Good morning, and welcome to Agios’ Second Quarter 2019 Conference Call. At this time, all participants are in a listen-only mode. There will be a question-and-answer session at the end. Please be advised that this call is being recorded at Agios’ request.

I would now like to turn the call over to Kendra Adams, Vice President, External Communication and Investor Relations..

Thank you, operator. Good morning, everyone, and welcome to Agios’ second quarter 2019 conference call. You can access slides for today’s by going to the Investors section of our website, agios.com. With me on the call today are Dr. Jackie Fouse, our Chief Executive Officer, who will review key business updates. Dr.

Chris Bowden, our Chief Medical Officer, who will highlight our clinical development progress, Darrin Miles, our Senior Vice-President of U.S. Commercial and Global Marketing will review commercial performance and Andrew Hirsch, our Chief Financial Officer who will summarize our second quarter 2019 financial results. Dr.

Scott Biller, our Chief Scientific Officer, will also be available for Q&A. Before we get started, I would like to remind everyone that statements we make on this call will include forward-looking statements.

Actual events and results could differ materially from those expressed or implied by any forward-looking statements as a result of various risks, uncertainties and other factors, including those set forth in the Risk Factors section of our most recent Form 10-Q filed with the SEC and any other filings that we may make with the SEC.

In addition, any forward-looking statements made on this call represent our views only as of today and should not be relied upon as representing our views as of any subsequent date. We specifically disclaim any obligation to update or revise any forward-looking statements. With that, I’ll turn the call over to Jackie..

Thanks, Kendra. Good morning, everyone, and thanks for joining us on our Q2, 2019 financial results call.

At the beginning of the year, we set out ambitious goals for 2019 across our research, clinical and commercial activities I’m incredibly proud of the progress our team has made so far this year and we'll update you on several of our achievements today.

In addition, we are maintaining a steady focus on our remaining 2019 priorities that have the potential to drive value across our oncology and rare genetic disease portfolios.

In the second quarter, we executed well across all areas of our business, driving commercial performance, expanding the TIBSOVO market opportunity, broadening mitapivat clinical development and advancing the AG-270 MAT2A inhibitor program.

Starting with TIBSOVO the relapsed and refractory AML launch trajectory returned to expected levels in April and the May frontline approval provided additional momentum. Darrin will provide more details on our commercial performance later in the call.

On the clinical side, we presented impressive data at ASCO and EHA that reiterated the potential of TIBSOVO in the non-intensive frontline AML IDH1 mutant setting both as a single agent and in combination with azacitidine.

In May, we announced the ClarIDHy Phase 3 trial in second line or later cholangiocarcinoma met its primary endpoint of improvement of median progression free survival compared to placebo. The results demonstrated clinically significant benefit of TIBSOVO and patients with this challenging disease.

And Chris will share more about our plans to present the full data next month and submit a supplemental NDA later this year. Chris will also discuss progress on our earlier stage trials including the completion of dose finding work AG-270 and our plan to begin the expansion phase of the ongoing Phase 1 trial.

Related to the evolution of our global business capabilities. We have begun the process of building our European commercial and medical teams, an effort that has gained momentum with the recent hiring of Orlando Oliveira as senior vice president and general manager of international.

Orlando is now leading our EU build activities and the strategy formulation for geographies outside the U.S. and the EU. In addition to making progress on our 2019 corporate objectives, I'm often asked about my priorities for the business and where I am focusing my efforts.

To start, I've been ensuring that we capitalize on the strong execution that has made the company successful in its first 10 years. I've also been evaluating the optionality in our unique research platform and our broad clinical and preclinical portfolios to better understand our long term value creation potential.

And I'm focused on building capabilities that we either don't currently have or that aren't yet mature and that are necessary to become a sustainable biopharmaceutical company.

These include, establishing our team in Europe, but also include solidifying our core capabilities in both malignant and non-malignant hematology and ensuring our readiness to enter the solid tumor market.

I continue to believe that for our size, we have one of the best pipelines in the industry and significant optionality across multiple compounds and indications in both oncology and rare genetic diseases. I'm excited not only about where we are today, but also where we're going. And I look forward to continuing to share our progress with you.

With that, I'll turn the call over to Chris to provide our clinical and regulatory update..

Thanks, Jackie. I'll start with our broad clinical development program in AML, where we're advancing a Global Development Strategy to secure labels for TIBSOVO monotherapy and the relapsed refractory setting and in combination with standard-of-care regimen in patients with newly diagnosed disease.

In the EU, we submitted the MAA for TIBSOVO and relapsed refractory AML at the end of 2018. Based on the day 120 questions and the anticipated clock stop, we are on target to receive a CHMP opinion in the second half of 2020.

In frontline AML, the treatment landscape continues to evolve with the goals of achieving higher response rates with longer remission.

Since IDH is an early driver mutation, and we have demonstrated mutation of clearance in the majority of responding patients, IDH inhibitors will play a critical role in improving the quality of remission and become the cornerstone of AML treatment for patients with the mutation.

Our current front line labels for an important subset of newly diagnosed patients who are ineligible for intensive chemotherapy, which is broader than the patient population we studied in a newly diagnosed cohort of our Phase 1 trial.

At ASCO, we presented updated data from Phase 1 study combining TIBSOVO with that showed with longer follow up the CR -- CRH rate increased to 70% and the CR rate increased to 61%. In addition, the majority of patients with CR also had IDH1 mutation clearance suggesting direct impact on the biology of IDH1 mutant AML.

At ASH later this year, we expect to present new data on mutation of clearance and minimal residual disease from patients who achieved a response in the ongoing Phase 1 trial of TIBSIVO plus azacitidine. This speaks to the depth and durability of this important treatment combination.

This combination is being explored further in the Agile Phase 3 trial which is enrolling patients. For those patients who can tolerate intensive chemotherapy, the cooperative groups the cooperative HOVON and AMLSG are now dosing patients in a Phase 3 trial combining TIBSOVO or IDHIFA with 7+3 depending on their IDH mutation.

In addition, we continue to support IST to explore novel novel combinations in AML. Dr. Courtney DiNardo of MD Anderson shared early but impressive data from her investigator sponsored study combining TIBSOVO and venetoclax at EHA.

Mostly patients in this study had relapsed refractory AML and the response rates were compelling with a CR rate of 42% CRCRH rate of 58% and an overall response rate of 75%. In addition, 44% of responding patients achieved minimal residual disease or were MRD-negative by flow cytometry. Dr.

DiNardo is also exploring a triplet combination of VIDAZA, TIBSOVO and Venetoclax which is currently enrolling patients.

Beyond AML, we are in the process of reopening the myelodysplastic syndrome arm of the TIBSOVO Phase 1 study in hematologic malignancies, with the goal of generating sufficient data to pursue a regulatory filing in this and indication.

Moving to solid tumors, we announced in May that the ClarIDHy Phase 3 study of TIBSOVO in advanced previously treated IDH1 mutant calendula carcinoma met its primary endpoint of prolonged progression free survival compared with placebo.

This is the first example of a differentiation agent showing evidence of clinical benefit in the solid tumor setting. Calendula carcinoma is a rare cancer of the bile ducts within and outside of the liver, and IDHI mutations occur in approximately two to three thousand patients annually in the U.S. and EU.

Current calendula carcinoma treatment options are limited, and there are no approved systemic therapies. We have submitted the full data set from the ClarIDHy study including interim overall survival for presentation at in the fall.

We are on track to submit the SNDA for TIBSOVO by the end of the year and have the potential to be the first targeted therapy in this setting. Finally, we now have input from the FDA and EMA on the end points for vorasidenib Phase 3 study and IDH mutant low grade glioma.

We are incorporating this feedback into our clinical plan and are on track to initiate the trial by the end of the year. We look forward to updating you on the trial design closer to initiation.

I'll now review our rare genetic disease program, where we're making significant progress toward expanding the opportunity for our PKR activator broadly to patients who have the potential to benefit.

Our pivotal program for mitapivat in adults with pyruvate kinase deficiency is advancing and ACTIVATE and ACTIVATE T remain on track to complete enrollment later this year.

Our patient finding efforts have not been successful and as we shared last quarter enrollment for ACTIVATE T has been increased to enroll up to 40 patients based on interests in the trial. We are continuing to better understand the comorbidities and complications of the disease through the natural history study and peak registry.

And we've submitted an abstract to ASH with findings from the natural history study aimed at better understanding the comorbidity profile of adults with pyruvate kinase deficiency.

Data from the DRIVE PK study including new data from the extension phase where some patients have now been on mitapivat treatment for more than three years have also been submitted for presentation at ASH.

This data has allowed us to better understand the potential of mitapivat in increasing and maintaining hemoglobin as well as the long term safety profile. In addition to pyruvate kinase deficiency, we know from our Phase 1 healthy volunteers trial, that activating wild type PKR results in an increase in ATP levels.

So we believe that by doing so in thalassemia patients, we can have an impact on that disease. Earlier this year, we initiated an open label Phase 2 study in approximately 20 thalassemia patients, with hemoglobin less than 9 grams per deciliter, and the primary endpoint is hemoglobin response.

This trial continues to enroll and we expect to achieve proof-of-concept by the end of the year. Lastly, we've been working with the National Institutes of Health on the clinical trial of mitapivat and sickle cell disease, where there is potential for PKR activator to provide benefit for these patients.

The study recently initiated and is enrolling patients. I'll close with our earlier stage programs AG-270, our MAT2A inhibitor and AG-636 our DHODH inhibitor. During the second quarter, we completed the single agent dose finding work in the AG-270 Phase 1 trial and selected to go forward dose.

In total, we studied AG-270 in approximately 40 patients across a wide variety of tumor types. We have submitted the data from this portion of the Phase 1 study for presentation at the AACR-NCI-EORTC International Conference on molecular targets in cancer therapeutics taking place in late October.

The focus of the presentation will be safety, pharmacokinetics and pharmacodynamic of AG-270 in addition to efficacy data. Of particular interest, our pharmacodynamic data namely reductions of SAM and downstream markers of MAT2A inhibition in tumor biopsies.

We are now advancing to the next phase of development where we will evaluate AG-270 in combination with taxane in two areas of high unmet need based on the compelling preclinical data we presented earlier this year at AACR.

One arm of the study will test AG-270 in combination with docetaxel in MTSAP-deleted non-small cell lung cancer and another arm will test AG-270 in combination with nab-paclitaxel and gemcitabine in MTAP-deleted pancreatic ductal adenocarcinoma. Each combination arm will enroll upto 45 patients.

Given the amount of safety PK and PD data we have already collected, we have determined that we don't need additional single agent data and a basket study in a Phase 1 patient population. As we progress our overall development plan, we may decide to explore AG-270 as a single agent in more homogenous and less heavily pre-treated patient populations.

We continue to be encouraged by the clinical and pre-clinical work that demonstrate the potential for AG-270 to help patients with MTAP Deleted tumors and we look forward to sharing the clinical data at the triple meeting in October.

Finally in June, we dosed our first patient in the Phase 1 study at the AG-636 our DHODH inhibitor and I will update you as the trial progresses. I'll now turn the call over to Darrin to review our commercial activities..

Thanks, Chris. I’m happy to join the call today to discuss our second quarter TIBSOVO performance. In my new role, I focused on two priorities, first the continued execution of the TIBSOVO launch and relapsed or refractory ML in the U.S. second, helping to ensure successful launch of our recent approval on frontline AML.

The commercial team is doing an outstanding job conducting two AML launches in just 10 months. I spent a lot of time in the field visiting with physicians and the level of engagement I’m witnessing is reflected in our performance.

Now with respect to our second quarter results, net TIBSOVO revenue was $13.7 million representing a 50% increase from the first quarter.

As the team mentioned on the first quarter call, we saw strong unit growth exiting Q1 into Q2 and that continued through the quarter, returning to our expected launch trajectory following the seasonal impact we saw in the first quarter.

Importantly, we’ve seen strong double digit growth in both the academic and community setting now that IDH testing has reached the 90% range, the physicians are becoming more familiar with TIBSOVO.

Now one year since FDA approval, we’ve surpassed 350 unique prescribers up 40% since Q1 and continue to broaden our prescriber base among both academic and community physicians. The second driver of growth was the front line approval in early May, which led to an even more momentum in the latter part of the quarter.

Our team continues to educate physicians about our indicated use for mutant IDH1 newly diagnosed older AML patients or those not eligible for intensive therapy.

Overall, physician feedback regarding the frontline approval has been positive and those still early we've heard from positions that use is largely in patients who were previously exposed to hypomethylating agents known as HMAs for treatment of an antecedent hematologic disorder such as myelodysplastic syndrome or those who were concerned about the toxicities associated with HMAs or HMA combinations.

We're also seeing a meaningful improvement in physician belief using molecularly targeted treatments, especially an IDH inhibitor in newly diagnosed patients. I'm extremely pleased by our progress to date, and I have confidence in our ability to continue the commercial success of TIBSIVO. I look forward to updating you on future calls.

I will now turn the call over to Andrew to discuss our second quarter financials..

Thanks, Darrin. Our second quarter results can be found in the press release we issued this morning, which I'll summarize. More detail will be included in our 10-Q filing later today. Total revenue for the second quarter was $26.2 million, which consisted of $13.7 million dollars of net U.S.

sales of TIBSIVO, $9.8 million of collaboration revenue, and $2.7 million of IDHIFA royalty revenue.

Revenue decreased compared to Q2, 2018 by $20.7 million, which was driven by a reduction in collaboration revenue of $29 million through the recognition of a $15 million milestone from Celgene and $12.4 million from the signing of the CStone collaboration in Q2, 2018. This was offset by $13.7 million of net U.S.

sales of TIBSIVO and an increase in IDHIFA royalty revenue of $1.1 million. TIBSIVO inventory levels on a week hand basis remain relatively flat throughout the quarter from where we ended Q1, but units increased on an absolute level consistent with the increase we saw in demand. Cost of sales for the quarter was $300,000.

Turning to operating expenses, R&D for the second quarter was $107 million, an increase of $20.7 million compared to the same period of 2018.

The year-over-year increase in R&D was largely driven by clinical trial activity from mitapivat and PK deficiency and thalassemia, startup costs related to the planned Phase 3 study of vorasidenib and low grade glioma.

Clinical trial costs for the AG-636 Phase 1 study in lymphoma including a milestone payment to origin [ph] and increases in our research and platform programs.

Selling, general and administrative expenses were $32.4 million for the quarter, representing a $5.8 million increase over second quarter 2018, driven by increased investment in our infrastructure and commercial capabilities. We ended the quarter with cash, cash equivalents and marketable securities of $624 million.

We expect that this cash balance in addition to expected product revenue and royalties, but excluding anticipated program specific milestone payments, will fund our current operating plans for at least the end of 2020. With that operator, please open the line for questions..

Thank you.[Operator Instructions].

Operator, just before we take questions, I wanted to correct something from my prepared remarks. The number I mentioned for the change in revenue from Q2, 2018 to Q2, 2019 was incorrect. I mistakenly used the increase in R&D expense. The correct number is a decrease of $14.2 million from Q2, 2018 to Q2, 2019. You can open the line for questions now.

Thank you..

Thank you. Our first question will come from Anupam Rama with JPMorgan..

Hey guys, thanks for taking the question, and congrats on all the progress. I had a quick question on the unique prescribers and increase of 40% between 1Q and 2Q 2019. What are the factors that really drove that pretty significant increase in unique prescribers? Thanks so much..

Anupam, this is Darrin here. The increase that we saw was even between both community and academic physicians. These are the mix of physicians who were prescribing TIBSIVO for the first time, and those who have been prescribing hadn't prescribed IDHIFA previously as well. So we're getting penetration or uptake amongst various types of physicians..

Great. Thanks so much for taking my questions..

Thank you. Our next question comes from Peter Lawson SunTrust..

Just a kind of follow up questions. Any other color you can provide around the TIBSIVO growth, whether it's kind of off label versus on-label or potential combination use that would be helpful.

And then you think we should be thinking around for gross to net and inventory for both this quarter and next quarter?.

Peter, it's Darrin here again. As I mentioned my remarks earlier, the growth that we saw in the second quarter was a continuation of the improve momentum we saw in the latter half of Q1 that carried through Q2. That is largely focused or driven by continued adoption in the relapsed refractory AML setting.

We then saw further acceleration of that growth just following the frontline monotherapy approval. That said, while we do have some spontaneous or off-label adoption of TIBSIVO, it's important to state that we don't promote for any unapproved uses, but that unapproved uses is fairly minimal..

And it’s Andrew. I’ll take the inventory and gross to net question. So, first on inventory. So we don't give out specific numbers. But again, our – we our are inventory levels remained relatively stable on a week’s on hand basis, and we expect that to continue through the rest of the year, since we want to make sure that they don't stack up too much.

Obviously that would increase with them, as demand increases. Absolutely and as I mentioned will increase. For gross to net, our guidance really has been in the mid-teens and obviously that fluctuates.

Clearly, given what we saw in Q1, we saw clearly an increase in the Medicare donut hole rebate, but as that's worked through, it's come down a little bit, but still within that range of mid-teens..

Great. Thank you.

And then just on MTAP study at the triple meeting, anything you can tell us around how much data we'd see on the efficacy side? And then, when we could potentially see the combination data for 270?.

Hi, it’s Chris Bowden here. Too early to comment on to provide guidance around the combination data, our main goal now is to get those expansions up in running. So more to come later on when that could read out and be presented at a major medical meeting.

With regards to what we -- what you will see and what we will be presenting at the triple meeting will be a comprehensive view of the single agent expansion data, safety, efficacy, pharmacodynamics and pharmacokinetics. So you'll get a good sense of our experience in those patients who are treated in that phase of the trial..

Got you. Okay, thanks so much. Thanks for taking the questions..

Thank you. Our next question comes from Chris Shibutani with Cowen..

Good morning, thank you very much. The statement that you made about AG-270 about not needing additional single agent basket data.

And if I think about what you said previously in terms of making sure that you were doing the right kind of work to think about dose selection, how can we look for any conclusions, can we draw about your confidence level about the dosing work that you're taking into combinations?.

Chris Bowden here. So I think that we have a good feel now after completing the dose escalation portion with single agent to now combine it with chemotherapy, the cytotoxic agents that I talked about in my prepared remarks.

And so, I think that of course when you start to combine, then you have to account for the side effect profile of the drugs that you're combining with. But overall, we're in a good place now that go ahead and proceed with those portions.

And that's what we think, we've always been talking about how we think that most potential for this drug is in combination with other drugs and there's a pretty strong preclinical rationale for combining with taxanes.

So that whole -- the whole component of that single agent expansion -- dose escalation are real key fundamental part of that was to prepare for this combination therapy. So we think we have what we need now to move forward..

Great, and then shifting over to the commercial side. In the past you talked about sort of what you're seeing in terms of duration of use from the patients, both in the relapsed refractory, and I would imagine that with the expansion of the label into potentially other earlier line usage, there's potential for that to increase.

Can you just comment on what you think the outlook for those duration of use trends are, as we go through continuing into the future? Thanks..

Absolutely Chris, this is Darrin. So I think, we've stated before that we continue to see steady improvement in duration, since the approval. Duration is now at about four months. We expect that it will ultimately settle around the 4 to 5 month point, which reflects both the clinical experience and about what we're seeing with IDHIFA.

That said, future labels particularly in the frontline setting in combination with center-of-care treatments could reasonably extend the duration further..

Great. Thanks, it's great to see the business back on track..

Thank you..

Thank you. Our next question comes from Kennen MacKay with RBC Capital Markets..

Hi, thanks for taking my question and congrats on the commercial progress this quarter. Maybe a couple of questions for Chris. From your commentary on what to expect of the triple meeting from 80 to 70, you didn't mention tumor response data and what we see there.

Does this mean that data won't be presented or just that there weren't responses with single agent AG-270? And then I guess as a follow up to that, can you help us understand how the combination arms and the expansions would be interpreted without control, and without real data defining how do chemotherapy do and MTAP Deleted populations from each respective tumour type.

I guess, I'm just trying to understand what you're hoping to see with the combination? Thank you..

Yes. So, so Kennen for the triple meeting, we're going to provide data from the dose escalation with regards to safety, efficacy, pharmacokinetics and pharmacodynamics.

So I think you'll see this as a pretty standard Phase 1 presentation from demographics to safety dose limiting toxicities, the efficacy we were able to record in this group of patients who are heavily treated across a range of different diagnoses. So that will be there.

Now with regards to your second part of your question, which is the combinations, and how you interpret that data in the absence of a control.

The first part is, you want to demonstrate to that -- the previous questioner is that you can combine these drugs together, that's a really important component, because we're – once we are able to give multiple cycles of drug assuming we induce tumor responses and be able to come up with a tolerable and active treatment regimen.

Now, without a control on any efficacy data, that you look as you always have to carry that caveat. Nonetheless, over the past several years there have been a number of trials in both the Phase 2 and Phase 3 setting, where you can get a pretty good sense of overall response, duration of response.

And so those will be important historical benchmarks we'll look at. And then the other interesting part of this that we'll need to think about is the fact that there are 16 deletions associated with these -- with MTAP deletions and that may also have some prognostic significance. So it's a caveat no doubt, that you've highlighted.

But I think what we've completed these two expansion cohorts, we’ll have a pretty good – we’ll have a very good sense of the safety and tolerability and the regimen to take forward.

And I think won't be able to look at historical data sets and make some reasonable judgments around the efficacy and that would able to be very useful in terms of preparing for the next stage of development..

Got it. Thanks. I was just confused on the MTAP slide in terms of the goals of the dose escalation study. You had said the pharmacokinetics and pharmacodynamics, but I didn’t expect it, so appreciate the color. Maybe just a quick follow up on the ACTIVATE and ACTIVATE T trial.

I was just wondering if you could sort of help us understand where we are in these trials, if one of them is maybe enrolling at a sort of a faster pace than the other, it seems like maybe the transition independent patients exist that are out there, but they are not in the clinics, since there's nothing available for them, and maybe that is the tough population to enroll.

Just any color there would be huge? And I appreciate it. Thanks so much..

Well, we think overall the disease could be is under diagnosed, because of the lack of therapy and available therapies nothing's approved.

And so there is, I'm not sure what the right word is, but you know patients with the disease may not be out looking for therapy and physicians they're not aware of something and nothing is approved, then there's not much to do other than transfusions and some of the other supportive care.

And the trials overall are accruing according to schedule, and we anticipate that we'll complete accrual by the end of the year.

I think the other part of your question was, if one went faster than the other, would that provide some sort of regulatory advantage that we would move on and never say never, but we see them as a package, because we think that this disease really is non-transfusion dependent and transfusion dependent patients as a spectrum of disease.

But we look at -- we look at the individual trials and we look at them together. So there certainly possibilities, but we're not getting anything along those lines at this point..

Thank you. Our next question comes from Salveen Richter with Goldman Sachs..

Great, thanks for taking our questions. This is Andrea on Salveen. My first one for Darrin.

If you could possibly comment on the contribution at the frontline AML patients to the TIBSIVO sales?.

Absolutely, Andrea. So as I mentioned my initial remarks, we’re extremely pleased by the performance in the first quarter. I will say that the approval and for monotherapy using the frontline setting was only in early May. And so we're in early days here, so we know it's absolutely made a contribution to performance in the quarter.

But still relatively early. Now with regard to utilization in the frontline versus risk relapsed refractory, I think we shared on previous calls we have limited visibility into the utilization of TIBSIVO by line of by line of treatment. So I can't tell you just how much of that is coming from, from use in the front line versus those other setting..

Got it. And then a second question, I recognize it is still early but any comments you might have on any pre-launch preparations education efforts that are ongoing for the cholangiocarcinoma indication? And what changes to the sales force do you think might be necessary as you transition to solid tumors? Thanks so much..

Okay, Andrea. It’s a good question. The focus in the – in this pre-filing phase is on disease disease education, so the team is ramping up efforts -- efforts around that.

There's actually a fair amount of overlap in target accounts between AML and cholangiocarcinoma, which actually then decreases the incremental effort that our incremental investments that's required in order to fully address the patient physician need here.

So, we don't expect to make a modest modest increase for the sales force in order to support the launch..

Great. Thanks so much..

Thank you. Our next question comes from John Newman with Canaccord..

Hi guys. Good morning. Thanks a lot for taking my question. Just had another one on how we should be thinking about TIBSIVO and cholangio. My question is specific to whether the accessibility for the IDH testing should be potentially a bit smoother and expanded versus what we saw for the initial launches in AML? Thanks..

So John, this is this is Darrin. I'm understanding your question here. You're asking about how does -- what we expect in terms of testing access for cholangio relative to AML. So we'll file, once we file, we'll have a simultaneous filing for a companion diagnostic which is the same as an NGS test.

But, as we know is sort of the common experience with most products that have a companion diagnostic, you have a mix of adoption of the FDA approved test, versus lab develop tests. So we expect that testing access should be should be broad. But what physicians ultimately end up using will be there will be their choice..

Hi John, it's Jackie.

I think you also know there's another company potentially coming to market with a targeted agent that does not overlap with nor compete with TIBSIVO and cholangio, but we think that, that development also heightens the awareness of the need to test for these two respective mutations in cholangiocarcinoma and that helps the whole market there..

Right. Thank you..

Thank you. Our next question comes from Mohit Bansal with Citi..

Good morning, and thank you for taking my questions. A broader question to Jackie, just wanted to get your thoughts on how you balance your desire to expand with the cash requirement? Your expenses are increasing for all the right reasons, but it seems like it might take some time to these expenses be supported by revenue.

So I guess the question is, how do you convince Andrew to loosen his purse strings here? Thank you..

Thanks, Mohit. I was feeling a little neglected for not going to your question directly. You know, that said to me, so I really do appreciate it. So I think what we're starting to see a very nice ramp in TIBSIVO and clearly we've got a lot of things going on in the portfolio that we can invest in.

And I think we are doing those in order of priority with respect to the value that we expect for them to create for patients and the economic opportunity that they create for our shareholders and for reinvestment in the business as well.

So I think, I've also said on a number of occasions as we continue to bring things along we are going to continuously review how we do that with a view to being very efficient with our capital utilization. And I think Andrew's been a terrific contributor to helping us do that, and we'll continue to do so..

Got it. Thank you..

Thank you. And our next question comes from Michael Schmidt with Guggenheim..

Hey, good morning. Congrats on the progress. And thanks for taking my question. I had one on cholangiocarcinoma. I believe the IDH mutation frequency is thought to be around 20%. And I was just wondering if you could comment on maybe your experience and the ClarIDHy trial whether it's comparable? And then the follow up question I had was just on AG-270.

I know that the focus in the near term is on combination development as you mentioned, but you did say there you may be looking into focus monotherapy cohorts. I was just wondering based on the mechanism, which types of tumors do you think could most likely be responsive to AG-270 on….

Okay, so the first question is around cholangio with regards to the frequency of mutation. We think, it's somewhere in the 15% to 20% range. And overall, we think there about 21,000 patients in there in the U.S. and EU diagnosed cholangiocarcinoma.

As far as the AG-270 question goes, whether non-small cell lung cancer versus pancreatic cancer has a higher probability of showing differential activity if you will.

It's just too early to say we think that, the reason why we selected those indications is because of the frequency of the MTAP Deletion and the use of taxsanes as one of the standard-of-care in both of those diseases. So there's a clinically pragmatic and feasibility issue, and the two areas are pretty high in need..

Thanks.

And can you just remind us of the frequency of MTAP Deletion and lung and in pancreatic?.

It's about 15% to 20%. We can get to the exact numbers as we presented a table with a large with a number of indications..

Yes, I think in both of those, it's closer to 20%, but they're both slightly above the 15% average rate that we've talked about and we can resend you the slide what we’ve got 12 or 15 tumor tops on there with the different frequency occurrence.

I think just on the question about the monotherapy versus combo on 270, I mean, just to be clear, and I think Chris absolutely was, that we evaluated the utility of doing another monotherapy basket trial.

And just decided that that sort of basket trial was not going to give us additional information that was going to be hugely beneficial compared to the information that we already have from the dose escalation trial.

And I think when you see the data at the triple meeting, you will this will all become pretty clear to you, but we are leaving open the possibility as we continue to evaluate the data that we have, and as we run these combo trials and learn more even through, through that work whether or not it would be a good idea to do a monotherapy expansion some monotherapy expansion work in a more targeted population.

So we're just leaving that, that open in case we see something that tells us that would be useful..

Thanks for clarifying that..

Thank you. Our next question comes from Tyler Van Buren with Piper Jaffray..

Hey, thanks guys. Good morning. I wanted to ask a question on Mitapivat, the mechanism does seem fairly specific for or appropriate for PKD. But could you just expand -- I understand it's wild type activation, so could you just expand upon the translate ability and the confidence you have and go -- and expanding thalassemia and sickle cell.

And do you think it's possible that we could see the majority of patients with the gram per deciliter increase in hemoglobin eventually, and as you think about the competitive landscape in some of the orals that are in later stages of development, how do you see it competing mechanistically with those?.

Yes it's a really interesting part of developing this drug and the demonstration in our first study with Mitapivat, which who would normally volunteer -- healthy volunteers who were treated for 14 days across a range of doses and demonstrated that we activated wild type PKR. So that’s the fundamental observation.

It helped us in terms of developing the drug in pyruvate kinase deficiency.

But also at the time our scientists internally and also with external collaborators were interested in whether this could have had the potential to help patients with hemoglobin of things [ph] like thalassemia as well as patients with sickle cell disease because of some of the metabolic effects.

So it is a very interesting thing to wrap your head around, because in pyruvate kinase deficiency we are improving the performance of an underperforming enzyme on the basis of the mutation, whereas in sickle cell and thalassemia, we're adding and improving the performance of an otherwise normal enzyme and in two diseases, where you may be able to improve the health of those red cells without really addressing that underlying genetic defect.

So that's the hypothesis and we didn't just decide to do this because it made sense or we thought it was a good idea, we had some pretty good preclinical data from collaborators in thalassemia that demonstrated in beta -- found mouse model that we not only raised hemoglobin, but we also had effects on ineffective [Indiscernible].

So all this comes together for that pilot study, I've described. And certainly that pilot study if it demonstrates compelling activity, we would then need to think about how we're going to develop the drug in and in an area where there is unmet medical need being addressed, but we still think there's probably going to be an ongoing unmet need.

So we would think about it as monotherapy. We would need to think about it in the various subsets of both of these individual diseases with the advent of new therapies coming in.

There's always the question of combinations, and/or patients who have not benefited from approved therapies, so that the challenge for us going forward should we see data from you know in either one of these diseases that suggests that PKR activation has potential for patients..

It's very interesting. Thanks for your thoughts..

Thank you. And our final question will come from Mark Breidenbach with Oppenheimer..

Hey guys, thanks for sneaking me in. And just a couple of quick ones, probably both for Chris. So first going back to AG-270. Can you give us a little bit more information about the setting, that the expansion cohorts will focus on in lung and pancreatic cancer.

Are we looking at newly diagnosed patients or will this be in a second or third line of setting?.

Yes. So we're not providing that level of detail yet as we get closer to opening those cohorts you'll get a good sense of a better sense of the exact patient population.

Needless to say, it's going to be more homogeneous in our Phase 1 setting, where we essentially took patients who really had no other treatment alternatives, so they could have had multiple prior lines of therapy, multiple diagnoses etcetera. So can’t answer your question specifically today, but those details will be forthcoming relatively shortly..

Okay great. And I guess a follow up on the related to mitapivat in beta [ph] thalassemia.

Can you give us a little bit more color on what you would define as a successful proof-of-concept? Is it purely a hemoglobin response or are we also hoping to see something perhaps a little more clinically meaningful for -- like a reduction in transfusion dependency and things of that sort? Thank you..

Yes.

These patients are coming in, are transfusion and not regularly transfused I should say, but your question is what would be the definition of success? I would argue because of the and based on what we know about the disease and the discussion with the experts who actually running the study that demonstrating a 1 gram increase that's sustained could be associated with clinical benefit.

One with the other positive signals that we would want to see would be other indicators that we're actually having an effect on the ineffective erythropoiesis as you see with these patients.

The number of patients who respond would be important as well as the magnitude of those changes, both in terms of the primary endpoint of hemoglobin increase as well as the ineffective erythropoiesis markers. So you know that the definition that of success I think is really going to depend on we're going to look at a number of different factors.

And in terms of relating this back to the prior question, we'll look at the -- we'll take a look at the activity profile and the safety of the drug by itself and then we'll have to step back a little further and say, okay, so how does this fit into an evolving treatment landscape.

In terms of making that ultimate decision are we going to take a further step in clinical development..

All right. Thanks for taking the questions, and congrats on the progress..

Ladies and gentlemen that does conclude today's question and answer session. I would now like to turn the call back over to management for any closing remarks..

Thank you, operator. 2019 is an important year for Agios as we work to execute across our broad oncology and rare genetic disease portfolios. And the first half of the year so far has been extremely successful. I would like to thank all of the tremendous employees at Agios for their dedication and passion to making a difference for patients.

I would also like to thank all of the patient’s, caregivers and physicians who participate in our clinical trials. Without them, we could not do what we do. Thank you all for joining us today..

Ladies and gentlemen, thank you for participating in today's conference. This concludes the program. You may all this connect, and have a wonderful day..