What changed in this filing

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Item 1. Financial Statements

2023-11-02 compared with 2023-08-03 · 95 added, 73 removed, 383 unchanged (30% of the section changed)

3 unchanged sentences

(In thousands, except share and per share data)

September 30,

2023 December 31,

23 unchanged sentences

25,000,000 shares authorized;

no shares issued or outstanding at June 30, 2023 and December 31, 2022

no shares issued or outstanding at September 30, 2023 and December 31, 2022

Common stock, $ 0.001 par value;

125,000,000 shares authorized;

71,951,186 shares issued and 55,734,775 shares outstanding at June 30, 2023, and 71,256,118 shares issued and 55,039,707 shares outstanding at December 31, 2022

72,100,384 shares issued and 55,883,973 shares outstanding at September 30, 2023, and 71,256,118 shares issued and 55,039,707 shares outstanding at December 31, 2022

Additional paid-in capital 2,421,862 2,386,325

Accumulated other comprehensive loss ( 5,896 ) ( 12,535 )

Treasury stock, at cost ( 16,216,411 shares at June 30, 2023 and December 31, 2022)

Treasury stock, at cost ( 16,216,411 shares at September 30, 2023 and December 31, 2022)

( 802,486 ) ( 802,486 )

5 unchanged sentences

Condensed Consolidated Statements of Operations

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

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

(In thousands, except share and per share data)

18 unchanged sentences

Condensed Consolidated Statements of Comprehensive Loss

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

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

(In thousands)

1 unchanged sentence

Net loss $ ( 91,324 ) $ ( 81,747 ) $ ( 256,148 ) $ ( 268,327 )

Other comprehensive (loss) income

Unrealized (loss) gain on available-for-sale securities ( 459 ) ( 2,757 ) 3,665 ( 9,304 )

Other comprehensive income (loss)

Unrealized gain (loss) on available-for-sale securities 2,974 ( 4,581 ) 6,639 ( 13,885 )

Comprehensive loss $ ( 88,350 ) $ ( 86,328 ) $ ( 249,509 ) $ ( 282,212 )

20 unchanged sentences

Balance at June 30, 2023 71,951,186 $ 72 $ 2,410,905 $ ( 8,870 ) $ ( 635,385 ) ( 16,216,411 ) $ ( 802,486 ) $ 964,236

Unrealized gain on available-for-sale securities — — — 2,974 — — — 2,974

Common stock issued under stock incentive plan and ESPP 149,198 — 1,881 — — — — 1,881

Stock-based compensation expense — — 9,076 — — — — 9,076

Net loss — — — — ( 91,324 ) — — ( 91,324 )

Balance at September 30, 2023 72,100,384 72 2,421,862 ( 5,896 ) ( 726,709 ) ( 16,216,411 ) ( 802,486 ) 886,843

Common Stock Additional

16 unchanged sentences

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

Unrealized loss on available-for-sale securities — — — ( 4,581 ) — — — ( 4,581 )

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

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

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

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

See accompanying Notes to Condensed Consolidated Financial Statements.

1 unchanged sentence

Condensed Consolidated Statements of Cash Flows

Six Months Ended

Nine Months Ended

September 30,

(In thousands) 2023 2022

5 unchanged sentences

Net (accretion of discount) amortization of premium on marketable securities ( 4,658 ) 721

(Gain) loss on disposal of property and equipment ( 150 ) 10

Loss on disposal of property and equipment 278 29

Non-cash operating lease expense 7,967 7,432

Expense associated with license agreement 17,500 —

Realized gain on investments ( 28 ) —

Changes in operating assets and liabilities:

11 unchanged sentences

Proceeds from maturities and sales of marketable securities 488,492 947,296

Payments associated with license agreement ( 17,500 ) —

Purchases of property and equipment ( 765 ) ( 4,768 )

10 unchanged sentences

Additions to property and equipment in accounts payable and accrued expenses $ 14 $ 21

Cash taxes paid $ 801 $ 1,842

Net cash taxes paid $ 1,586 $ 1,940

See accompanying Notes to Condensed Consolidated Financial Statements.

19 unchanged sentences

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 Note 11, "Subsequent Events" , for more information on the license agreement with Alnylam.

See below for more information on the license agreement with Alnylam.

We are subject to risks common to companies in our industry including, but not limited to, uncertainties relating to conducting preclinical and 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, potential product liability claims and potential government investigations.

1 unchanged sentence

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.

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 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.

1 unchanged sentence

Servier also acquired our co-commercialization rights for Bristol Myers Squibb’s

IDHIFA® and the right to receive a $ 25.0 million potential milestone payment under our prior collaboration agreement with Celgene Corporation, and following the sale Servier will conduct certain clinical development activities within the IDHIFA® development program.

IDHIFA® and the right to receive a $ 25.0 million potential milestone payment under our prior collaboration agreement with Celgene Corporation, Servier is responsible for conducting certain clinical development activities within the IDHIFA® development program.

We recorded income from royalties of approximately $ 4.4 million and $ 9.9 million on U.S.

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

Sale of Contingent Payments

4 unchanged sentences

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

Alnylam License Agreement

On July 28, 2023, Agios and Alnylam Pharmaceuticals, Inc., or Alnylam, entered into a license agreement under which Agios acquired the rights to develop and commercialize Alnylam’s novel preclinical siRNA targeting TMPRSS6, as a potential disease-modifying treatment for patients with PV.

Because the acquired assets do not meet the definition of a business in accordance with ASC 805, Business Combinations, Agios will account for the agreement as an asset acquisition.

In accordance with the agreement, in the three months ended September 30, 2023, Agios made an up-front payment to Alnylam and recognized in-process research and development of $ 17.5 million which was recorded in research and development expense within our Consolidated Statements of Operations and classified as investing activities within our Consolidated Statements of Cash Flows.

Agios will also pay Alnylam for certain expenses associated with the development of TMPRSS6 and these will be recorded in our Consolidated Statements of Operations as incurred.

Additionally, Agios is responsible to pay up to $ 130.0 million in potential development and regulatory milestones, in addition to sales milestones as well as tiered royalties on annual net sales, if any, of licensed products, which may be subject to specified reductions and offsets.

Basis of Presentation

The condensed consolidated balance sheet as of June 30, 2023, the condensed consolidated statements of operations, comprehensive loss and stockholders' equity for the three and six months ended June 30, 2023 and 2022, and the condensed consolidated statements of cash flows for the six months ended June 30, 2023 and 2022 are unaudited.

The unaudited condensed consolidated financial statements have been prepared on the same basis as the annual financial statements and, in the opinion of our management, reflect all adjustments, which include only normal recurring adjustments, necessary to fairly state our financial position as of June 30, 2023, our results of operations and stockholders' equity for the three and six months ended June 30, 2023 and 2022, and cash flows for the six months ended June 30, 2023 and 2022.

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

The results of operations for the three and six months ended June 30, 2023 are not necessarily indicative of the results to be expected for the year ending December 31, 2023 or for any other future annual or interim period.

The condensed consolidated balance sheet as of September 30, 2023, the condensed consolidated statements of operations, comprehensive loss and stockholders' equity for the three and nine months ended September 30, 2023 and 2022, and the condensed consolidated statements of cash flows for the nine months ended September 30, 2023 and 2022 are unaudited.

The unaudited condensed consolidated financial statements have been prepared on the same basis as the annual financial statements and, in the opinion of our management, reflect all adjustments, which include only normal recurring adjustments, necessary to fairly state our financial position as of September 30, 2023, our results of operations and stockholders' equity for the three and nine months ended September 30, 2023 and 2022, and cash flows for the nine months ended September 30, 2023 and 2022.

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

The results of operations for the three and nine months ended September 30, 2023 are not necessarily indicative of the results to be expected for the year ending December 31, 2023 or for any other future annual or interim period.

The condensed consolidated balance sheet data as of December 31, 2022 was derived from our audited financial statements, but does not include all disclosures required by U.S.

8 unchanged sentences

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

The full extent to which the recent COVID-19 pandemic, or other pandemics or public health emergencies, may in the future 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.

highly uncertain.

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

Actual results may differ from these estimates.

As of June 30, 2023, we had cash, cash equivalents and marketable securities of $ 946.9 million.

As of September 30, 2023, we had cash, cash equivalents and marketable securities of $ 872.4 million.

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

10 unchanged sentences

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

The following table summarizes our cash equivalents and marketable securities measured at fair value and by level on a recurring basis as of June 30, 2023:

The following table summarizes our cash equivalents and marketable securities measured at fair value and by level on a recurring basis as of September 30, 2023:

(In thousands) Level 1 Level 2 Level 3 Total

9 unchanged sentences

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

After completing our validation procedures, we did not adjust or override any fair value measurements provided by the pricing services as of June 30, 2023.

There have been no changes to the valuation methods during the six months ended June 30, 2023, and we had no financial assets or liabilities that were classified as Level 3 at any point during the six months ended June 30, 2023.

After completing our validation procedures, we did not adjust or override any fair value measurements provided by the pricing services as of September 30, 2023.

There have been no changes to the valuation methods during the nine months ended September 30, 2023, and we had no financial assets or liabilities that were classified as Level 3 at any point during the nine months ended September 30, 2023.

Marketable Securities

Our marketable securities are classified as available-for-sale pursuant to ASC 320, Investments – Debt and Equity Securities , and are recorded at fair value.

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

Unrealized gains and losses are included as a component of accumulated other comprehensive loss in the condensed consolidated balance sheets and statements of stockholders’ equity and a component of total

comprehensive loss in the condensed consolidated statements of comprehensive loss, until realized.

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

1 unchanged sentence

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

There were no material realized gains or losses on marketable securities for the three and six months ended June 30, 2023 or 2022.

Marketable securities at June 30, 2023 consisted of the following:

There were no material realized gains or losses on marketable securities for the three and nine months ended September 30, 2023 or 2022.

Marketable securities at September 30, 2023 consisted of the following:

(In thousands) Amortized

23 unchanged sentences

Total marketable securities $ 970,269 $ 99 $ ( 12,634 ) $ 957,734

As of June 30, 2023 and December 31, 2022, we held both current and non-current investments.

As of September 30, 2023 and December 31, 2022, we held both current and non-current investments.

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

1 unchanged sentence

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

As of June 30, 2023 and December 31, 2022, we held 243 and 259 debt securities, respectively, that were in an unrealized loss position for less than one year.

We did no t record an allowance for credit losses as of June 30, 2023 and December 31, 2022 related to these securities.

The aggregate fair value of debt securities in an unrealized loss position at June 30, 2023 and December 31, 2022 was $ 842.2 million and $ 868.2 million, respectively.

There were no individual securities that were in a significant unrealized loss position as of June 30, 2023 and December 31, 2022.

As of September 30, 2023 and December 31, 2022, we held 233 and 259 debt securities, respectively, that were in an unrealized loss position for less than one year.

We did no t record an allowance for credit losses as of September 30, 2023 and December 31, 2022 related to these securities.

The aggregate fair value of debt securities in an unrealized loss position at September 30, 2023 and December 31, 2022 was $ 808.1 million and $ 868.2 million, respectively.

There were no individual securities that were in a significant unrealized loss position as of September 30, 2023 and December 31, 2022.

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

We do not consider these marketable securities to be impaired as of June 30, 2023 and December 31, 2022.

We do not consider these marketable securities to be impaired as of September 30, 2023 and December 31, 2022.

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

(In thousands) June 30,

(In thousands) September 30,

2023 December 31,

4 unchanged sentences

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

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

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

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

2 unchanged sentences

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

(In thousands) 2023 2022 2023 2022

1 unchanged sentence

Cash paid for amounts included in the measurement of operating lease liabilities $ 4,550 $ 4,420 $ 13,614 $ 12,610

We have not entered into any material short-term leases or financing leases as of June 30, 2023.

In arriving at the operating lease liabilities as of June 30, 2023 and December 31, 2022, we applied the weighted-average incremental borrowing rate of 5.7 % for both periods over a weighted-average remaining lease term of 4.7 and 5.2 years, respectively.

As of June 30, 2023, undiscounted minimum rental commitments under non-cancelable leases, for each of the next five years and total thereafter were as follows:

We have not entered into any material short-term leases or financing leases as of September 30, 2023.

In arriving at the operating lease liabilities as of September 30, 2023 and December 31, 2022, we applied the weighted-average incremental borrowing rate of 5.7 % for both periods over a weighted-average remaining lease term of 4.4 and 5.2 years, respectively.

As of September 30, 2023, undiscounted minimum rental commitments under non-cancelable leases, for each of the next five years and total thereafter were as follows:

(In thousands)

7 unchanged sentences

In May 2023, we entered into a long-term sublease agreement for 7,407 square feet of office space on the first floor of 64 Sidney Street, Cambridge, Massachusetts, with the term of the lease running through April 2025.

We recorded operating sublease income of $ 1.4 million and $ 1.7 million for the three months ended June 30, 2023 and 2022, respectively, and $ 2.8 million and $ 1.7 million for the six months ended June 30, 2023 and 2022, respectively, in

other income, net in the condensed consolidated statements of operations.

We recorded operating sublease income of $ 1.7 million and $ 1.0 million for the three months ended September 30, 2023 and 2022, respectively, and $ 4.5 million and $ 2.7 million for the nine months ended September 30, 2023 and 2022,

respectively, in other income, net in the condensed consolidated statements of operations.

We received security deposits from our sublessees of approximately $ 1.2 million which is recorded within other non-current assets on our condensed consolidated balance sheet.

As of June 30, 2023, the future minimum lease payments to be received under the long-term sublease agreements were as follows:

As of September 30, 2023, the future minimum lease payments to be received under the long-term sublease agreements were as follows:

(In thousands)

3 unchanged sentences

Accrued expenses consisted of the following:

(In thousands) June 30,

(In thousands) September 30,

2023 December 31,

10 unchanged sentences

Product revenue, net, were as follows:

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

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

(In thousands) 2023 2022 2023 2022

15 unchanged sentences

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

The following table summarizes balances and activity in each of the product revenue allowance and reserve categories for the six months ended June 30, 2023:

The following table summarizes balances and activity in each of the product revenue allowance and reserve categories for the nine months ended September 30, 2023:

(In thousands) Contractual Adjustments Government Rebates Returns/ Replacement Total

4 unchanged sentences

Payments/returns relating to sales in the prior years ( 49 ) ( 306 ) ( 48 ) ( 403 )

Balance at June 30, 2023 $ 168 $ 1,000 $ 191 $ 1,359

Balance at September 30, 2023 $ 142 $ 1,396 $ 274 $ 1,812

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

(In thousands) June 30, 2023 December 31, 2022

(In thousands) September 30, 2023 December 31, 2022

Reduction of accounts receivable $ 137 $ 60

1 unchanged sentence

Total revenue-related reserves $ 1,812 $ 771

The following table presents changes in our contract assets during the six months ended June 30, 2023:

(In thousands) December 31, 2022 Additions Deductions June 30, 2023

The following table presents changes in our contract assets during the nine months ended September 30, 2023:

(In thousands) December 31, 2022 Additions Deductions September 30, 2023

Contract assets (1)

11 unchanged sentences

PSUs, which awards were made outside our equity incentive plans as inducements material to their respective entry into employment with us in accordance with Nasdaq Listing Rule 5635(c)(4).

As of June 30, 2023, the maximum number of shares reserved under the 2007 Plan, the 2013 Plan, the 2023 Plan and the inducement grants described above was 11,881,185 , and we had 4,265,366 shares available for future issuance under the 2023 Plan.

As of September 30, 2023, the maximum number of shares reserved under the 2007 Plan, the 2013 Plan, the 2023 Plan and the inducement grants described above was 12,065,656 , and we had 4,762,423 shares available for future issuance under the 2023 Plan.

Stock options

The following table presents stock option activity for the six months ended June 30, 2023:

The following table presents stock option activity for the nine months ended September 30, 2023:

Stock Options Weighted-Average

4 unchanged sentences

Forfeited/Expired ( 912,479 ) 55.49

Outstanding at June 30, 2023 5,789,272 $ 45.53

Exercisable at June 30, 2023 3,403,431 $ 55.74

Vested and expected to vest at June 30, 2023 5,789,272 $ 45.53

At June 30, 2023, there was approximately $ 36.7 million of total unrecognized compensation expense related to unvested stock option awards, which we expect to recognize over a weighted-average period of approximately 2.71 years.

Outstanding at September 30, 2023 5,542,418 $ 45.37

Exercisable at September 30, 2023 3,485,110 $ 54.14

Vested and expected to vest at September 30, 2023 5,542,418 $ 45.37

At September 30, 2023, there was approximately $ 31.9 million of total unrecognized compensation expense related to unvested stock option awards, which we expect to recognize over a weighted-average period of approximately 2.55 years.

Restricted stock units

The following table presents RSU activity for the six months ended June 30, 2023:

The following table presents RSU activity for the nine months ended September 30, 2023:

Stock Units Weighted-Average

4 unchanged sentences

Forfeited ( 210,420 ) 33.46

Unvested shares at June 30, 2023 1,415,219 $ 30.18

As of June 30, 2023, there was approximately $ 32.6 million of total unrecognized compensation expense related to RSUs, which we expect to recognize over a weighted-average period of approximately 2 years.

Unvested shares at September 30, 2023 1,355,987 $ 29.84

As of September 30, 2023, there was approximately $ 27.5 million of total unrecognized compensation expense related to RSUs, which we expect to recognize over a weighted-average period of approximately 1.87 years.

Performance-based stock units

The following table presents PSU activity for the six months ended June 30, 2023:

The following table presents PSU activity for the nine months ended September 30, 2023:

Stock Units Weighted-Average

4 unchanged sentences

Forfeited ( 101,750 ) 46.39

Unvested shares at June 30, 2023 368,633 $ 30.90

Unvested shares at September 30, 2023 362,133 $ 30.66

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

As of June 30, 2023, there was no unrecognized compensation expense related to PSUs with performance-based vesting criteria that are considered probable of achievement, and $ 11.4 million of total unrecognized compensation expense related to PSUs with performance-based vesting criteria that are considered not probable of achievement.

As of September 30, 2023, there was no unrecognized compensation expense related to PSUs with performance-based vesting criteria that are considered probable of achievement, and $ 11.1 million of total unrecognized compensation expense related to PSUs with performance-based vesting criteria that are considered not probable of achievement.

Market-based stock units

The following table presents market-based stock unit, or MSU, activity for the six months ended June 30, 2023:

The following table presents market-based stock unit, or MSU, activity for the nine months ended September 30, 2023:

Stock Units Weighted-Average

1 unchanged sentence

Unvested shares at December 31, 2022 42,695 $ 41.50

Unvested shares at June 30, 2023 42,695 $ 41.50

Unvested shares at September 30, 2023 42,695 $ 41.50

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

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

As of June 30, 2023, there was no remaining unrecognized compensation expense related to MSUs.

As of September 30, 2023, there was no remaining unrecognized compensation expense related to MSUs.

2013 Employee Stock Purchase Plan

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

We issued and sold 54,867 and 48,156 shares of common stock during the six months ended June 30, 2023 and 2022, respectively, under the 2013 ESPP.

We issued and sold 112,832 and 104,867 shares of common stock during the nine months ended September 30, 2023 and 2022, respectively, under the 2013 ESPP.

The 2013 ESPP provides participating employees with the opportunity to purchase up to an aggregate of 2,363,636 shares of our common stock.

As of June 30, 2023, we had 1,744,004 shares of common stock available for future issuance under the 2013 ESPP.

As of September 30, 2023, we had 1,686,039 shares of common stock available for future issuance under the 2013 ESPP.

Stock-based compensation expense

1 unchanged sentence

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

(In thousands) 2023 2022 2023 2022

6 unchanged sentences

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

(In thousands) 2023 2022 2023 2022

5 unchanged sentences

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

For purposes of the dilutive net loss per share calculation, stock options, RSUs, PSUs and MSUs for which the performance and market vesting conditions, respectively, have been deemed probable, and 2013 ESPP shares are considered to be common stock equivalents, while PSUs and MSUs with performance and market vesting conditions, respectively, that were not deemed probable as of June 30, 2023 are not considered to be common stock equivalents.

For purposes of the dilutive net loss per share calculation, stock options, RSUs, PSUs and MSUs for which the performance and market vesting conditions, respectively, have been deemed probable, and 2013 ESPP shares are considered to be common stock equivalents, while PSUs and MSUs with performance and market vesting conditions, respectively, that were not deemed probable as of September 30, 2023 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.

4 unchanged sentences

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

Three and Six Months Ended June 30,

Three and Nine Months Ended September 30,

Stock options 5,542,418 5,909,087

2 unchanged sentences

Total common stock equivalents 6,909,788 7,183,967

Subsequent Events

On July 28, 2023, Agios and Alnylam Pharmaceuticals, Inc., or Alnylam, entered into a license agreement under which Agios acquired the rights to develop and commercialize Alnylam's novel preclinical siRNA targeting TMPRSS6, as a potential disease-modifying treatment for patients with polycythemia vera (PV).

Under the terms of the agreement, in August 2023, Agios is obligated to make an up-front payment to Alnylam of $ 17.5 million.

In addition, Agios is responsible to pay up to $ 130.0 million in potential development and regulatory milestone payments, in addition to sales milestones and tiered royalties.

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

What changed 10-Q

Item 1. Financial Statements