[Business Overview](index=6&type=section&id=Item%201.%20Business) [Company Profile and Strategy](index=6&type=section&id=General) Agios Pharmaceuticals refocused on rare diseases after selling its oncology business for approximately **$1.8 billion**, aiming for cash-flow positivity by 2026 with its lead product PYRUKYND® and a refined research strategy - On March 31, 2021, the company sold its oncology business to Servier for approximately **$1.8 billion** in cash, plus potential **$200.0 million** milestone and royalties on TIBSOVO® and vorasidenib sales[21](index=21&type=chunk) - In October 2022, Agios sold TIBSOVO® royalty rights for **$127.9 million**, retaining vorasidenib milestone and royalty rights[23](index=23&type=chunk) - The company's 2026 strategic vision includes establishing a hematology franchise with PYRUKYND® approvals, portfolio expansion, and achieving **cash-flow positivity**[31](index=31&type=chunk) - In May 2022, the company restructured its research to focus on late-stage programs and in-licensing, reducing 45 roles and projecting annual cost savings of **$40-$50 million** from 2023-2026[24](index=24&type=chunk)[26](index=26&type=chunk) [Development Pipeline](index=9&type=section&id=Our%20Development%20Programs) Agios's pipeline, focused on cellular metabolism and hematology, is led by PYRUKYND® for PK deficiency, thalassemia, and sickle cell disease, alongside AG-946 for MDS and a preclinical PKU program [PYRUKYND® (mitapivat)](index=12&type=section&id=PYRUKYND%C2%AE%20(mitapivat)%3A%20First-in-Class%20PK%20Activator) PYRUKYND®, an oral PK activator, received 2022 approvals for PK deficiency and is in pivotal trials for thalassemia, sickle cell disease, and pediatric PK deficiency - PYRUKYND® received marketing approval in the U.S. (Feb 2022), EU (Nov 2022), and Great Britain (Dec 2022) for adults with PK deficiency[52](index=52&type=chunk) PYRUKYND® Clinical Trial Status | Trial Name | Indication | Phase | Status / Next Milestone | | :--- | :--- | :--- | :--- | | **ENERGIZE** | Non-transfusion-dependent Thalassemia | 3 | Enrolling; expect to complete enrollment by mid-year 2023 | | **ENERGIZE-T** | Transfusion-dependent Thalassemia | 3 | Enrolling; expect to complete enrollment by mid-year 2023 | | **RISE UP** | Sickle Cell Disease (SCD) | 2/3 | Phase 2 fully enrolled; data and Phase 3 initiation decision expected by mid-year 2023 | | **ACTIVATE-kids / kidsT** | Pediatric PK Deficiency | 3 | Enrolling; expect to enroll at least half of patients by year-end 2023 | [AG-946 and Other Programs](index=13&type=section&id=AG-946%20and%20Other%20Programs) Agios is developing AG-946 for LR MDS with Phase 2a enrollment expected by year-end 2023, and plans an IND filing for a PKU PAH stabilizer by year-end 2023 - A Phase 2a study of AG-946 in adults with LR MDS is underway, with enrollment expected to complete by **year-end 2023**[55](index=55&type=chunk) - The company plans to file an IND for its PAH stabilizer program for PKU by **year-end 2023**[56](index=56&type=chunk) [Intellectual Property](index=13&type=section&id=Intellectual%20Property) Agios protects its PK activator program, including PYRUKYND® and AG-946, with 11 issued U.S. and 190 foreign patents expiring from 2030 to 2042 - As of February 1, 2023, the PK activator program patent portfolio includes **11 issued U.S. patents** and **190 issued foreign patents**[59](index=59&type=chunk) - Patents covering the PK activator program have statutory expiration dates ranging from at least **2030 to 2042**, with potential for extensions[60](index=60&type=chunk) [Competition](index=15&type=section&id=Competition) Agios faces intense competition in rare diseases, particularly for hemolytic anemias and PKU, from major pharmaceutical companies and developers of gene therapies and other PK activators - Key competitors include **BMS, BioMarin, bluebird bio, Merck, Novartis, Pfizer, Rocket Pharma, and Vertex**[67](index=67&type=chunk) - Specific competitive threats include gene therapies for PK deficiency (Rocket Pharma) and SCD (Vertex), and a PKR activator from Novo Nordisk for hemolytic anemias[68](index=68&type=chunk) [Manufacturing and Supply](index=16&type=section&id=Manufacturing%20and%20Supply%20Chain) Agios relies entirely on third-party contract manufacturers for all supply, with redundant raw material and API sources for PYRUKYND® but no redundant finished drug product supply - The company relies on **third parties for all manufacturing** and has no plans to establish its own facilities[73](index=73&type=chunk) - For PYRUKYND®, Agios has redundant supply for raw materials and API but not for the final drug product, though it maintains a safety stock[75](index=75&type=chunk) [Government Regulation](index=16&type=section&id=Government%20Regulation%20and%20Product%20Approvals) Agios's products are subject to extensive government regulation, including rigorous testing, manufacturing, and approval processes, with the regulatory landscape impacted by healthcare reforms like the U.S. Inflation Reduction Act - The U.S. drug approval process involves preclinical testing, IND filing, Phase 1-3 clinical trials for safety and efficacy, and NDA submission to the FDA[78](index=78&type=chunk) - The Inflation Reduction Act of 2022 (IRA) will impact Medicare pricing through negotiations for high-cost drugs starting in **2026** and inflation-based rebates, potentially affecting future profitability[149](index=149&type=chunk)[150](index=150&type=chunk) - In the EU, marketing authorization can be obtained via centralized, decentralized, or mutual recognition procedures, with the centralized procedure compulsory for orphan drugs like PYRUKYND®[160](index=160&type=chunk)[161](index=161&type=chunk) [Human Capital](index=35&type=section&id=Employees%20and%20Human%20Capital) As of December 31, 2022, Agios had **393 U.S.-based employees**, with a 59% female and 31% ethnically diverse workforce, supported by a flexible work policy - As of December 31, 2022, the company had **389 full-time** and **4 part-time employees**[178](index=178&type=chunk) - The workforce is **59% female** and **31% ethnically diverse**, with continued emphasis on Black and Latino representation[181](index=181&type=chunk) - The company has a flexible work policy, with **67% of 2022 new hires** choosing to work remotely[184](index=184&type=chunk) [Risk Factors](index=39&type=section&id=Item%201A.%20Risk%20Factors) [Risks Related to Product Development and Commercialization](index=39&type=section&id=Risks%20Related%20to%20the%20Discovery%2C%20Development%2C%20and%20Commercialization%20of%20our%20Products%20and%20Product%20Candidates) Agios's success depends on PYRUKYND® commercialization and pipeline advancement, facing risks of clinical trial failures, patient enrollment challenges, intense competition, market acceptance issues, and ongoing COVID-19 disruptions - The company's prospects are substantially harmed if it does not successfully commercialize **PYRUKYND®**, its first approved rare disease product[191](index=191&type=chunk) - The company depends heavily on its clinical product candidates, with trials facing risks of efficacy failure, side effects, or enrollment challenges, especially for orphan diseases[193](index=193&type=chunk)[196](index=196&type=chunk) - The COVID-19 pandemic may continue to disrupt clinical trials, regulatory activities, and commercial infrastructure[200](index=200&type=chunk)[201](index=201&type=chunk) - PYRUKYND® and other candidates face substantial competition from companies like **Rocket Pharma, Vertex, Novo Nordisk, and Pfizer** developing therapies for the same indications[209](index=209&type=chunk)[223](index=223&type=chunk) [Financial and Operational Risks](index=48&type=section&id=Risks%20Related%20to%20Our%20Financial%20Position) As a smaller, rare disease-focused company post-oncology sale, Agios faces financial risks from historical operating losses, potential need for dilutive capital, uncertain milestone payments, cybersecurity breaches, and stringent data privacy compliance - As a smaller company focused on rare diseases after the oncology sale, Agios is more susceptible to changing market conditions[251](index=251&type=chunk)[253](index=253&type=chunk) - The company has a history of operating losses, with a net loss of **$231.8 million** in 2022, and profitability depends on successful commercialization[18](index=18&type=chunk)[259](index=259&type=chunk) - The receipt of a **$200.0 million** milestone payment and future royalties from Servier for vorasidenib is contingent on uncertain regulatory approval and commercial success[264](index=264&type=chunk)[265](index=265&type=chunk) - The company's internal systems are vulnerable to cyber incidents, and it is subject to stringent data privacy laws (HIPAA, GDPR, CCPA) with significant non-compliance penalties[236](index=236&type=chunk)[240](index=240&type=chunk) [Risks Related to Third Parties and Intellectual Property](index=52&type=section&id=Risks%20Related%20to%20Our%20Dependence%20on%20Third%20Parties) Agios heavily relies on third-party CROs and CMOs, posing operational risks, and its success depends on robust intellectual property protection, facing risks of patent infringement and validity challenges - The company relies on third-party CROs for clinical trials and is responsible for their cGCP compliance, as failure could render data unreliable[269](index=269&type=chunk)[271](index=271&type=chunk) - Agios depends on third-party manufacturers for all product supply, with performance failures, disruptions, or cGMP non-compliance risking development and commercialization delays[276](index=276&type=chunk)[277](index=277&type=chunk)[279](index=279&type=chunk) - Successful commercialization depends on obtaining and maintaining patent protection, which may be challenged, invalidated, or circumvented by competitors[285](index=285&type=chunk)[291](index=291&type=chunk)[292](index=292&type=chunk) [Regulatory and Legal Risks](index=57&type=section&id=Risks%20Related%20to%20Regulatory%20Approval%20of%20Our%20Product%20Candidates%20and%20Other%20Legal%20Compliance%20Matters) Agios faces significant regulatory and legal risks, including uncertain and costly marketing approvals, pricing and reimbursement pressures intensified by healthcare reforms, and strict compliance with anti-kickback and fraud laws - The regulatory approval process is uncertain, potentially delaying or preventing commercialization, as authorities have discretion and may require additional costly trials[301](index=301&type=chunk)[304](index=304&type=chunk) - Even if approved, products may face unfavorable pricing and reimbursement, intensified by the Inflation Reduction Act and other healthcare reforms, harming the business[332](index=332&type=chunk)[338](index=338&type=chunk)[346](index=346&type=chunk) - The company is subject to strict healthcare laws, including the federal Anti-Kickback Statute and False Claims Act, risking criminal sanctions, civil penalties, and reputational harm[326](index=326&type=chunk)[327](index=327&type=chunk) [Financial Condition and Results of Operations (MD&A)](index=76&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) [Overview of Financial Performance](index=76&type=section&id=Financial%20Operations%20Overview) Agios reported a **$231.8 million net loss** in 2022, a shift from **$1.6 billion net income** in 2021 due to the oncology business sale, reflecting its rare disease focus with initial PYRUKYND® revenues and increased R&D Consolidated Statements of Operations Data (in thousands) | (In thousands) | 2022 | 2021 | 2020 | | :--- | :--- | :--- | :--- | | **Total Revenue** | $14,240 | $— | $— | | **Total Operating Expenses** | $403,287 | $378,418 | $335,916 | | **Net Loss from Continuing Operations** | $(231,801) | $(356,510) | $(329,305) | | **Net Income from Discontinued Operations, Net of Tax** | $— | $1,961,225 | $1,935 | | **Net (Loss) Income** | **$(231,801)** | **$1,604,715** | **$(327,370)** | [Results of Operations (2020-2022)](index=84&type=section&id=Results%20of%20Operations) In 2022, total revenue reached **$14.2 million** from PYRUKYND® launch, R&D expenses increased to **$279.9 million**, and a **$127.9 million gain** from TIBSOVO® royalty rights reduced net loss from continuing operations to **$231.8 million** Revenue Breakdown (in thousands) | (In thousands) | 2022 | 2021 | | :--- | :--- | :--- | | Product Revenue, Net | $11,740 | $— | | Milestone Revenue | $2,500 | $— | | **Total Revenue** | **$14,240** | **$—** | Research and Development Expenses (in thousands) | (In thousands) | 2022 | 2021 | 2020 | | :--- | :--- | :--- | :--- | | PK Activator (PYRUKYND®) | $83,271 | $73,999 | $48,669 | | Novel PK Activator (AG-946) | $15,747 | $10,658 | $8,378 | | Other Research and Platform Programs | $26,837 | $22,959 | $13,790 | | Indirect R&D Expenses | $154,055 | $149,357 | $149,974 | | **Total R&D Expense** | **$279,910** | **$256,973** | **$220,811** | - In 2022, the company recognized a **$127.9 million gain** on the sale of its rights to future TIBSOVO® royalty payments to Sagard[409](index=409&type=chunk)[460](index=460&type=chunk) [Liquidity and Capital Resources](index=86&type=section&id=Liquidity%20and%20Capital%20Resources) As of December 31, 2022, Agios held **$1.1 billion** in cash and equivalents, bolstered by the oncology sale, with management expecting sufficient capital to reach cash-flow positivity without additional equity - As of December 31, 2022, the company had cash, cash equivalents, and marketable securities of **$1.1 billion**[470](index=470&type=chunk)[492](index=492&type=chunk) Cash Flow Summary (in thousands) | (In thousands) | 2022 | 2021 | 2020 | | :--- | :--- | :--- | :--- | | Net Cash Used in Operating Activities | $(309,478) | $(407,320) | $(290,759) | | Net Cash Provided by Investing Activities | $243,261 | $1,248,778 | $75,746 | | Net Cash Provided by (Used in) Financing Activities | $2,350 | $(765,768) | $261,518 | - The company expects existing cash and anticipated revenues will enable it to execute its operating plan to **cash-flow positivity** without additional equity[483](index=483&type=chunk) [Contractual Obligations](index=89&type=section&id=Contractual%20Obligations) As of December 31, 2022, Agios had approximately **$109.4 million** in contractual obligations, primarily **$99.2 million** for operating leases, alongside manufacturing and service arrangements Contractual Obligations (in thousands) | (In thousands) | Total | Less than 1 year | 1-3 years | 3-5 years | More than 5 years | | :--- | :--- | :--- | :--- | :--- | :--- | | Operating Lease Obligations | $99,203 | $16,651 | $38,167 | $40,906 | $3,479 | | Manufacturing Arrangements | $904 | $301 | $603 | $— | $— | | Service Arrangements | $9,300 | $1,860 | $3,720 | $3,720 | $— | [Financial Statements and Notes](index=90&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) [Consolidated Financial Statements](index=102&type=section&id=Consolidated%20Financial%20Statements) The audited consolidated financial statements for 2022 reflect Agios's financial position, including **$1.1 billion** in cash and equivalents, and the reclassification of the oncology business as a discontinued operation Consolidated Balance Sheet Data (in thousands) | (In thousands) | Dec 31, 2022 | Dec 31, 2021 | | :--- | :--- | :--- | | **Assets** | | | | Cash, Cash Equivalents & Marketable Securities | $1,097,000 | $1,300,000 | | Total Assets | $1,238,718 | $1,437,736 | | **Liabilities & Equity** | | | | Total Liabilities | $137,904 | $145,761 | | Total Stockholders' Equity | $1,100,814 | $1,291,975 | [Key Notes to Financial Statements](index=107&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) Key notes detail the **$1.98 billion** pre-tax gain from the oncology business sale, PYRUKYND® product revenue, the **$1.2 billion** share repurchase program, and the **$296.0 million** valuation allowance against deferred tax assets - **Discontinued Operations (Note 15):** The March 31, 2021, sale of the oncology business to Servier resulted in a pre-tax gain of **$1,989.1 million**, with historical results reported separately[682](index=682&type=chunk)[684](index=684&type=chunk)[686](index=686&type=chunk) - **Product Revenue (Note 8):** For 2022, gross product sales were reduced by **$1.5 million** for adjustments, resulting in net revenue of **$11.7 million**[639](index=639&type=chunk)[641](index=641&type=chunk) - **Share Repurchase Program (Note 14):** As of Dec 31, 2022, the company repurchased **16.2 million shares** for **$802.5 million** under its **$1.2 billion** authorization, with the program currently paused[678](index=678&type=chunk)[679](index=679&type=chunk)[680](index=680&type=chunk) - **Income Taxes (Note 11):** The company maintains a full valuation allowance of **$296.0 million** against its deferred tax assets as of Dec 31, 2022, due to uncertainty of realization[667](index=667&type=chunk)[670](index=670&type=chunk) [Other Information](index=74&type=section&id=PART%20II%20Other%20Information) [Market for Common Equity and Shareholder Matters](index=74&type=section&id=Item%205.%20Market%20for%20Registrant%27s%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) Agios's common stock trades on Nasdaq under "AGIO"; the company has never paid dividends and has paused its **$1.2 billion** share repurchase program after repurchasing **$802.5 million** in shares - A share repurchase program of up to **$1.2 billion** was authorized in March 2021, with **16.2 million shares** repurchased for **$802.5 million** as of December 31, 2022[398](index=398&type=chunk)[399](index=399&type=chunk) - The company has paused share repurchases to prioritize capital for development and business opportunities[400](index=400&type=chunk) [Corporate Governance and Controls](index=90&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management and PricewaterhouseCoopers LLP concluded that Agios's disclosure controls and internal control over financial reporting were effective as of December 31, 2022 - Management concluded that the company's disclosure controls and procedures were **effective** as of December 31, 2022[497](index=497&type=chunk) - Management and PricewaterhouseCoopers LLP concluded that the company's internal control over financial reporting was **effective** as of December 31, 2022[501](index=501&type=chunk)

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 Form 10-K (Mark One) ☑ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2021 OR ☐ 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 incorpora ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 Form 10-K (Mark One) ☑ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2020 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission File Number: 001-36014 | --- | --- | |------------------------------------------------------------------------------------|-----------------------------------| | AGIOS ...

Table of Contents 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 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, 2020 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission file ...