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Item 2. Management’s Discussion and Analysis

2024-08-01 compared with 2024-05-02 · 134 added, 102 removed, 188 unchanged (56% of the section changed)

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Forward-looking Information

The following discussion of our financial condition and results of operations should be read in conjunction with our unaudited condensed consolidated financial statements as of March 31, 2024 and for the three months ended March 31, 2024 and 2023, and related notes included in Part I, Item 1 of this Quarterly Report on Form 10-Q, as well as the audited consolidated financial statements and notes and Management’s Discussion and Analysis of Financial Condition and Results of Operations, included in our Annual Report on Form 10-K for the year ended December 31, 2023 filed with the SEC on February 15, 2024.

The following discussion of our financial condition and results of operations should be read in conjunction with our unaudited condensed consolidated financial statements as of June 30, 2024 and for the three and six months ended June 30, 2024 and 2023, and related notes included in Part I, Item 1 of this Quarterly Report on Form 10-Q, as well as the audited consolidated financial statements and notes and Management’s Discussion and Analysis of Financial Condition and Results of Operations, included in our Annual Report on Form 10-K for the year ended December 31, 2023 filed with the SEC on February 15, 2024.

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

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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.

Alnylam License Agreement

In accordance with the license agreement with Alnylam, in the year 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

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Because the acquired assets under the license agreement with Alnylam do not meet the definition of a business in accordance with ASC 805, Business Combinations , we accounted for the agreement as an asset acquisition.

Sale of our Oncology Business to Servier

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, 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), 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, with these royalties 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 an NDA 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, or the Upfront Payment, 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.

Financial Operations Overview

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Following the sale of our oncology business to Servier on March 31, 2021, we have financed and expect to continue to finance our operations primarily through cash on hand, royalty payments from Servier with respect to U.S.

net sales of TIBSOVO® prior to the sale of these contingent payments to Sagard, proceeds from the sale of contingent payments to Sagard, a potential milestone payment and royalties from Servier if a NDA for vorasidenib is approved by the FDA with a label that permits vorasidenib's use as a single agent for the adjuvant treatment of patients with Grade 2 glioma that have an IDH1 or IDH2 mutation, the actual and potential future sales of PYRUKYND® and, potentially, collaborations, strategic alliances, licensing arrangements and other nondilutive strategic transactions.

net sales of TIBSOVO® prior to the sale of these contingent payments to Sagard, proceeds from the sale of contingent payments to Sagard, a potential Upfront Payment from Royalty Pharma and a potential Vorasidenib Milestone Payment from Servier, both of which are contingent on if the NDA for vorasidenib is approved by the FDA, potential royalty payments with respect to the Retained Earn-Out Rights, the actual and potential future sales of PYRUKYND® and, potentially, collaborations, strategic alliances, licensing arrangements and other nondilutive strategic transactions.

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

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

Our net losses for the three months ended March 31, 2024 and 2023 were $81.5 million and $81.0 million, respectively.

As of March 31, 2024, we had an accumulated deficit of $904.2 million.

Our net losses for the six months ended June 30, 2024 and 2023 were $177.7 million and $164.8 million, respectively.

As of June 30, 2024, we had an accumulated deficit of $1.0 billion.

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

Our net losses may fluctuate significantly from year to year.

We expect that we will continue to incur significant expenses as we continue to advance and expand clinical development and commercialization activities for PYRUKYND®;

advance and expand clinical development of AG-946;

We expect that we will continue to incur significant expenses as we continue to advance and expand clinical development and commercialization activities for PYRUKYND®, including with respect to our anticipated regulatory submissions for the treatment of thalassemia;

advance and expand clinical development of AG-946 (tebapivat);

continue to advance AG-181, our PAH stabilizer;

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

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

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

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

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

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

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

Based on our policy to expense costs associated with the manufacturing of our products prior to regulatory approval, certain of the manufacturing costs associated with product shipments of PYRUKYND® recorded during the three months ended March 31, 2024 and 2023 were expensed prior to February 17, 2022, and, therefore, are not included in costs of sales during the three months ended March 31, 2024 and 2023.

Based on our policy to expense costs associated with the manufacturing of our products prior to regulatory approval, certain of the manufacturing costs associated with product shipments of PYRUKYND® recorded during the three and six months ended June 30, 2024 and 2023 were expensed prior to February 17, 2022, and, therefore, are not included in costs of sales during the three and six months ended June 30, 2024 and 2023.

The amounts excluded from cost of sales were not significant during the three and six months ended June 30, 2024 and 2023.

Inventories are reviewed periodically to identify excess or obsolete inventory based on projected sales activity as well as product shelf-life.

Expired inventory is disposed of, and the related costs are recognized as cost of sales in our consolidated statements of operations, when, based on the expiry date, we do not believe we are able to sell the inventory.

We have not reserved for excess or obsolete inventory during the three and six months ended June 30, 2024 and 2023.

Research and Development Expenses

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However, the successful development of our product candidates is highly uncertain.

As such, at this time, we cannot reasonably estimate or know the nature, timing and estimated costs of the efforts that will be necessary to complete the remainder of the development and to commercialize these product candidates.

As such, at this time, we cannot reasonably estimate or know the nature, timing and estimated costs of the efforts that will be necessary to complete the development of and to commercialize these product candidates.

We are unable to predict the amount of net cash inflows from PYRUKYND® or any of our product candidates.

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• obtaining and maintaining patent and trade secret protection and regulatory exclusivity for our product candidates;

• launching commercial sales of the products, if and when approved, whether alone or in collaboration with others;

• launching commercial sales of the products, if and when approved, in the United States or in other jurisdictions, whether alone or in collaboration with others, including pursuant to the NewBridge Agreement;

• maintaining an acceptable safety profile of the products following approval.

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PYRUKYND® has been granted orphan drug designation for the treatment of PK deficiency by the FDA and the EMA.

Additionally, PYRUKYND® has received orphan drug designation from the FDA for the treatment of thalassemia and SCD.

Additionally, PYRUKYND® has received orphan drug designation from the FDA for the treatment of thalassemia and SCD, and breakthrough medicine designation by the Saudi Food and Drug Authority for the treatment of thalassemia.

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

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

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

We are evaluating PYRUKYND® in the following clinical trials:

Our global managed access program has not had a significant impact on our business, financial condition or results of operations.

We are evaluating PYRUKYND® in numerous clinical trials, including the following:

• An extension study evaluating the long-term safety, tolerability and efficacy of treatment with PYRUKYND® in patients from ENERGIZE, our completed phase 3, double-blind, randomized, placebo-controlled multicenter study pivotal trial of PYRUKYND® in adults with non-transfusion-dependent alpha- or beta-thalassemia.

We announced topline data for ENERGIZE in January 2024.

A total of 194 patients were enrolled in the study, with 130 randomized to PYRUKYND® 100 mg twice-daily, and 64 randomized to matched placebo.

We announced topline data for ENERGIZE in January 2024 and a more detailed analysis of the data in June 2024.

A total of 194 patients were enrolled

in the study, with 130 randomized to PYRUKYND® 100 mg twice-daily, and 64 randomized to matched placebo.

122 patients (93.8%) in the PYRUKYND® arm and 62 patients (96.9%) in the placebo arm completed the 24-week double-blind period of the study.

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During the 24-week double-blind period, four (3.1%) subjects in the PYRUKYND® arm experienced adverse events, or AEs, leading to discontinuation, and there were no AEs in the placebo arm leading to discontinuation.

We plan to provide a more detailed analysis of the data from this trial at an upcoming medical meeting and we aim to submit an NDA for PYRUKYND® in thalassemia to the FDA by the end of 2024.

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

We aim to submit an sNDA for PYRUKYND® in thalassemia to the FDA by the end of 2024.

• An extension study evaluating the long-term safety, tolerability and efficacy of treatment with PYRUKYND® in patients from ENERGIZE-T, our completed phase 3, double-blind, randomized, placebo-controlled multicenter study evaluating the efficacy and safety of PYRUKYND® as a potential treatment for adults with transfusion-dependent alpha- or beta-thalassemia, defined as 6 to 20 red blood cell, or RBC, units transfused and ≤ six-week transfusion-free period during the 24-week period before randomization.

The primary endpoint of the trial is percentage of patients with transfusion reduction response, defined as a ≥50% reduction in transfused RBC units with a reduction of ≥2 units of transfused RBCs in any consecutive 12-week period through week 48 compared with baseline.

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

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

We announced topline data for ENERGIZE-T in June 2024.

A total of 258 patients were enrolled in the study, with 171 randomized to PYRUKYND® 100 mg twice-daily and 87 randomized to matched placebo.

155 patients (90.6%) in the PYRUKYND® arm and 83 patients (95.4%) in the placebo arm completed the 48-week double-blind period of the study.

The study met the primary endpoint of transfusion reduction response, where treatment with PYRUKYND® demonstrated a statistically significant reduction in transfusion burden compared to placebo, as 30.4% of patients achieved a transfusion reduction response, compared to 12.6% of patients in the placebo arm (2-sided p=0.0003).

Treatment with PYRUKYND® also demonstrated a statistically significant reduction in additional measures of transfusion reduction response compared to placebo as assessed by the three key secondary endpoints:

(i) ≥50% reduction in transfused RBC units in any consecutive 24-week period through week 48 compared with baseline, (ii) ≥33% reduction in transfused RBC units from week 13 through week 48 compared with baseline, and (iii) ≥50% reduction in transfused RBC units from week 13 through week 48 compared with baseline.

In addition, a higher proportion of patients in the PYRUKYND® arm (9.9%) compared to the placebo arm (1.1%) achieved the secondary endpoint of transfusion independence (transfusion-free for ≥8 consecutive weeks through week 48).

During the 48-week double-blind period, 5.8% of the patients in the PYRUKYND® arm experienced an AE leading to discontinuation, compared to 1.2% of patients in the placebo arm.

As mentioned above, we aim to submit an sNDA for PYRUKYND® in thalassemia to the FDA by the end of 2024.

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

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

46.2% of patients (n=12) in the 50 mg twice daily mitapivat arm and 50.0% of patients (n=13) in the 100 mg twice daily mitapivat arm achieved a hemoglobin response, compared to 3.7% of

patients (n=1) in the placebo arm (2-sided p=0.0003 and 0.0001, respectively).

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

In December 2023, we announced the following additional results of the phase 2 portion of the trial:

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The safety profile for mitapivat observed in the phase 2 portion of the trial was generally consistent with previously reported data in other studies of SCD and other hemolytic anemias.

The most common treatment-emergent AEs in the 50 mg BID, 100 mg BID, and placebo arms, respectively, were:

The most common

treatment-emergent adverse events, or TEAEs, in the 50 mg BID, 100 mg BID, and placebo arms, respectively, were:

headache (n=6, 6, 7), arthralgia (n=3, 5, 9), dysmenorrhea (n=0, 3, 0), pain (n=3, 3, 2), pain in extremity (n=1, 3, 6), back pain (n=4, 2, 3), nausea (n=1, 2, 4), fatigue (n=4, 1, 5), and influenza-like illness (n=1, 1, 3).

There were no serious treatment-emergent adverse events, or TEAEs, attributed to mitapivat and there were no AEs leading to drug reduction, discontinuation, interruption or death in either the mitapivat or the placebo arms.

There were no serious TEAEs attributed to mitapivat and there were no AEs leading to drug reduction, discontinuation, interruption or death in either the mitapivat or the placebo arms.

Of the 79 patients enrolled in the study, 73 continued into the Phase 2 open-label extension period.

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

The primary endpoint of ACTIVATE-kids is percentage of patients with hemoglobin response, defined as ≥1.5 g/dL increase in hemoglobin concentration from baseline that is sustained at two or more scheduled assessments at weeks 12, 16, and 20 during the double-blind period.

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

ACTIVATE-kidsT has completed enrollment and we expect to announce topline data for this trial by mid-2024.

ACTIVATE-kids is currently enrolling patients, we expect to complete enrollment for this trial by mid-2024, and we anticipate announcing topline data for this trial in 2025.

We announced topline data for ACTIVATE-kidsT in August 2024.

Using Bayesian methodology, the prespecified statistical criterion for the primary endpoint in ACTIVATE-kidsT was not met using low or moderate borrowing of data from the ACTIVATE-T study in adults.

In the study, 28.1% of patients in the mitapivat arm achieved the primary endpoint of transfusion reduction response, compared to 11.8% of patients in the placebo arm.

Transfusion-free response and normal hemoglobin response were secondary endpoints in this study and only observed in patients in the mitapivat arm.

In the 32-week double-blind treatment period, mitapivat was generally safe and well-tolerated, with safety results consistent with the safety profile for mitapivat previously observed in adults with PK deficiency who are regularly transfused.

We plan to provide a more detailed analysis of the data from this trial at an upcoming medical meeting.

ACTIVATE-kids has completed enrollment and we anticipate announcing topline data for this trial in 2025.

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

• An extension study evaluating the long-term safety, tolerability and efficacy of treatment with PYRUKYND® in patients from DRIVE PK, our completed global phase 2, first-in-patient, open-label safety and efficacy clinical trial of PYRUKYND® in adult, not regularly transfused patients with PK deficiency.

• An extension study evaluating the safety, tolerability and efficacy of treatment with PYRUKYND® in patients from our completed phase 2, open-label safety and efficacy clinical trial of PYRUKYND® in adults with non-transfusion-dependent alpha- and beta-thalassemia.

• In collaboration with the Company, the National Institutes of Health, or NIH, is evaluating PYRUKYND® in a phase 1 trial in patients with SCD pursuant to a cooperative research and development agreement.

The core trial period has completed, and the long-term extension study is ongoing.

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

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

The trial has completed enrollment and

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

AG-946 (tebapivat):

Novel PK Activator

We are developing AG-946, a novel PK activator, for the potential treatment of LR MDS and hemolytic anemias.

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

We are developing AG-946 (tebapivat), a novel PK activator, for the potential treatment of LR MDS and hemolytic anemias.

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

We have presented data from the healthy volunteer cohorts, and we have initiated the SCD patient cohort of this phase 1 trial.

We initiated a phase 2a clinical trial of AG-946 in adults with LR MDS in the third quarter of 2022, and the trial has completed enrollment with 22 patients, including 12 patients classified as non-transfused and 10 patients classified as low transfusion burden.

Patients received 5 mg of AG-946 once daily for up to 16 weeks.

We initiated a phase 2a clinical trial of AG-946 (tebapivat) in adults with LR MDS in the third quarter of 2022, and the trial has completed enrollment with 22 patients, including 12 patients classified as non-transfused and 10 patients classified as low transfusion burden.

Patients received 5 mg of AG-946 (tebapivat) once daily for up to 16 weeks.

The two primary endpoints of the trial were transfusion independence (for patients classified as low transfusion burden), defined as transfusion-free for ≥ eight consecutive weeks during the 16-week treatment period, and hemoglobin response, defined as a ≥ 1.5 g/dL increase from baseline in the average hemoglobin concentration measured from week 8 through week 16.

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We observed that four of the 10 patients with low transfusion burden achieved the transfusion independence endpoint, and one of the 22 patients achieved the hemoglobin response endpoint in the 16-week treatment period.

The safety profile observed was consistent with data reported in the healthy volunteer study of AG-946.

The safety profile observed was consistent with data reported in the healthy volunteer study of AG-946 (tebapivat).

19 patients elected to enroll in the extension period for up to 156 weeks.

We intend to complete a full evaluation of the phase 2a trial results and assess the impact on the phase 2b portion of the protocol in 2024.

Based on the data generated in the Phase 2a study, we plan to increase the doses evaluated in the upcoming Phase 2b study, which we expect to initiate in mid-2024.

We intend to complete a full evaluation of the phase 2a trial results and assess the impact of those results on the phase 2b portion of the protocol in 2024.

Based on the data generated in the Phase 2a trial, we plan to increase the dosage levels evaluated in the upcoming Phase 2b trial, which we expect to initiate in mid-2024.

Other Programs

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We initiated a phase 1 trial of AG-181 in healthy volunteers in the first quarter of 2024.

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

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

Selling, General and Administrative Expenses

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

As of March 31, 2024, there have been no material changes to our existing critical accounting estimates discussed in Part II, Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2023.

As of June 30, 2024, there have been no material changes to our existing critical accounting estimates discussed in Part II, Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2023.

Results of Operations

Comparison of the three months ended March 31, 2024 and 2023

Three Months Ended March 31,

Comparison of the three and six months ended June 30, 2024 and 2023

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

(In thousands) 2024 2023 2024 2023

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Total revenue $ 8,615 $ 6,712 $ 16,804 $ 12,321

Total Revenue - Three Months Ended March 31, 2024 vs.

Three Months Ended March 31, 2023 – The increase in total revenue of $2.6 million for the three months ended March 31, 2024 compared to the three months ended March 31, 2023 was due to increased product revenue associated with PYRUKYND®.

Total Revenue - Three Months Ended June 30, 2024 vs.

Three Months Ended June 30, 2023 – The increase in total revenue of $1.9 million for the three months ended June 30, 2024 compared to the three months ended June 30, 2023 was due to increased product revenue associated with PYRUKYND®.

Total Revenue - Six Months Ended June 30, 2024 vs.

Six Months Ended June 30, 2023 – The increase in total revenue of $4.5 million for the six months ended June 30, 2024 compared to the six months ended June 30, 2023 was due to increased product revenue associated with PYRUKYND®.

Total Operating Expenses

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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Total operating expenses $ 114,432 $ 100,412 $ 214,693 $ 196,634

Total Operating Expenses - Three Months Ended March 31, 2024 vs.

Three Months Ended March 31, 2023 – The increase in total operating expenses of $4.0 million for the three months ended March 31, 2024 compared to the three months ended March 31, 2023 was primarily due to an increase in selling, general and administrative expenses of $2.6 million, driven by an increase in commercial-related activities as we prepare for the potential approval of PYRUKYND® in thalassemia, and an increase in research and development expenses of $1.3 million which is described below under Research and Development Expenses.

Total Operating Expenses - Three Months Ended June 30, 2024 vs.

Three Months Ended June 30, 2023 – The increase in total operating expenses of $14.0 million for the three months ended June 30, 2024 compared to the three months ended June 30, 2023 was primarily due to an increase in research and development expenses of $8.5 million which is described below under

Research and Development Expenses, and an increase in selling, general and administrative expenses of $5.1 million, driven by an increase in commercial-related activities as we prepare for the potential approval of PYRUKYND® in thalassemia.

Total Operating Expenses - Six Months Ended June 30, 2024 vs.

Six Months Ended June 30, 2023 – The increase in total operating expenses of $18.1 million for the six months ended June 30, 2024 compared to the six months ended June 30, 2023 was primarily due to an increase in research and development expenses of $9.8 million which is described below under Research and Development Expenses, and an increase in selling, general and administrative expenses of $7.8 million, driven by an increase in commercial-related activities as we prepare for the potential approval of PYRUKYND® in thalassemia.

Research and Development Expenses

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

Three Months Ended March 31,

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

(In thousands) 2024 2023 2024 2023

PK activator (PYRUKYND®) $ 27,968 $ 26,492 $ 54,004 $ 47,491

Novel PK activator (AG-946) 1,895 3,468

Novel PK activator (AG-946) (tebapivat) 4,488 4,129 6,383 7,597

Other research and platform programs 7,270 2,058 10,955 5,525

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Total research and development expense $ 77,401 $ 68,895 $ 146,021 $ 136,196

Total Research and Development Expenses - Three Months Ended March 31, 2024 vs.

Three Months Ended March 31, 2023 – The increase in total research and development expenses of $1.3 million for the three months ended March 31, 2024 compared to the three months ended March 31, 2023 was primarily due to a $3.7 million increase in our direct expenses, partially offset by a $2.4 million decrease in our indirect expenses.

The increase in direct expenses was primarily due to an increase in PYRUKYND® costs due to increased process development expenses, partially offset by a decrease in AG-946 costs due to lower clinical trial and process development expenses.

The decrease in our indirect expenses was primarily due to a decrease in compensation and related expenses, driven principally by workforce related expenses.

Total Research and Development Expenses - Three Months Ended June 30, 2024 vs.

Three Months Ended June 30, 2023 – The increase in total research and development expenses of $8.5 million for the three months ended June 30, 2024 compared to the three months ended June 30, 2023 was primarily due to a $7.0 million increase in our direct expenses.

The increase in direct expenses was primarily due to an increase in other research and platform programs as a result of costs associated with the in-licensed siRNA TMPRSS6 program for polycythemia vera.

Total Research and Development Expenses - Six Months Ended June 30, 2024 vs.

Six Months Ended June 30, 2023 – The increase in total research and development expenses of $9.8 million for the six months ended June 30, 2024 compared to the six months ended June 30, 2023 was primarily due to a $10.7 million increase in our direct expenses.

The increase in direct expenses was primarily due to an increase in PYRUKYND® costs due to increased process development expenses and increased costs associated with clinical trials for patients with SCD, partially offset by lower costs associated with the phase 3 clinical trials of PYRUKYND® in patients with thalassemia, ENERGIZE and ENERGIZE-T, and an increase in other research and platform programs as a result of costs associated with the in-licensed siRNA TMPRSS6 program for polycythemia vera.

Other Income and Expense

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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Other income, net 1,579 1,640 3,213 3,144

Other Income and Expense - Three Months Ended March 31, 2024 vs.

Three Months Ended March 31, 2023 – The increase in interest income, net was primarily attributable to an increase in interest rates.

Other income, net in the three months ended March 31, 2024 was relatively consistent with the three months ended March 31, 2023.

Three Months Ended March 31,

Other Income and Expense - Three Months Ended June 30, 2024 vs.

Three Months Ended June 30, 2023 – Interest income, net and other income, net in the three months ended June 30, 2024 were relatively consistent with the three months ended June 30, 2023.

Other Income and Expense - Six Months Ended June 30, 2024 vs.

Six Months Ended June 30, 2023 – The increase in interest income, net was primarily attributable to an increase in interest rates.

Other income, net in the six months ended June 30, 2024 was relatively consistent with the six months ended June 30, 2023.

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)

Net Loss - Three Months Ended March 31, 2024 vs.

Three Months Ended March 31, 2023 – The increase in net loss for the three months ended March 31, 2024 compared to the three months ended March 31, 2023 was primarily driven by the increase in selling, general and administrative expenses discussed above under Total Operating Expenses and the increase in research and development expenses discussed above under Research and Development Expenses, partially offset by the increase in revenue discussed above under Revenues and the increase in interest income, net discussed above under Other Income and Expense.

Net Loss - Three Months Ended June 30, 2024 vs.

Three Months Ended June 30, 2023 – The increase in net loss for the three months ended June 30, 2024 compared to the three months ended June 30, 2023 was primarily driven by the increase in research and development expenses discussed above under Research and Development Expenses and the increase in selling, general and administrative expenses discussed above under Total Operating Expenses, partially offset by the increase in revenue discussed above under Revenues.

Net Loss - Six Months Ended June 30, 2024 vs.

Six Months Ended June 30, 2023 – The increase in net loss for the six months ended June 30, 2024 compared to the six months ended June 30, 2023 was primarily driven by the increase in research and development expenses discussed above under Research and Development Expenses and the increase in selling, general and administrative expenses discussed above under Total Operating Expenses, partially offset by the increase in revenue discussed above under Revenues and the increase in interest income, net discussed above under Other Income and Expense.

Liquidity and Capital Resources

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net sales of TIBSOVO® prior to the sale of these contingent payments to Sagard, proceeds from the sale of contingent payments to Sagard, a potential milestone payment and royalties from Servier if a NDA for vorasidenib is approved by the FDA with a label that permits vorasidenib’s use as a single agent for the adjuvant treatment of patients with Grade 2 glioma that have an IDH1 or IDH2 mutation, the actual and potential future sales of PYRUKYND® and, potentially, collaborations, strategic alliances, licensing arrangements and other nondilutive strategic transactions.

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

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

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 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 IDH1 or IDH2 mutation (and, to the extent required by such approval, the vorasidenib companion diagnostic test is granted an FDA premarket approval), as well as a royalty of 5% of U.S.

net sales of TIBSOVO® from the close of the transaction through loss of exclusivity, and a royalty of 15% of U.S.

net sales of vorasidenib from the first commercial sale of vorasidenib through loss of exclusivity.

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

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

net sales of TIBSOVO® from the close of the transaction through loss of exclusivity, and the potential 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 a lso acquired our co-commercialization rights for Bristol Myers Squibb's IDHIFA® and the right to receive a $25.0 million potential milestone payment under our prior collaboration agreement with Celgene, and following the sale Servier is responsible for conducting certain clinical development activities within the IDHIFA® development progra m.

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

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

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

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.

Our cash, cash equivalents and marketable securities balance was $714.3 million at March 31, 2024.

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

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

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

The following table provides information regarding our cash flows for the three months ended March 31, 2024 and 2023:

Three Months Ended March 31,

We retained our rights to the Vorasidenib Milestone Payments and Vorasidenib Royalty Rights.

The FDA assigned the NDA a 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 with Royalty Pharma, pursuant to which we agreed to sell the Vorasidenib Royalty Rights for the Upfront Payment of $905.0 million.

The consummation of the sale and payment of the purchase price are subject to 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 Retained Earn-Out Rights.

We also retain our rights to the potential Vorasidenib Milestone Payment.

Our cash, cash equivalents and marketable securities balance was $645.3 million at June 30, 2024.

The potential Vorasidenib Milestone Payment, the Upfront Payment and the Retained Earn-Out Rights are our only committed potential external sources of funds.

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

uncertainties, which are outside our control.

Furthermore, we cannot predict what success, if any, Servier may have in the United States with respect to sales of vorasidenib, if approved, and consequently we cannot estimate the amount of payments, if any, we may receive on account of the Retained Earn-Out Rights.

The following table provides information regarding our cash flows for the six months ended June 30, 2024 and 2023:

Six Months Ended June 30,

(In thousands) 2024 2023

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Net cash used in operating activities.

Cash used in operating activities of $99.9 million during the three months ended March 31, 2024 was primarily due to operating expenses driven by research and development costs described above under Research and Development Expenses, partially offset by cash received from interest income of $10.5 million and product revenues of $8.6 million.

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

Cash used in operating activities of $172.5 million during the six months ended June 30, 2024 was primarily due to operating expenses driven by research and development costs described above under Research and Development Expenses, partially offset by cash received from interest income of $19.3 million and product revenues of $17.6 million.

Cash used in operating activities of $161.9 million during the six months ended June 30, 2023 was primarily due to operating expenses driven by research and development costs described above under Research and Development Expenses, partially offset by cash received from interest income of $15.6 million and product revenues of $13.6 million.

Net cash provided by investing activities .

Cash provided by investing activities of $124.6 million during the three months ended March 31, 2024 was primarily due to higher proceeds from maturities and sales of marketable securities than purchases of marketable securities.

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

Cash provided by investing activities of $161.8 million during the six months ended June 30, 2024 was primarily due to higher proceeds from maturities and sales of marketable securities than purchases of marketable securities.

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

Net cash provided by financing activities .

Cash provided by financing activities of $5.9 million during the three months ended March 31, 2024, was the result of net proceeds received from stock option exercises and purchases made pursuant to our 2013 Employee Stock Purchase Plan, or 2013 ESPP.

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

Cash provided by financing activities of $7.0 million during the six months ended June 30, 2024, was the result of net proceeds received from stock option exercises and purchases made pursuant to our 2013 Employee Stock Purchase Plan, or 2013 ESPP.

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

Funding requirements

We expect our expenses to increase as we continue the research, development and clinical trials of, seek marketing approvals for, and commercialize our product candidates in our portfolio, including as we continue to commercialize PYRUKYND®.

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

We expect that our existing cash, cash equivalents and marketable securities as of March 31, 2024, together with anticipated product revenue, interest income and the potential vorasidenib milestone will enable us to fund our operating expenses and capital expenditures through several value-creating milestones and at least into 2026.

This does not include cash inflows from potential royalties or royalty monetization from vorasidenib, commercializing mitapivat outside of the United States through one or more partnerships, or other potential strategic business or financial agreements.

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

We expect that our existing cash, cash equivalents and marketable securities as of June 30, 2024, together with anticipated product revenue, interest income and the potential Vorasidenib Milestone Payment and Upfront Payment, will provide the financial independence to prepare for potential PYRUKYND® launches in thalassemia and SCD, and to opportunistically expand our pipeline through both internally and externally discovered assets.

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

• the amount and timing of future revenue received from commercial sales of PYRUKYND® or any of our product candidates for which we may receive marketing approval;

• the amount of contingent consideration we ultimately receive from Servier;

• whether vorasidenib is approved by the FDA and the sale of the Vorasidenib Royalty Rights to Royalty Pharma is consummated;

• the amount of payments, if any, we may receive on account of the Retained Earn-Out Rights;

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

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

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

• the costs, timing and outcome of regulatory review of our product candidates, including with respect to our anticipated regulatory submissions for PYRUKYND® for the treatment of thalassemia;

• the costs of preparing, filing and prosecuting patent applications, maintaining and enforcing our intellectual property rights and defending intellectual property-related claims;

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• our ability to successfully execute on our strategic plans;

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

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

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

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

We may evaluate opportunities to sell all or a portion of our rights to the royalty from Servier of 15% of U.S.

net sales of vorasidenib from the first commercial sale of vorasidenib through loss of exclusivity.

We have no current arrangement, commitments or understandings for any specific monetization at this time and cannot provide any assurances that we will consummate any such transaction.

Until such time, if ever, as we can generate substantial product revenue, we expect to finance our cash needs primarily through cash on hand, the potential Vorasidenib Milestone Payment and Upfront Payment, potential Retained Earn-Out Rights, the actual and potential future sales of PYRUKYND® and, potentially, collaborations, strategic alliances, licensing arrangements and other nondilutive strategic transactions.

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

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

We do not have any committed external source of funds other than the potential Vorasidenib Milestone Payment, Upfront Payment and Retained Earn-Out Rights.

To the extent that we raise additional capital through the sale of equity or convertible debt securities, the ownership interest of our stockholders will be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect the rights of our common stockholders.

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Contractual Obligations

During the three months ended March 31, 2024, there were no material changes to our contractual obligations and commitments described under Management's Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report on Form 10-K for the year ended December 31, 2023.

During the six months ended June 30, 2024, there were no material changes to our contractual obligations and commitments described under Management's Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report on Form 10-K for the year ended December 31, 2023.

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

What changed 10-Q

Item 2. Management’s Discussion and Analysis