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Item 2. Management’s Discussion and Analysis

2023-11-02 compared with 2023-08-03 · 81 added, 74 removed, 210 unchanged (42% 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 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.

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 September 30, 2023 and for the three and nine months ended September 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.

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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.

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.

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

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, Servier is responsible for conducting certain clinical development activities within the IDHIFA® development program.

Sale of Contingent Payments

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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.

Financial Operations Overview

Impact of COVID-19 on our Business

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.

As of September 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.

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

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.

Our net loss for the nine months ended September 30, 2023 and 2022 were $256.1 million and $268.3 million, respectively.

As of September 30, 2023, we had an accumulated deficit of $726.7 million.

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

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

PYRUKYND®, and AG-946;

PYRUKYND®, and

continue to prioritize advancement of our PAH stabilizer;

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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®.

In addition to distribution agreements with Customers, we enter into arrangements with healthcare providers and payors that provide for government-mandated and/or privately-negotiated rebates, chargebacks and discounts with respect to the purchase of PYRUKYND®.

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

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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 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.

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 nine months ended September 30, 2023 and 2022 were expensed prior to February 17, 2022, and, therefore, are not included in costs of sales during the three and nine months ended September 30, 2023 and 2022.

Research and development expenses

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In November 2022, we received marketing authorization from the European Commission for PYRUKYND® for the treatment of PK deficiency in adult patients in the 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 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, SCD, and in pediatric patients with PK deficiency.

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We have built our commercial infrastructure to support the commercial launch of PYRUKYND® in adult PK deficiency in the United States.

We are currently providing access to PYRUKYND® free of charge for eligible patients in the EU and Great Britain through a global managed access program.

In connection with our regulatory approvals in the EU and Great Britain, we are currently providing access to PYRUKYND® free of charge for eligible patients in those jurisdictions through a global managed access program.

We may provide access to PYRUKYND® for adult patients with PK deficiency in other jurisdictions upon request through the global managed access program, on either a free of charge or for charge basis.

Beyond the global managed access program, we continue to evaluate options for the commercialization of PYRUKYND® outside of the United States, including through exploring potential partnership opportunities.

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

This trial has completed enrollment.

This trial has completed enrollment and we expect to announce topline data from this trial in the first half of 2024.

• 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 completed enrollment.

This trial has completed enrollment and we expect to announce topline data from this trial in the second half of 2024.

• 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.

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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.

In October 2023, we enrolled the first patient in the phase 3 portion of this trial.

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.

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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 the end of 2023.

ACTIVATE-kidsT has completed enrollment.

ACTIVATE-kids is currently enrolling patients and we have enrolled more than half of the patients in this trial.

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

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

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

• In collaboration with the Company, UMC Utrecht is evaluating PYRUKYND® in patients with SCD pursuant to an investigator sponsored trial agreement.

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

Novel PK Activator

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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.

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

Other Programs

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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.

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.

As of September 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 and six months ended June 30, 2023 and 2022

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

Comparison of the three and nine months ended September 30, 2023 and 2022

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

(In thousands) 2023 2022 2023 2022

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Total revenue $ 7,399 $ 3,516 $ 19,720 $ 9,930

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 Revenue - Three Months Ended September 30, 2023 vs.

Three Months Ended September 30, 2022 – The increase in total revenue of $3.9 million for the three months ended September 30, 2023 compared to the three months ended September 30, 2022 was due to increased product revenue associated with PYRUKYND®, which was approved by the FDA in February 2022.

Total Revenue - Nine Months Ended September 30, 2023 vs.

Nine Months Ended September 30, 2022 – The increase in total revenue of $9.8 million for the nine months ended September 30, 2023 compared to the nine months ended September 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 nine months ended September 30, 2022 associated with the licensing of intellectual property for our Friedreich's Ataxia preclinical program.

Total Operating Expenses

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

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Total operating expenses $ 108,296 $ 94,606 $ 304,930 $ 299,805

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.

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

Three Months Ended September 30, 2022 – The increase in total operating expenses of $13.7 million for the three months ended September 30, 2023 compared to the three months ended September 30, 2022 was primarily due to a increase in research and development expenses of $16.9 million which is described below under Research and Development Expenses, partially offset by a decrease in selling, general and administrative expenses of $3.3 million, driven by a decrease in stock-based compensation expense and external professional fees.

Total Operating Expenses - Nine Months Ended September 30, 2023 vs.

Nine Months Ended September 30, 2022 – The increase in total operating expenses of $5.1 million for the nine months ended September 30, 2023 compared to the nine months ended September 30, 2022 was primarily due to a increase in research and development expenses of $8.4 million which is described below under Research and Development Expenses, partially offset by a decrease of $4.3 million in selling, general and administrative expenses driven by a decrease in stock-based compensation expense.

Research and Development Expenses

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

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

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Novel PK activator (AG-946) 4,220 2,943 11,817 11,517

In-process research and development 17,500 — 17,500 —

Other research and platform programs 1,250 4,945 6,775 20,669

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Total research and development expense $ 81,841 $ 64,966 $ 218,037 $ 209,612

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.

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

Three Months Ended September 30, 2022 – The increase in total research and development expenses of $16.9 million for the three months ended September 30, 2023 compared to the three months ended September 30, 2022 was primarily due to an $18.2 million increase in our direct expenses.

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.

Total Research and Development Expenses - Nine Months Ended September 30, 2023 vs.

Nine Months Ended September 30, 2022 – The increase in total research and development expenses of $8.4 million for the nine months ended September 30, 2023 compared to the nine months ended September 30, 2022 was due to an $18.4 million increase in our direct expenses, partially offset by a $9.9 million decrease in our indirect expenses.

The increase in direct expenses was primarily due to in-process research and development as a result of the $17.5 million up-front payment associated with the agreement with Alnylam discussed above under Overview and 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 increased process development and medical affairs expenses, 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.

The decrease in indirect expenses was due to a $5.0 million decrease in compensation and related expenses as a result of lower stock-based compensation expense and reduced headcount related to the evolution of our research organization, a $3.4 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 nine months ended September 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.

Other Income and Expense

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

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Other income, net 1,198 1,082 4,342 5,392

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.

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

Three Months Ended September 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®.

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.

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

Other Income and Expense - Nine Months Ended September 30, 2023 vs.

Nine Months Ended September 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,

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 nine months ended September 30, 2022, partially offset by $1.8 million of additional sublease income recognized in the nine months ended September 30, 2023 compared to the nine months ended September 30, 2022.

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

(In thousands) 2023 2022 2023 2022

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

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.

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

Three Months Ended September 30, 2022 – The increase in net loss for the three months ended September 30, 2023 compared to the three months ended September 30, 2022 was primarily driven by the $17.5 million up-front payment associated with the agreement with Alnylam discussed above under Overview and the decrease in royalty income from gain on sale of oncology business discussed above under Other Income and Expense , partially offset by the increase in interest income, net discussed above under Other Income and Expense and the increase in revenue discussed above under Revenues.

Net Loss - Nine Months Ended September 30, 2023 vs.

Nine Months Ended September 30, 2022 – The decrease in net loss for the nine months ended September 30, 2023 compared to the nine months ended September 30, 2022 was primarily driven by the increase in interest income, net discussed above under Other Income and Expense and the increase in revenue discussed above under Revenues, partially offset by the increase in research and development expenses discussed above under Research and Development Expenses, which includes the $17.5 million up-front payment associated with the agreement with Alnylam discussed above under Overview , and 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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net sales of TIBSOVO® prior to the sale of these contingent payments to Sagard, proceeds from the sale of contingent payments to Sagard, a potential milestone payment and royalties from Servier if vorasidenib is approved by the FDA, the actual and potential future sales of PYRUKYND® and, potentially, collaborations, strategic alliances, licensing arrangements and other nondilutive strategic transactions.

In addition, we may pursue opportunistic debt offerings, and equity or equity-linked offerings.

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

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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.

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

net sales of TIBSOVO® to Sagard for $131.8 million.

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

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

Our cash, cash equivalents and marketable securities balance was $872.4 million at September 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 six months ended June 30, 2023 and 2022:

Six Months Ended June 30,

Whether the regulatory approval milestone for vorasidenib will be achieved is subject to various risks and uncertainties, which are

outside our control.

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 nine months ended September 30, 2023 and 2022:

Nine Months Ended September 30,

(In thousands) 2023 2022

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Net cash used in operating activities.

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®.

Cash used in operating activities of $223.6 million during the nine months ended September 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 of $23.6 million and product revenues of $22.9 million.

Cash used in operating activities of $243.3 million during the nine months ended September 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 $8.8 million and royalties on U.S.

net sales of TIBSOVO® of $8.6 million.

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

Cash provided by investing activities of $144.1 million during the nine months ended September 30, 2023 was primarily due to higher proceeds from maturities and sales of marketable securities than purchases of marketable securities, partially offset by the $17.5 million up-front payment associated with the Alnylam agreement discussed above under Overview .

Cash provided by investing activities of $160.3 million during the nine months ended September 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 $2.7 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.

Cash provided by financing activities of $4.6 million during the nine months ended September 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 $2.3 million during the nine months ended September 30, 2022 was primarily the result of $2.6 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 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.

We expect that our existing cash, cash equivalents and marketable securities as of September 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.

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Until such time, if ever, as we can generate substantial product revenue, we expect to finance our cash needs primarily through cash on hand, the potential milestone payment and royalties from Servier if vorasidenib is approved by the FDA, the actual and potential sales of PYRUKYND® and, potentially, collaborations, strategic alliances, licensing arrangements and other nondilutive strategic transactions.

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

In addition, we may pursue opportunistic debt offerings, and equity or equity-linked offerings.

We do not have any committed external source of funds other than the potential milestone and royalty payments that we are eligible to receive with respect to vorasidenib under our purchase agreement with Servier.

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Contractual Obligations

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.

In July 2023, Agios entered into a license agreement with Alnylam as discussed above under Overview .

Under the license agreement, Agios may be required 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.

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