the common stock.

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We determine our deferred tax assets and liabilities based on differences between the financial reporting and tax bases of assets and liabilities, which are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse.

Valuation allowances are provided, if based upon the weight of available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized.

Valuation allowances are

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provided, if based upon the weight of available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized.

We also account for uncertain tax positions in accordance with the provisions of ASC 740.

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

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

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

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

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

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

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

Segment and geographic information

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

allocate resources and assess performance.

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

Our chief operating decision maker is the chief executive officer.

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Discontinued operations

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

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

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

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

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

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

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

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

Due to the sale of the oncology business during the first quarter of 2021, in accordance with ASC 205, we have classified the results of the oncology business as discontinued operations in our consolidated statements of operations and cash flows for all periods presented, and refer to Note 15 , Discontinued Operations .

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

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

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Treasury stock

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Recent accounting pronouncements

In February 2016, the Financial Accounting Standard Board, or FASB issued Accounting Standards Update, or ASU, No.

2016-02, Leases (Topic 842) , which was codified as ASC 842, Leases , and amended through subsequent ASUs.

We adopted ASC 842 effective January 1, 2019 using the optional transition method provided for under ASU 2018-11, Leases (Topic 842):

Targeted Improvements , whereby we applied the new lease requirements through a cumulative-effect adjustment, which after completing our implementation analysis, resulted in no material adjustment to our January 1, 2019 beginning accumulated deficit balance.

We also elected the package of practical expedients provided for under ASU 2018-11, which allows us not to reassess whether contracts are or contain leases, lease classification, and whether initial direct costs qualify for capitalization.

Additionally, as an accounting policy, for our building leases, we chose not to separate the non-lease components from the lease components and, instead, accounted for each non-lease component and lease component as a single component.

We completed our assessment over the impact of the standard and determined that the only material leases that we hold are our building leases.

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

Other recent accounting pronouncements

In June 2018, the FASB issued ASU 2018-07 – Compensation-Stock Compensation (Topic 718)-Improvements to Nonemployee Share-Based Payment Accounting .

ASU 2018-07 simplifies the accounting for share-based payments to nonemployees by aligning it with the accounting for share-based payments to employees, with certain exceptions.

ASU 2018-07 is effective for fiscal years beginning after December 15, 2018.

The Company adopted the new standard as of January 1, 2019.

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

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

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

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

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

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

The Company has early

adopted this amendment as of January 1, 2019.

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

In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326) , which introduces new guidance for the accounting for credit losses on instruments within its scope.

In June 2016, the Financial Accounting Standards Board, or FASB, issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326) , which introduces new guidance for the accounting for credit losses on instruments within its scope.

The new guidance introduces an approach based on expected losses to estimate credit losses on certain types of financial instruments.

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

Discontinued Operations

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

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

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

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

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

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

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

(in thousands) December 31, 2020

Current assets:

Accounts receivable, net $ 21,328

Collaboration receivable – related party 2,123

Collaboration receivable – other 1,948

Inventory 14,698

Prepaid expenses and other current assets 7,762

Total current assets of discontinued operations 47,859

Other non-current assets 2,601

Total assets of discontinued operations $ 50,460

Current liabilities:

Accounts payable $ 9,120

Accrued expenses 29,339

Total current liabilities of discontinued operations 38,459

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

Total liabilities of discontinued operations $ 299,728

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

(in thousands) March 31, 2021

Current assets:

Accounts receivable, net $ 25,386

Collaboration receivable – related party 2,253

Collaboration receivable – other 2,438

Inventory 16,190

Prepaid expenses and other current assets 7,125

Total current assets of discontinued operations 53,392

Other non-current assets 2,234

Total assets of discontinued operations $ 55,626

Current liabilities:

Accounts payable $ 4,245

Accrued expenses 30,288

Total current liabilities of discontinued operations 34,533

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

Total liabilities of discontinued operations 298,814

Net liabilities distributed to Servier $ ( 243,188 )

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

(in thousands) December 31, 2021

Cash proceeds $ 1,802,936

transaction and insurance costs ( 53,573 )

net liabilities distributed, including working capital adjustment 239,770

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

Income tax expense ( 12,799 )

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

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

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

(in thousands) 2021 2020 2019

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

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

Collaboration revenue – other 491 3,571 8,262

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

Total revenue 41,409 203,196 117,912

Cost and expenses:

Cost of sales 706 2,805 1,317

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

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

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

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

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

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

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

Income tax expense ( 12,799 ) — —

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

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

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

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

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

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

Fair Value Measurements

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There were no material realized gains or losses on marketable securities for the years ended December 31, 2022 and 2021.

At December 31, 2021 and 2020, we held 294 and 87 debt securities, respectfully, that were in an unrealized loss position for less than one year.

We did no t record an allowance for credit losses as of December 31, 2021 and December 31, 2020 related to these securities.

At December 31, 2022 and 2021, we held 259 and 294 debt securities, respectively, that were in an unrealized loss position for less than one year.

We did not record an allowance for credit losses as of December 31, 2022 and December 31, 2021 related to these securities.

The aggregate fair value of debt securities in an unrealized loss position at December 31, 2022 and 2021 was $ 868.2 million and $ 950.5 million, respectively.

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

Property and Equipment, net

Property and equipment, net consisted of the following at December 31:

(In thousands) 2021 2020

Laboratory equipment $ 22,165 $ 23,858

Computer equipment and software 6,913 6,945

Leasehold improvements 32,726 32,568

Furniture and fixtures 3,035 3,035

Office equipment 1,690 1,651

Construction in progress 7,368 4,111

Total property and equipment 73,897 72,168

accumulated depreciation ( 44,974 ) ( 41,353 )

Total property and equipment, net $ 28,923 $ 30,815

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

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

(In thousands) December 31,

2022 December 31,

Raw materials $ — $ —

Work-in-process 7,550 —

Finished goods 942 —

Total inventory $ 8,492 $ —

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.

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

These lease agreements have remaining lease terms of 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.

The lease agreements do not contain residual value guarantees.

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

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

The term of the lease runs until December 2024.

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

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

In August 2021, we entered into a long-term sublease agreement for 13,000 square feet of the office space at 38 Sidney Street, Cambridge, Massachusetts, with the term of the lease running through December 2024.

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 $ 4.1 million and $ 0.5 million for the years ended December 31, 2022 and December 31, 2021, respectively, in other income, net in the 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 consolidated balance sheet.

As of December 31, 2022, the future minimum lease payments to be received under the long-term sublease agreements were as follows:

(In thousands)

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Total accrued expenses $ 30,350 $ 31,967

Commitments and Contingent Liabilities

Manufacturing Commitments

We are party to various agreements with contract manufacturing organizations that we are not contractually able to terminate for convenience and avoid any and all future obligations to the vendors.

Under such agreements, we are obligated to make certain minimum payments, with the exact amounts in the event of termination to be based on the timing of the termination and the exact terms of the agreement.

Legal Contingencies

From time to time, we may be involved in disputes and legal proceedings in the ordinary course of business.

These proceedings may include allegations of infringement of intellectual property, employment or other matters.

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

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

Holders of common stock are entitled to one vote per share.

Additionally, holders of common stock are entitled to receive dividends, if and when declared by our board of directors, and to share ratably in our assets legally available for distribution to our shareholders in the event of liquidation.

Product Revenue

We sell PYRUKYND®, our wholly owned product, to the Customers.

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

Product revenue, net, was as follows for the years ended December 31:

(In thousands) 2022 2021 2020

Product revenue, net $ 11,740 $ — $ —

Reserves for Variable Consideration

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

The following table summarizes balances and activity in each of the product revenue allowance and reserve categories for the year ended December 31, 2022:

(In thousands) Contractual Adjustments Government Rebates Returns Total

Balance at December 31, 2021 $ — $ — $ — $ —

Current provisions relating to sales in the current year 497 912 133 1,542

Adjustments relating to prior years — — — —

Payments/returns relating to sales in the current year ( 432 ) ( 339 ) ( 771 )

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

Balance at December 31, 2022 $ 65 $ 573 $ 133 $ 771

There were no balances or activity related to product revenue allowance and reserve categories for the year ended December 31, 2021.

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

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

Reduction of accounts receivable $ 60 $ —

Component of accrued expenses 711 —

Total revenue-related reserves $ 771 $ —

The following table presents changes in our contract assets during the year ended December 31, 2022:

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

Contract assets (1)

Accounts receivable, net $ — $ 13,283 $ ( 11,077 ) $ 2,206

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

There were no balances or activity related to contract assets for the year ended December 31, 2021.

Share-Based Payments

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

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

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

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

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Granted 337,243 30.33

Vested ( 53,777 ) 54.28

Forfeited ( 47,190 ) 49.06

Expired ( 40,092 ) 56.52

Unvested shares at December 31, 2022 430,243 $ 35.87

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Market-based stock units

The Company has issued certain equity awards that contain market based vesting conditions, in which shares of stock are earned at vesting based on stock price performance.

We have issued certain equity awards that contain market based vesting conditions, in which shares of stock are earned at vesting based on stock price performance.

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

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We issued 104,867 shares and 94,888 shares during the years ended December 31, 2022 and 2021, respectively, under the 2013 ESPP.

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

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

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 December 31, 2022, we had 1,289,780 shares available for future issuance under the 2013 ESPP.

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No related tax benefits were recognized for the years ended December 31, 2022, 2021 and 2020.

The fair value of each stock option granted to employees and nonemployees is estimated on the date of grant using the Black-Scholes option-pricing model.

The fair value of each stock option granted to employees and non-employees is estimated on the date of grant using the Black-Scholes option-pricing model.

The following table summarizes the weighted average assumptions used in calculating the grant date fair value of the awards:

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

Net Income (Loss) per Share

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

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

The control number used is loss from continuing operations.

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

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

Years ended December 31,

2022 2021 2020

Stock options 5,772,564 4,798,826 6,143,046

Restricted stock units 1,117,921 1,002,924 1,284,378

Employee Stock Purchase Plan shares 42,026 39,864 46,439

Total 6,932,511 5,841,614 7,473,863

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

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Stock based compensation ( 1.1 ) % ( 0.5 ) % ( 0.7 ) %

Foreign rate differential — % — % 0.5 %

Total — % — % — %

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Non-deductible accruals and reserves, including inventory 3,992 4,033

RPI Royalty Sale — 58,048

Other — 1,230

Section 174 R&D expense 56,565 —

Total deferred tax assets 316,105 257,677

3 unchanged sentences

Net deferred taxes $ — $ —

On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security (CARES) Act was signed into law making several changes to the Internal Revenue Code.

The changes include, but are not limited to:

increasing the limitation on the amount of deductible interest expense, allowing companies to carryback certain net operating losses, and increasing the amount of net operating loss carryforwards that corporations can use to offset taxable income.

The tax law changes in the Act did not have a material impact on the Company’s income tax provision.

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

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

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

approximately $ 13.5 million and $ 24.0 million, respectively.

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

The Tax Cuts and Jobs Act (TCJA) requires taxpayers to capitalize and amortize research and experimental expenditures under section 174 for tax years beginning after December 31, 2021.

This rule became effective for the Company during the year ending December 31, 2022 and resulted in the capitalization of research and development costs of $ 261.4 million.

We will amortize these costs for tax purposes over 5 years if the research and development was performed in the U.S.

and over 15 years if the research and development was performed outside the U.S.

As of December 31, 2022, we had net operating loss carryforwards, or NOLs, available to reduce state and foreign income taxes of approximately $ 1.2 billion and $ 65.2 million, respectively.

At December 31, 2022, we also had available research and development tax credits for federal and state income tax purposes of approximately $ 16.9 million and $ 25.7 million, respectively.

If not utilized, the credits begin to expire in 2039 and 2027 for federal and state income tax purposes, respectively.

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

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Based on the weight of available evidence, both positive and negative, we recorded a valuation allowance of $ 296.0 million and $ 236.5 million as of December 31, 2022 and December 31, 2021, respectively, because we have determined that it is more likely than not that these assets will not be fully realized.

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

The valuation allowance increased by $ 59.5 million for the year ended December 31, 2022 primarily due to the Section 174 R&D expense capitalization and decreased by $ 358.3 million for the year ended December 31, 2021 primarily due to the utilization of net operating losses and tax credits.

The following table presents our change in valuation allowance for the years ended December 31, 2022 and, 2021:

1 unchanged sentence

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

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

Increase (decrease) for the current period 59,515 ( 358,274 )

Valuation allowance at the end of the year $ 295,993 $ 236,478

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

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

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

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

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

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

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

As of December 31, 2022, the unremitted earnings of our foreign subsidiaries are not material.

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

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

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

Defined Contribution Benefit Plan

We sponsor a 401(k) retirement plan, in which substantially all of our full-time employees are eligible to participate.

Participants may contribute a percentage of their annual compensation to this plan, subject to statutory limitations.

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

Net Income (Loss) per Share

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

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 December 31, 2021 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.

The control number used is loss from continuing operations.

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

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

Years ended December 31,

2021 2020 2019

Stock options 4,798,826 6,143,046 6,201,485

Restricted stock units 1,002,924 1,284,378 766,953

Performance-based stock units — — 72,046

Employee Stock Purchase Plan shares 39,864 46,439 49,418

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

As of December 31, 2022 and 2021, we had an income tax receivable of $ 0.3 million and $ 2.9 million, respectively, recorded within prepaid expenses and other assets.

Property and Equipment, net

Property and equipment, net consisted of the following at December 31:

(In thousands) 2022 2021

Laboratory equipment $ 23,182 $ 22,165

Computer equipment and software 6,179 6,913

Leasehold improvements 37,277 32,726

Furniture and fixtures 3,514 3,035

Office equipment 2,248 1,690

Construction in progress 657 7,368

Total property and equipment 73,057 73,897

accumulated depreciation ( 50,070 ) ( 44,974 )

Total property and equipment, net $ 22,987 $ 28,923

Depreciation expense for the years ended December 31, 2022, 2021 and 2020 was $ 8.4 million, $ 8.8 million and $ 9.4 million, respectively.

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

Holders of common stock are entitled to one vote per share.

Share Repurchase Program

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

As of December 31, 2021, we have repurchased

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

As of December 31, 2022, we have repurchased approximately 9.1 million shares of common stock for $ 458.0 million, or $ 50.35 per share, under the Rule 10b5-1 repurchase plan.

In total, as of December 31, 2022, we have repurchased 16.2 million shares of common stock for $ 802.5 million, or $ 49.49 per share, under the Repurchase Program.

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

We have paused our share repurchases for the foreseeable future.

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

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There were no retirements or re-issuances of treasury stock during the year ended December 31, 2022.

Selected Quarterly Financial Data (Unaudited)

The following table contains quarterly financial information for 2021 and 2020:

2021 (in thousands, except per share data)

Quarter Second

Quarter Third

Quarter Fourth

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

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

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

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

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

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

2020 (in thousands, except per share data)

Quarter Second

Quarter Third

Quarter Fourth

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

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

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

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

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

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

Subsequent Events

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

Discontinued Operations

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

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

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

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

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

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

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

(in thousands) March 31, 2021

Current assets:

Accounts receivable, net $ 25,386

Collaboration receivable – related party 2,253

Collaboration receivable – other 2,438

Inventory 16,190

Prepaid expenses and other current assets 7,125

Total current assets of discontinued operations 53,392

Other non-current assets 2,234

Total assets of discontinued operations $ 55,626

Current liabilities:

Accounts payable $ 4,245

Accrued expenses 30,288

Total current liabilities of discontinued operations 34,533

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

Total liabilities of discontinued operations 298,814

Net liabilities distributed to Servier $ ( 243,188 )

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

(in thousands) December 31, 2021

Cash proceeds $ 1,802,936

transaction and insurance costs ( 53,573 )

net liabilities distributed, including working capital adjustment 239,770

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

Income tax expense ( 12,799 )

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

As of December 31, 2022 and December 31, 2021, there were no assets or liabilities classified as discontinued operations.

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

(in thousands) 2021 2020

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

Collaboration revenue – related party 1,350 68,274

Collaboration revenue – other 491 3,571

Royalty revenue – related party 2,659 10,262

Total revenue 41,409 203,196

Cost and expenses:

Cost of sales 706 2,805

Research and development 41,564 146,659

Selling, general and administrative 8,551 33,965

Total cost and expenses 50,821 183,429

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

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

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

Income from discontinued operations, pre-tax 1,974,024 1,935

Income tax expense ( 12,799 ) —

Net income from discontinued operations $ 1,961,225 $ 1,935

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

We also entered into a Transition Services Agreement with Servier, through which we provided transitional services related to discovery, clinical development, technical operations, commercial and general and administrative related activities through March 31, 2022.

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

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

As described in Note 1, Nature of Business , on October 27, 2022, we sold our rights to future contingent payments to entities affiliated with Sagard and recognized income of $ 127.9 million within the gain on sale of contingent payments line item in our consolidated statements of operations for the year ended December 31, 2022.

Commitments and Contingent Liabilities

Manufacturing Commitments

We are party to various agreements with contract manufacturing organizations that we are not contractually able to terminate for convenience and avoid any and all future obligations to the vendors.

Legal Contingencies

From time to time, we may be involved in disputes and legal proceedings in the ordinary course of business.

These proceedings may include allegations of infringement of intellectual property, employment or other matters.

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

Defined Contribution Benefit Plan

We sponsor a 401(k) retirement plan, in which substantially all of our full-time employees are eligible to participate.

Participants may contribute a percentage of their annual compensation to this plan, subject to statutory limitations.

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

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

What changed 10-K

Item 9A. Controls and Procedures