What changed in this filing

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Item 9A. Controls and Procedures

2024-02-15 compared with 2023-02-23 · 172 added, 206 removed, 880 unchanged (30% of the section changed)

17 unchanged sentences

Our management assessed the effectiveness of our internal control over financial reporting as of December 31, 2023.

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

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

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

Based on our assessment, our management has concluded that, as of December 31, 2023, our internal control over financial reporting is effective based on those criteria.

The effectiveness of our internal control over financial reporting as of December 31, 2023, has been audited by PricewaterhouseCoopers LLP, an independent registered public accounting firm, as stated in their report, which is included herein.

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Changes in Internal Control over Financial Reporting

1 unchanged sentence

Other Information

(b) Director and Officer Trading Arrangements

None of our directors or officers adopted or terminated a Rule 10b5-1 trading arrangement or a non-Rule 10b5-1 trading arrangement (as defined in Item 408(c) of Regulation S-K) during the three months ended December 31, 2023.

Disclosure Regarding Foreign Jurisdictions that Prevent Inspections

30 unchanged sentences

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

3.1 R estated Certificate of Incorproation of the Registrant

February 23, 2023 2.2

3.1 Restated Certificate of Incorp o r ation of the Registrant

July 30, 2013 3.1

Second Amended and Restated By-Laws

December 19, 2018

Third Amended and Restated By-Law s

March 3, 2023 3.1

Specimen Stock Certificate evidencing the shares of common stock

8 unchanged sentences

June 24, 2013

2013 Stock Incentive Plan

June 24, 2013

Form of Incentive Stock Option Agreement under 2013 Stock Incentive Plan

June 24, 2013

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Form of Nonstatutory Stock Option Agreement under 2013 Stock Incentive Plan

June 24, 2013

2013 Employee Stock Purchase Plan

2 unchanged sentences

July 11, 2013

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

February 26, 2016

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

14 unchanged sentences

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

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

November 1, 2018

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

6 unchanged sentences

August 1, 2019

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

February 19, 2020

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

April 30, 2020

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

April 30, 2020

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

4 unchanged sentences

February 24, 2022

10.21 Sublease Agreement, dated April 14, 2023, between the Registrant and Watershed Informatics, Inc.

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

4 unchanged sentences

August 4, 2022

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

11 unchanged sentences

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

February 23, 2023

Form of Inducement Stock Option Agreement for Tsveta Milanova

4 unchanged sentences

January 3, 2023

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

10.35# 2023 Stock Incentive Plan

333-272615 June 13, 2023 99.1

10.36# Form of Stock Option Agreement Under 2023 Stock Incentive Plan

001-36014 August 3, 2023 10.2

10.37# Form of Restricted Stock Unit Agreement Under 2023 Stock Incentive Plan

001-36014 August 3, 2023 10.3

10.38# Form of Restricted Stock Unit Agreement (P erformance -Based) Under 2023 Stock Incentive Plan

10-Q 001-36014 August 3, 2023 10.4

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

Subsidiaries of the Registrant

1 unchanged sentence

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

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

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

97.1 Dodd-Frank Compensation Recovery Policy

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XBRL Instance Document

32 unchanged sentences

Rahul Ballal, Ph.D.

Clancy Director February 23, 2023

/s/ Jeffrey Capello Director February 15, 2024

Jeffrey Capello

/s/ Kaye Foster Director February 15, 2024

1 unchanged sentence

Maykin Ho, Ph.D.

Maraganore Director February 23, 2023

Maraganore, Ph.D.

/s/ Catherine Owen Director February 15, 2024

Catherine Owen

/s/ David Scadden Director February 15, 2024

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We have audited the accompanying consolidated balance sheets of Agios Pharmaceuticals, Inc.

and its subsidiaries (the “Company”) as of December 31, 2022 and 2021, and the related consolidated statements of operations, of comprehensive income (loss), of stockholders’ equity and of cash flows for each of the three years in the period ended December 31, 2022, including the related notes (collectively referred to as the “consolidated financial statements”).

and its subsidiaries (the “Company”) as of December 31, 2023 and 2022, and the related consolidated statements of operations, of comprehensive (loss) income, of stockholders’ equity and of cash flows for each of the three years in the period ended December 31, 2023, including the related notes (collectively referred to as the “consolidated financial statements”).

We also have audited the Company's internal control over financial reporting as of December 31, 2023, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

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

Accounting for the Sagard agreement

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

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

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

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

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

Revenue Recognition - PYRUKYND® Product Revenue

As described in Notes 2 and 8 to the consolidated financial statements, the Company generates product revenue from sales of PYRUKYND® to a limited number of specialty distributors and specialty pharmacy providers, or collectively, the Customers.

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

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

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

For the year ended December 31, 2023, the Company recognized $26.8 million of net product revenue relating to the sale of PYRUKYND®.

The principal consideration for our determination that performing procedures relating to PYRUKYND® product revenue recognition is a critical audit matter is a high degree of auditor effort in performing procedures related to the Company’s product revenue recognition.

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

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

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

These procedures included testing the effectiveness of controls relating to the revenue recognition process, including controls over the recording of PYRUKYND® product revenue at the transaction price once control passes to the customer.

These procedures also included, among others, (i) evaluating management’s revenue recognition policy and (ii) testing the completeness, accuracy, and occurrence of revenue recognized for a sample of product revenue transactions by obtaining and inspecting source documents, such as purchase orders, invoices, proof of delivery, and subsequent cash receipts.

/s/ PricewaterhouseCoopers LLP

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Accounts receivable, net 2,810 2,206

Other receivable — 4,378

Inventory 19,076 8,492

4 unchanged sentences

Property and equipment, net 15,382 22,987

Financing lease assets — 183

Other non-current assets 4,057 3,956

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Operating lease liabilities 15,008 13,663

Financing lease liabilities — 331

Total current liabilities 67,955 62,629

Operating lease liabilities, net of current portion 56,988 71,996

Financing lease liabilities, net of current portion — 276

Other non-current liabilities 1,156 3,279

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Other comprehensive (loss) income

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

Unrealized gain (loss) on available-for-sale securities 12,094 ( 11,337 ) ( 1,303 )

Comprehensive (loss) income $ ( 339,994 ) $ ( 243,138 ) $ 1,603,412

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

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

Stock-based compensation expense — — 61,602 — — — — 61,602

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

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

Balance at December 31, 2020 69,293,920 $ 69 $ 2,242,801 $ 105 $ ( 1,843,475 ) — $ — $ 399,500

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

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

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

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

Common stock issued under stock incentive plan and ESPP 1,256,711 2 37,294 — — — — 37,296

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

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

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

Common stock issued under stock incentive plan and ESPP 705,487 — 2,681 — — — — 2,681

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

Unrealized gain on available-for-sale securities — — — 12,094 — — — 12,094

Net loss — — — — ( 352,088 ) — — ( 352,088 )

Stock-based compensation expense — — 44,766 — — — — 44,766

Common stock issued under stock incentive plan and ESPP 905,371 1 5,432 — — — — 5,433

Balance at December 31, 2023 72,161,489 $ 72 $ 2,436,523 $ ( 441 ) $ ( 822,649 ) ( 16,216,411 ) $ ( 802,486 ) $ 811,019

See accompanying Notes to Consolidated Financial Statements.

13 unchanged sentences

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

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

Loss (gain) on disposal of property and equipment 553 ( 48 ) 12

Non-cash operating lease expense 10,720 9,995 9,537

Expense associated with license agreement 17,500 — —

Realized gain on investments ( 28 ) — —

Changes in operating assets and liabilities:

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Other liabilities ( 2,123 ) 3,003 —

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

Net cash used in operating activities - continuing operations ( 296,062 ) ( 309,478 ) ( 314,086 )

Net cash used in operating activities - discontinued operations — — ( 93,234 )

4 unchanged sentences

Proceeds from sale of contingent payments — 131,784 —

Payments associated with license agreement ( 17,500 ) — —

Purchases of property and equipment ( 999 ) ( 4,881 ) ( 5,741 )

Proceeds from sale of equipment 1,325 964 —

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

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

Net cash provided by (used in) investing activities - continuing operations 239,575 243,261 ( 554,158 )

Net cash provided by investing activities - discontinued operations — — 1,802,936

Net cash provided by investing activities 239,575 243,261 1,248,778

4 unchanged sentences

Net cash provided by (used in) financing activities 5,433 2,350 ( 765,768 )

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

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

Net change in cash and cash equivalents ( 51,054 ) ( 63,867 ) 75,690

3 unchanged sentences

Additions to property and equipment in accounts payable and accrued expenses $ 55 $ 158 $ 1,678

Cash taxes paid $ — $ 16,078 $ —

Net cash taxes paid $ 1,569 $ — $ 16,078

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

5 unchanged sentences

References to Agios

Throughout this Annual Report on Form 10-K, “the Company,” “we,” “us,” and “our,” and similar expressions, except where the context requires otherwise, refer to Agios Pharmaceuticals, Inc.

Throughout this Annual Report on Form 10-K, “the Company,” “Agios,” “we,” “us,” and “our,” and similar expressions, except where the context requires otherwise, refer to Agios Pharmaceuticals, Inc.

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

We are a biopharmaceutical company committed to transforming patients’ lives through leadership in the field of cellular metabolism, with the goal of creating differentiated, small molecule medicines for 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.

Building on this expertise, these learnings can be rapidly applied to our clinical trials with the goal of developing medicines that can have a significant impact for patients.

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

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

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

In February 2022, the U.S.

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

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

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

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

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

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

Sale of our Oncology Business to Servier

We are also developing (i) AG-946, a novel PK activator, for the potential treatment of lower-risk myelodysplastic syndrome, or LR MDS, and hemolytic anemias, and (ii) AG-181, our phenylalanine hydroxylase, or PAH, stabilizer for the potential treatment of phenylketonuria, or PKU.

In addition to the aforementioned development programs, 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 preclinical 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 disease-modifying treatment of patients with polycythemia vera, or PV, a rare blood disorder.

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.

Alnylam License Agreement

On July 28, 2023, we entered into a license agreement with Alnylam under which we acquired the rights to develop and commercialize Alnylam’s novel preclinical siRNA targeting the TMPRSS6 gene, 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, we will account for the agreement as an asset acquisition.

In accordance with the license agreement, in the twelve months ended December 31, 2023, we 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.

We 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, we are 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.

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Sale of Oncology Business to Servier and Sale of Contingent Payments

On March 31, 2021, we completed the sale of our oncology business to Servier Pharmaceuticals, LLC, or Servier, which represented a discontinued operation.

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

We recorded income from royalties of approximately $ 9.9 million and $ 6.6 million on U.S.

In October 2022, we sold our rights to future contingent payments associated with the royalty of 5 % of U.S.

net sales of TIBSOVO® from the close of the transaction through the loss of exclusivity to entities affiliated with Sagard Healthcare Partners, or Sagard, and recognized income of $ 127.9 million within the gain on sale of contingent payments line item in our Consolidated Statements of Operations for the year ended December 31, 2022.

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

We recorded income from royalties of $ 9.9 million and $ 6.6 million on U.S.

net sales of TIBSOVO® by Servier in the royalty income from gain on sale of oncology business line item within the consolidated statements of operation s for the years ended December 31, 2022 and December 31, 2021, respectively.

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Sale of Contingent Payments

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

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

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

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

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

Reclassifications

Certain amounts in prior periods have been reclassified to reflect the impact of the discontinued operations treatment of the oncology business in order to conform to the current period presentation.

On March 31, 2021, we completed the sale of our oncology business to Servier, and received approximately $ 1.8 billion in cash at closing.

In connection with the sale, on March 25, 2021, we announced that our Board of Directors authorized the repurchase of up to $ 1.2 billion of our outstanding shares of common stock, or the Repurchase Program, using the proceeds from the sale of our oncology business to Servier.

On March 31, 2021, in connection with the Repurchase Program, we entered into a definitive share repurchase agreement with Bristol-Myers Squibb Company, or BMS, to repurchase 7.1 million shares of our common stock held by certain subsidiaries of BMS for an aggregate purchase price of $ 344.5 million, or $ 48.38 per share.

This repurchase was completed on April 5, 2021.

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

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

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

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

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

We have paused our share repurchases for the foreseeable future.

As of December 31, 2023, we had cash, cash equivalents and marketable securities of $ 806.4 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 to be sufficient to fund current operations for at least the next twelve months from the issuance of the financial statements.

If we are unable to raise additional funds through equity or debt financings, we may be required to delay, limit, reduce or terminate product development or future commercialization efforts or grant rights to develop and market products or product candidates that we would otherwise prefer to develop and market ourselves.

On April 30, 2020, we entered into an at-the-market sales agreement, or the 2020 sales agreement, with Cowen & Company LLC, or Cowen, pursuant to which we may offer and sell shares of our common stock having an aggregate offering price of up to $ 250.0 million through Cowen pursuant to a universal shelf registration statement on Form S-3 filed with the SEC on April 30, 2020.

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

As of December 31, 2022, we had cash, cash equivalents and marketable securities of $ 1.1 billion.

Summary of Significant Accounting Policies

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

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

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

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

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

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

Actual results may differ from these estimates.

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.

Cash and cash equivalents

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We generate product revenue from sales of PYRUKYND® to a limited number of specialty distributors and specialty pharmacy providers, or collectively, the Customers.

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

These Customers subsequently resell PYRUKYND® to pharmacies or dispense PYRUKYND® 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®.

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

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

Contractual Adjustments .

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

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

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

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

Marketable securities

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At December 31, 2023 and 2022, we held both current and non-current investments.

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

Investments classified as current are those that:

(i) have a maturity of less than one year , or (ii) have a maturity of one to two years but we intend to liquidate within the next twelve months.

Investments classified as non-current are those that:

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

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

We review marketable securities for impairment whenever the fair value of a marketable security is less than the amortized cost and evidence indicates that a marketable security’s carrying amount is not recoverable.

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

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Fair value measurements

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Level 2 – Quoted prices for similar assets and liabilities in active markets, quoted prices in markets that are not active, or inputs which are observable, either directly or indirectly, for substantially the full term of the asset or liability.

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

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

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

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economic projections, market trends and product development cycles.

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

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

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An arrangement is determined to contain a lease if the contract conveys the right to control the use of an identified property or equipment for a period of time in exchange for consideration.

If we can benefit from the various underlying assets of a lease on their own or together with other resources that are readily available, or if the various underlying assets are neither highly dependent on nor highly interrelated with other underlying assets in the arrangement, they are considered to be a separate lease component.

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arrangement, they are considered to be a separate lease component.

In the event multiple underlying assets are identified, the lease consideration is allocated to the various components based on each of the component’s relative fair value.

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For awards subject to service-based vesting conditions, we recognize stock-based compensation expense equal to the grant date fair value of stock options on a straight-line basis over the requisite service period.

For awards subject to both performance and service-based vesting conditions, we recognize stock-based compensation expense over the remaining service period if the performance condition is considered probable of achievement using management’s best estimates.

For awards subject to performance-based vesting conditions, we recognize stock-based compensation expense if the performance condition is considered probable of achievement using management’s best estimates.

Income taxes are recorded in accordance with ASC 740, Accounting for Income Taxes , or ASC 740, which provides for deferred taxes using an asset and liability approach.

1 unchanged sentence

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

Valuation allowances are

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

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

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

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The determination as to whether the tax benefit will more likely than not be realized is based upon the technical merits of the tax position as well as consideration of the available facts and circumstances.

Comprehensive income (loss)

Comprehensive income (loss) is defined as the change in equity of a business enterprise during a period from transactions, and other events and circumstances, and currently consists of net loss and unrealized gains and losses on available-for-sale securities.

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Comprehensive (loss) income

Comprehensive (loss) income is defined as the change in equity of a business enterprise during a period from transactions, and other events and circumstances, and currently consists of net loss and unrealized gains and losses on available-for-sale securities.

Accumulated other comprehensive (loss) income consists entirely of unrealized gains and losses from available-for-sale securities as of December 31, 2023 and 2022.

Net income (loss) per share

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

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

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

Net (loss) income per share

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

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

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

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

1 unchanged sentence

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

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

Segment and geographic information

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Discontinued operations

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

We accounted for the sale of our oncology business in the first quarter of 2021 in accordance with ASC 205, Discontinued Operations and Accounting Standards Update, or ASU, No.

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

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

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

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

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

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

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Treasury stock

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Recent accounting pronouncements

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

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

Credit losses relating to available-for-sale debt securities will also be recorded through an allowance for credit losses rather than as a reduction in the amortized cost basis of the securities.

The guidance is effective for fiscal years beginning after December 31, 2019, including interim periods within those years.

The Company adopted this amendment as of January 1, 2020, which eliminated the concept of other-than-temporary impairments and required credit losses on debt securities to be recorded through an allowance for credit losses instead of as a reduction in the amortized cost basis of the securities.

Application of the amendments is through a cumulative-effect adjustment to retained earnings as of the effective date.

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

Other accounting standards that have been issued by the FASB or other standards-setting bodies that do not require adoption until a future date are not expected to have a material impact on our financial statements upon adoption.

Accounting standards that have been issued by the Financial Accounting Standards Board or other standards-setting bodies that do not require adoption until a future date are not expected to have a material impact on our financial statements upon adoption.

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Subsequent events

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Fair Value Measurements

The following table summarizes our cash equivalents and marketable securities measured at fair value and by level (as described in Note 2.

Summary of Significant Accounting Policies ) on a recurring basis as of December 31, 2022:

The following table summarizes our cash equivalents and marketable securities measured at fair value and by level (as described in Note 2, Su mmary of Significant Accounting Policies ) on a recurring basis as of December 31, 2023:

(In thousands) Level 1 Level 2 Level 3 Total

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At December 31, 2023 and 2022, we held 151 and 259 debt securities, respectively, that were in an unrealized loss position for less than one year.

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

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

The aggregate fair value of debt securities in an unrealized loss position at December 31, 2023 and 2022 was $ 513.5 million and $ 868.2 million, respectively.

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

(In thousands) December 31,

2022 December 31,

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

Raw materials $ 51 $ —

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

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

These lease agreements have remaining lease terms of 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.

The lease agreements do not contain residual value guarantees.

On April 11, 2019, we entered into an agreement to lease approximately 13,000 square feet of office space located at 38 Sidney Street, Cambridge, Massachusetts, or the 38 Sidney Lease, with Thirty-Eight Sidney Street, LLC.

The initial term of the 38 Sidney Lease commenced on May 1, 2019 and expires on February 29, 2028.

At the end of the lease term, we have the option to extend the 38 Sidney Lease for two consecutive terms of five years at fair market rent at the time of the extension.

The 38 Sidney Lease provides us with the right to lease additional space within the 38 Sidney Street building and also includes rent escalation clauses and a tenant improvement allowance of $ 1.0 million.

In connection with the 38 Sidney Lease, we also amended our existing building leases at 88 Sidney Street, Cambridge, Massachusetts and at 64 Sidney Street, Cambridge, Massachusetts to extend the initial terms of those leases by approximately three years through February 29, 2028.

The amendments also provide us with the right to lease additional space at the 64 Sidney Street building.

Our existing extension options for the 88 Sidney Street building and 64 Sidney Street building continue as set forth in the existing leases for those buildings.

We currently lease approximately 146,000 square feet at 88 Sidney Street, 43,000 square feet at 64 Sidney Street, and 13,000 square feet at 38 Sidney Street, Cambridge, Massachusetts.

All leases, as amended, expire on February 29, 2028.

At the end of the initial lease period, we have the option to extend the leases at all facilities for two consecutive five-year periods at the fair market rent at the time of the extension.

The components of lease expense and other information related to leases were as follows:

(In millions) 2022 2021 2020

(In thousands) 2023 2022 2021

Operating lease costs $ 15,227 $ 15,227 $ 15,229

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2024 $ 17,142

Thereafter 3,479

Undiscounted minimum rental commitments 81,033

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Total operating lease liabilities $ 71,996

We provided our landlord a standby letter of credit of $ 2.9 million as security for our leases.

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

We provided our landlord a security deposit of $ 2.9 million as security for our leases, which is included within other non-current assets on our consolidated balance sheet.

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

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

At the end of the initial sublease periods, the subtenant has the option to extend the leases for one additional 6 -month period.

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.

At the end of the initial sublease period, the subtenant has the option to extend the lease for one additional year, followed by a second extension option for twenty-two additional months.

We recorded operating sublease income of $ 6.1 million and $ 4.1 million for the years ended December 31, 2023 and December 31, 2022, respectively, in other income, net in the consolidated statements of operations.

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Product Revenue

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

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

We generate product revenue from sales of PYRUKYND® to a limited number of specialty distributors and specialty pharmacy providers, or collectively, the Customers.

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

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

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

The following tables summarize balances and activity in each of the product revenue allowance and reserve categories for the years ended December 31, 2023 and December 31, 2022:

(In thousands) Contractual Adjustments Government Rebates Returns Total

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Balance at December 31, 2023 $ 156 $ 1,084 $ 232 $ 1,472

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

(In thousands) Contractual Adjustments Government Rebates Returns Total

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

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

Adjustments relating to prior years — — — —

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

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

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

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

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Total revenue-related reserves $ 1,472 $ 771

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

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

Contract assets (1)

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

The following table presents changes in our contract assets, which consisted of accounts receivable, net:

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

Beginning balance $ 2,206 $ —

Additions (1)

31,855 13,283

Deductions (1)

( 31,251 ) ( 11,077 )

Ending balance $ 2,810 $ 2,206

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

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

Share-Based Payments

Stock incentive plans

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

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

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

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

As of December 31, 2022, the total number of shares reserved under the 2007 Plan and the 2013 Plan was 12,821,789 , and we had 5,458,366 shares available for future issuance under the 2013 Plan.

The 2013 Plan provides for an annual increase, to be added on the first day of each fiscal year, beginning with the fiscal year ending December 31, 2014 and continuing until the expiration of the 2013 Plan, equal to the lesser of (i) 2,000,000 shares of common stock, (ii) 4 % of the outstanding shares of common stock on such date or (iii) an amount determined by our Board of Directors.

On January 1, 2023, the annual increase for the 2013 Plan resulted in an additional 2,000,000 shares authorized for issuance.

2023 Stock Incentive Plan and Inducement Grants

In June 2023, our stockholders approved the 2023 Stock Incentive Plan, or the 2023 Plan.

The 2023 Plan provides for the grant of incentive stock options, nonstatutory stock options, stock appreciation rights, restricted stock awards, restricted stock units, or RSUs, performance-based share units, or PSUs, and other stock-based awards to employees, advisors, consultants and non-employee directors.

Following the adoption of the 2023 Plan, we ceased granting equity awards under the 2013 Stock Incentive Plan, or the 2013 Plan.

Any outstanding equity awards that were previously granted under the 2013 Plan continue to be governed by their terms.

Following adoption of the 2013 Plan, we ceased granting equity awards under the 2007 Stock Incentive Plan, or the 2007 Plan.

There are no outstanding equity awards under the 2007 Plan.

In connection with the start of employment of our Chief Executive Officer and Chief Financial Officer in 2022, and our Chief Commercial Officer in 2023, our board of directors granted each of them equity awards in the form of stock options, RSUs and 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 December 31, 2023, the maximum number of shares reserved under the 2013 Plan, the 2023 Plan and the inducement grants described above was 12,004,551 , and we had 4,989,341 shares available for future issuance under the 2023 Plan.

Stock options

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Forfeited ( 101,750 ) 46.39

Expired ( 40,092 ) 56.52

Unvested shares at December 31, 2023 362,133 $ 30.66

Included in unvested shares were 145,023 shares with performance-based vesting criteria that were considered probable of achievement at December 31, 2023 and vested in January 2024.

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 December 31, 2022, there was no unrecognized compensation expense related to PSUs with performance-based vesting criteria that are considered probable of achievement that we expect to recognize.

As of December 31, 2023, there was no unrecognized compensation expense related to PSUs with performance-

based vesting criteria that are considered probable of achievement that we expect to recognize.

There is $ 5.9 million of total unrecognized compensation expense related to PSUs with performance-based vesting criteria that are considered not probable of achievement.

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Stock-based compensation expense

During the years ended December 31, 2022, 2021 and 2020, we recorded stock-based compensation expense for employee and non-employee stock options, RSUs, PSUs, ESPP shares and other stock-based awards.

During the years ended December 31, 2023, 2022 and 2021, we recorded stock-based compensation expense for employee and non-employee stock options, RSUs, PSUs, and ESPP shares.

Stock-based compensation expense by award type included within the consolidated statements of operations is as follows:

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Employee Stock Purchase Plan 868 976 1,013

Other stock awards — — 781

Total stock-based compensation expense $ 44,766 $ 49,296 $ 53,508

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Under this approach, the weighted-average expected life is presumed to be the average of the contractual term of ten years and the weighted-average vesting term of the stock options, taking into consideration multiple vesting tranches.

We utilize this method due to lack of historical data and the plain-vanilla nature of our share-based awards.

The expected volatility has been determined using Agios' historical volatilities for a period equal to the expected term of the option grant.

We utilize this method due to the plain-vanilla nature of our share-based awards.

The expected volatility has been determined using our historical volatilities for a period equal to the expected term of the option grant.

Risk-free rate

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

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

The control number used is loss from continuing operations.

The control number used is net loss from continuing operations.

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

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

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

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Restricted stock units 1,346,701 1,117,921 1,002,924

Performance-based stock units 145,023 — —

Employee Stock Purchase Plan shares 48,713 42,026 39,864

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Total $ ( 352,088 ) $ ( 231,801 ) $ ( 356,510 )

We did not have any material provision for income taxes for the years ended December 31, 2022, 2021 and 2020.

We did not have any provision for income taxes for the years ended December 31, 2023, 2022 and 2021.

A reconciliation of the expected income tax benefit (expense) computed using the federal statutory income tax rate to our effective income tax rate is as follows for the years ended December 31, 2023, 2022 and 2021:

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Net deferred taxes $ — $ —

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

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

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

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

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

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

The Company capitalized research and experimental costs of $ 232.7 million and $ 261.4 million for the years ended December 31, 2023 and December 31, 2022, respectively.

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

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

As of December 31, 2023, we had net operating loss carryforwards, or NOLs, available to reduce federal, state and foreign income taxes of approximately $ 131.7 million, $ 502.4 million and $ 65.2 million, respectively.

At December 31, 2023, we also had available research and development tax credits for federal and state income tax purposes of approximately $ 25.5 million and $ 28.1 million, respectively.

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Based on the weight of available evidence, both positive and negative, we recorded a valuation allowance of $ 379.7 million and $ 296.0 million as of December 31, 2023 and December 31, 2022, respectively, because we have determined that it is more likely than not that these assets will not be fully realized.

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

The valuation allowance increased by $ 83.7 million for the year ended December 31, 2023 and by $ 59.5 million for the year ended December 31, 2022 primarily due to the Section 174 R&D expense capitalization.

The following table presents our change in valuation allowance for the years ended December 31, 2023 and, 2022:

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The statute of limitations for assessment in Switzerland remains open for tax years ending December 31, 2023, 2022, 2021, 2020 and 2019.

The Company’s subsidiaries in the Netherlands and Germany were incorporated in 2019 and therefore the statute of limitations for assessment that remain open in these jurisdictions are for the tax years ending December 31, 2022, 2021, 2020 and 2019.

The Company’s subsidiaries in Italy and France were incorporated in 2020 and therefore the statute of limitations for assessment that remain open in these jurisdictions are for the tax years ending December 31, 2022, 2021 and 2020.

The Company’s subsidiaries in the Netherlands and Germany were incorporated in 2019 and have statute of limitations for 5 and 4 years, respectively, for assessment.

The tax years that remain open in these jurisdictions are for the tax years ending December 31, 2023, 2022, 2021, 2020 and 2019.

The Company’s subsidiaries in Italy and France were incorporated in 2020 and have statute of limitations for 5 and 3 years, respectively, for assessment.

The tax years that remain open in these jurisdictions are for the tax years ending December 31, 2023, 2022, 2021 and 2020.

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

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

As of December 31, 2023 and 2022, we had an income tax receivable of $ 1.1 million and $ 0.3 million, respectively, recorded within prepaid expenses and other current assets.

Property and Equipment, net

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Share Repurchase Program

On March 25, 2021, we announced that our board of directors authorized the Repurchase Program for the repurchase of up to $ 1.2 billion of our outstanding shares of common stock.

On March 25, 2021, we announced that our board of directors authorized a repurchase program, or the Repurchase Program, for the repurchase of up to $ 1.2 billion of our outstanding shares of common stock.

On March 31, 2021, in connection with the Repurchase Program, we entered into a definitive share repurchase agreement with BMS to repurchase 7.1 million shares of our common stock held by certain subsidiaries of BMS for an aggregate purchase price of $ 344.5 million, or $ 48.38 per share.

1 unchanged sentence

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

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

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

As of December 31, 2023, we repurchased approximately 9.1 million shares of common stock for $ 458.0 million, or $ 50.35 per share, under the Rule 10b5-1 repurchase plan.

In total, as of December 31, 2023, we repurchased 16.2 million shares of common stock for $ 802.5 million, or $ 49.49 per share, under the Repurchase Program.

No common stock was purchased during the years ended December 31, 2023 or December 31, 2022.

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

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

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

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

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

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

The results of operations from the oncology business were classified as discontinued operations in the consolidated statements of operations.

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

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

(in thousands) March 31, 2021

Current assets:

Accounts receivable, net $ 25,386

Collaboration receivable – related party 2,253

Collaboration receivable – other 2,438

Inventory 16,190

Prepaid expenses and other current assets 7,125

Total current assets of discontinued operations 53,392

Other non-current assets 2,234

Total assets of discontinued operations $ 55,626

Current liabilities:

Accounts payable $ 4,245

Accrued expenses 30,288

Total current liabilities of discontinued operations 34,533

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

Total liabilities of discontinued operations 298,814

Net liabilities distributed to Servier $ ( 243,188 )

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

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

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

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

Commitments and Contingent Liabilities

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

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

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

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

What changed 10-K

Item 9A. Controls and Procedures