What changed in this filing

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Item 1. Financial Statements

2024-08-01 compared with 2024-05-02 · 101 added, 78 removed, 358 unchanged (33% of the section changed)

28 unchanged sentences

25,000,000 shares authorized;

no shares issued or outstanding at March 31, 2024 and December 31, 2023

no shares issued or outstanding at June 30, 2024 and December 31, 2023

Common stock, $ 0.001 par value;

125,000,000 shares authorized;

72,967,922 shares issued and 56,751,511 shares outstanding at March 31, 2024, and 72,161,489 shares issued and 55,945,078 shares outstanding at December 31, 2023

73,091,490 shares issued and 56,875,079 shares outstanding at June 30, 2024, and 72,161,489 shares issued and 55,945,078 shares outstanding at December 31, 2023

Additional paid-in capital 2,464,284 2,436,523

Accumulated other comprehensive loss ( 1,045 ) ( 441 )

Treasury stock, at cost ( 16,216,411 shares at March 31, 2024 and December 31, 2023)

Treasury stock, at cost ( 16,216,411 shares at June 30, 2024 and December 31, 2023)

( 802,486 ) ( 802,486 )

5 unchanged sentences

Condensed Consolidated Statements of Operations

Three Months Ended March 31,

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

(In thousands, except share and per share data)

2024 2023 2024 2023

Product revenue, net $ 8,615 $ 6,712 $ 16,804 $ 12,321

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Condensed Consolidated Statements of Comprehensive Loss

Three Months Ended March 31,

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

(In thousands)

2024 2023 2024 2023

Net loss $ ( 96,118 ) $ ( 83,806 ) $ ( 177,667 ) $ ( 164,824 )

Other comprehensive (loss) income

Unrealized (loss) gain on available-for-sale securities ( 646 ) 4,124

Other comprehensive income (loss)

Unrealized gain (loss) on available-for-sale securities 42 ( 459 ) ( 604 ) 3,665

Comprehensive loss $ ( 96,076 ) $ ( 84,265 ) $ ( 178,271 ) $ ( 161,159 )

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Balance at March 31, 2024 72,967,922 $ 73 $ 2,451,620 $ ( 1,087 ) $ ( 904,198 ) ( 16,216,411 ) $ ( 802,486 ) $ 743,922

Unrealized gain on available-for-sale securities — — — 42 — — — 42

Common stock issued under stock incentive plan and ESPP 123,568 — 1,099 — — — — 1,099

Stock-based compensation expense — — 11,565 — — — — 11,565

Net loss — — — — ( 96,118 ) — — ( 96,118 )

Balance at June 30, 2024 73,091,490 $ 73 $ 2,464,284 $ ( 1,045 ) $ ( 1,000,316 ) ( 16,216,411 ) $ ( 802,486 ) $ 660,510

Common Stock Additional

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Balance at March 31, 2023 71,757,778 $ 72 $ 2,398,930 $ ( 8,411 ) $ ( 551,579 ) ( 16,216,411 ) $ ( 802,486 ) $ 1,036,526

Unrealized loss on available-for-sale securities — — — ( 459 ) — — — ( 459 )

Common stock issued under stock incentive plan and ESPP 193,408 — 238 — — — — 238

Stock-based compensation expense — — 11,737 — — — — 11,737

Net loss — — — — ( 83,806 ) — — ( 83,806 )

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

See accompanying Notes to Condensed Consolidated Financial Statements.

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Condensed Consolidated Statements of Cash Flows

Three Months Ended

Six Months Ended

(In thousands) 2024 2023

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Supplemental disclosure of non-cash investing and financing transactions

Additions to property and equipment in accounts payable and accrued expenses $ 42 $ 6

Net cash taxes (returned) paid $ ( 603 ) $ 801

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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 (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 also developing (i) AG-946 (tebapivat), 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 have begun preclinical development of a product candidate 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.

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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 accounted for the agreement as an asset acquisition.

Because the acquired assets do not meet the definition of a business in accordance with Accounting Standards Codification, or ASC, 805, Business Combinations , we accounted 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.

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

We will also pay Alnylam for certain expenses associated with the development of the TMPRSS6 program, 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.

Sale of Oncology Business to Servier and Sale of Contingent Payments

Sale of Oncology Business to Servier and Sale of Contingent Payments and Royalty Rights

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, 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, or IDH, 1 or 2 mutation (and, to the extent required by such approval, the vorasidenib companion diagnostic test is granted an FDA premarket approval), or the Vorasidenib Milestone Payment, 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, with these royalties referred to as contingent payments and recognized as income when realizable.

net sales of vorasidenib from the first commercial sale of vorasidenib through loss of exclusivity, or the Vorasidenib Royalty Rights.

The Vorasidenib Milestone Payment, Vorasidenib Royalty Rights and royalty payments related to TIBSOVO® are referred to as contingent payments and recognized as income when realizable.

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.

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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.

In February 2024, Servier announced that it received filing acceptance and priority review from the FDA for its NDA for vorasidenib for the treatment of certain IDH-mutant diffuse glioma and accelerated assessment from the European Medicines Agency, or EMA, for its Marketing Authorization Application, or MAA, for vorasidenib.

The FDA assigned the NDA a Prescription Drug User Fee Act action date of August 20, 2024, and Servier anticipates that the European Commission will approve its MAA in the second half of 2024.

The FDA assigned the NDA a Prescription Drug User Fee Act, or PDUFA, action date of August 20, 2024, and Servier anticipates that the European Commission will approve its MAA in the second half of 2024.

In May 2024, we entered into a purchase and sale agreement to sell the Vorasidenib Royalty Rights to Royalty Pharma Investments 2019 ICAV, or Royalty Pharma, for $ 905.0 million in cash, which sale is contingent upon NDA approval of vorasidenib by the FDA on or before October 31, 2024, and other customary closing conditions.

Upon consummation of the sale, Royalty Pharma will acquire 100% of the Vorasidenib Royalty Rights payments made by Servier on account of up to $1.0 billion in net sales for each calendar year.

In addition, any such Vorasidenib Royalty Rights payments made by Servier on account of U.S.

net sales in each calendar year in excess of $1.0 billion will be split, with Royalty Pharma having the rights to a 12 % earn-out on those excess payments and Agios retaining the rights to a 3 % earn-out on those excess payments, or the Retained Earn-Out Rights.

We retain our rights to the potential Vorasidenib Milestone Payment.

Basis of Presentation

The condensed consolidated balance sheet as of March 31, 2024, the condensed consolidated statements of operations, comprehensive loss and stockholders' equity for the three months ended March 31, 2024 and 2023, and the condensed consolidated statements of cash flows for the three months ended March 31, 2024 and 2023 are unaudited.

The unaudited condensed consolidated financial statements have been prepared on the same basis as the annual financial statements and, in the opinion of our management, reflect all adjustments, which include only normal recurring adjustments, necessary to fairly state our financial position as of March 31, 2024, our results of operations and stockholders' equity for the three months ended March 31, 2024 and 2023, and cash flows for the three months ended March 31, 2024 and 2023.

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

The results of operations for the three months ended March 31, 2024 are not necessarily indicative of the results to be expected for the year ending December 31, 2024 or for any other future annual or interim period.

The condensed consolidated balance sheet as of June 30, 2024, the condensed consolidated statements of operations, comprehensive loss and stockholders' equity for the three and six months ended June 30, 2024 and 2023, and the condensed consolidated statements of cash flows for the six months ended June 30, 2024 and 2023 are unaudited.

The unaudited condensed consolidated financial statements have been prepared on the same basis as the annual financial statements and, in the opinion of our management, reflect all adjustments, which include only normal recurring adjustments, necessary to fairly state our financial position as of June 30, 2024, our results of operations and stockholders' equity for the three and six months ended June 30, 2024 and 2023, and cash flows for the six months ended June 30, 2024 and 2023.

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

The results of operations for the three and six months ended June 30, 2024 are not necessarily indicative of the results to be expected for the year ending December 31, 2024 or for any other future annual or interim period.

The condensed consolidated balance sheet data as of December 31, 2023 was derived from our audited financial statements, but does not include all disclosures required by U.S.

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

The full extent to which the recent COVID-19 pandemic, or other pandemics or public health emergencies, may in the future directly or indirectly impact our business, results of operations and financial condition, including expenses, reserves and allowances, clinical trials, research and development costs and employee-related amounts, will depend on future developments that are highly uncertain.

As of March 31, 2024, we had cash, cash equivalents and marketable securities of $ 714.3 million.

The full extent to which 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.

As of June 30, 2024, we had cash, cash equivalents and marketable securities of $ 645.3 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.

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We record cash equivalents and marketable securities at fair value.

Accounting Standards Codification, or ASC, 820, Fair Value Measurements and Disclosures , establishes a fair value hierarchy for those instruments measured at fair value that distinguishes between assumptions based on market data (observable inputs) and our own assumptions (unobservable inputs).

ASC 820, Fair Value Measurements and Disclosures , establishes a fair value hierarchy for those instruments measured at fair value that distinguishes between assumptions based on market data (observable inputs) and our own assumptions (unobservable inputs).

The hierarchy consists of three levels:

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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.

The following table summarizes our cash equivalents and marketable securities measured at fair value and by level on a recurring basis as of March 31, 2024:

The following table summarizes our cash equivalents and marketable securities measured at fair value and by level on a recurring basis as of June 30, 2024:

(In thousands) Level 1 Level 2 Level 3 Total

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Cash equivalents and marketable securities have been initially valued at the transaction price and are subsequently valued, at the end of each reporting period, utilizing third-party pricing services or other observable market data.

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

After completing our validation procedures, we did not adjust or override any fair value measurements provided by the pricing services as of March 31, 2024.

There have been no changes to the valuation methods during the three months ended March 31, 2024, and we had no financial assets or liabilities that were classified as Level 3 at any point during the three months ended March 31, 2024.

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

determine value.

After completing our validation procedures, we did not adjust or override any fair value measurements provided by the pricing services as of June 30, 2024.

There have been no changes to the valuation methods during the six months ended June 30, 2024, and we had no financial assets or liabilities that were classified as Level 3 at any point during the six months ended June 30, 2024.

Marketable Securities

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

Unrealized gains and losses are included as a component of accumulated other comprehensive

loss in the condensed consolidated balance sheets and statements of stockholders’ equity, and a component of total comprehensive loss in the condensed consolidated statements of comprehensive loss, until realized.

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

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

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

There were no material realized gains or losses on marketable securities for the three months ended March 31, 2024 or 2023.

Marketable securities at March 31, 2024 consisted of the following:

There were no material realized gains or losses on marketable securities for the three and six months ended June 30, 2024 or 2023.

Marketable securities at June 30, 2024 consisted of the following:

(In thousands) Amortized

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Total marketable securities $ 718,599 $ 1,285 $ ( 1,726 ) $ 718,158

As of March 31, 2024 and December 31, 2023, we held both current and non-current investments.

As of June 30, 2024 and December 31, 2023, we held both current and non-current investments.

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

Investments classified as non-current are those that:

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

As of March 31, 2024 and December 31, 2023, we held 160 and 151 debt securities, respectively, that were in an unrealized loss position for less than one year.

We did no t record an allowance for credit losses as of March 31, 2024 and December 31, 2023 related to these securities.

The aggregate fair value of debt securities in an unrealized loss position at March 31, 2024 and December 31, 2023 was $ 490.1 million and $ 513.5 million, respectively.

There were no individual securities that were in a significant unrealized loss position as of March 31, 2024 and December 31, 2023.

We regularly review the securities in an unrealized loss position and evaluate the current expected credit loss by considering factors such as historical experience,

market data, issuer-specific factors, and current economic conditions.

We do not consider these marketable securities to be impaired as of March 31, 2024 and December 31, 2023.

(i) have a maturity of greater

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

As of June 30, 2024 and December 31, 2023, we held 194 and 151 debt securities, respectively, that were in an unrealized loss position for less than one year.

We did no t record an allowance for credit losses as of June 30, 2024 and December 31, 2023 related to these securities.

The aggregate fair value of debt securities in an unrealized loss position at June 30, 2024 and December 31, 2023 was $ 538.0 million and $ 513.5 million, respectively.

There were no individual securities that were in a significant unrealized loss position as of June 30, 2024 and December 31, 2023.

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

We do not consider these marketable securities to be impaired as of June 30, 2024 and December 31, 2023.

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

(In thousands) March 31,

(In thousands) June 30,

2024 December 31,

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Three Months Ended

June 30, Six Months Ended

(In thousands) 2024 2023 2024 2023

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Cash paid for amounts included in the measurement of operating lease liabilities 4,678 4,544 $ 9,331 $ 9,064

We have not entered into any material short-term leases or financing leases as of March 31, 2024.

In arriving at the operating lease liabilities as of March 31, 2024 and December 31, 2023, we applied the weighted-average incremental borrowing rate of 5.7 % for both periods over a weighted-average remaining lease term of 3.9 and 4.2 years, respectively.

As of March 31, 2024, undiscounted minimum rental commitments under non-cancelable leases were as follows:

We have not entered into any material short-term leases or financing leases as of June 30, 2024.

In arriving at the operating lease liabilities as of June 30, 2024 and December 31, 2023, we applied the weighted-average incremental borrowing rate of 5.7 % for both periods over a weighted-average remaining lease term of 3.7 and 4.2 years, respectively.

As of June 30, 2024, undiscounted minimum rental commitments under non-cancelable leases were as follows:

(In thousands)

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

We recorded operating sublease income of $ 1.6 million and $ 1.4 million for the three months ended March 31, 2024 and 2023, respectively, in other income, net in the condensed consolidated statements of operations.

We received security

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

As of March 31, 2024, the future minimum lease payments to be received under the long-term sublease agreements were as follows:

We recorded operating sublease income of $ 1.6 million and $ 1.4 million for the three months ended June 30, 2024 and 2023, respectively, and $ 3.2 million and $ 2.8 million for the six months ended June 30, 2024 and 2023, respectively, in other income, net in the condensed consolidated statements of operations.

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

As of June 30, 2024, the future minimum lease payments to be received under the long-term sublease agreements were as follows:

(In thousands)

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Accrued expenses consisted of the following:

(In thousands) March 31,

(In thousands) June 30,

2024 December 31,

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Product revenue, net, were as follows:

Three Months Ended March 31,

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

(In thousands) 2024 2023 2024 2023

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

The following table summarizes balances and activity in each of the product revenue allowance and reserve categories for the three months ended March 31, 2024:

The following table summarizes balances and activity in each of the product revenue allowance and reserve categories for the six months ended June 30, 2024:

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

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Payments/returns relating to sales in the prior years ( 85 ) ( 371 ) ( 71 ) ( 527 )

Balance at March 31, 2024 $ 121 $ 1,394 $ 365 $ 1,880

Balance at June 30, 2024 $ 172 $ 1,603 $ 390 $ 2,165

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

(In thousands) March 31, 2024 December 31, 2023

(In thousands) June 30, 2024 December 31, 2023

Reduction of accounts receivable $ 102 $ 151

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Total revenue-related reserves $ 2,165 $ 1,472

The following table presents changes in our contract assets during the three months ended March 31, 2024:

(In thousands) December 31, 2023 Additions Deductions March 31, 2024

The following table presents changes in our contract assets during the six months ended June 30, 2024:

(In thousands) December 31, 2023 Additions Deductions June 30, 2024

Contract assets (1)

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There are no outstanding equity awards under the 2007 Plan.

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 March 31, 2024, the maximum number of shares reserved under the 2013 Plan, the 2023 Plan and the inducement grants described above was 11,250,432 , and we had 3,076,274 shares available for future issuance under the 2023 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 June 30, 2024, the maximum number of shares reserved under the 2013 Plan, the 2023 Plan and the inducement grants described above was 11,127,064 , and we had 2,896,048 shares available for future issuance under the 2023 Plan.

Stock options

The following table presents stock option activity for the three months ended March 31, 2024:

The following table presents stock option activity for the six months ended June 30, 2024:

Stock Options Weighted-Average

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Expired ( 22,750 ) 34.41

Outstanding at March 31, 2024 5,908,863 $ 43.56

Exercisable at March 31, 2024 3,475,385 $ 52.67

Vested and expected to vest at March 31, 2024 5,908,863 $ 43.56

At March 31, 2024, there was approximately $ 38.0 million of total unrecognized compensation expense related to unvested stock option awards, which we expect to recognize over a weighted-average period of approximately 2.86 years.

Outstanding at June 30, 2024 5,996,025 $ 43.57

Exercisable at June 30, 2024 3,727,328 $ 51.07

Vested and expected to vest at June 30, 2024 5,996,025 $ 43.57

At June 30, 2024, there was approximately $ 36.8 million of total unrecognized compensation expense related to unvested stock option awards, which we expect to recognize over a weighted-average period of approximately 2.61 years.

Restricted stock units

The following table presents RSU activity for the three months ended March 31, 2024:

The following table presents RSU activity for the six months ended June 30, 2024:

Stock Units Weighted-Average

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Forfeited ( 18,252 ) 29.17

Unvested shares at March 31, 2024 1,865,185 $ 29.37

As of March 31, 2024, there was approximately $ 47.9 million of total unrecognized compensation expense related to RSUs, which we expect to recognize over a weighted-average period of approximately 2.33 years.

Unvested shares at June 30, 2024 1,860,408 $ 29.62

As of June 30, 2024, there was approximately $ 43.8 million of total unrecognized compensation expense related to RSUs, which we expect to recognize over a weighted-average period of approximately 2.14 years.

Performance-based stock units

The following table presents PSU activity for the three months ended March 31, 2024:

The following table presents PSU activity for the six months ended June 30, 2024:

Stock Units Weighted-Average

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Vested ( 170,550 ) 35.04

Unvested shares at March 31, 2024 400,110 $ 29.45

Unvested shares at June 30, 2024 374,583 $ 29.45

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 March 31, 2024, there was no unrecognized compensation expense related to PSUs with performance-based vesting criteria that are considered probable of achievement, and $ 11.8 million of total unrecognized compensation expense related to PSUs with performance-based vesting criteria that are considered not probable of achievement.

As of June 30, 2024, there was no unrecognized compensation expense related to PSUs with performance-based vesting criteria that are considered probable of achievement, and $ 11.0 million of total unrecognized compensation expense related to PSUs with performance-based vesting criteria that are considered not probable of achievement.

Market-based stock units

The following table presents market-based stock unit, or MSU, activity for the three months ended March 31, 2024:

The following table presents market-based stock unit, or MSU, activity for the six months ended June 30, 2024:

Stock Units Weighted-Average

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Expired ( 42,695 ) 41.50

Unvested shares at March 31, 2024 — $ —

Unvested shares at June 30, 2024 — $ —

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

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

As of March 31, 2024, there was no remaining unrecognized compensation expense related to MSUs.

As of June 30, 2024, there was no remaining unrecognized compensation expense related to MSUs.

2013 Employee Stock Purchase Plan

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

We issued and sold 52,514 and 54,867 shares of common stock during the three months ended March 31, 2024 and 2023, respectively, under the 2013 ESPP.

We issued and sold 52,514 and 54,867 shares of common stock during the six months ended June 30, 2024 and 2023, respectively, under the 2013 ESPP.

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

As of March 31, 2024, we had 1,633,525 shares of common stock available for future issuance under the 2013 ESPP.

As of June 30, 2024, we had 1,633,525 shares of common stock available for future issuance under the 2013 ESPP.

Stock-based compensation expense

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Three Months Ended

June 30, Six Months Ended

(In thousands) 2024 2023 2024 2023

1 unchanged sentence

Restricted stock units 6,211 4,754 11,177 9,701

Performance-based stock units 750 2,784 750 2,784

Employee stock purchase plan 243 262 440 497

2 unchanged sentences

Three Months Ended

June 30, Six Months Ended

(In thousands) 2024 2023 2024 2023

5 unchanged sentences

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

For purposes of the dilutive net loss per share calculation, stock options, RSUs, PSUs and MSUs for which the performance and market vesting conditions, respectively, have been deemed probable, and 2013 ESPP shares are considered to be common stock equivalents, while PSUs and MSUs with performance and market vesting conditions, respectively, that were not deemed probable as of March 31, 2024 are not considered to be common stock equivalents.

For purposes of the dilutive net loss per share calculation, stock options, RSUs, PSUs and MSUs for which the performance and market vesting conditions, respectively, have been deemed probable, and 2013 ESPP shares are considered to be common stock equivalents, while PSUs and MSUs with performance and market vesting conditions, respectively, that were not deemed probable as of June 30, 2024 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.

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.

we had a net loss for all periods presented, no dilutive effect has been recognized in the calculation of loss per share.

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

Basic and diluted net 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:

Three Months Ended March 31,

Three and Six Months Ended June 30,

Stock options 5,996,025 5,789,272

2 unchanged sentences

Total common stock equivalents 7,895,814 7,255,433

Subsequent Events

In July 2024, we entered into a distribution agreement with NewBridge Pharmaceuticals FZ-LLC, or NewBridge, pursuant to which we granted NewBridge the right to commercialize PYRUKYND® in Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the United Arab Emirates.

We do not expect this agreement to have a material impact on our business, financial condition or results of operations for the fiscal year ending December 31, 2024.

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

What changed 10-Q

Item 1. Financial Statements