Good morning and welcome to Agios' Fourth Quarter 2021 Conference Call. At this time, all participants are in 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 Holly Manning, Senior Director of Investor Relations..

Thank you, operator. Good morning, everyone, and welcome to Agios' Fourth Quarter 2021 Conference Call. You can access slides for today's call by going to the Investors section of our website, agios.com. With me on the call today with prepared remarks are Dr. Jackie Fouse, our Chief Executive Officer; Dr.

Sarah Gheuens, our Chief Medical Officer; Richa Poddar, our Chief Commercial Officer; Jonathan Biller, our Chief Financial Officer and Head of Corporate Affairs; and Dr. Bruce Car, our Chief Scientific Officer, who will join for Q&A.

Before we get started, I would like to remind everyone that some of the 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 our most recent filings with the SEC and any other future filings that we may make with the SEC. With that, I will turn the call over to Jackie..

Thank you, Holly. Good morning, everyone. And thanks for joining our fourth quarter 2021 results call.

As I reflect on 2021, I'm reminded of this time last year when we had just recently announced our decision to divest our oncology business and were in the thick of creating a plan for the next chapter of Agios focused solely on genetically defined diseases.

Today, 12 months later, I'm astounded at what we've been able to accomplish together with our teams across all areas of the business. And I'm incredibly optimistic about the future that we're building toward.

On the heels of our FDA approval of PYRUKYND last week, our commercial team is off to the races engaging with physicians and educating on PK deficiency. Richa, who joins us for her first earnings call in her new role as Chief Commercial Officer, will provide more insight into our commercial launch strategy.

Our clinical team is moving full speed ahead in rolling our thalassemia and sickle cell disease pivotal studies, while also working through startup activities for our pediatric PK deficiency pivotal trials, the AG-946 Phase 1 sickle cell disease cohort, and the AG-946 MDS study.

As always, our research organization continues to focus on the next wave of discovery and preclinical programs, which we laid out at our Investor Day back in November.

Importantly, because our oncology business divestiture provided us with significant cash and a strong balance sheet that supports our near and long-term business strategy, we can remain focused on executing against our business priorities during a time when financial markets are volatile and uncertain.

Last year, we reduced our share count by more than 23% through our share repurchase program, while retaining financial flexibility to accelerate programs in our pipeline, and potentially pursue complementary business development opportunities that could arise.

As we look ahead to this year, we're committed to continuing our track record of strong execution across research, clinical and commercial. With that, I'll turn it over to Sarah..

Thanks, Jackie. The productivity of our clinical organization over the last year has truly been remarkable as we've completed two pivotal trials, initiated three others, advanced a new molecule into its first-in-human study, began startup activities for numerous other trials that we'll initiate this year and submit it to regulatory filings.

I'll start with pyruvate kinase deficiency, where we are proud to be the first company to have created the treatment for this lifelong hemolytic anemia. Last week, the FDA approved PYRUKYND for the treatment of hemolytic anemia in adults with PK deficiency.

The label which we reviewed in detail on our approval investor webcast encompasses all phenotypes and transfusion status. While this is a significant milestone for each of us at Agios, we know our work in PK deficiency is far from over.

Our marketing authorization application for adult PK deficiency is under review in the EU and we remain on track to receive a decision from the EMA in the second half of 2022.

In addition, our team is actively working through startup activities for two pivotal trials in pediatric patients with PK deficiency who are not regularly transfused and those who are regularly transfused. We expect ACTIVATE-kids and ACTIVATE-kidsT to initiate in mid-2022.

A key priority for us is to continue to elucidate the burden of PK deficiency and understanding the long term impact of treatments with PYRUKYND.

At ASH in December, we were pleased to share new data that highlighted the maintenance of response for patients in the extension studies as well as PYRUKYND's ability to reduce iron overload and improve ineffective erythropoiesis.

Our adult PK deficiency extension studies as well as the peak registry are ongoing and we look forward to sharing additional insights from these trials at future medical meetings. Beyond PK deficiency, we believe PK activation has the potential to play an important role in the treatment of thalassemia and sickle cell disease.

At the end of last year, we initiated our two global placebo-controlled clinical trials of PYRUKYND in thalassemia, ENERGIZE and ENERGIZE-T as well as the Phase 2 portion of our Phase 2/3 study in sickle cell disease, RISE UP.

The first patients have been dosed in all three trials and our team is focused on continuing global site activation and patient enrollment efforts. Our goal is to complete enrollment in the Phase 2 portion of RISE UP and enroll a meaningful portion of patients in ENERGIZE and ENERGIZE-T by the end of the year.

At ASH, we shared important new data in both disease area.

Notably, we presented the first extension data supporting long-term use of PYRUKYND in both alpha and beta non-transfusion dependent thalassemia and our collaborators at the NIH shared the complete data set from the core periods of their Phase 1 study and our collaborators in the Netherlands shared the first analysis from their investigator-sponsored trials, including data on point of sickling.

Together, these data continues to demonstrate that PYRUKYND has the potential to meaningfully impact these hemolytic anemia. Leveraging our pioneering expertise in PK activation, we're also advancing our novel PK activator, AG-946.

AG-946 is currently being evaluated in a Phase 1 study with a healthy volunteer component, followed by a sickle cell disease component. We continue to enroll healthy volunteer multiple ascending dose cohorts and plan to initiate the sickle cell disease cohort in the first half of this year.

At our IR Day in November, we shared our plans to explore AG-946 in anemia associated with low to intermediate risk MDS. The Phase 2a trial will initiate by the end of this year. I will now turn the call over to Richa, our Chief Commercial Officer. .

Thank you, Sarah. It's an exciting time for the commercial organization as we launch our first therapy for a genetically defined disease. In the last week, our field team has been actively engaging with physicians and educating on the first approved treatment for pyruvate kinase deficiency.

As we laid out at approval investor event, our commercial launch strategy focuses on disease education, raising awareness of the benefit of PYRUKYND for eligible patients, and ensuring patients that are eligible have access and can stay on therapy.

We believe there are approximately 1,500 to 4,000 people living with PK deficiency in the United States. And we have focused our pre-launch educational efforts on the diagnosis of PK deficiency. However, given that it is under diagnosed, we believe we'll have a better understanding of prevalence as we get further into the launch.

Having a treatment available provides a compelling reason for physicians to consider PK deficiency when diagnosing patients. Of these patients, we believe approximately 30% are currently diagnosed and 80% are adults.

Once the patient is diagnosed with PK deficiency, they're able to join the myAgios Patient Support Service for disease education and support. This service is available to all people living with pyruvate kinase deficiency regardless of their treatment regimen.

For patients prescribed PYRUKYND, myAgios also works with the patient and provider to ensure access, provide drug-related education and support long-term adherence. A few things to highlight. For eligible, commercially or privately insured patients, the program lowers the copay coinsurance deductible to $0.

The prescription is processed through a single specialty pharmacy to give patients a seamless experience. Patients are immediately connected to a myAgios patient support manager who can help them navigate insurance questions and provide adherence resources to ensure a smooth start on PYRUKYND.

For eligible uninsured or underinsured patients, we will offer bridge and patient assistance programs, PAP. As we said before, it will take approximately 12 months to achieve optimal coverage and that can differ depending on the insurance provider.

Commercial patients will make up the majority of our expected patient mix and we expect that to be the fastest to achieve optimal coverage with Medicare and Medicaid lagging behind. This is consistent with comparable rare disease products we have studied.

Prior to formulary coverage, patients will need to navigate the medical exceptions process in order to obtain PYRUKYND, which typically takes about 6 to 12 weeks. Given these dynamics, we anticipate limited revenues the first few quarters.

In addition to payer dynamics, we are also cognizant of the impact that the current pandemic conditions have on our team's ability to interact with physicians and patient comfort levels with seeking medical attention at this time.

As you would expect, physicians are prioritizing direct patient care and the most acute situation, and our team has developed a thoughtful cadence of interaction with this in mind.

Importantly, as our team has been in place for the past few quarters, we have established relationships and scheduled appointments with physicians who treat PK deficiency to ensure that we can engage in a timely fashion now that we have approval.

Additionally, we are connecting with the patient community through social media channels, patient webinars, and close collaboration with the advocacy organizations, both to raise awareness of the approval of PYRUKYND and also to help provide support in terms of navigating the disease.

Importantly, our commercial strategy, our knowledge base and the connections we've made will help set us up for success as we continue to expand the applicability of PYRUKYND to other genetically defined diseases. With that, I'll now turn it over to Jonathan to review fourth quarter financials..

Thanks, Richa. Our full-year and fourth quarter 2021 financial results can be found in the press release we issued this morning, which I will summarize. More detail will be included in our 10-K filing later today.

As a reminder, our fourth quarter financial results discussion only includes our continuing operations on a comparative basis, which excludes results from our divested oncology business. Turning to operating expenses.

R&D expenses for the fourth quarter were $73.3 million and $257 million for full-year 2021, an increase of $36.2 million compared to the full year 2020.

This year-over-year increase in R&D was largely driven by startup costs for PYRUKYND pivotal studies, including ENERGIZE ENERGIZE-T and RISE UP, offset by close outs of ACTIVATE and ACTIVATE-T studies, FDA and EMA regulatory filings and increased workforce spend across all of R&D.

Selling, general and administrative expenses were $31.5 million for the fourth quarter, and $121.4 million for the full-year 2021. This represents a $6.3 million increase over full year 2020, driven primarily by PYRUKYND launch prep and disease education, including field sales build, training and marketing.

We also recorded TIBSOVO income from royalties of $2.6 million in the fourth quarter and $6.6 million for the full-year 2021, which is included within the gain on sale of oncology business line items in our income statement. We ended the quarter with cash, cash equivalents and marketable securities of approximately $1.3 billion.

With this cash balance, we expect to be able to execute our current operating plan through major catalysts and to cash flow positivity without the need to raise additional equity. With that, operator, please open the line for questions..

[Operator Instructions]. Our first question comes from Marc Frahm with Cowen..

Maybe just start with Richa and the launch. I understand the first quarter or two, you're not going to – not going to be very meaningful from a sales perspective itself.

But what launch metrics are you really going to be looking at to gauge whether the launch is going well? And I guess, most importantly, which of those metrics do you do intend to inform us about?.

The way to think about it is the three pillars that we've talked about in terms of what is important for launch success, which is informed by the patient and provider journey. So, that includes like ensuring accurate diagnosis, getting eligible patients on PYRUKYND, and then ensuring that they have access and are able to stay on therapy.

So, with that in mind, the way we are thinking about the launch metrics and what we think will be most useful is to show how the disease similarity is improving because this is a severely underdiagnosed disease, how patients are getting on treatment in terms of the net sales for PYRUKYND, and then in terms of the formulary coverage and how that's progressing, that's kind of how we intend to track it.

So, we're very much in line with how we set up the strategy, so that we can see how launch is progressing over the next few quarters..

Just recognizing that, as you said, in your comments, COVID is having some impact on patients coming into clinics and things like that.

Where do you think it is today in terms of how frequently the typical – or previously diagnosed PKD patient is coming into a clinic [indiscernible] that may be offered to them, like where do you expect that to go as hopefully COVID impacts decline?.

It's very variable, Matt. So, what we've seen over the past year and more when we study the disease and talked to patients, caregivers, and providers, the symptoms for the disease can present itself at various points in time.

So, we've seen everywhere from seeing their physician once a year to seeing their physician more frequently, if they are more regularly transfused.

In terms of when they will see their physician, I think, right now, given that there's an approved therapy, that's why the number one goal for us is to make sure that as many physicians as possible, as well as a broader patient caregiver community is aware that the drug exists, so that patients that are already diagnosed are coming into their doctor's office and having the conversations about whether they are eligible for PYRUKYND or not.

So that's the goal right now and will continue to be the goal for the next few quarters. So we are taking a very holistic approach to ensure that that happens.

So, it's not just through in person interactions, but we have the field team prepared and they're already out there having those conversations, but also using a very robust social media digital approach, so that we can create that surround sound to raise awareness around the disease as well as the availability of the product. .

Our next question comes from Anupam Rama with J.P. Morgan..

Congrats again on the approval last week. I've got a quick question.

So what are you hoping to learn from the sickle cell portion of the Phase 1 946 study, given I think the focus is really on low intermediate MDS Phase 2, which is supposed to start later in the year?.

This is Sarah. So in regards to the sickle cell disease portion, obviously, we're looking at any signal in the context of sickle cell disease, but also it applies to hemolytic anemia in general. And so, that will give us a lot of optionality to decide what to do next based on the Phase 1 component of that trial, in that context.

And yes, of course, we're very excited about the MDS program. And that's the beauty of that Phase 1. Because of the healthy volunteer study in the sickle cell disease component, it allows us to move on to MDS and it gives us a lot of optionality that way..

Our next question comes from Kennen McKay, RBC Capital Markets..

Congrats, again, on the approval of PYRUKYND.

Thinking about the expansion into sickle cell, can you maybe help us a little bit with what we should be looking for in that Phase 2 portion of the RISE UP study and really what that could inform for us?.

The RISE UP study has two primary endpoints. One is focused on a hemoglobin response and the other one is looking at a reduction in vaso-occlusive crisis via sickle cell pain crises.

So, the goal of this study is, of course, to provide a therapy that can hit on two components that are very important in this disease, which is both the hemolytic anemia component and the vaso-occlusive component and the secondary endpoints also provide additional information on how patients feel and function.

So, the way that trial is set up, it also gives us a lot of optionality in – via the different endpoints. And well, obviously, we hope to provide a meaningful therapy for sickle cell disease after we get the results from RISE UP..

Sarah, Kennen wanted to know specifically what we're looking for from the Phase 2 portion of RISE UP that would then dovetail into Phase 3..

For the Phase 2 specifically, we're looking at safety and efficacy, efficacy as measured via hemoglobin endpoints. There are in that Phase 2 two doses tested and placebo. And so it allows us to select those to move forward into Phase 3..

Our next question comes from Alethia Young with Cantor Fitzgerald. .

Congrats again on the approval.

I guess my question is just a little bit, when you're reflecting on the oncology divestiture, can you talk a little bit how you're thinking about business development right now? And what are opportunities you're seeing and what you think you might or – may or may not need to do to add things to the pipeline? How do you think about diversifying that? I guess obviously you've done the R&D day internally, but just, I guess, more specifically externally.

.

I'll start and then others may want to jump in. I think one of the first things that I would point out is, given the progress that we've made with our internal programs and the ongoing evolution of our insights into the biology of cellular metabolism, I think we have an even better idea today.

And as other innovation may have progressed outside of Agios, I think we see more with respect to potential complementarity of targets or mechanisms or ways that we could approach moving some of our biological insights forward. So, I think that's one thing.

We've always – at least here, up to now, probably felt like our sweet spot for doing business development at Agios is on preclinical stage assets or early stage clinical assets, just given our scientific expertise, as well as the expertise of our clinical development team, translational medicine, that sort of thing.

So that would typically be the stage that we would probably mostly be looking at, not that we would be opposed to doing later stage things. But we think that's where we probably add the most value.

From a therapeutic category standpoint, I think it's pretty clear that non-malignant hematology or classical hematology, as we call it, would be clearly an area that would be in our sweet spot, as well as other diseases of inborn errors of metabolism.

And I think we've learned even more about over the last few years with our research and discovery team, as well. So from a financial standpoint, those sorts of deals that we think would probably be in our sweet spot would be totally manageable within the resources that we have. And we're working on a few things.

And hopefully, at some point, we'll be able to talk about some of that, but we're quite keen to add to our pipeline with the complementary targets or mechanisms and potentially partnerships with other companies in a variety of ways, including research partnerships. .

Our next question comes from Greg Harrison with Bank of America. .

Just two quick ones on the launch.

First, what feedback have you gotten to this point from payers on the pricing that you announced last week? And then, what does your research indicate as far as the enthusiasm for doctors to put their patients who are eligible on PYRUKYND, just trying to get an idea of what sort of trajectory we could expect once the launch is into full swing?.

So, a couple of things here. So we've had payer conversations both prior to launch, as well as post-approval as well as they've been very positive.

We came up with the price in concert, I should say, with having a very good understanding of both the disease, how it was valued in the context of the unmet need and then how they value the clinical data, the context of disease.

So, we had all those conversations ahead of the approval, so that we were coming up with a price that very much reflected the feedback that we had received from all sources. So, we've taken a very holistic approach to price.

We've considered what our overall pricing and access philosophy is, so we can go to optimize access for patients that are eligible for treatment, but also ensure that we are continuing to invest in innovation. So in that context, reception has been positive. So, we're not anticipating significant pushback.

I think the one thing that's worth mentioning, and we've talked about before, is that we did have – we have a very broad label, which we're very happy about. It's always better to have a broader label than not.

But we did exclude the double [indiscernible] patients, which is about 9% to 15%, as well as those patients that have a hemoglobin greater than 10 grams per deciliter.

And both of these patient populations, because they were not included in our pivotal registration trials, there could be some payers that might restrict use in that particular patient population, although the label does allow for use in the broadest possible patient population with adults with PK deficiency.

So those are the conversations we're having. It will be very payer dependent, but the conversations have been quite positive. As far as physicians are concerned, I think overwhelmingly positive again, both pre and post launch discussions. There hasn't been any treatment options. The first case of pyruvate kinase deficiency was discovered in 1961.

And all of the treatment options have been very much supportive in nature. So, you're really trying to control the symptoms. This is the first and only approved treatment that's actually impacting the underlying cause or chronic molecules that you see with the disease. So we believe that they will trial it in the vast majority of their patients.

Where some of the dynamics come in is in the context of payer reauthorizations which we expect in the three to six month timeframe. But we expect physicians to trial it for the vast majority of eligible patients, which is about the pyruvate kinase deficiency..

Our next question comes from Mark Breidenbach, Oppenheimer..

Since it really sounds like 2022 is going to be a year of patient accrual in the ENERGIZE and RISE UP trials, I just wanted to make sure we're not overlooking any upcoming clinical catalysts.

So should we be expecting any new clinical data from AG-946 or maybe from the academic sponsored studies have made a pivot this year? And then the second question is really looking ahead to a potential launch of PYRUKYND in the EU? I'm wondering if you would consider commercial partnership in Europe or partnerships in Europe? And also, if you have a sense for how PKD patients are distributed in the EU, if there are any clusters of patients in specific territories or they're kind of broadly distributed.

.

I'll take the first question. This is Sarah. And then I'll hand it over to Richa for the second question. In regards to the data catalyst, you're right that we are very focused on execution for ENERGIZE and RISE UP right now.

However, we will continue to communicate on the long term extension data that we are continuing to gather on both for pyruvate kinase deficiency and for thalassemia at upcoming medical conferences.

And that is actually really important because it does highlight a maintenance of response over time, it allows us to look at other signals that would take a longer time to appear, such as what we've just communicated at ASH around iron overload data. So, things like that we will continue to communicate on.

But you're right, it's a big year for us on execution. And we're super excited about that. So, yeah, more to come..

So, to address your Europe question, in terms of timelines, right, we filed in June of last year, so we are anticipating approval towards the end of this year. And then, with the way the pricing and reimbursement environment works in Europe, it will take about 12 to 18 months before all of that is sorted.

We are committed to patient access and ensuring that patients that need access to our therapy has the ability to do so. So, we are evaluating all of our options in terms of how best to do that outside of the US. And we continue to maintain that building a commercial infrastructure outside the US is not the best approach. So we are looking for partners.

It could be a partner or multiple partners, as you talked about, but we have a little bit of time to make some of those decisions as things evolve. And then, with regards to the patient population, it's quite similar to the US, in that you don't really see clusters per se. It's [indiscernible].

There are some centers of excellence, but for the most part the patient population is not concentrated in any one area..

Our next Question comes from Salveen Richter with Goldman Sachs..

This is Matt [ph] on for Salveen.

Could you just elaborate a little bit on the pricing strategy for PYRUKYND in sickle cell? And then also expand on patient eligibility if only one primary endpoint is met?.

So, Sarah talked about before, we have two primary endpoints in the sickle cell program. One is hemoglobin and the other one is the analyzed rate of vaso-occlusive crisis, right? So, it's two primary endpoints.

We believe that if we hit both of those primary endpoints, it gives us a very compelling and competitively differentiated profile because the available treatments today only allow you to – only address one of the two primary challenges with the disease.

So we have a lot of options once it comes to the data and how we think about pricing associated with that. So, we think about sickle cell as optionality for us. We have to wait and see what the data shows. And depending on what the data shows will determine how we think about pricing overall.

We'll take a very similar approach to pricing in sickle cell that we have with PKD, which is a very holistic approach, we will talk to the broader community, look at the data, show them the data, see how they evaluate the data in the context of the disease and then make some decisions.

If we only hit one of the primary endpoints, hemoglobin, for example, we could consider maintaining the price that we have for [indiscernible] and then just go for a salvage patient population.

But again, given the size of the patient population and the overall value creation, we still think it would be positive overall, even if you have to take a price cut across all three indications. And if we have the full data package, then we again have another – we have a different option of considering how you want to think about price.

But, overall, sickle cell, lots of optionality. Have to wait and see what the data suggests and then take a holistic approach to determining what the best approach is..

I think I just want to make sure this is like abundantly clear, right? When you're going to market with a drug where you potentially have multiple indications over time, these label expansions, it's always better to start with the rarest disease and then make your way through those potential label expansions because it gives you more flexibility on how you deal with price over time.

So we're totally comfortable with where we are in PKD and how based on the totality of the clinical data for each indication. As they play out, we would deal with that, that price over time. So, we have a lot of flexibility in that regard. .

Our next question from Danielle Brill with Raymond James..

It's Madison or for Danielle. I was just wondering if any patients have been prescribed the drug yet. I believe last week, you said it would probably take about two weeks for a distribution to play out.

So are you seeing if any changes to that?.

We've been having interactions. As a reminder, we just got approved on Thursday. Right? So, it's early still but lots of positive interactions with payers and physicians. You're right, drug will be channel in two weeks – within two weeks, but it doesn't impact physician prescribing behavior per se.

But from a payer dynamics standpoint, reimbursement will take about 6 to 12 weeks early on till the drug gets on formulary. But lots of positive momentum, physicians are excited and patients are to about having this treatment option available..

Our next question comes from John Newman with Canaccord..

Thanks for taking my question. Just had a question on the dose titration for PYRUKYND. Obviously, this is nothing new. We've known about this. You've done a nice job establishing the dose profile in your pivotal studies.

Just curious if you think that the titration might have any effect on adoption or is this simply something where because of the severity of the disease and the lack of available therapies and the physician's experience, it's probably not likely to have much of an effect. .

This is Sarah. So, exactly the last part, what you mentioned is what we've heard, right? So we haven't seen any problems or issues with his dose titration in our clinical trial program, and indeed, the hematologists are pretty used to having medications in which they have to do a dose titration with a variety of methods.

So, this is actually pretty straightforward dose titration, so we haven't heard any concerns. .

Thank you. And I'm currently showing no further questions. At this time, I'd like to turn back over to Jackie Fouse for closing remarks. .

Thank you very much. Thanks, operator. Thank you, everyone, for all of the great questions this morning. As always, I would like to end by thanking my Agios colleagues for their dedication and passion for making a difference for patients. We're extremely excited about the approval of PYRUKYND in PKD.

I also want to thank all of the patients, caregivers and physicians who partner with us in so many ways, and especially those participating in our clinical trials across all of the indications. We couldn't do this and we wouldn't be here without patients, caregivers and physicians. .

And I'm sorry, it looks like we've lost Jackie at this time. Thank you, everyone, for joining us today. This concludes today's conference call. Everyone, have a wonderful day. You may now disconnect..