Good day and thank you for standing by. Welcome to the Agios Pharmaceuticals Incorporated quarter three 2023 earnings conference call. At this time, all participants are in a listen-only mode. After the speakers’ presentation, there will be a question and answer session.

To ask a question during this session, you will need to press star-one-one on your telephone. You will then hear an automated message advising that your hand is raised. Please be advised that today’s conference is being recorded. I would now like to hand the conference over to Mr. Chris Taylor, VP Investor Relations and Corporate Communications.

Please go ahead..

Thank you Operator. Good morning everyone and welcome to Agios’ third quarter 2023 conference call. You can access slides for today’s call by going to the Investors section of our website, agios.com. On today’s call, I am joined by our Chief Executive Officer, Brian Goff; Dr.

Sarah Gheuens, Chief Medical Officer of Head of Research and Development; Tsveta Milanova, our Chief Commercial Officer; and Cecilia Jones, Chief Financial Officer. 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 these 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’ll turn the call over to Brian..

Thanks Chris. Good morning everyone and thank you for joining us. Our vision for Agios is to build a leading hematology franchise with approvals spanning multiple indications, an expanded portfolio fueled by disciplined business development, and advancement of an internal pipeline aligned with our core expertise in rare disease.

We’re excited to speak with you today to review our progress thus far this year and highlight a number of important near term clinical and regulatory milestones in the months ahead. Our momentum has been building and our accomplishments have been many - clinically, commercially, and in strategic business development.

Most importantly, we’ve meaningfully advanced our pipeline through excellent execution and clinical development, generation of consistent and compelling clinical data, and investigators’ enthusiasm for the potential of PK activation in our lead indications.

In addition to the milestones achieved to date, I am pleased to announce that we have recently dosed the first patient in the Phase III portion of the RISE UP study of mitapivat in sickle cell disease and completed enrollment of the Phase III ACTIVATEkids-T study of mitapivat in pediatric PK deficiency ahead of schedule.

With this progress, we are on track to deliver six mid to late stage data readouts by the end of 2025, including three by the end of next year, and we remain well positioned to generate significant value over both the near and long term. Sarah will provide a detailed update on our progress in R&D in just a few minutes.

As you’ll hear from Tsveta, we remain encouraged that the durable efficacy observed in the clinical trials of mitapivat in PK deficiency has continued to translate to a low discontinuation rate among patients in the real world.

Importantly, we continue to maximize the current launch in PK deficiency while strengthening our commercial capabilities to support anticipated future launches in meaningfully larger patient populations, including a potential launch in thalassemia in 2025.

As you’ll hear from Cecilia, we ended the third quarter with approximately $872 million in cash and investments on the balance sheet. We are very pleased to have added a promising early stage siRNA asset from Alnylam last quarter and we continue to explore opportunities to expand and diversify our pipeline in a disciplined fashion.

We’re also keenly tracking Servier’s progress towards FDA approval of vorasidenib given our retained economics. Looking at the path ahead, we are on track to achieve each of our remaining 2023 milestones and advance priorities for next year.

Specifically, we’re focused on reporting top line data from the Phase IIa study of AG-946 in lower risk MDS by year end, and also by the end of this year, we plan to file the IND for our PAH stabilizer for the treatment of phenylketonuria, or PKU.

Our other priorities moving into next year include preparing for two Phase III data readouts for ENERGIZE and ENERGIZE-T in thalassemia next year, ramping enrolment in the Phase III portion of the RISE UP study of mitapivat in sickle cell disease, and completing enrolment in the Phase III ACTIVATEkids study of mitapivat in pediatric PK deficiency.

Overall, I’m very pleased with the significant progress we’ve made in 2023 and I look forward to finishing the year strong. With that, I’ll now turn the call over to Sarah..

Novel Therapy for Hereditary Hemolytic Anemia. The session will include presentations from leading KOLs on the therapeutic potential of PK activation in PK deficiency, sickle cell disease, and thalassemia. As leaders in PK activation, we were obviously thrilled to see this recognition.

As Brian mentioned, we recently dosed the first patient in the Phase III portion of the RISE UP study of mitapivat in sickle cell disease, and the team is working diligently to bring sites onboard.

The importance of our efforts was reinforced just a couple weeks ago as Brian and I had the opportunity to participate in the Sickle Cell Disease Association of America’s national convention in the DC area.

We were able to further strengthen our connection with the sickle cell disease patient community by listening to the everyday challenges these patients face in their lives and reinforce Agios’ commitment to patient advocacy and clinical progress.

Switching to our second PK activator, AG-946, given the accelerated enrolment of the Phase IIa study in lower risk MDS, we expect to report top line data from this study by the end of this year. As a reminder, MDS is a heterogenous groups of rare hematological malignancies characterized by ineffective erythropoiesis, commonly leading to anemia.

Importantly, lower risk MDS accounts for approximately 70% of MDS cases and shares [indiscernible] physiological features with other hematological diseases in our pipeline.

This Phase IIa is a 16-week study in 20 patients and the primary end points are hemoglobin response, defined as an average increase of at least 1.5 grams per deciliter from baseline from Week 8 to Week 16, and/or transfusion independence, defined as remaining transfusion-free for at least eight consecutive weeks.

The primary objective of this study is to establish proof of concept for AG-946 in participants with lower risk MDS and through analysis of the results to determine if any protocols adjustments would be appropriate as we contemplate proceeding with Phase IIb. As Brian mentioned briefly, we are on track to achieve all of our remaining 2023 milestones.

We expect to file the IND for our phenylalanine hydroxylase, or PAH stabilizer to address the underlying cause of phenylketonuria, or PKU by the end of the year.

In our pediatric studies, enrolment in the Phase III ACTIVATEkids-T study of mitapivat in children with PK deficiency who are regularly transfused is now complete several months ahead of schedule.

In the complementary study, the Phase III ACTIVATEkids study of mitapivat on children with PK deficiency who are not regularly transfused, our team achieved our goal of enrolling at least half of the patients in the study by year end and is now focused on completing enrolment.

Finally, the TMPRSS6 siRNA that we recently in-licensed from Alnylam has been integrated into our portfolio and our team is excited to begin advancing that program as a potential disease modifying treatment for polycythemia vera.

Looking ahead to next year, we expect to report top line results from the Phase III ENERGIZE and ENERGIZE-T studies of mitapivat in thalassemia. Together, these studies are evaluating mitapivat across all thalassemia sub-types, including both alpha and beta thalassemia and patients encompassed in the full range of transfusion burden.

For ENERGIZE, our primary end point of hemoglobin response, defined as an equal or more 1 gram per deciliter increase in average hemoglobin concentration from Week 12 through Week 24 compared with baseline.

For ENERGIZE-T, the primary end point is transfusion reduction response, defined as a 50% or greater reduction in transfused red blood cell units with a reduction of equal or more than two units of transfused red blood cells in any consecutive 12-week period through Week 48 compared with baseline.

The design of these trials allows us to demonstrate clinical meaningfulness in a variety of ways via hemoglobin increase supported by a reduction in fatigue and/or transfusion reduction.

Following the strong pace of enrolment, we expect data from the ENERGIZE study in the first half of next year and data from ENERGIZE-T in the second half of next year. With that, I will now turn the call over to Tsveta..

Thank you Sarah. Our commercial organization remains focused on maximizing the opportunity of the current launch in PK deficiency, which will lay the foundation for potential future launches in thalassemia, sickle cell disease, and lower risk MDS.

In the third quarter of 2023, we generated $7.4 million in net Pyrukynd revenue, a 10% increase over the prior quarter. A total of 160 patients have completed a prescription enrolment form, including 13 in the third quarter of 2023, a 9% increase versus the second quarter. This translated into net 100 patients on therapy at the end of Q3.

We continue to observe PEF conversion timelines in the range of four to six weeks. Patients on therapy continue to stem from a growing and diverse prescriber base of 142 physicians and represent a broad demographic and disease manifestation range that is consistent with the adult PK deficiency population.

We continue to expect slow and steady uptake over time and variability quarter-over-quarter. This is due to the ultra-rare nature of this disease and the long lead time between identifying a potential prescriber and then converting into a PEF and ultimately a patient on therapy.

We remain focused on efficiently identifying providers likely to treat adult patients with PK deficiency and continue to be encouraged with the persistency of patient treatment.

All of our work to build capabilities in targeting analytics, physician awareness and education, and patient access is helping to build a strong foundation to maximize the opportunity of potential future launches in meaningfully larger patient populations.

The first of these anticipated launches is in thalassemia, where mitapivat has the potential to become the first therapy to improve hemolytic anemia and ineffective erythropoiesis across the full range of disease sub-types, including alpha and beta thalassemia and transfusion-dependent and non-transfusion dependent thalassemia.

Importantly, unmet need across thalassemia sub-types remains high. Approximately 60% of thalassemia patients in the U.S. do not have an approved treatment option. As highlighted on this slide, in contrast to PK deficiency, the thalassemia market in the U.S. is better established with a higher diagnosed prevalence and higher disease awareness.

PK deficiency is an ultra-rare disease which includes approximately 3,000 patients with an estimated diagnosis rate of 30%. In contrast, thalassemia impacts approximately 8,000 patients in the U.S.

The diagnosis rate for thalassemia is high given the availability of targeted newborn screening; in addition, thalassemia has well established ICD-10 codes. The availability of claims data in thalassemia will allow us to utilize the capabilities we are building today to inform our segmentation, targeting, and education efforts for launch.

Analyzing these data, we have identified that approximately half of the adult thalassemia patients are treated at less than 150 affiliated hematology and oncology academic and community practices; therefore, we plan to focus our initial launch efforts on thalassemia centers of excellence and these affiliated academic and community practices.

As the launch progresses, we anticipate expanding to additional community practices with regularly monitored patients. With the potential future launches in thalassemia and sickle cell disease approaching, we are very excited by the prospect of expanding the range of patients we serve. With that, I will now turn the call over to Cecilia..

Thanks Tsveta. Our third quarter 2023 financial results can be found in the press release we issued this morning, and more details will be included in our 10-Q, which will be filed later today. Let me now take a moment to provide some context and highlight a few key points.

Third quarter 2023 net Pyrukynd revenue was $7.4 million, an increase of $0.7 million compared to Q2 2023. Driven by the variability that Tsveta spoke to a moment ago, third quarter revenue was lower than we anticipated.

Given the ultra-rare nature of the disease and long lead times associated with initiating patients on therapy, we continue to expect slow and steady growth and quarter-to-quarter variability as we move forward. Consistent with other rare disease launches, gross-to-net is expected to be in the 10% to 20% range on an annual basis.

Cost of sales for the quarter was $0.6 million. R&D expenses were $81.8 million for the third quarter, an increase of $16.9 million compared to the third quarter of 2022. This increase was primarily driven by the $17.5 million upfront payment to Alnylam for the TMPERSS6 asset.

SG&A expenses were $25.8 million for the third quarter, a decrease of $3.3 million compared to the third quarter of 2022 that was primarily driven by decreases in stock-based compensation expense and professional fees.

As a reminder, as part of the divestiture of our oncology business to Servier, we retain rights to a potential $200 million milestone upon FDA approval of vorasidenib and 15% royalty on potential U.S. net sales. We ended the quarter with cash, cash equivalents and marketable securities of approximately $872.4 million.

We expect that this balance, together with anticipated product revenue, interest income, and the potential vorasidenib milestone will enable the company to fund our operating expenses and capital expenditures through several value-creating milestones and at least into 2026.

This guidance does not include cash inflows from potential royalties for vorasidenib, commercializing mitapivat outside of the U.S. in one or more partnerships, or other potential strategic business or financial agreements.

We remain focused on creating shareholder value, including by proactively managing our cost base and deploying a disciplined cash allocation approach as we prepare to support potential future launches of Pyrukynd.

As we move toward additional potential value-creating milestones in the near term, I am confident that our strong balance sheet will enable us to execute from a position of strength as we continue to pursue ways to create shareholder value. I will now turn the call back over to Brian for his closing remarks..

Thanks Cecilia. So far this year, we’ve made significant progress towards achieving our vision for Agios, and I look forward to the catalyst-rich period ahead of us with read-outs in three mid to late stage studies expected by the end of next year.

As always, we’ll continue to strive to be responsible stewards of our balance sheet and evaluate meaningful opportunities for value creation.

Finally, I’d like to thank all of our employees for their hard work and dedication to our mission of transforming the lives of patients living with rare diseases, and all of our partners, including the patients, physicians, caregivers, and participants in our clinical development programs. With that, we’ll open the call for questions..

Thank you. [Operator instructions] Your first question comes from the line of Divya Rao from TD Cowen. Your line is now open..

Hey guys, thanks for taking my question. This is Divya on for Mark. Congrats on the quarter.

Just in terms of the MDS read-out, could you give us a little bit more color on the scope of that read-out, and does the team have any, I guess, internal bar for what success looks like and what’s needed--what you’d need to see before moving into the Phase III portion?.

Thanks Divya.

Sarah, you want to take that?.

Sure. As we mentioned, we have sped up the enrolment of this program, allowing us to create read-outs this year, by the end of this year. What you can expect is consistent with how we’ve handled top line data results in the past, so more to come on that.

Obviously full details will always [indiscernible] for a medical meeting, so that would be in the works too. In regards to your question for do we have a bar, yes, we do have a bar.

Now, this is a Phase IIa, so of course we’re looking at the study to provide us learnings, and as we’ve mentioned, we will make sure that the data is reviewed and that we set up the Phase IIb for maximum success..

And I just want to take an opportunity to acknowledge again that this is Sarah and her team delivering, because this was originally something that we were expecting next year. It enrolled a lot faster than we expected, so we’re very much looking forward to the read-out..

Thank you..

Sure..

Your next question comes from the line of Salveen Richter from Goldman Sachs. Your line is now open..

Hi, this is Lydia on for Salveen.

Kind of going off the last question, could you just lay out the opportunity for AG-946 and how it fits within the broader pipeline and in the context of Pyrukynd?.

Yes, maybe I’ll take that one. First of all, I think we’re in a great position to have more than one PK activator, and for a number of reasons - IRA is actually one of them, that gives us a lot of optionality. As you know, we’re currently pursuing 946 in two different pathways.

Sarah just talked about one, which is our pursuit of low risk MDS, and we’re very excited to have the opportunity to get the data read-out.

The other is we’re pursuing 946 in sickle cell disease in a Phase I study, and the main intent there is to get data in another hemolytic anemia, and based on what that read-out looks like at the right time, that will guide us as to what else we would like to do with 946.

But again, from an overall perspective, a franchise perspective, we have a lot of optionality and several different opportunities in front of us..

Please stand by. Your next question is from the line of Tess Romero from JP Morgan. Your line is now open..

Good morning guys. Thanks so much for taking our question. Can you just give us a sense of the type of analyses we will get in the fuller presentation of RISE UP at a medical meeting later this year, that are beyond what we saw in the top line? Thank you..

Sure, thanks Tess. As you can expect from us, as we always do for our data read-outs, we will provide you with more detail on our secondary end points because we did not provide that yet in the first release, so you’ll see more detail around hemolytic parameters, things like that, and then of course safety as well.

Per our usual approach, we speak to our intent to treat, so you will see exactly the primary and secondary end points the way we had described them in the protocol..

Okay, looking forward to ASH abstracts in a little bit here, and thanks for taking our questions..

We are too. Thanks Tess..

Your next question comes from the line of Greg Renza from RBC Capital Markets. Your line is now open..

Hi, this is [indiscernible] on for Greg, and congrats on the progress. I have a question on AG-946.

First, can you remind us--and you mentioned earlier that there’s a heterogeneity in the low risk MDS, but can you remind us the difference between patients with non-transfused or low burden transfusion versus high burden of transfusion, that will be included in Phase IIb, and why the mechanism of 946 could address both populations? Secondarily, I know there was a question about the bar for success earlier, but can I ask the question in a different way? I was wondering if we should look for [indiscernible] of early data, you know, with 30% to 40% obviously transfusion independent as a bar for competitiveness.

Thank you..

Thanks for the question. These are--I’ll start with the last part. You can’t really compare trial to trial - they’re not designed like head-to-head comparisons. They are different in the population enrolled, they are different in the duration of the trial, so I don’t think you can just take a bar from another trial and apply it to the next.

In regards to the population, so the first part is a short duration trial in which we chose to and focus on a population that is less transfused, so we can truly examine what happens there. Then the IIb is a longer trial in which we feel comfortable to enroll a higher burden--transfusion burdened population.

It’s really just a numerical cut-off between all of those different populations, and that’s it..

Got it, thank you. .

Our next question comes from the line of Greg Harrison of Bank of America. Your line is now open..

Hey, good morning. Thanks for taking the question.

How are you thinking about the incremental commercial opportunity in pediatric PKD? How well are these patients characterized, and what efforts remain on your end for identification? Would you expect a launch here to have a similar cadence to what you’ve seen in adult?.

Thanks for the question. Absolutely. When you look at the PKD patient population in totality, we know we expect to have about 3,000 to 8,000 patients in the U.S. and EU side, so it’s around 3,000 patients in the U.S. Eighty percent of those are estimated to be the adult patient population, so it’s about 20% of the pediatric.

Given the ultra-rare nature of that disease, we would expect a very similar launch dynamic. Having said that, we’ll be on the market for a lot longer with a higher experience with Pyrukynd and understanding of the disease, so we will be hoping to reach these patients as quickly as possible..

And Greg, I’ll just add too that in addition to the commercial opportunity that Tsveta is talking about, we also think it’s really important to have these studies conducted and completed in PKD because it gives a really nice signal of safety as we look ahead to these meaningfully larger opportunities that we talk about all the time - thalassemia, sickle cell disease, so that’s the other dimension of this that I think for the community, the investigators, the patients who will be watching.

We’re very enthusiastic about getting those data read-outs..

Thanks, that’s helpful.

Are you able to provide any additional color on discontinuations at this point in the launch, and if you can’t quantify it now, is there any time in the future where we’d be able to expect that?.

As we’ve said in the past, we continue to make progress with the launch and learn every day. Given the ultra-rare disease nature of PKD, we would expect to see slow and steady progress over time, but also variability quarter-over-quarter.

I can tell that very importantly, we continue to see strength in patient persistency, we get positive provider feedback and payor support for the product, so the discontinuation rate continues to remain low. We are dealing with small patient numbers and that’s why you might see some of the changes in the [indiscernible] here..

To add to that, the discontinuation in the clinical trial also is low, and that allows us to really study maintenance of effect in the different open label extensions that we have ongoing as well, and that remains encouraging..

Got it, and thanks again for taking the questions..

Thank you Greg..

Your next question is from the line of Danielle Brill from Raymond James. Your line is open..

Hey guys, this is Alex on for Danielle. Another question on 946 ahead of MDS data. Just curious about your updated thoughts on how big you think the thrombocytopenia risk is as a toxicity signal.

I know you’re not using the same dose where it emerged, but was kind of curious if there’s anything particular about MDS that could make these patients more susceptible to that signal. Thanks so much..

Sure, thanks for the question.

To start with the second part of your question, thrombocytopenia is indeed more common in patients living with MDS because they can be prone to develop pancytopenia, which includes a decrease in platelets as part of their disease, and indeed many of the therapies have thromobocytopenia as an additional adverse event reported.

To your point, we did observe thrombocytopenia at the high dose, the 20 milligram dose in healthy volunteers. Right now, we are studying 5 milligrams in the MDS patient population and we’re working to really understand the safety profile and efficacy profile of the drug, so more to come on that after we have a database lock..

And Sarah often adds the phrase that this is--it’s monitorable, it’s manageable, and it’s reversible, which is very encouraging as well..

Indeed. That’s the thing we hear, really, from physicians as well, because this is something that actually occurs within the organ system that they’ve very comfortable with. They’re treating all of these hematological conditions.

The fact that thrombocytopenia is something that can be picked up on lab draws and then mitigated by a potential discontinuation is a very reassuring thing..

Thank you. Now I would like to turn the call back to Brian Goff for closing comments..

Well, thank you all very much for participating in today’s call. As you heard this morning, our team has great conviction in our potential to deliver transformative new therapies for patients and significant long term value for shareholders. I’m really proud of the efforts, the continued efforts from our team.

We appreciate your interest in Agios and very much look forward to speaking with you soon. Thanks a lot..

This concludes today’s conference call. We thank all for participating. You may disconnect..