SEC Filing – Agios Pharmaceuticals, Inc.

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 10-Q

(Mark One)


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2023


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission file number: 001-36014

AGIOS PHARMACEUTICALS, INC.

(Exact Name of Registrant as Specified in Its Charter)


Delaware									26-0662915
(State or Other Jurisdiction of Incorporation or Organization)									(I.R.S. Employer Identification No.)

88 Sidney Street, Cambridge, Massachusetts									02139
(Address of Principal Executive Offices)									(Zip Code)

(617) 649-8600

(Registrant’s Telephone Number, Including Area Code)

(Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading symbol(s)	Name of each exchange on which registered
Common Stock, Par Value $0.001 per share	AGIO	Nasdaq Global Select Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

Number of shares of the registrant’s Common Stock, $0.001 par value, outstanding on October 27, 2023: 55,891,284

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AGIOS PHARMACEUTICALS, INC.

FORM 10-Q

FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2023

TABLE OF CONTENTS


		Page No.
PART I. FINANCIAL INFORMATION
Item 1.	Financial Statements (Unaudited)	1
	Condensed Consolidated Balance Sheets as of September 30, 2023 and December 31, 2022	1
	Condensed Consolidated Statements of Operations for the Three and Nine Months Ended September 30, 2023 and 2022	2
	Condensed Consolidated Statements of Comprehensive Loss for the Three and Nine Months Ended September 30, 2023 and 2022	3
	Condensed Consolidated Statements of Stockholders' Equity for the Three and Nine Months Ended September 30, 2023 and 2022	4
	Condensed Consolidated Statements of Cash Flows for the Nine Months Ended Septem ber 30, 2023 and 2022	6
	Notes to Condensed Consolidated Financial Statements	7
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	17
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	26
Item 4.	Controls and Procedures	26
PART II. OTHER INFORMATION		28
Item 1A.	Risk Factors	28
Item 5.	Other Information	58
Item 6.	Exhibits	59
	Signatures	60

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PART I. FINANCIAL INFORMATION

Item 1. Financial Statements (Unaudited)

AGIOS PHARMACEUTICALS, INC.

Condensed Consolidated Balance Sheets

(Unaudited)


(In thousands, except share and per share data)	September 30, 2023		December 31, 2022
Assets
Current assets:
Cash and cash equivalents	$	64,333	$	139,259
Marketable securities	583,155		643,860
Accounts receivable, net	1,176		2,206



Inventory	17,274		8,492
Prepaid expenses and other current assets	38,414		38,955

Total current assets	704,352		832,772
Marketable securities	224,902		313,874
Operating lease assets	57,162		65,129
Property and equipment, net	16,785		22,987
Other non-current assets	4,057		3,956

Total assets	$	1,007,258	$	1,238,718
Liabilities and stockholders’ equity
Current liabilities:

Accounts payable	$	13,271	$	18,616
Accrued expenses	30,490		30,350

Operating lease liabilities	14,664		13,663




Total current liabilities	58,425		62,629

Operating lease liabilities, net of current portion	60,834		71,996
Other non-current liabilities	1,156		3,279


Total liabilities	120,415		137,904
Stockholders’ equity:
Preferred stock, $0.001 par value; 25,000,000 shares authorized; no shares issued or outstanding at September 30, 2023 and December 31, 2022	—		—
Common stock, $0.001 par value; 125,000,000 shares authorized; 72,100,384 shares issued and 55,883,973 shares outstanding at September 30, 2023, and 71,256,118 shares issued and 55,039,707 shares outstanding at December 31, 2022	72		71
Additional paid-in capital	2,421,862		2,386,325
Accumulated other comprehensive loss	(5,896)		(12,535)
Treasury stock, at cost (16,216,411 shares at September 30, 2023 and December 31, 2022)	(802,486)		(802,486)
Accumulated deficit	(726,709)		(470,561)
Total stockholders’ equity	886,843		1,100,814
Total liabilities and stockholders’ equity	$	1,007,258	$	1,238,718

See accompanying Notes to Condensed Consolidated Financial Statements.

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AGIOS PHARMACEUTICALS, INC.

Condensed Consolidated Statements of Operations

(Unaudited)


	Three Months Ended September 30,				Nine Months Ended September 30,
(In thousands, except share and per share data)	2023		2022		2023		2022
Revenues:
Product revenue, net	$	7,399	$	3,516	$	19,720	$	7,430
Milestone revenue	—		—		—		2,500

Total revenue	7,399		3,516		19,720		9,930
Operating expenses:
Cost of sales	$	633	$	517	$	2,295	$	1,291
Research and development	81,841		64,966		218,037		209,612
Selling, general and administrative	25,822		29,123		84,598		88,902
Total operating expenses	108,296		94,606		304,930		299,805
Loss from operations	(100,897)		(91,090)		(285,210)		(289,875)
Royalty income from gain on sale of oncology business	—		4,443		—		9,851
Interest income, net	8,375		3,818		24,720		6,305
Other income, net	1,198		1,082		4,342		5,392




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



Net loss per share - basic and diluted	$	(1.64)	$	(1.49)	$	(4.61)	$	(4.90)

Weighted-average number of common shares used in computing net loss per share – basic and diluted	55,803,663		54,844,579		55,559,766		54,734,301

See accompanying Notes to Condensed Consolidated Financial Statements.

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AGIOS PHARMACEUTICALS, INC.

Condensed Consolidated Statements of Comprehensive Loss

(Unaudited)


	Three Months Ended September 30,				Nine Months Ended September 30,
(In thousands)	2023		2022		2023		2022
Net loss	$	(91,324)	$	(81,747)	$	(256,148)	$	(268,327)
Other comprehensive income (loss)
Unrealized gain (loss) on available-for-sale securities	2,974		(4,581)		6,639		(13,885)
Comprehensive loss	$	(88,350)	$	(86,328)	$	(249,509)	$	(282,212)

See accompanying Notes to Condensed Consolidated Financial Statements.

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AGIOS PHARMACEUTICALS, INC.

Condensed Consolidated Statements of Stockholders' Equity

(Unaudited)


	Common Stock			Additional Paid-In Capital		Accumulated Other Comprehensive (Loss) Income		Accumulated Deficit		Treasury Stock			Total Stockholders’ Equity
(in thousands, except share amounts)	Shares	Amount								Shares	Amount
Balance at December 31, 2022	71,256,118	$	71	$	2,386,325	$	(12,535)	$	(470,561)	(16,216,411)	$	(802,486)	$	1,100,814

Unrealized gain on available-for-sale securities	—	—		—		4,124		—		—	—		4,124
Common stock issued under stock incentive plan and ESPP	501,660	1		2,466		—		—		—	—		2,467
Stock-based compensation expense	—	—		10,139		—		—		—	—		10,139

Net loss	—	—		—		—		(81,018)		—	—		(81,018)

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
Unrealized gain on available-for-sale securities	—	—		—		2,974		—		—	—		2,974
Common stock issued under stock incentive plan and ESPP	149,198	—		1,881		—		—		—	—		1,881
Stock-based compensation expense	—	—		9,076		—		—		—	—		9,076
Net loss	—	—		—		—		(91,324)		—	—		(91,324)
Balance at September 30, 2023	72,100,384	72		2,421,862		(5,896)		(726,709)		(16,216,411)	(802,486)		886,843

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	Common Stock			Additional Paid-In Capital		Accumulated Other Comprehensive (Loss) Income		Accumulated Deficit		Treasury Stock			Total Stockholders’ Equity
(in thousands, except share amounts)	Shares	Amount								Shares	Amount
Balance at December 31, 2021	70,550,631	$	71	$	2,334,348	$	(1,198)	$	(238,760)	(16,216,411)	$	(802,486)	$	1,291,975

Unrealized loss on available-for-sale securities	—	—		—		(6,547)		—		—	—		(6,547)
Common stock issued under stock incentive plan and ESPP	442,646	—		1,289		—		—		—	—		1,289
Stock-based compensation expense	—	—		15,510		—		—		—	—		15,510
Net loss	—	—		—		—		(94,774)		—	—		(94,774)
Balance at March 31, 2022	70,993,277	$	71	$	2,351,147	$	(7,745)	$	(333,534)	(16,216,411)	$	(802,486)	$	1,207,453
Unrealized loss on available-for-sale securities	—	—		—		(2,757)		—		—	—		(2,757)
Common stock issued under stock incentive plan and ESPP	38,515	—		15		—		—		—			15
Stock-based compensation expense	—	—		11,165		—		—		—	—		11,165
Net loss	—	—		—		—		(91,806)		—	—		(91,806)


Balance at June 30, 2022	71,031,792	$	71	$	2,362,327	$	(10,502)	$	(425,340)	(16,216,411)	$	(802,486)	$	1,124,070
Unrealized loss on available-for-sale securities	—	—		—		(4,581)		—		—	—		(4,581)
Common stock issued under stock incentive plan and ESPP	78,650	—		1,272		—		—		—	—		1,272
Stock-based compensation expense	—	—		11,156		—		—		—	—		11,156
Net loss	—	—		—		—		(81,747)			—		(81,747)
Balance at September 30, 2022	71,110,442	$	71	$	2,374,755	$	(15,083)	$	(507,087)	(16,216,411)	$	(802,486)	$	1,050,170

See accompanying Notes to Condensed Consolidated Financial Statements.

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AGIOS PHARMACEUTICALS, INC.

Condensed Consolidated Statements of Cash Flows
(Unaudited)


	Nine Months Ended September 30,
(In thousands)	2023		2022
Operating activities
Net loss	$	(256,148)	$	(268,327)


Adjustments to reconcile net loss from operations to net cash used in operating activities:
Depreciation and amortization	5,220		6,750
Stock-based compensation expense	30,952		37,831
Net (accretion of discount) amortization of premium on marketable securities	(4,658)		721
Loss on disposal of property and equipment	278		29
Non-cash operating lease expense	7,967		7,432
Expense associated with license agreement	17,500		—
Realized gain on investments	(28)		—



Changes in operating assets and liabilities:
Accounts receivable, net	1,030		(1,818)



Inventory	(8,782)		(5,176)

Other receivables	—		604
Prepaid expenses and other current and non-current assets	440		(7,655)
Accounts payable	(5,201)		(4,628)
Accrued expenses and other current liabilities	140		(2,211)


Operating lease liabilities	(10,161)		(7,646)

Other non-current liabilities	(2,123)		779


Net cash used in operating activities	(223,574)		(243,315)
Investing activities
Purchases of marketable securities	(327,490)		(782,218)
Proceeds from maturities and sales of marketable securities	488,492		947,296
Payments associated with license agreement	(17,500)		—
Purchases of property and equipment	(765)		(4,768)
Proceeds from sale of equipment	1,325		—


Net cash provided by investing activities	144,062		160,310
Financing activities
Payments on financing lease obligations	—		(248)


Net proceeds from stock option exercises and employee stock purchase plan	4,586		2,576


Net cash provided by financing activities	4,586		2,328
Net change in cash and cash equivalents	(74,926)		(80,677)
Cash and cash equivalents at beginning of the period	139,259		203,126
Cash and cash equivalents at end of the period	$	64,333	$	122,449


Supplemental disclosure of non-cash investing and financing transactions
Additions to property and equipment in accounts payable and accrued expenses	$	14	$	21




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

See accompanying Notes to Condensed Consolidated Financial Statements.

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AGIOS PHARMACEUTICALS, INC.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

1. Overview and Basis of Presentation

References to Agios

Throughout this Quarterly Report on Form 10-Q, “we,” “us,” and “our,” and similar expressions, except where the context requires otherwise, refer to Agios Pharmaceuticals, Inc. and its consolidated subsidiaries, and “our Board of Directors” refers to the board of directors of Agios Pharmaceuticals, Inc.

Overview

We are a biopharmaceutical company committed to transforming patients’ lives through leadership in the field of cellular metabolism, with the goal of creating differentiated medicines for rare diseases. With a history of focused study on cellular metabolism, we have a deep and mature understanding of this biology, which is involved in the healthy functioning of nearly every system in the body. Building on this expertise, these learnings can be rapidly applied to our clinical trials with the goal of developing medicines that can have a significant impact for patients. We accelerate the impact of our portfolio by cultivating connections with patient communities, healthcare professionals, partners and colleagues to discover, develop and deliver potential therapies for rare diseases. We are located in Cambridge, Massachusetts.

The lead product candidate in our portfolio, PYRUKYND® (mitapivat), is an activator of both wild-type and mutant pyruvate kinase, or PK, enzymes for the potential treatment of hemolytic anemias. In February 2022, the U.S. Food and Drug Administration, or FDA, approved PYRUKYND® for the treatment of hemolytic anemia in adults with PK deficiency in the United States. In November 2022, we received marketing authorization from the European Commission for PYRUKYND® for the treatment of PK deficiency in adult patients in the European Union, or EU. In December 2022, we received marketing authorization in Great Britain for PYRUKYND® for the treatment of PK deficiency in adult patients under the European Commission Decision Reliance Procedure. In addition, we are currently evaluating PYRUKYND® in clinical trials for the treatment of thalassemia, sickle cell disease, or SCD, and in pediatric patients with PK deficiency. We are also developing AG-946, a novel PK activator, for the potential treatment of lower-risk myelodysplastic syndrome, or LR MDS, and hemolytic anemias.

In addition to the aforementioned development programs, we continue to invest in our late-stage research program focused on advancing a phenylalanine hydroxylase, or PAH, stabilizer for the treatment of phenylketonuria, or PKU. Also, in July 2023 we entered into a license agreement with Alnylam Pharmaceuticals, Inc., or Alnylam, for the development and commercialization of products containing or comprised of an siRNA development candidate discovered by Alnylam and targeting the transmembrane serine protease 6, or TMPRSS6, gene, and we intend to pursue development of a licensed product for the potential treatment of patients with polycythemia vera, or PV, a rare blood disorder. See below for more information on the license agreement with Alnylam.

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

Sale of our Oncology Business to Servier

On March 31, 2021, we completed the sale of our oncology business to Servier Pharmaceuticals, LLC, or Servier, which represented a discontinued operation. The transaction included the sale of our oncology business, including TIBSOVO®, our clinical-stage product candidates vorasidenib, AG-270 and AG-636, and our oncology research programs for a payment of approximately $1.8 billion in cash at the closing, subject to certain adjustments, and a payment of $200.0 million in cash, if, prior to January 1, 2027, vorasidenib is granted new drug application approval from the FDA with an approved label that permits vorasidenib’s use as a single agent for the adjuvant treatment of patients with Grade 2 glioma that have an isocitrate dehydrogenase 1 or 2 mutation (and, to the extent required by such approval, the vorasidenib companion diagnostic test is granted an FDA premarket approval), as well as a royalty of 5% of U.S. net sales of TIBSOVO® from the close of the transaction through loss of exclusivity, and a royalty of 15% of U.S. net sales of vorasidenib from the first commercial sale of vorasidenib through loss of exclusivity. Servier also acquired our co-commercialization rights for Bristol Myers Squibb’s

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

We recorded income from royalties of approximately $4.4 million and $9.9 million on U.S. net sales of TIBSOVO® by Servier in the royalty income from gain on sale of oncology business line item within the condensed consolidated statements of operations, for the three and nine months ended September 30, 2022, respectively.

Sale of Contingent Payments

The consideration for the sale of our oncology business to Servier included a royalty of 5% of U.S. net sales of TIBSOVO® from the close of the transaction through the loss of exclusivity, referred to as contingent payments. We recognized the contingent payments in the royalty income from gain on sale of oncology business line item in our consolidated statements of operations in the period when realizable. In October 2022, we sold our rights to future contingent payments to entities affiliated with Sagard Healthcare Partners, or Sagard, and recognized income of $127.9 million within the gain on sale of contingent payments line item in our consolidated statements of operations for the year ended December 31, 2022. We retain our rights to the potential milestone payment and royalties from Servier if vorasidenib is approved by the FDA.

Alnylam License Agreement

On July 28, 2023, Agios and Alnylam Pharmaceuticals, Inc., or Alnylam, entered into a license agreement under which Agios acquired the rights to develop and commercialize Alnylam’s novel preclinical siRNA targeting TMPRSS6, as a potential disease-modifying treatment for patients with PV. Because the acquired assets do not meet the definition of a business in accordance with ASC 805, Business Combinations, Agios will account for the agreement as an asset acquisition.

In accordance with the agreement, in the three months ended September 30, 2023, Agios made an up-front payment to Alnylam and recognized in-process research and development of $17.5 million which was recorded in research and development expense within our Consolidated Statements of Operations and classified as investing activities within our Consolidated Statements of Cash Flows. Agios will also pay Alnylam for certain expenses associated with the development of TMPRSS6 and these will be recorded in our Consolidated Statements of Operations as incurred. Additionally, Agios is responsible to pay up to $130.0 million in potential development and regulatory milestones, in addition to sales milestones as well as tiered royalties on annual net sales, if any, of licensed products, which may be subject to specified reductions and offsets.

Basis of Presentation

The condensed consolidated balance sheet as of September 30, 2023, the condensed consolidated statements of operations, comprehensive loss and stockholders' equity for the three and nine months ended September 30, 2023 and 2022, and the condensed consolidated statements of cash flows for the nine months ended September 30, 2023 and 2022 are unaudited. The unaudited condensed consolidated financial statements have been prepared on the same basis as the annual financial statements and, in the opinion of our management, reflect all adjustments, which include only normal recurring adjustments, necessary to fairly state our financial position as of September 30, 2023, our results of operations and stockholders' equity for the three and nine months ended September 30, 2023 and 2022, and cash flows for the nine months ended September 30, 2023 and 2022. The financial data and the other financial information disclosed in these notes to the condensed consolidated financial statements related to the three and nine-month periods are also unaudited. The results of operations for the three and nine months ended September 30, 2023 are not necessarily indicative of the results to be expected for the year ending December 31, 2023 or for any other future annual or interim period. The condensed consolidated balance sheet data as of December 31, 2022 was derived from our audited financial statements, but does not include all disclosures required by U.S. generally accepted accounting principles, or U.S. GAAP. The condensed consolidated interim financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2022 that was filed with the Securities and Exchange Commission, or SEC, on February 23, 2023.

Our condensed consolidated financial statements include our accounts and the accounts of our wholly owned subsidiaries. All intercompany transactions have been eliminated in consolidation. The condensed consolidated financial statements have been prepared in conformity with U.S. GAAP.

Use of Estimates

The preparation of our condensed consolidated financial statements requires us to make estimates, judgments and assumptions that may affect the reported amounts of assets, liabilities, equity, revenues and expenses and related disclosure of contingent assets and liabilities. On an ongoing basis we evaluate our estimates, judgments and methodologies. We base our estimates on historical experience and on various other assumptions that we believe are reasonable, the results of which form the basis for making 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

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highly uncertain. We have made estimates of the impact of the recent COVID-19 pandemic within our financial statements and there may be changes to those estimates in future periods. Actual results may differ from these estimates.

Liquidity

As of September 30, 2023, we had cash, cash equivalents and marketable securities of $872.4 million. Although we have incurred recurring losses and expect to continue to incur losses for the foreseeable future, we expect our cash, cash equivalents and marketable securities will be sufficient to fund current operations for at least the next twelve months from the issuance date of these financial statements.

2. Summary of Significant Accounting Policies

There have been no material changes to the significant accounting policies previously disclosed in our Annual Report on Form 10-K for the year ended December 31, 2022.

Recent Accounting Pronouncements

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

3. Fair Value Measurements

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). The hierarchy consists of three levels:

Level 1 – Unadjusted quoted prices in active markets for identical assets or liabilities.

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

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 September 30, 2023:


(In thousands)	Level 1		Level 2		Level 3		Total
Cash equivalents	$	5,187	$	—	$	—	$	5,187
Total cash equivalents	5,187		—		—		5,187

Marketable securities:


U.S. Treasuries	—		32,973		—		32,973
Government securities	—		363,542		—		363,542
Corporate debt securities	—		411,542		—		411,542
Total marketable securities	—		808,057		—		808,057
Total cash equivalents and marketable securities	$	5,187	$	808,057	$	—	$	813,244

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 September 30, 2023.

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

4. 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

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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. Credit-related impairment is recognized as an allowance on the condensed consolidated balance sheets with a corresponding adjustment to earnings, and noncredit-related impairment is recognized in other comprehensive income, net of taxes. Realized gains and losses are included in investment income on a specific-identification basis. There were no material realized gains or losses on marketable securities for the three and nine months ended September 30, 2023 or 2022.

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


(In thousands)	Amortized Cost		Unrealized Gains		Unrealized Losses		Fair Value
Current:

U.S. Treasuries	$	33,214	$	—	$	(241)	$	32,973
Government securities	293,501		—		(2,136)		291,365
Corporate debt securities	260,658		—		(1,841)		258,817
Total Current	587,373		—		(4,218)		583,155

Non-current:

U.S. Treasuries	—		—		—		—
Government securities	72,630		—		(453)		72,177
Corporate debt securities	153,950		—		(1,225)		152,725
Total Non-current	226,580		—		(1,678)		224,902
Total marketable securities	$	813,953	$	—	$	(5,896)	$	808,057

Marketable securities at December 31, 2022 consisted of the following:


(In thousands)	Amortized Cost		Unrealized Gains		Unrealized Losses		Fair Value
Current:

U.S. Treasuries	$	68,175	$	3	$	(811)	$	67,367
Government securities	220,901		8		(5,289)		215,620
Corporate debt securities	363,263		1		(2,391)		360,873
Total Current	652,339		12		(8,491)		643,860

Non-current:

U.S. Treasuries	17,418		4		(193)		17,229
Government securities	117,475		7		(1,659)		115,823
Corporate debt securities	183,037		76		(2,291)		180,822
Total Non-current	317,930		87		(4,143)		313,874
Total marketable securities	$	970,269	$	99	$	(12,634)	$	957,734

As of September 30, 2023 and December 31, 2022, we held both current and non-current investments. Investments classified as current have maturities of less than one year. 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 September 30, 2023 and December 31, 2022, we held 233 and 259 debt securities, respectively, that were in an unrealized loss position for less than one year. We did not record an allowance for credit losses as of September 30, 2023 and December 31, 2022 related to these securities. The aggregate fair value of debt securities in an unrealized loss position at September 30, 2023 and December 31, 2022 was $808.1 million and $868.2 million, respectively. There were no individual securities that were in a significant unrealized loss position as of September 30, 2023 and December 31, 2022. We regularly review the securities in an unrealized loss position and evaluate the current expected credit loss by considering factors such as historical experience, market data, issuer-specific factors, and current economic conditions. We do not consider these marketable securities to be impaired as of September 30, 2023 and December 31, 2022.

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5. Inventory

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


(In thousands)	September 30, 2023		December 31, 2022
Raw materials	$	470	$	—
Work-in-process	15,743		7,550
Finished goods	1,061		942
Total inventory	$	17,274	$	8,492

6. Leases

Our building leases are comprised of office and laboratory space under non-cancelable operating leases. These lease agreements have remaining lease terms of approximately four years and contain various clauses for renewal at our option. The renewal options were not included in the calculation of the operating lease assets and the operating lease liabilities as the renewal options are not reasonably certain of being exercised. The lease agreements do not contain residual value guarantees.

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


	Three Months Ended September 30,				Nine Months Ended September 30,
(In thousands)	2023		2022		2023		2022
Operating lease costs	$	3,807	$	3,807	$	11,420	$	11,420
Cash paid for amounts included in the measurement of operating lease liabilities	$	4,550	$	4,420	$	13,614	$	12,610

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

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

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



(In thousands)
Remaining 2023	$	3,037
2024	18,660
2025	19,507
2026	20,151
2027	20,755
2028	3,479
Thereafter	—
Undiscounted minimum rental commitments	$	85,589
Interest	(10,091)
Operating lease liabilities	$	75,498

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

In August 2021, we entered into a long-term sublease agreement for 13,000 square feet of the office space at 38 Sidney Street, Cambridge, Massachusetts, with the term of the lease running through December 2024. In April 2022, we entered into a long-term sublease agreement for 27,000 square feet of the office space at 64 Sidney Street, Cambridge, Massachusetts, with the term of the lease running through April 2025. 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 $1.7 million and $1.0 million for the three months ended September 30, 2023 and 2022, respectively, and $4.5 million and $2.7 million for the nine months ended September 30, 2023 and 2022,

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


(In thousands)
Remaining 2023	$	1,247
2024	5,078
2025	1,310

Total	$	7,635

7. Accrued Expenses

Accrued expenses consisted of the following:


(In thousands)	September 30, 2023		December 31, 2022
Accrued compensation	$	14,022	$	18,105
Accrued research and development costs	12,528		8,425
Accrued professional fees	1,369		2,435
Accrued other	2,571		1,385
Total accrued expenses	$	30,490	$	30,350

8. Product Revenue

We sell PYRUKYND®, our wholly owned product, to a limited number of specialty distributors and specialty pharmacy providers, or collectively, the Customers. The Customers subsequently resell PYRUKYND® to pharmacies or dispense directly to patients. In addition to distribution agreements with Customers, we enter into arrangements with healthcare providers and payors that provide for government-mandated and/or privately-negotiated rebates, chargebacks and discounts with respect to the purchase of PYRUKYND®.

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

Product revenue, net, were as follows:


	Three Months Ended September 30,				Nine Months Ended September 30,
(In thousands)	2023		2022		2023		2022
Product revenue, net	$	7,399	$	3,516	$	19,720	$	7,430

Reserves for Variable Consideration

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

Contractual Adjustments

We generally provide Customers with discounts, including prompt pay discounts, and allowances that are explicitly stated in the contracts and are recorded as a reduction of revenue in the period the related product revenue is recognized. In addition, we receive sales order management, data and distribution services from certain Customers.

Chargebacks and discounts represent the estimated obligations resulting from contractual commitments to sell products to qualified healthcare providers at prices lower than the list prices charged to Customers who directly purchase the product from us. Customers charge us for the difference between what they pay for the product and the ultimate selling price to the qualified healthcare providers. These reserves are estimated using the expected value method, based upon a range of possible outcomes that are probability-weighted for the estimated channel mix and are established in the same period that the related revenue is recognized, resulting in a reduction of product revenue.

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Government Rebates

Government rebates include Medicare, TriCare, and Medicaid rebates, which we estimate using the expected value method, based upon a range of possible outcomes that are probability-weighted for the estimated payor mix. These reserves are recorded in the same period the related revenue is recognized, resulting in a reduction of product revenue. For Medicare, we also estimate the number of patients in the prescription drug coverage gap for whom we will owe an additional liability under the Medicare Part D program.

Returns / Replacement

We estimate the amount of product sales that may be returned by Customers or replaced by Agios and record this estimate as a reduction of revenue in the period the related product revenue is recognized. 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 nine months ended September 30, 2023:


(In thousands)	Contractual Adjustments		Government Rebates		Returns/ Replacement		Total
Balance at December 31, 2022	$	65	$	573	$	133	$	771
Current provisions relating to sales in the current year	919		1,631		2,147		4,697
Adjustments relating to prior years	—		(7)		—		(7)
Payments/returns relating to sales in the current year	(793)		(495)		(1,958)		(3,246)
Payments/returns relating to sales in the prior years	(49)		(306)		(48)		(403)
Balance at September 30, 2023	$	142	$	1,396	$	274	$	1,812

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


(In thousands)	September 30, 2023		December 31, 2022
Reduction of accounts receivable	$	137	$	60
Component of accrued expenses	1,675		711
Total revenue-related reserves	$	1,812	$	771

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


(In thousands)	December 31, 2022		Additions		Deductions		September 30, 2023
Contract assets(1)
Accounts receivable, net	$	2,206	$	24,411	$	(25,441)	$	1,176

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

9. Share-Based Payments

2023 Stock Incentive Plan and Inducement Grants

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

Following the adoption of the 2023 Plan, we ceased granting equity awards under the 2013 Stock Incentive Plan, or the 2013 Plan. Any outstanding equity awards that were previously granted under the 2013 Plan continue to be governed by their terms. Following adoption of the 2013 Plan, we ceased granting equity awards under the 2007 Stock Incentive Plan, or the 2007 Plan. There are no outstanding equity awards under the 2007 Plan.

In connection with the start of employment of our Chief Executive Officer and Chief Financial Officer in 2022, and our Chief Commercial Officer in 2023, our board of directors granted each of them equity awards in the form of stock options, RSUs and

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

Stock options

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


	Number of Stock Options	Weighted-Average Exercise Price
Outstanding at December 31, 2022	5,772,564	$	48.81
Granted	870,924	25.88
Exercised	(188,591)	11.52
Forfeited/Expired	(912,479)	55.49
Outstanding at September 30, 2023	5,542,418	$	45.37
Exercisable at September 30, 2023	3,485,110	$	54.14
Vested and expected to vest at September 30, 2023	5,542,418	$	45.37

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

Restricted stock units

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


	Number of Stock Units	Weighted-Average Grant Date Fair Value
Unvested shares at December 31, 2022	1,117,921	$	38.30
Granted	899,072	25.97
Vested	(450,586)	41.42
Forfeited	(210,420)	33.46
Unvested shares at September 30, 2023	1,355,987	$	29.84

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

Performance-based stock units

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


	Number of Stock Units	Weighted-Average Grant Date Fair Value
Unvested shares at December 31, 2022	430,243	$	35.87
Granted	125,897	25.23
Vested	(92,257)	30.18
Forfeited	(101,750)	46.39
Unvested shares at September 30, 2023	362,133	$	30.66

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

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

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Market-based stock units

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


	Number of Stock Units	Weighted-Average Grant Date Fair Value
Unvested shares at December 31, 2022	42,695	$	41.50
Granted	—	—


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

The fair value of MSUs are estimated using a Monte Carlo simulation model. Assumptions and estimates utilized in the model include the risk-free interest rate, dividend yield, expected stock volatility and the estimated period to achievement of the market condition. As of September 30, 2023, there was no remaining unrecognized compensation expense related to MSUs.

2013 Employee Stock Purchase Plan

In June 2013, our Board of Directors adopted, and in July 2013 our stockholders approved, the 2013 Employee Stock Purchase Plan, or the 2013 ESPP. We issued and sold 112,832 and 104,867 shares of common stock during the nine months ended September 30, 2023 and 2022, respectively, under the 2013 ESPP. The 2013 ESPP provides participating employees with the opportunity to purchase up to an aggregate of 2,363,636 shares of our common stock. As of September 30, 2023, we had 1,686,039 shares of common stock available for future issuance under the 2013 ESPP.

Stock-based compensation expense

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


	Three Months Ended September 30,				Nine Months Ended September 30,
(In thousands)	2023		2022		2023		2022
Stock options	$	4,171	$	5,864	$	13,065	$	17,720
Restricted stock units	4,735		5,115		14,436		16,512
Performance-based stock units	—		—		2,784		2,919
Employee stock purchase plan	170		177		667		680

Total stock-based compensation expense	$	9,076	$	11,156	$	30,952	$	37,831

Expenses related to stock options and stock-based awards were allocated as follows in the condensed consolidated statements of operations:


	Three Months Ended September 30,				Nine Months Ended September 30,
(In thousands)	2023		2022		2023		2022
Research and development expense	$	3,635	$	4,628	$	12,530	$	16,207
Selling, general and administrative expense	5,441		6,528		18,422		21,624
Total stock-based compensation expense	$	9,076	$	11,156	$	30,952	$	37,831

10. Loss per Share

Basic net loss per share is calculated by dividing net loss by the weighted-average shares outstanding during the period, without consideration for common stock equivalents. 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 September 30, 2023 are not considered to be common stock equivalents.

We utilize the control number concept in the computation of diluted earnings per share to determine whether potential common stock equivalents are dilutive. The control number used is net loss from continuing operations. The control number concept requires that the same number of potentially dilutive securities applied in computing diluted earnings per share from continuing operations be applied to all other categories of income or loss, regardless of their anti-dilutive effect on such categories. Since

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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 and Nine Months Ended September 30,
	2023	2022
Stock options	5,542,418	5,909,087
Restricted stock units	1,355,987	1,264,377

Employee stock purchase plan shares	11,383	10,503
Total common stock equivalents	6,909,788	7,183,967

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

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 September 30, 2023 and for the three and nine months ended September 30, 2023 and 2022, and related notes included in Part I, Item 1 of this Quarterly Report on Form 10-Q, as well as the audited consolidated financial statements and notes and Management’s Discussion and Analysis of Financial Condition and Results of Operations, included in our Annual Report on Form 10-K for the year ended December 31, 2022 filed with the SEC on February 23, 2023. This Management’s Discussion and Analysis of Financial Condition and Results of Operations contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on current expectations, estimates, forecasts and projections, and the beliefs and assumptions of our management, and include, without limitation, statements with respect to our expectations regarding our research, development and commercialization plans and prospects, results of operations, selling, general and administrative expenses, research and development expenses, and the sufficiency of our cash for future operations. Words such as “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “goal,” “intend,” “may,” “plan,” “potential,” “predict,” “project,” “should,” “strategy,” “target,” “vision” “will,” “would,” and similar expressions are intended to identify these forward-looking statements, although not all forward-looking statements contain these identifying words. Readers are cautioned that these forward-looking statements are predictions and are subject to risks, uncertainties and assumptions that are difficult to predict. Therefore, actual results may differ materially and adversely from those expressed in any forward-looking statements. Among the important factors that could cause actual results to differ materially from those indicated by our forward-looking statements are those discussed under the heading “Risk Factors” in Part II, Item 1A and elsewhere in this report, and in our Annual Report on Form 10-K for the year ended December 31, 2022. We undertake no obligation to revise the forward-looking statements contained herein to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events, except as required by law.

Overview

Sale of our Oncology Business to Servier

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dehydrogenase 1 or 2 mutation (and, to the extent required by such approval, the vorasidenib companion diagnostic test is granted an FDA premarket approval), as well as a royalty of 5% of U.S. net sales of TIBSOVO® from the close of the transaction through loss of exclusivity, and a royalty of 15% of U.S. net sales of vorasidenib from the first commercial sale of vorasidenib through loss of exclusivity. Servier also acquired our co-commercialization rights for Bristol Myers Squibb’s IDHIFA® and the right to receive a $25.0 million potential milestone payment under our prior collaboration agreement with Celgene Corporation, or Celgene, Servier is responsible for conducting certain clinical development activities within the IDHIFA® development program.

Sale of Contingent Payments

Alnylam License Agreement

Financial Operations Overview

Impact of COVID-19 on our Business

As of September 30, 2023, we have not experienced a significant financial or supply chain impact directly related to the recent COVID-19 pandemic, but have experienced some disruptions to clinical operations and certain clinical and research activities at our contract research organizations, or CROs. Although the public health emergency declaration related to COVID-19 ended on May 11, 2023, the extent of the effect of any future pandemics or public health emergencies on our operational and financial performance will depend in large part on future developments, which cannot be predicted and are out of our control.

General

Since inception, our operations have primarily focused on organizing and staffing our company, business planning, raising capital, assembling our core capabilities in cellular metabolism, identifying potential product candidates, undertaking preclinical studies, conducting clinical trials, establishing a commercial infrastructure, preparing for and executing on the commercial launch of PYRUKYND® and, prior to the sale of our oncology business to Servier on March 31, 2021, marketing TIBSOVO® and IDHIFA®. Through March 31, 2021, we financed our operations primarily through proceeds from the sale of our royalty rights, commercial sales of TIBSOVO®, funding received from our collaboration agreements, private placements of our preferred stock, our initial public offering of our common stock and concurrent private placement of common stock to an affiliate of Celgene, and our follow-on public offerings. 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 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.

Additionally, since inception, we have historically incurred operating losses. Our net loss for the nine months ended September 30, 2023 and 2022 were $256.1 million and $268.3 million, respectively. As of September 30, 2023, we had an accumulated deficit of $726.7 million. We expect to incur significant expenses and net losses until such time we are able to report profitable results. 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 activities for our lead programs: PYRUKYND®, and

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AG-946; continue to prioritize advancement of our PAH stabilizer; initiate 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; and hire additional commercial and development personnel.

Revenues

Our wholly owned product, PYRUKYND®, received approval from the FDA on February 17, 2022, for the treatment of hemolytic anemia in adults with PK deficiency in the United States. Upon FDA approval of PYRUKYND® in the United States, we began generating product revenue from sales of PYRUKYND®. We sell PYRUKYND® to a limited number of specialty distributors and specialty pharmacy providers, or collectively, the Customers. These Customers subsequently resell PYRUKYND® to pharmacies or dispense directly to patients. In addition to distribution agreements with Customers, we enter into arrangements with healthcare providers and payors that provide for government-mandated and/or privately-negotiated rebates, chargebacks and discounts with respect to the purchase of PYRUKYND®. For further discussion of our revenue recognition policy, see Note 8, Product Revenue, to the condensed consolidated financial statements in this Form 10-Q.

In the future, we expect to continue to generate revenue from a combination of product sales, royalties on product sales, cost reimbursements, milestone payments, and upfront payments to the extent we enter into future collaborations or licensing agreements.

Cost of Sales

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

Research and development expenses

Research and development activities are central to our business model. Product candidates in later stages of clinical development generally have higher development costs than those in earlier stages of clinical development, primarily due to the increased size and duration of later-stage clinical trials. We expect research and development costs related to our portfolio to increase significantly for the foreseeable future as our product candidate development programs progress. 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. We are unable to predict the amount of net cash inflows from PYRUKYND® or any of our product candidates. This is due to the numerous risks and uncertainties associated with developing medicines, including the uncertainty of:

•establishing an appropriate safety profile with an investigational new drug application, or IND, and/or NDA-enabling toxicology and clinical trials;

•the successful enrollment in, and completion of, clinical trials;

•the receipt of marketing approvals from applicable regulatory authorities;

•establishing compliant commercial manufacturing capabilities or making arrangements with third-party manufacturers;

•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; and

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

A change in the outcome of any of these variables with respect to the development of any of our product candidates would significantly change the costs and timing associated with the development of that product candidate.

Research and development expenses consist primarily of costs incurred for our research activities, including our drug discovery efforts, and the development of our product candidates, which include:

•employee-related expenses, including salaries, benefits and stock-based compensation expense;

•expenses incurred under agreements with third parties, including CROs, that conduct research and development and both preclinical and clinical activities on our behalf, and the cost of consultants;

•the cost of lab supplies and acquiring, developing and manufacturing preclinical and clinical study materials; and

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•facilities, depreciation, and other expenses, which include direct and allocated expenses for rent and the maintenance of facilities, insurance and other operating costs.

The following summarizes our most advanced programs:

PYRUKYND® (mitapivat): First-in-Class PK Activator

We are developing PYRUKYND® for the treatment of PK deficiency and other hemolytic anemias such as thalassemia and SCD. PYRUKYND® is an orally available small molecule and a potent activator of the wild-type and mutated PK enzymes.

In February 2022, the FDA approved PYRUKYND® for the treatment of hemolytic anemia in adults with PK deficiency in the United States. In November 2022, we received marketing authorization from the European Commission for PYRUKYND® for the treatment of PK deficiency in adult patients in the EU. In December 2022, we received marketing authorization in Great Britain for PYRUKYND® for the treatment of PK deficiency in adult patients under the European Commission Decision Reliance Procedure. In addition, we are currently evaluating PYRUKYND® in clinical trials for the treatment of thalassemia, SCD, and in pediatric patients with PK deficiency. We have worldwide development and commercial rights to PYRUKYND® and expect to fund the future development and commercialization costs related to this program. PYRUKYND® has been granted orphan drug designation for the treatment of PK deficiency by the FDA and the European Medicines Agency, or EMA. Additionally, PYRUKYND® has received orphan drug designation from the FDA for the treatment of thalassemia and SCD.

We have built our commercial infrastructure to support the commercial launch of PYRUKYND® in adult PK deficiency in the United States. In connection with our regulatory approvals in the EU and Great Britain, we are currently providing access to PYRUKYND® free of charge for eligible patients in those jurisdictions through a global managed access program. We may provide access to PYRUKYND® for adult patients with PK deficiency in other jurisdictions upon request through the global managed access program, on either a free of charge or for charge basis. Beyond the global managed access program, we continue to evaluate options for the commercialization of PYRUKYND® outside of the United States, including through exploring potential partnership opportunities.

We are evaluating PYRUKYND® in the following clinical trials:

•ENERGIZE, a phase 3, double-blind, randomized, placebo-controlled multicenter study evaluating the efficacy and safety of PYRUKYND® as a potential treatment for adults with non-transfusion-dependent α- or β-thalassemia, defined as ≤5 red blood cell, or RBC, units during the 24-week period before randomization and no RBC transfusions ≤8 weeks before providing informed consent or during the screening period. The primary endpoint of the trial is percentage of patients with hemoglobin response, defined as a ≥1.0 g/dL increase in average hemoglobin concentration from Week 12 through Week 24 compared with baseline. Secondary endpoints include markers of hemolysis and ineffective erythropoiesis, as well as patient-reported outcome measures. This trial has completed enrollment and we expect to announce topline data from this trial in the first half of 2024.

•ENERGIZE-T, a phase 3, double-blind, randomized, placebo-controlled multicenter study evaluating the efficacy and safety of PYRUKYND® as a potential treatment for adults with transfusion-dependent α- or β-thalassemia, defined as 6 to 20 RBC units transfused and ≤6-week transfusion-free period during the 24-week period before randomization. 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 expect to announce topline data from this trial in the second half of 2024.

•RISE UP, a phase 2/3 study evaluating the efficacy and safety of PYRUKYND® in SCD patients who are 16 years of age or older, have had between two and 10 sickle cell pain crises in the past 12 months, and have hemoglobin within the range of 5.5 to 10.5 g/dL during screening. 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). The safety profile for mitapivat observed in the phase 2 portion of the study was generally consistent with previously reported data in other studies of sickle cell disease and other hemolytic anemias, and there were no adverse events leading to discontinuation in either the mitapivat or the placebo arms. In October 2023, we enrolled the first patient in the phase 3 portion of this trial. The phase 3 portion includes a 52-week randomized, placebo-controlled period in which participants will be randomized in a 2:1 ratio to receive the recommended (100 mg twice daily) PYRUKYND® dose level or placebo. The primary endpoints are hemoglobin response, defined as ≥1 g/dL increase in average hemoglobin from baseline to Week 52, and annualized rate of sickle cell pain crises. Participants who complete either the phase 2 or phase 3 portion will have the option to move into a 216-week open-label extension period to continue to receive PYRUKYND®.

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

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

•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 α- and β-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, 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: 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 have presented data from the healthy volunteer cohorts, and we have initiated the SCD patient cohort of this trial. We initiated a phase 2a study of AG-946 in adults with LR MDS in the third quarter of 2022, and the trial has completed enrollment. We expect to report the topline results of this trial by the end of 2023.

Other Programs

In addition to the aforementioned development programs, we are advancing our late-stage research program focused on a PAH stabilizer for the treatment of PKU, for which we expect to file an IND by the end of 2023. 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 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.

Selling, general and administrative expenses

Selling, general and administrative expenses consist primarily of salaries and other related costs, including stock-based compensation, for personnel in executive, finance, business development, commercial, legal, information technology and human resources functions. Other significant costs include facility-related costs not otherwise included in research and development expenses, legal fees relating to patent and corporate matters, and fees for accounting and consulting services.

We anticipate that our selling, general and administrative expenses will increase in the future to support continued research and development activities and ongoing and future commercialization activities related to our portfolio, including the ongoing commercialization of PYRUKYND® and any of our other product candidates. These increases will likely include increased costs related to the hiring of additional personnel and fees to outside consultants, lawyers and accountants, among other expenses.

Critical Accounting Estimates

Our critical accounting estimates are those which require the most significant judgments and estimates in the preparation of our condensed consolidated financial statements. 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 September 30, 2023, there have been no material changes to our existing critical accounting estimates discussed in Part II, Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2022.

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Results of Operations

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

Revenues


	Three Months Ended September 30,				Nine Months Ended September 30,
(In thousands)	2023		2022		2023		2022
Revenues:
Product revenue, net	$	7,399	$	3,516	$	19,720	$	7,430
Milestone revenue	—		—		—		2,500


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

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

Total Revenue - Nine Months Ended September 30, 2023 vs. Nine Months Ended September 30, 2022 – The increase in total revenue of $9.8 million for the nine months ended September 30, 2023 compared to the nine months ended September 30, 2022 was due to increased product revenue associated with PYRUKYND®, which was approved by the FDA in February 2022, partially offset by revenue recognized in the nine months ended September 30, 2022 associated with the licensing of intellectual property for our Friedreich's Ataxia preclinical program.

Total Operating Expenses


	Three Months Ended September 30,				Nine Months Ended September 30,
(In thousands)	2023		2022		2023		2022
Operating expenses:
Cost of sales	$	633	$	517	$	2,295	$	1,291
Research and development	81,841		64,966		218,037		209,612
Selling, general and administrative	25,822		29,123		84,598		88,902
Total operating expenses	$	108,296	$	94,606	$	304,930	$	299,805

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

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

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Research and Development Expenses

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


	Three Months Ended September 30,				Nine Months Ended September 30,
(In thousands)	2023		2022		2023		2022



PK activator (PYRUKYND®)	$	24,000	$	20,906	$	71,491	$	57,036


Novel PK activator (AG-946)	4,220		2,943		11,817		11,517
In-process research and development	17,500		—		17,500		—
Other research and platform programs	1,250		4,945		6,775		20,669
Total direct research and development expenses	46,970		28,794		107,583		89,222
Compensation and related expenses	25,529		25,959		81,483		86,481
Facilities and IT related expenses & other	9,342		10,213		28,971		32,392
Other expenses - transition services	—		—		—		1,517
Total indirect research and development expenses	34,871		36,172		110,454		120,390
Total research and development expense	$	81,841	$	64,966	$	218,037	$	209,612

Total Research and Development Expenses - Three Months Ended September 30, 2023 vs. Three Months Ended September 30, 2022 – The increase in total research and development expenses of $16.9 million for the three months ended September 30, 2023 compared to the three months ended September 30, 2022 was primarily due to an $18.2 million increase in our direct expenses. The increase in direct expenses was primarily due to in-process research and development as a result of the $17.5 million up-front payment associated with the agreement with Alnylam discussed above under Overview and an increase in PYRUKYND® costs due to increased process development and medical affairs expenses. The increase in direct expenses was partially offset by a decrease in expenses related to our other research and platform programs as a result of our decision to evolve our approach to exploratory research and drug discovery to focus on our existing late-lead optimization programs.

Total Research and Development Expenses - Nine Months Ended September 30, 2023 vs. Nine Months Ended September 30, 2022 – The increase in total research and development expenses of $8.4 million for the nine months ended September 30, 2023 compared to the nine months ended September 30, 2022 was due to an $18.4 million increase in our direct expenses, partially offset by a $9.9 million decrease in our indirect expenses. The increase in direct expenses was primarily due to in-process research and development as a result of the $17.5 million up-front payment associated with the agreement with Alnylam discussed above under Overview and an increase in PYRUKYND® costs due to increased costs for the phase 3 trials of PYRUKYND® in patients with thalassemia, ENERGIZE and ENERGIZE-T, and increased process development and medical affairs expenses, partially offset by a decrease in expenses related to our other research and platform programs as a result of our decision to evolve our approach to exploratory research and drug discovery to focus on our existing late-lead optimization programs. The decrease in indirect expenses was due to a $5.0 million decrease in compensation and related expenses as a result of lower stock-based compensation expense and reduced headcount related to the evolution of our research organization, a $3.4 million decrease in facilities and IT related expenses & other due to a reduction in facility expenses associated with the evolution of our research organization, and the $1.5 million of reimbursable transition related services we provided to Servier in the nine months ended September 30, 2022 related to the sale of the oncology business for discovery, clinical development, technical operations, and related activities, which were completed during the three months ended March 31, 2022.

Other Income and Expense


	Three Months Ended September 30,				Nine Months Ended September 30,
(In thousands)	2023		2022		2023		2022
Royalty income from gain on sale of oncology business	$	—	$	4,443	$	—	$	9,851
Interest income, net	8,375		3,818		24,720		6,305
Other income, net	1,198		1,082		4,342		5,392

Other Income and Expense - Three Months Ended September 30, 2023 vs. Three Months Ended September 30, 2022 – The increase in interest income, net was primarily attributable to an increase in interest rates. The decrease in royalty income from gain on sale of oncology business was due to the sale to Sagard in the fourth quarter of 2022 of our rights to future contingent payments associated with royalties on U.S. net sales of TIBSOVO®. Other income, net in the three months ended September 30, 2023 was relatively consistent with the three months ended September 30, 2022.

Other Income and Expense - Nine Months Ended September 30, 2023 vs. Nine Months Ended September 30, 2022 – The increase in interest income, net was primarily attributable to an increase in interest rates. The decrease in royalty income from

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gain on sale of oncology business was due to the sale to Sagard in the fourth quarter of 2022 of our rights to future contingent payments associated with royalties on U.S. net sales of TIBSOVO®. The decrease in other income, net primarily relates to approximately $2.6 million of reimbursable transition related services and fees for the sale of the oncology business for the nine months ended September 30, 2022, partially offset by $1.8 million of additional sublease income recognized in the nine months ended September 30, 2023 compared to the nine months ended September 30, 2022.

Net Loss


	Three Months Ended September 30,				Nine Months Ended September 30,
(In thousands)	2023		2022		2023		2022


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

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

Net Loss - Nine Months Ended September 30, 2023 vs. Nine Months Ended September 30, 2022 – The decrease in net loss for the nine months ended September 30, 2023 compared to the nine months ended September 30, 2022 was primarily driven by the increase in interest income, net discussed above under Other Income and Expense and the increase in revenue discussed above under Revenues, partially offset by the increase in research and development expenses discussed above under Research and Development Expenses, which includes the $17.5 million up-front payment associated with the agreement with Alnylam discussed above under Overview, and the decrease in royalty income from gain on sale of oncology business discussed above under Other Income and Expense.

Liquidity and Capital Resources

Sources of liquidity

Since our inception, and through March 31, 2021, we financed our operations primarily through proceeds from the sale of our royalty rights, commercial sales of TIBSOVO®, funding received from our collaboration agreements, private placements of our preferred stock, our initial public offering of our common stock and concurrent private placement of common stock to an affiliate of Celgene, and our follow-on public offerings. 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 vorasidenib is approved by the FDA, the actual and potential future sales of PYRUKYND® and, potentially, collaborations, strategic alliances, licensing arrangements and other nondilutive strategic transactions. In addition, we may pursue opportunistic debt offerings, and equity or equity-linked offerings.

On March 31, 2021, we completed the sale of our oncology business to Servier. 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 isocitrate dehydrogenase 1 or 2 mutation (and, to the extent required by such approval, the vorasidenib companion diagnostic test is granted an FDA premarket approval), as well as a royalty of 5% of U.S. net sales of TIBSOVO® from the close of the transaction through loss of exclusivity, and a royalty of 15% of U.S. net sales of vorasidenib from the first commercial sale of vorasidenib through loss of exclusivity. 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 program. As discussed above in Note 1, Overview and Basis of Presentation, in October 2022, we sold our rights to the royalty on U.S. net sales of TIBSOVO® to Sagard for $131.8 million. We retained our rights to the potential milestone payment and royalties from Servier if vorasidenib is approved by the FDA.

Our cash, cash equivalents and marketable securities balance was $872.4 million at September 30, 2023. The $200.0 million milestone payment and royalty payments discussed above are our only committed potential external source of funds. Whether the regulatory approval milestone for vorasidenib will be achieved is subject to various risks and uncertainties, which are

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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.

Cash flows

The following table provides information regarding our cash flows for the nine months ended September 30, 2023 and 2022:


	Nine Months Ended September 30,
(In thousands)	2023		2022
Net cash used in operating activities	$	(223,574)	$	(243,315)
Net cash provided by investing activities	144,062		160,310
Net cash provided by financing activities	4,586		2,328
Net change in cash and cash equivalents	$	(74,926)	$	(80,677)

Net cash used in operating activities. Cash used in operating activities of $223.6 million during the nine months ended September 30, 2023 was primarily due to operating expenses driven by research and development costs described above under Research and Development Expenses, partially offset by cash received from interest income of $23.6 million and product revenues of $22.9 million.

Cash used in operating activities of $243.3 million during the nine months ended September 30, 2022 was primarily due to operating expenses driven by research and development costs described above under Research and Development Expenses, partially offset by cash received from revenues of $8.8 million and royalties on U.S. net sales of TIBSOVO® of $8.6 million.

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

Cash provided by investing activities of $160.3 million during the nine months ended September 30, 2022 was primarily due to higher proceeds from maturities and sales of marketable securities than purchases of marketable securities.

Net cash provided by financing activities. Cash provided by financing activities of $4.6 million during the nine months ended September 30, 2023, was the result of net proceeds received from stock option exercises and purchases made pursuant to our 2013 Employee Stock Purchase Plan, or 2013 ESPP.

Cash provided by financing activities of $2.3 million during the nine months ended September 30, 2022 was primarily the result of $2.6 million of proceeds received from stock option exercises and purchases made pursuant to our 2013 ESPP.

Funding requirements

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 September 30, 2023, together with anticipated product revenue, interest income and the potential vorasidenib milestone will enable us to fund our operating expenses and capital expenditures through several value-creating milestones and at least into 2026. This guidance does not include cash inflows from potential royalties from vorasidenib, commercializing mitapivat outside of the U.S. through one or more partnerships, or other potential strategic business or financial agreements. 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;

•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;

•the scope, progress, results and costs of preclinical development, laboratory testing and clinical trials for our product candidates;

•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;

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

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

•the costs and timing of future commercialization activities, including product manufacturing, sales, marketing and distribution, for any of our product candidates for which we may receive marketing approval;

•our ability to establish and maintain collaborations on favorable terms, if at all;

•our ability to successfully execute on our strategic plans;

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

•operational delays, disruptions and/or increased costs associated with 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 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. 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. Debt financing, if available, may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends.

If we raise funds through collaborations, strategic alliances or licensing arrangements with third parties, we may have to relinquish valuable rights to our technologies, future revenue streams, research programs or product candidates, or grant licenses on terms that may not be favorable to us. If we are unable to raise additional funds through equity or debt financings when needed or on attractive terms, we may be required to delay, limit, reduce or terminate our product development or future commercialization efforts, or grant rights to develop and market product candidates that we would otherwise prefer to develop and market ourselves.

Contractual Obligations

In July 2023, Agios entered into a license agreement with Alnylam as discussed above under Overview. Under the license agreement, Agios may be required to pay up to $130.0 million in potential development and regulatory milestones, in addition to sales milestones as well as tiered royalties on annual net sales, if any, of licensed products, which may be subject to specified reductions and offsets.

Item 3. Quantitative and Qualitative Disclosures about Market Risk

We are exposed to market risk related to changes in interest rates. As of September 30, 2023 and December 31, 2022, we had cash, cash equivalents and marketable securities of $872.4 million and $1.1 billion, respectively. Our marketable securities consist primarily of investments in U.S. Treasuries, government securities and corporate debt securities. Our primary exposure to market risk is interest rate sensitivity, which is affected by changes in the general level of U.S. interest rates, particularly because our investments are primarily in short-term marketable securities. Our marketable securities are subject to interest rate risk and could fall in value if market interest rates increase. Due to the short-term duration of our investment portfolio and the low risk profile of our investments, we do not believe an immediate and uniform 100 basis point change in interest rates would have a material effect on the fair market value of our investment portfolio.

We are also exposed to market risk related to changes in foreign currency exchange rates. We have contracts with CROs located in Asia and Europe that are denominated in foreign currencies, and we are subject to fluctuations in foreign currency rates in connection with these agreements. We do not currently hedge our foreign currency exchange rate risk. As of September 30, 2023 and December 31, 2022, liabilities denominated in foreign currencies were immaterial.

Item 4. Controls and Procedures

Disclosure Controls and Procedures

Our management, with the participation of our principal executive officer and principal financial officer, evaluated, as of the end of the period covered by this Quarterly Report on Form 10-Q, the effectiveness of our disclosure controls and procedures. Based on that evaluation of our disclosure controls and procedures as of September 30, 2023, our principal executive officer and principal financial officer concluded that our disclosure controls and procedures as of such date are effective at the

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reasonable assurance level. The term “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, or the Exchange Act, means controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports it files or submits under the Exchange Act is accumulated and communicated to its management, including its principal executive officer and principal financial officer, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure. Our management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives, and our management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures.

Changes in Internal Control Over Financial Reporting

There were no changes in our internal control over financial reporting, as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act, that occurred during the fiscal quarter ended September 30, 2023 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II. OTHER INFORMATION

Item 1A. Risk Factors

The following risk factors and other information included in this Quarterly Report on Form 10-Q should be carefully considered. The risks and uncertainties described below are not the only risks and uncertainties we face. Additional risks and uncertainties not presently known to us or that we presently deem less significant may also impair our business operations. Please see page 17 of this Quarterly Report on Form 10-Q for a discussion of some of the forward-looking statements that are qualified by these risk factors. If any of the following risks occur, our business, financial condition, results of operations and future growth prospects could be materially and adversely affected.

Risks Related to the Discovery, Development, and Commercialization of our Products and Product Candidates

If we do not successfully commercialize PYRUKYND® and other products for which we receive approval, our prospects may be substantially harmed.

In February 2022, we obtained marketing approval from the FDA for PYRUKYND® (mitapivat) for the treatment of hemolytic anemia in adults with pyruvate kinase (PK) deficiency in the United States. In November 2022, we received marketing authorization from the European Commission for PYRUKYND® for the treatment of PK deficiency in adult patients in the European Union, or EU, and in December 2022 we received marketing authorization in Great Britain for PYRUKYND® for the treatment of PK deficiency in adult patients under the European Commission Decision Reliance Procedure. PYRUKYND® is the first product in our rare disease portfolio that has received marketing approval and is our first product following the sale of our oncology business to Servier in March 2021. Our ability to generate meaningful revenue from PYRUKYND® will depend heavily on our successful development and commercialization of the product.

The development and commercialization of PYRUKYND® could be unsuccessful if:

•the medical community and third-party payors do not accept PYRUKYND® as safe, efficacious and cost-effective for the treatment of adults with PK deficiency in the approved jurisdictions;

•we fail to maintain the necessary financial resources and expertise to manufacture, market and sell PYRUKYND®;

•we fail to develop, implement and maintain effective marketing, sales and distribution strategies and operations for the development and commercialization of PYRUKYND®;

•we fail to continue to develop, validate and maintain a commercially viable manufacturing process for PYRUKYND® that is compliant with current good manufacturing practices, or cGMP;

•we fail to successfully obtain third party reimbursement and generate commercial demand that results in expected sales of PYRUKYND®;

•PYRUKYND® may become subject to unfavorable pricing regulations and third-party reimbursement practices;

•we encounter any third-party patent interference, derivation, inter partes review, post-grant review, reexamination or patent infringement claims with respect to PYRUKYND®;

•we fail to comply with regulatory and legal requirements applicable to the sale of PYRUKYND®;

•competing drug products are approved for the same indications as PYRUKYND®;

•significant safety, manufacturing and/or quality risks are identified;

•PYRUKYND® fails to gain and/or maintain sufficient market acceptance by physicians, patients, healthcare payors and others in the medical community;

•a significant number of eligible patients with PK deficiency are not prescribed PYRUKYND® and, if they are, such patients do not stay on treatment; or

•PYRUKYND® does not demonstrate acceptable safety and efficacy in current or future clinical trials, or otherwise does not meet applicable regulatory standards for approval in other indications.

If we experience significant delays or an inability to successfully develop and commercialize PYRUKYND® our business would be materially harmed.

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We depend heavily on the success of our clinical product candidates, including the potential approval of PYRUKYND® for use in indications other than PK deficiency. Clinical trials of our product candidates may not be successful for a number of important reasons. If we or our collaborators are unable to commercialize our product candidates or experience significant delays in doing so, our business will be materially harmed.

We have invested a significant portion of our efforts and financial resources in the identification of our product candidates and development of our most advanced clinical programs, including PYRUKYND®. Our ability to generate meaningful product revenue will depend heavily on the successful clinical development and eventual commercialization of our current and any future product candidates, including PYRUKYND®. While we obtained marketing approval of PYRUKYND® for the treatment of hemolytic anemia in adults with PK deficiency in the United States and marketing authorization of PYRUKYND® for the treatment of adults with PK deficiency in the EU and Great Britain, we cannot be certain that we will obtain marketing approval of PYRUKYND® in indications other than PK deficiency.

We, and any collaborators, are not permitted to commercialize, market, promote or sell any product candidate in the United States without obtaining marketing approval from the FDA. Foreign regulatory authorities, such as the EMA, impose similar requirements in foreign jurisdictions. Before obtaining marketing approval from regulatory authorities for the sale of our product candidates, we must complete preclinical development and then conduct extensive clinical trials to demonstrate the safety and efficacy of our product candidates in humans.

Clinical testing is expensive, difficult to design and implement, can take many years to complete and is uncertain as to outcome. We cannot guarantee that any clinical trials will be conducted as planned or completed on schedule, if at all. The clinical development of our product candidates is susceptible to the risk of failure inherent at any stage of product development. Moreover, we, or any collaborators, may experience any of a number of possible unforeseen adverse events in connection with clinical trials, many of which are beyo