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Item 2. Management’s Discussion and Analysis

2023-08-03 compared with 2023-05-04 · 85 added, 65 removed, 199 unchanged (43% of the section changed)

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Forward-looking Information

The following discussion of our financial condition and results of operations should be read in conjunction with our unaudited condensed consolidated financial statements as of March 31, 2023 and for the three months ended March 31, 2023 and 2022, and related notes included in Part I, Item 1 of this Quarterly Report on Form 10-Q, as well as the audited consolidated financial statements and notes and Management’s Discussion and Analysis of Financial Condition and Results of Operations, included in our Annual Report on Form 10-K for the year ended December 31, 2022 filed with the SEC on February 23, 2023.

The following discussion of our financial condition and results of operations should be read in conjunction with our unaudited condensed consolidated financial statements as of June 30, 2023 and for the three and six months ended June 30, 2023 and 2022, and related notes included in Part I, Item 1 of this Quarterly Report on Form 10-Q, as well as the audited consolidated financial statements and notes and Management’s Discussion and Analysis of Financial Condition and Results of Operations, included in our Annual Report on Form 10-K for the year ended December 31, 2022 filed with the SEC on February 23, 2023.

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

These forward-looking statements are based on current expectations, estimates, forecasts and projections, and the beliefs and assumptions of our management, and include, without limitation, statements with respect to our expectations regarding our research, development and commercialization plans and prospects, results of operations, selling, general and administrative expenses, research and development expenses, the sufficiency of our cash for future operations and business activity disruption due to the COVID-19 pandemic.

These forward-looking statements are based on current expectations, estimates, forecasts and projections, and the beliefs and assumptions of our management, and include, without limitation, statements with respect to our expectations regarding our research, development and commercialization plans and prospects, results of operations, selling, general and administrative expenses, research and development expenses, and the sufficiency of our cash for future operations.

Words such as “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “goal,” “intend,” “may,” “plan,” “potential,” “predict,” “project,” “should,” “strategy,” “target,” “vision” “will,” “would,” and similar expressions are intended to identify these forward-looking statements, although not all forward-looking statements contain these identifying words.

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We undertake no obligation to revise the forward-looking statements contained herein to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events, except as required by law.

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.

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In addition to the aforementioned 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.

Also, in July 2023 we entered into a license agreement with Alnylam Pharmaceuticals, Inc., or Alnylam, for the development and commercialization of products containing or comprised of an siRNA development candidate discovered by Alnylam and targeting the transmembrane serine protease 6, or TMPRSS6, gene, and we intend to pursue development of a licensed product for the potential treatment of patients with polycythemia vera, or PV, a rare blood disorder.

See Item 5, "Other In formation" , for more information on the license agreement with Alnylam.

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, 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.

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.

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Impact of COVID-19 on our Business

As of March 31, 2023, we have not experienced a significant financial or supply chain impact directly related to the COVID-19 pandemic, but have experienced some disruptions to clinical operations and certain clinical and research activities at our contract research organizations, or CROs.

Although the public health emergency declaration related to COVID-19 will end on May 11, 2023, the extent of COVID-19's effect on our operational and financial performance will depend in large part on future developments, which cannot be predicted and are out of our control.

Future developments may include changes in the duration, scope and severity of the pandemic, emergence of another pandemic or other public health emergency, the actions taken to contain or mitigate its impact, the impact on governmental programs and budgets, the supply, distribution and efficacy of vaccines, and the resumption of widespread economic activity.

As of June 30, 2023, we have not experienced a significant financial or supply chain impact directly related to the recent COVID-19 pandemic, but have experienced some disruptions to clinical operations and certain clinical and research activities at our contract research organizations, or CROs.

Although the public health emergency declaration related to COVID-19 ended on May 11, 2023, the extent of the effect of any future pandemics or public health emergencies on our operational and financial performance will depend in large part on future developments, which cannot be predicted and are out of our control.

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

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Additionally, since inception, we have historically incurred operating losses.

Our net loss for the three months ended March 31, 2023 and 2022 were $81.0 million and $94.8 million, respectively.

As of March 31, 2023, we had an accumulated deficit of $551.6 million.

Our net loss for the six months ended June 30, 2023 and 2022 were $164.8 million and $186.6 million, respectively.

As of June 30, 2023, we had an accumulated deficit of $635.4 million.

We expect to incur significant expenses and net losses until such time we are able to report profitable results.

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continue to prioritize advancement of our PAH stabilizer;

initiate development of a licensed siRNA development candidate pursuant to our license agreement with Alnylam;

expand and protect our intellectual property portfolio, including by in-licensing or acquiring assets for pipeline growth;

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

Based on our policy to expense costs associated with the manufacturing of our products prior to regulatory approval, certain of the manufacturing costs associated with product shipments of PYRUKYND® recorded during the three months ended March 31, 2023 and 2022 were expensed prior to February 17, 2022, and, therefore, are not included in costs of sales during the three months ended March 31, 2023 and 2022.

Based on our policy to expense costs associated with the manufacturing of our products prior to regulatory approval, certain of the manufacturing costs associated with product shipments of PYRUKYND® recorded during the three and six months ended June 30, 2023 and 2022 were expensed prior to February 17, 2022, and, therefore, are not included in costs of sales during the three and six months ended June 30, 2023 and 2022.

Research and development expenses

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

This trial has closed screening for patient enrollment.

This trial has completed enrollment.

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

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

This trial has closed screening for patient enrollment.

This trial has completed enrollment.

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

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

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

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

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

In June 2023, we announced the phase 2 portion of this trial had achieved its primary endpoint of hemoglobin response in patients in both 50 mg and 100 mg twice daily mitapivat arms.

46.2% of patients (n=12) in the 50 mg twice daily mitapivat arm and 50.0% of patients (n=13) in the 100 mg twice daily mitapivat arm achieved a hemoglobin response, compared to 3.7% of patients (n=1) in the placebo arm (2-sided p=0.0003 and 0.0001, respectively).

The safety profile for mitapivat observed in the phase 2 portion of the study was generally consistent with previously reported data in other studies of sickle cell disease and other hemolytic anemias, and there were no adverse events leading to discontinuation in either the mitapivat or the placebo arms.

We expect to enroll the first patient in the phase 3 portion of this trial by the end of 2023.

The phase 3 portion includes a 52-week randomized, placebo-controlled period in which participants will be randomized in a 2:1 ratio to receive the recommended (100 mg twice daily) PYRUKYND® dose level or placebo.

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

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

The phase 2 portion of this trial has been fully enrolled, and we expect to announce data from the phase 2 portion of this trial and decide whether we are initiating the phase 3 portion of this trial by mid-year 2023.

• ACTIVATE-kids and ACTIVATE-kidsT, double-blind phase 3 studies evaluating the efficacy and safety of PYRUKYND® as a potential treatment for PK deficiency in not regularly transfused and regularly transfused patients between one and 18 years old, respectively.

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The primary endpoint of ACTIVATE-kidsT is transfusion reduction response, defined as ≥33% reduction in total RBC transfusion volume from week 9 through week 32 of the double-blind period.

Both trials are enrolling patients, and we expect to enroll at least half of the patients by year-end 2023.

Both trials are enrolling patients, and we expect to enroll at least half of the patients by the end of 2023.

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

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

We have presented data from the healthy volunteer cohort, and we have initiated the SCD patient cohort of this trial.

We initiated a phase 2a study of AG-946 in adults with LR MDS in the third quarter of 2022, and we expect to complete enrollment by year-end 2023.

We have presented data from the healthy volunteer cohorts, and we have initiated the SCD patient cohort of this trial.

We initiated a phase 2a study of AG-946 in adults with LR MDS in the third quarter of 2022, and the trial has completed enrollment.

We expect to report the results of this trial by the end of 2023.

Other Programs

In addition to the aforementioned development programs, we are advancing our late-stage research program focused on a PAH stabilizer for the treatment of PKU, for which we expect to file an IND by year-end 2023.

Also, in July 2023, we entered into a license agreement with Alnylam for the development and commercialization of products containing or comprised of an siRNA development candidate discovered by Alnylam and targeting the TMPRSS6 gene, and we intend to pursue development of a licensed product for the potential treatment of patients with PV.

Selling, general and administrative expenses

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

There have been no material changes to our existing critical accounting estimates discussed in Part II, Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2022.

As of June 30, 2023, there have been no material changes to our existing critical accounting estimates discussed in Part II, Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2022.

Results of Operations

Comparison of the three months ended March 31, 2023 and 2022

Three Months Ended March 31,

Comparison of the three and six months ended June 30, 2023 and 2022

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

(In thousands) 2023 2022 2023 2022

Product revenue, net $ 6,712 $ 3,082 $ 12,321 $ 3,914

Milestone revenue — 2,500 — 2,500

Total revenue $ 6,712 $ 5,582 $ 12,321 $ 6,414

Total Revenue - Three Months Ended March 31, 2023 vs.

Three Months Ended March 31, 2022 – The increase in total revenue of $4.8 million for the three months ended March 31, 2023 compared to the three months ended March 31, 2022 was due to increased product revenue associated with PYRUKYND®, which was approved by the FDA in February 2022.

Total Revenue - Three Months Ended June 30, 2023 vs.

Three Months Ended June 30, 2022 – The increase in total revenue of $1.1 million for the three months ended June 30, 2023 compared to the three months ended June 30, 2022 was due to increased product revenue associated with PYRUKYND®, which was approved by the FDA in February 2022, partially offset by revenue recognized in the three months ended June 30, 2022 associated with the licensing of intellectual property for our Friedreich's Ataxia preclinical program.

Total Revenue - Six Months Ended June 30, 2023 vs.

Six Months Ended June 30, 2022 – The increase in total revenue of $5.9 million for the six months ended June 30, 2023 compared to the six months ended June 30, 2022 was due to increased product revenue associated with PYRUKYND®, which was approved by the FDA in February 2022, partially offset by revenue recognized in the six months ended June 30, 2022 associated with the licensing of intellectual property for our Friedreich's Ataxia preclinical program.

Total Operating Expenses

Three Months Ended March 31,

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

(In thousands) 2023 2022 2023 2022

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Total operating expenses $ 100,412 $ 103,222 $ 196,634 $ 205,199

Total Operating Expenses - Three Months Ended March 31, 2023 vs.

Three Months Ended March 31, 2022 – The decrease in total operating expenses of $5.8 million for the three months ended March 31, 2023 compared to the three months ended March 31, 2022 was primarily due to a decrease in selling, general and administrative expenses of $3.1 million, driven by a reduction in workforce-related expenses, and a decrease in research and development expenses of $2.8 million which is described below under Research and Development Expenses.

Included in selling, general and administrative expenses for the three months ended March 31, 2022 is approximately $1.1 million of reimbursable transition related services we provided to Servier related to the sale of the oncology business.

Total Operating Expenses - Three Months Ended June 30, 2023 vs.

Three Months Ended June 30, 2022 – The decrease in total operating expenses of $2.8 million for the three months ended June 30, 2023 compared to the three months ended June 30, 2022 was primarily due to a decrease in research and development expenses of $5.6 million which is described below under Research and Development Expenses, partially offset by an increase in selling, general and administrative expenses of $2.1 million, driven by an increase in stock-based compensation expense.

Total Operating Expenses - Six Months Ended June 30, 2023 vs.

Six Months Ended June 30, 2022 – The decrease in total operating expenses of $8.6 million for the six months ended June 30, 2023 compared to the six months ended June 30, 2022 was primarily due to a decrease in research and development expenses of $8.5 million which is described below under Research and Development Expenses.

Research and Development Expenses

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

Three Months Ended March 31,

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

(In thousands) 2023 2022 2023 2022

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Total research and development expense $ 68,895 $ 74,523 $ 136,196 $ 144,646

Total Research and Development Expenses - Three Months Ended March 31, 2023 vs.

Three Months Ended March 31, 2022 – The decrease in total research and development expenses of $2.8 million for the three months ended March 31, 2023 compared to the three months ended March 31, 2022 was due to a $0.6 million decrease in our direct expenses and a $2.2 million decrease in our indirect expenses.

The decrease in direct expenses was due to a decrease in expenses related to our other research and platform programs as a result of our decision to evolve our approach to exploratory research and drug discovery to focus on our existing late-lead optimization programs.

This decrease in direct expenses was partially offset by an increase in PYRUKYND®

costs due to increased costs for the phase 3 trials of PYRUKYND® in patients with thalassemia, ENERGIZE and ENERGIZE-T, and the phase 2/3 trial of PYRUKYND® in patients with SCD, RISE UP.

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

Total Research and Development Expenses - Three Months Ended June 30, 2023 vs.

Three Months Ended June 30, 2022 – The decrease in total research and development expenses of $5.6 million for the three months ended June 30, 2023 compared to the three months ended June 30, 2022 was due to a $6.4 million decrease in our indirect expenses, partially offset by a $0.8 million increase in our direct expenses.

The decrease in indirect expenses was primarily due to a $5.1 million decrease in compensation and workforce-related expenses as a result of reduced headcount related to the evolution of our research organization.

The increase in direct expenses was partially offset by a decrease in expenses related to our other research and platform programs as a result of our decision to evolve our approach to exploratory research and drug discovery to focus on our existing late-lead optimization programs.

Total Research and Development Expenses - Six Months Ended June 30, 2023 vs.

Six Months Ended June 30, 2022 – The decrease in total research and development expenses of $8.5 million for the six months ended June 30, 2023 compared to the six months ended June 30, 2022 was due to a $8.7 million decrease in our indirect expenses and a $0.2 million increase in our direct expenses.

The decrease in indirect expenses was due to a $4.6 million decrease in compensation and workforce-related expenses as a result of reduced headcount related to the evolution of our research organization and lower stock-based compensation expense, a $2.6 million decrease in facilities and IT related expenses & other due to a reduction in facility expenses associated with the evolution of our research organization, and the $1.5 million of reimbursable transition related services we provided to Servier in the six months ended June 30, 2022 related to the sale of the oncology business for discovery, clinical development, technical operations, and related activities, which were completed during the three months ended March 31, 2022.

The increase in direct expenses was primarily due to an increase in PYRUKYND® costs due to increased costs for the phase 3 trials of PYRUKYND® in patients with thalassemia, ENERGIZE and ENERGIZE-T, and the phase 2/3 trial of PYRUKYND® in patients with SCD, RISE UP, partially offset by a decrease in expenses related to our other research and platform programs as a result of our decision to evolve our approach to exploratory research and drug discovery to focus on our existing late-lead optimization programs.

Other Income and Expense

Three Months Ended March 31,

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

(In thousands) 2023 2022 2023 2022

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Other income, net 1,640 1,337 3,144 4,310

Other Income and Expense - Three Months Ended March 31, 2023 vs.

Three Months Ended March 31, 2022 – The increase in interest income, net was primarily attributable to an increase in interest rates.

Other Income and Expense - Three Months Ended June 30, 2023 vs.

Three Months Ended June 30, 2022 – The increase in interest income, net was primarily attributable to an increase in interest rates.

The decrease in royalty income from gain on sale of oncology business was due to the sale to Sagard in the fourth quarter of 2022 of our rights to future contingent payments associated with royalties on U.S.

net sales of TIBSOVO®.

The decrease in other income, net primarily relates to approximately $2.6 million of reimbursable transition related services and fees for the sale of the oncology business for the three months ended March 31, 2022, partially offset by $1.0 million of additional sublease income recognized in the three months ended March 31, 2023 compared to the three months ended March 31, 2022.

Three Months Ended March 31,

Other income, net in the three months ended June 30, 2023 was relatively consistent with the three months ended June 30, 2022.

Other Income and Expense - Six Months Ended June 30, 2023 vs.

Six Months Ended June 30, 2022 – The increase in interest income, net was primarily attributable to an increase in interest rates.

The decrease in royalty income from gain on sale of

oncology business was due to the sale to Sagard in the fourth quarter of 2022 of our rights to future contingent payments associated with royalties on U.S.

net sales of TIBSOVO®.

The decrease in other income, net primarily relates to approximately $2.6 million of reimbursable transition related services and fees for the sale of the oncology business for the three months ended June 30, 2022, partially offset by $1.1 million of additional sublease income recognized in the three months ended June 30, 2023 compared to the three months ended June 30, 2022.

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

(In thousands) 2023 2022 2023 2022

Net loss $ (83,806) $ (91,806) $ (164,824) $ (186,580)

Net Loss - Three Months Ended March 31, 2023 vs.

Three Months Ended March 31, 2022 – The decrease in net loss for the three months ended March 31, 2023 compared to the three months ended March 31, 2022 was primarily driven by the increase in interest income, net discussed above under Other Income and Expense, the increase in revenue discussed above under Revenues, lower selling, general and administrative expenses discussed above under Total Operating Expenses, and lower research and development expenses discussed above under Research and Development Expenses, partially offset by the decrease in royalty income from gain on sale of oncology business discussed above under Other Income and Expense.

Net Loss - Three Months Ended June 30, 2023 vs.

Three Months Ended June 30, 2022 – The decrease in net loss for the three months ended June 30, 2023 compared to the three months ended June 30, 2022 was primarily driven by the increase in interest income, net discussed above under Other Income and Expense, lower research and development expenses discussed above under Research and Development Expenses and the increase in revenue discussed above under Revenues, partially offset by the decrease in royalty income from gain on sale of oncology business discussed above under Other Income and Expense and higher selling, general and administrative expenses discussed above under Total Operating Expenses.

Net Loss - Six Months Ended June 30, 2023 vs.

Six Months Ended June 30, 2022 – The decrease in net loss for the six months ended June 30, 2023 compared to the six months ended June 30, 2022 was primarily driven by the increase in interest income, net discussed above under Other Income and Expense, lower research and development expenses discussed above under Research and Development Expenses and the increase in revenue discussed above under Revenues, partially offset by the decrease in royalty income from gain on sale of oncology business discussed above under Other Income and Expense.

Liquidity and Capital Resources

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

Servier also acquired our co-commercialization rights for Bristol Myers Squibb''s IDHIFA® and the right to receive a $25.0 million potential milestone payment under our prior collaboration agreement with Celgene, and following the sale Servier is responsible for conducting

certain clinical development activities within the IDHIFA® development progra m.

Servier also acquired our co-commercialization rights for Bristol Myers Squibb's IDHIFA® and the right to receive a $25.0 million potential milestone payment under our prior collaboration agreement with Celgene, and following the sale Servier is responsible for conducting certain clinical development activities within the IDHIFA® development progra m.

As discussed above in Note 1, Overview , in October 2022, we sold our rights to the royalty on U.S.

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

Our cash, cash equivalents and marketable securities balance was $1.0 billion at March 31, 2023.

Our cash, cash equivalents and marketable securities balance was $946.9 million at June 30, 2023.

The $200.0 million milestone payment and royalty payments discussed above are our only committed potential external source of funds.

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

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

The following table provides information regarding our cash flows for the three months ended March 31, 2023 and 2022:

Three Months Ended March 31,

Furthermore, we cannot predict what success, if any, Servier may have in the United States with respect to sales of vorasidenib, if approved, and consequently we

cannot estimate the amount of royalty payments that we can expect to receive from Servier prior to the loss of exclusivity of vorasidenib.

The following table provides information regarding our cash flows for the six months ended June 30, 2023 and 2022:

Six Months Ended June 30,

(In thousands) 2023 2022

Net cash used in operating activities $ (161,931) $ (171,964)

Net cash provided by (used in) investing activities 57,596 (26,573)

Net cash provided by investing activities 104,721 56,240

Net cash provided by financing activities 2,704 1,141

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Net cash used in operating activities.

Cash used in operating activities of $95.2 million during the three months ended March 31, 2023 was primarily due to operating expenses driven by research and development costs described above under Research and Development Expenses, partially offset by cash received from product revenues.

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

Cash used in operating activities of $161.9 million during the six months ended June 30, 2023 was primarily due to operating expenses driven by research and development costs described above under Research and Development Expenses, partially offset by cash received from interest income and product revenues.

Cash used in operating activities of $172.0 million during the six months ended June 30, 2022 was primarily due to operating expenses driven by research and development costs described above under Research and Development Expenses, partially offset by cash received from revenues of $5.2 million and royalties of $5.3 million on U.S.

net sales of TIBSOVO®.

Net cash provided by (used in) investing activities .

Cash provided by investing activities of $57.6 million during the three months ended March 31, 2023 was primarily due to higher proceeds from maturities and sales of marketable securities than purchases of marketable securities.

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

Net cash provided by investing activities .

Cash provided by investing activities of $104.7 million during the six months ended June 30, 2023 was primarily due to higher proceeds from maturities and sales of marketable securities than purchases of marketable securities.

Cash provided by investing activities of $56.2 million during the six months ended June 30, 2022 was primarily due to higher proceeds from maturities and sales of marketable securities than purchases of marketable securities

Net cash provided by financing activities .

Cash provided by financing activities of $2.5 million during the three months ended March 31, 2023, was the result of proceeds received from stock option exercises and purchases made pursuant to our 2013 Employee Stock Purchase Plan, or 2013 ESPP.

Cash provided by financing activities of $1.2 million for the three months ended March 31, 2022 was primarily the result of $1.3 million of proceeds received from stock option exercises and purchases made pursuant to our 2013 ESPP.

Cash provided by financing activities of $2.7 million during the six months ended June 30, 2023, was the result of net proceeds received from stock option exercises and purchases made pursuant to our 2013 Employee Stock Purchase Plan, or 2013 ESPP.

Cash provided by financing activities of $1.1 million during the six months ended June 30, 2022 was primarily the result of $1.3 million of proceeds received from stock option exercises and purchases made pursuant to our 2013 ESPP.

Funding requirements

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

We expect that our existing cash, cash equivalents and marketable securities as of March 31, 2023, together with anticipated product revenue and interest income will enable us to execute our operating plan, including funding our currently planned development programs for mitapivat, AG-946 and PAH stabilization, and commercializing mitapivat outside of the United States through one or more partnerships.

We expect that our existing cash, cash equivalents and marketable securities as of June 30, 2023, together with anticipated product revenue, interest income and the potential vorasidenib milestone will enable us to fund our operating expenses and capital expenditures through several value creating milestones and at least into 2026.

This guidance does not include cash inflows from potential royalties from vorasidenib, commercializing mitapivat outside of the U.S.

through one or more partnerships, or other potential strategic business or financial agreements.

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

2 unchanged sentences

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

• the anticipated cost-savings associated with the evolution of our research organization;

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

• the costs associated with in-licensing or acquiring assets for pipeline growth;

• the costs associated with in-licensing or acquiring assets for pipeline growth, including the amount and timing of future milestone and royalty payments potentially payable to Alnylam pursuant to the license agreement;

• the costs, timing and outcome of regulatory review of our product candidates;

3 unchanged sentences

• our ability to successfully execute on our strategic plans;

• operational delays due to public health epidemics, including the COVID-19 pandemic;

• operational delays due to public health epidemics, including the recent COVID-19 pandemic;

• operational delays, disruptions and/or increased costs associated with rising global energy prices or energy shortages or rationing.

7 unchanged sentences

Contractual Obligations

During the three months ended March 31, 2023, there were no material changes to our contractual obligations and commitments described under Management’s Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report on Form 10-K for the year ended December 31, 2022.

During the six months ended June 30, 2023, there were no material changes to our contractual obligations and commitments described under Management’s Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report on Form 10-K for the year ended December 31, 2022.

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

What changed 10-Q

Item 2. Management’s Discussion and Analysis