Agios Pharmaceuticals, Inc.

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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-K
(Mark One)
☑
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2025
OR
☐
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Commission File Number:
001-36014
AGIOS PHARMACEUTICALS, INC.
(Exact name of registrant as specified in its charter)
Delaware
26-0662915
(State or other jurisdiction of
incorporation or organization)
(IRS Employer
Identification No.)
88 Sidney Street,
Cambridge, MA
02139
(Address of principal executive offices)
(Zip Code)
Registrant’s telephone number, including area code:
(617) 649-8600
Securities registered pursuant to Section 12(b) of the Act:
Title of Class
Trading symbol(s)
Name of Exchange on Which Registered
Common Stock, Par Value $0.001 per share
AGIO
Nasdaq Global Select Market
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.    Yes  ☑        No  ☐
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.    Yes  ☐        No  ☑
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12
months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  ☑        No  ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§
232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes  ☑        No  ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth
company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Large accelerated filer  ☑
Accelerated filer  ☐
Non-accelerated filer  ☐

Smaller reporting
company  ☐
Emerging growth
company  ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial
accounting standards provided pursuant to Section 13(a) of the Exchange Act.    ☐
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial
reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☑
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the
correction of an error to previously issued financial statements.    ☐
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the
registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b).    ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).    Yes   ☐         No   ☑
The aggregate market value of the voting and non-voting Common Stock held by non-affiliates of the registrant computed by reference to the price of the registrant’s Common
Stock as of June 30, 2025 (based on the last reported sale price on the Nasdaq Global Select Market as of such date) was $1,914,339,201.
As of February 6, 2026, there were 58,592,172 shares of Common Stock, $0.001 par value per share, outstanding.

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DOCUMENTS INCORPORATED BY REFERENCE
Portions of the registrant’s definitive proxy statement for its 2026 Annual Meeting of Stockholders to be filed pursuant to Regulation 14A within 120 days of the end of the
registrant’s fiscal year ended December 31, 2025 are incorporated by reference into Part III of this Annual Report on Form 10-K to the extent stated herein.

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Table of Contents
PART I
Page
Item 1.
Business
3
Item 1A.
Risk Factors
38
Item 1B.
Unresolved Staff Comments
66
Item 1C.
Cybersecurity
66
Item 2.
Properties
67
Item 3.
Legal Proceedings
67
Item 4.
Mine Safety Disclosures
67
PART II
Item 5.
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity
Securities
68
Item 6.
Reserved
69
Item 7.
Management’s Discussion and Analysis of Financial Condition and Results of Operations
70
Item 7A.
Quantitative and Qualitative Disclosures about Market Risk
84
Item 8.
Financial Statements and Supplementary Data
84
Item 9.
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
84
Item 9A.
Controls and Procedures
84
Item 9B.
Other Information
85
Item 9C.
Disclosure Regarding Foreign Jurisdictions that Prevent Inspections
86
PART III
Item 10.
Directors, Executive Officers and Corporate Governance
87
Item 11.
Executive Compensation
87
Item 12.
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
87
Item 13.
Certain Relationships and Related Transactions, and Director Independence
87
Item 14.
Principal Accountant Fees and Services
87
PART IV
Item 15.
Exhibits and Financial Statement Schedules
88
Item 16.
Form 10-K Summary
91
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PART I
Note Regarding Certain References in this Annual Report on Form 10-K
Throughout this Annual Report on Form 10-K, “Agios,” “the Company,” “we,” “us,” and “our,” and similar expressions, except where the context requires
otherwise, refer to Agios Pharmaceuticals, Inc. and its consolidated subsidiaries, and “our Board of Directors” refers to the board of directors of Agios
Pharmaceuticals, Inc.
In addition, unless otherwise stated or the context indicates otherwise, all references in this Annual Report on Form 10-K to “AQVESME™ (mitapivat)” or
“AQVESME™” refer to our FDA-approved medicine for the treatment of anemia in adults with non-transfusion dependent and transfusion-dependent
alpha- or beta-thalassemia in the United States; references to “PYRUKYND® (mitapivat)”, “PYRUKYND®”, or “mitapivat” refer to all other
commercially available mitapivat products or mitapivat product candidates for which we are exploring further applications and indications, as the context
requires.
Cautionary Note Regarding Forward-looking Information
This Annual Report on Form 10-K contains forward-looking statements that involve substantial risks and uncertainties. All statements, other than
statements of historical fact, contained in this Annual Report on Form 10-K, including statements regarding our strategy, future operations, future financial
position, future revenue, projected costs, prospects, plans, and objectives of management, are forward-looking statements. The words “aim,” “anticipate,”
“believe,” “continue,” “could,” “estimate,” “expect,” “goal,” “intend,” “may,” “might,” “plan,” “potential,” “predict,” “project,” “should,” “strategy,”
“target,” “vision,” “will,” “would” or the negatives of these words and similar expressions are intended to identify forward-looking statements, although
not all forward-looking statements contain these identifying words.
The forward-looking statements in this Annual Report on Form 10-K include, among other things, statements regarding:
•
our commercialization efforts and plans to commercialize PYRUKYND® (mitapivat) and AQVESME™ (mitapivat);
•
the initiation, timing, progress and results of current, planned and future preclinical studies and clinical trials, and our research and
development programs;
•
the potential of the isoforms of pyruvate kinase, including pyruvate kinase-R, or PKR, as therapeutic targets;
•
the potential benefits of our products and product candidates targeting PKR, including PYRUKYND®, AQVESME™ and tebapivat, and of our
product candidate in our phenylalanine hydroxylase, or PAH, stabilizer program, AG-181, and our siRNA targeting the transmembrane serine
protease 6, or TMPRSS6, gene, AG-236;
•
our plans to develop and commercialize any additional product candidates for which we may receive approval, either alone or with partners;
•
our ability to establish and maintain collaborations or to obtain additional funding, if needed;
•
the timing or likelihood of regulatory filings and approvals, including the pending regulatory submissions for PYRUKYND® for the treatment of
thalassemia in certain jurisdictions outside of the United States and the potential future regulatory submission for mitapivat for the treatment of
sickle cell disease;
•
our strategic vision;
•
the timing, likelihood and amount of royalty payments we may receive from Servier Pharmaceuticals LLC with respect to certain U.S. net
sales of vorasidenib;
•
the amount and timing of future milestone and royalty payments potentially payable to Alnylam Pharmaceuticals, Inc. pursuant to the license
agreement entered into in July 2023;
•
the implementation of our business model and strategic plans for our business, product candidates and technology;
•
our commercialization, sales, marketing and manufacturing capabilities and strategy;
•
the rate and degree of market acceptance and clinical utility of our products;
•
our competitive position;
•
our intellectual property position;
•
developments and projections relating to our competitors and our industry;
•
our estimates regarding our expenses, future revenue, capital requirements and needs for additional financing and our expectations regarding
profitability; and
•
the potential impact of public health epidemics or pandemics, global economic developments and geopolitical events on our business, operations,
strategy and goals.
We may not actually achieve the plans, intentions or expectations disclosed in our forward-looking statements, and you should not place undue reliance on
our forward-looking statements. Actual results or events could differ materially from the plans,
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intentions and expectations disclosed in the forward-looking statements we make. We have included important factors in this Annual Report on Form 10-K,
particularly in the “Summary Risk Factors” and “Risk Factors” sections, that could cause actual results or events to differ materially from the forward-
looking statements that we make. Our forward-looking statements do not reflect the potential impact of any future acquisitions, in-licensing arrangements,
mergers, dispositions, joint ventures or investments we may make.
You should read this Annual Report on Form 10-K and the documents that we have filed as exhibits to this Annual Report on Form 10-K completely. We
do not assume any obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise, except as
required by law.
This Annual Report on Form 10-K includes statistical and other industry and market data that we obtained from industry publications and research, surveys
and studies conducted by third parties as well as our own estimates of potential market opportunities. All of the market data used in this Annual Report on
Form 10-K involves a number of assumptions and limitations, and you are cautioned not to give undue weight to such data. We believe that the information
from these industry publications, research, surveys and studies is reliable. The industry in which we operate is subject to a high degree of uncertainty and
risk due to a variety of important factors, including those described in the sections titled “Summary Risk Factors” and “Risk Factors.”
Summary Risk Factors
Our business is subject to a number of risks that if realized could materially affect our business, financial condition, results of operations, cash flows and
access to liquidity. These risks are discussed more fully in the “Risk Factors” section of this Annual Report on Form 10-K. Our principal risks include the
following:
•
If we do not successfully commercialize PYRUKYND®, AQVESME™ and other products for which we may receive approval, our prospects may
be substantially harmed. Our ability to generate product revenue from PYRUKYND® and AQVESME™ depends heavily on our successful
development and commercialization of the products.
•
We depend heavily on the success of our clinical-stage product candidates, including the potential approval of mitapivat for the treatment of
thalassemia in the European Union, or sickle cell disease in the United States and in other jurisdictions. Clinical trials of our product candidates may
not be successful for a number of important reasons. If we or our collaborators are unable to commercialize our product candidates or experience
significant delays in doing so, our business will be materially harmed.
•
We may engage in in-licensing transactions or acquisitions that could disrupt our business, cause dilution to our stockholders or reduce our financial
resources.
•
The outcome of preclinical studies and early clinical trials may not be predictive of the success of later clinical trials, and positive results of
completed clinical trials do not necessarily predict success in future clinical trials.
•
Interim and preliminary data from clinical trials that we announce or publish from time to time may change as more patient data becomes available
and are subject to audit and verification procedures that could result in material changes in the final data.
•
We may expend our limited resources to pursue a particular product candidate or indication and fail to capitalize on product candidates or indications
that may be more profitable or for which there is a greater likelihood of success.
•
PYRUKYND®, AQVESME™, or any of our product candidates that may receive marketing approval in the future, may be less effective than
previously believed or cause undesirable side effects that were not previously identified in clinical trials or may fail to achieve the degree of market
acceptance by physicians, patients, healthcare payors and others in the medical community necessary for commercial success, which could
compromise our ability, or that of any collaborators, to market the product.
•
If we are unable to establish and maintain sales and marketing capabilities or enter into agreements with third parties to sell and market our products,
we may not be successful in commercializing PYRUKYND®, AQVESME™ or our product candidates if they are approved.
•
We provide certain development estimates related to the development and regulatory approval of our product candidates, including mitapivat. If we
do not achieve our projected development or regulatory approval estimates in the timeframes we announce and expect, the commercialization of our
products may be delayed and, as a result, our stock price may decline.
•
We face substantial competition, which may result in others discovering, developing or commercializing products before or more successfully than
we do. There are a number of large pharmaceutical and biotechnology companies that currently market and sell products or are pursuing the
development of products for the treatment of the indications for which we are marketing or developing PYRUKYND®, AQVESME™ or our
product candidates. Our competitors may develop products that are more effective, safer, more convenient or less costly than PYRUKYND®,
AQVESME™ or
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any product candidates that we are developing or that would render PYRUKYND®, AQVESME™ or our product candidates obsolete or non-
competitive.
•
We are singularly focused on products and product candidates for the treatment of rare diseases. As a result, we may be more susceptible to changing
market conditions, including fluctuations and risks particular to the markets for patients with rare diseases, than a more diversified company, which
could adversely affect our business, financial condition and results of operations.
•
If our existing capital is insufficient to fund our operating expenses and capital expenditures, we will need to raise capital, and if we are unable to
raise capital when needed, we would be forced to delay, reduce or eliminate our product development programs or commercialization efforts.
•
We have historically incurred operating losses. We expect to incur losses in the future and may never achieve or maintain profitability. Our net loss
for the year ended December 31, 2025 was $412.8 million, our net income for the year ended December 31, 2024 was $673.7 million and our net
loss for the year ended December 31, 2023 was $352.1 million. The net income we generated in the year ended December 31, 2024 was primarily
due to the sale of the Vorasidenib Royalty Rights to Royalty Pharma and our receipt of the Vorasidenib Milestone Payment discussed below in Item
1. Business. As of December 31, 2025, we had an accumulated deficit of $561.7 million.
•
We currently rely and expect to continue to rely on third parties for the manufacture of our product candidates for preclinical and clinical testing and
for commercial supply of PYRUKYND® and AQVESME™ and any product candidate for which we may obtain marketing approval. Any
performance failure on the part of our existing or future third-party manufacturers could delay clinical development, marketing approval or our
commercialization efforts.
•
We rely and expect to continue to rely on third parties to conduct our clinical trials and some aspects of our research and preclinical testing, and
those third parties may not perform satisfactorily, including failing to meet deadlines for the completion of such trials, research or testing.
•
We may depend on collaborations with third parties for the development and commercialization of our product candidates. If those collaborations are
not successful, we may not be able to capitalize on the market potential of these product candidates.
•
If we are unable to obtain and maintain patent or trade secret protection for our medicines and technology, or if the scope of the patent protection
obtained is not sufficiently broad, our competitors could develop and commercialize medicines and technology similar or identical to ours, and our
ability to successfully commercialize our medicines and technology may be adversely affected. If we do not, or are unable to, obtain or maintain any
issued patents for any of our most advanced product candidates, it could have a material adverse effect on our competitive position, business,
financial condition, results of operations, and prospects.
•
PYRUKYND®, AQVESME™ or any product candidate that we commercialize may become subject to unfavorable pricing regulations and third-
party reimbursement practices, which would harm our business.
•
The prices of prescription pharmaceuticals in the United States and foreign jurisdictions are subject to considerable legislative and executive actions
and could impact the prices we obtain for our drug products, if and when approved, and/or the sustainability of those prices.
Item 1. Business
General
We are a commercial-stage biopharmaceutical company dedicated to redefining the future of rare disease treatment. Fueled by connections, we build
trusted partnerships with communities, collaborating to develop and deliver innovative medicines with the potential to transform lives. With a foundation in
hematology, we combine biological expertise with real-world insights to advance a growing pipeline of rare disease medicines that reflect the priorities of
the people we serve.
Business Overview
Rare diseases
The lead product candidate in our portfolio, mitapivat, is an activator of both wild-type and mutant pyruvate kinase, or PK, enzymes for the potential
treatment of hemolytic anemias. Mitapivat is approved in the United States by the U.S. Food and Drug Administration, or FDA, under the brand name
AQVESME™ for the treatment of anemia in adults with non-transfusion dependent and transfusion-dependent alpha- or beta-thalassemia and in Saudi
Arabia under the brand name PYRUKYND® for the treatment of adult patients with non-transfusion-dependent and transfusion-dependent alpha- or beta-
thalassemia. Mitapivat is also approved under the brand name PYRUKYND® in the United States by the FDA for the treatment of hemolytic anemia in
adults with PK deficiency and in the European Union, or EU, and Great Britain for the treatment of PK deficiency in adults.
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In December 2024, we announced that we submitted a marketing authorization application, or MAA, to the European Medicines Agency, or EMA, and a
regulatory application to the United Arab Emirates health authorities for PYRUKYND® for the treatment of adult patients with non-transfusion dependent
and transfusion-dependent alpha- or beta-thalassemia. In October 2025, we announced that the Committee for Medicinal Products for Human Use, or the
CHMP, of the EMA adopted a positive opinion for the new indication for PYRUKYND® in adults for the treatment of anemia associated with transfusion-
dependent and non-transfusion-dependent alpha- or beta-thalassemia. The European Commission is reviewing the CHMP’s opinion, with the final decision
expected in early 2026.
We will have a pre-supplemental New Drug Application, or sNDA, meeting with the FDA in the first quarter of 2026 and intend to submit a U.S. marketing
application for mitapivat in sickle cell disease, or SCD, following that engagement.
In addition, we are evaluating mitapivat for the treatment of pediatric patients with PK deficiency. We are also developing (i) tebapivat, a novel PK
activator, for the potential treatment of lower-risk myelodysplastic syndromes, or LR MDS, and SCD; (ii) AG-181, our phenylalanine hydroxylase, or PAH,
stabilizer for the potential treatment of phenylketonuria, or PKU; and (iii) AG-236, an siRNA in-licensed from Alnylam Pharmaceuticals, Inc., or Alnylam,
targeting the transmembrane serine protease 6, or TMPRSS6, gene for the potential treatment of polycythemia vera, or PV.
Alnylam License Agreement
On July 28, 2023, we entered into a license agreement with Alnylam under which we acquired the rights to develop and commercialize Alnylam’s novel
preclinical siRNA targeting the TMPRSS6 gene, which we refer to as AG-236, as a potential disease-modifying treatment for patients with PV.
In accordance with the license agreement, we made an up-front payment to Alnylam and recognized in-process research and development of $17.5 million
in the year ended December 31, 2023. We will also pay Alnylam for certain expenses associated with the development of AG-236, and these will be
recorded in our consolidated statements of operations as incurred. Additionally, we are responsible to pay up to $130.0 million in potential development
and regulatory milestones, in addition to sales milestones as well as tiered royalties on annual net sales, if any, of licensed products, which may be subject
to specified reductions and offsets. In the year ended December 31, 2025, we achieved a regulatory milestone that triggered a $10.0 million payment to
Alnylam, which was recorded in research and development expense within our consolidated statements of operations and classified as investing activities
within our consolidated statements of cash flows. Because the acquired assets under the license agreement with Alnylam do not meet the definition of a
business in accordance with Accounting Standards Codification, or ASC, 805, Business Combinations, we accounted for the agreement as an asset
acquisition.
Sale of Oncology Business to Servier and Sale of Contingent Payments
On March 31, 2021, we completed the sale of our oncology business to Servier Pharmaceuticals, LLC, or Servier. The transaction included the sale of our
entire oncology business, including our clinical-stage product candidate vorasidenib, for a payment of approximately $1.8 billion in cash at the closing,
subject to certain adjustments, and a payment of $200.0 million in cash, if, prior to January 1, 2027, vorasidenib is granted new drug application, or NDA,
approval from the FDA with an approved label that permits vorasidenib’s use as a single agent for the adjuvant treatment of patients with Grade 2 glioma
that have an isocitrate dehydrogenase, or IDH, 1 or 2 mutation (and, to the extent required by such approval, the vorasidenib companion diagnostic test is
granted an FDA premarket approval), or the Vorasidenib Milestone Payment, and a royalty of 15% of U.S. net sales of vorasidenib from the first
commercial sale of vorasidenib through loss of exclusivity, or the Vorasidenib Royalty Rights. The Vorasidenib Milestone Payment and Vorasidenib
Royalty Rights are referred to as contingent payments and recognized as income when realizable.
In August 2024, the FDA approved vorasidenib for adult and pediatric patients 12 years and older with Grade 2 astrocytoma or oligodendroglioma with a
susceptible IDH1 or IDH2 mutation, following surgery including biopsy, sub-total resection, or gross total resection. In September 2024, we received the
Vorasidenib Milestone Payment from Servier and recognized income of $200.0 million within the milestone payment from gain on sale of oncology
business line item in our consolidated statements of operations for the year ended December 31, 2024. In May 2024, we entered into a purchase and sale
agreement to sell the Vorasidenib Royalty Rights to Royalty Pharma Investments 2019 ICAV, or Royalty Pharma, for $905.0 million in cash, or the Upfront
Payment. The sale was contingent upon FDA approval of vorasidenib and other customary closing conditions.
Upon consummation of the sale in August 2024, Royalty Pharma acquired 100% of the Vorasidenib Royalty Rights payments made by Servier on account
of up to $1.0 billion in U.S. net sales for each calendar year. In addition, any such Vorasidenib Royalty Rights payments made by Servier on account of
U.S. net sales in each calendar year in excess of $1.0 billion will be split, with Royalty Pharma having the rights to a 12% earn-out on those excess
payments and Agios retaining the rights to a 3% earn-out on those excess payments, or the Retained Earn-Out Rights. As a result of the sale, we recognized
income of $889.1 million ($905.0 million net of fees of $15.9 million) within the gain on sale of contingent payments line item in our consolidated
statements of operations for the year ended December 31, 2024. Royalty income related to the Retained Earn-Out Rights, if any, will be recognized in the
period when realizable.
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Our Strategy and Long-term Goals
We are building a sustainable, value-creating company, grounded in our expertise in cellular metabolism and classical hematology, focused on developing
and delivering innovative medicines for patients.
We believe our proven PK activator franchise has the potential to become standard of care across multiple hemolytic anemias, supported by approved
indications in PK deficiency and thalassemia. In addition, we see significant opportunity to unlock further value through a robust early- and mid-stage
pipeline and we believe we have a clear path to profitability supported by our existing commercial portfolio. With a distinctive pipeline and a track record
of disciplined execution, we believe Agios is well positioned to establish leadership in rare hematology and evolve into a sustainable rare disease company.
Our Core Values
Our values cultivate an environment that promotes collaboration, contribution, engagement and high regard for others’ points of view. This foundation
helps our people push the boundaries of our science and create transformative medicines, which we believe will provide long-term benefits for all our
stakeholders. Our connections – with each other and with the rare disease community we serve – fuel the development of new medicines. Our core values
include:
•
Aim High: We set the bar high for ourselves, and we keep working to raise it. At our core, we’re guided by a deep respect for the science and a
commitment always to act with the utmost integrity.
•
Come Together: We grow supportive relationships with patients and caregivers. We build trusting connections with collaborators. Together, we
make a bigger impact than we ever could alone.
•
Embrace Differences: Because opportunities and insights come from anywhere and anyone, we honor all voices and encourage honest dialogue. We
learn equally from success and failure, bringing an open mind and a flexible approach to everything we do.
•
Bring Your Whole Self: We know we make the biggest impact when each of us can contribute and lead in our own way.
•
Blaze New Trails: We ask the tough questions that can lead to groundbreaking scientific advances. We nurture a creative mindset and resourceful
approach that spark life-changing innovations for patients.
Cellular Metabolism
Cellular metabolism is involved in the healthy functioning of nearly every system in the body and refers to the set of life-sustaining chemical
transformations within the cells of living organisms. The conversion of nutrients into energy via enzyme-catalyzed reactions allows organisms to grow and
reproduce, maintain their structures, and respond to their environments. Additionally, metabolites serve as key regulators of diverse aspects of cellular
biology, and pharmacologic targeting of metabolism can therefore have disease-modifying effects in a wide variety of pathologies. The chemical reactions
of metabolism are organized into metabolic pathways, in which one chemical is transformed through a series of steps into another chemical, by a sequence
of enzymes. Enzymes catalyze quick and efficient reactions, serve as key regulators of metabolic pathways, and respond to changes in the cell’s
environment or signals from other cells.
Rare diseases
Diseases are typically considered rare if they affect fewer than 200,000 people in the United States, or fewer than five per 10,000 people in France,
Germany, Italy, Spain, United Kingdom, or the EU5. Many rare diseases are likely to be under-diagnosed given the lack of available medicines or
diagnostics, the rarity of the condition, or limited understanding of how the disease genetics relate to the disease phenotype. It has been shown that small
molecule medicines able to specifically correct genetic deficiencies and their associated organ dysfunction may have application in conditions that arise
independent of patient genetics but for which identical organ dysfunction occurs. For example, a treatment for a hereditary hemolytic anemia may find
direct application in the treatment of a secondarily acquired hemolytic anemia.
Many rare diseases carry severe or life-threatening features. In many of these disorders, the defect of single or multiple genes leads to a deficient expression
or function in one or several gene products which collectively manifest in organ dysfunction. As these conditions are by nature congenital and frequently
hereditary, they are often detected either by genetic testing or phenotypic diagnosis in newborns or in early childhood. A typical course of many such
diseases is inexorable deterioration until death or significant irreversible life-long disability and/or suffering.
Classical hematology
Classical hematology refers to the study and treatment of blood disorders that are not cancerous, including thrombotic and hemorrhagic disorders, anemia,
thrombocytopenia, disorders of iron metabolism and hemoglobin disorders. Many of these diseases are debilitating, have a negative impact on patients’
quality of life and are associated with severe complications and/or shortened life expectancy. Despite the significant need for novel medicines and
improved patient care, there is a shortage of research and trained specialists in the field of classical hematology, and patients with these disorders are often
underserved and
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experience health disparities and inequity. In addition, even in diseases in which some progress has been made, large subsets of the disease may remain
underserved. Our goal is to develop innovative medicines for patients with various classical hematological disorders through broad clinical development
programs to address the unmet needs of a large range of patients.
Our Development Programs
We believe that the capabilities we have built in classical hematology—together with our expertise in cellular metabolism— enable us to advance new
therapeutic candidates and expand our pipeline into additional rare hematologic conditions and, over time, potentially other rare diseases. We have a proven
track record of developing novel therapeutic approaches and multiple proprietary first‑in‑class oral small molecules.
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The following summarizes our approved products and most advanced clinical product candidates, each of which is described in further detail below.
PK Activator Programs
PK is an enzyme involved in glycolysis — the conversion of glucose into lactic acid. This enzyme has several tissue-specific isoforms (PKR, PKL, PKM1
and PKM2). Pyruvate kinase-R, or PKR, is the isoform of PK that is present in red blood cells, or RBCs. Mutations in PKR cause defects in RBC
glycolysis and lead to a hematological rare disease known as PK deficiency. Glycolysis is the only pathway available for RBCs to maintain the production
of adenosine triphosphate, or ATP, which is a
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form of chemical energy within cells. Accordingly, we believe that activation of mutant forms of PKR can restore glycolytic pathway activity and increase
RBC health in patients with PK deficiency, and activation of wild-type (non-mutated) PKR can increase ATP which can then meet the increased energy
demands resulting from metabolic stress in RBCs of patients with hemolytic anemias such as thalassemia and SCD.
PK Deficiency
PK deficiency is a rare genetic disorder and disease understanding is still evolving. We estimate that the prevalence of PK deficiency is between
approximately 3,000 and 8,000 individuals in the United States and EU5, and believe that the disease is likely under-diagnosed. PK deficiency leads to a
shortened life span for RBCs and is the most common form of non-spherocytic hemolytic anemia in humans.
There is currently no known unique ethnic or geographic representation of the disease. The disease manifests by mild to severe forms of anemia caused by
the excessive premature destruction of RBCs. The chronic hemolysis can lead to long-term complications and comorbidities, regardless of the degree of the
anemia, often resulting in jaundice and lifelong conditions associated with chronic anemia and secondary complications. The precise mechanism for the
hemolysis is not well understood but is thought to result from membrane instability secondary to the metabolic defect caused by the low level of PKR
enzyme. The hemolysis is “extra-vascular” in that the RBCs are destroyed in small capillaries or organs and do not spontaneously break open in the
circulation. PK deficiency is an autosomal recessive disease whereby all patients inherit two mutations, one from each parent. Children with the disease
produce PKR enzyme that has only a fraction of the normal level of activity (generally <50%). Prior to the approval of PYRUKYND®, the only
management strategies for PK deficiency included blood transfusion and splenectomy, which are associated with both short- and long-term risks. More than
350 different mutations have been identified to date. As a result, there are many different possible mutant combinations and no one clear mutational profile.
We maintain a global registry, called Peak, for up to 500 adult and pediatric patients with PK deficiency to increase understanding of the long-term disease
burden of this chronic hemolytic anemia.
Thalassemia
Thalassemia is a hereditary blood disorder in which mutations in the α- or β-globin chains of hemoglobin lead to globin chain precipitates and aggregates
that disturb the RBC membrane and induce oxidative stress, leading to decreased survival of RBC precursors, ineffective erythropoiesis, hemolysis of
mature RBCs, and anemia. We estimate that the prevalence of thalassemia is between 18,000 and 23,000 individuals in the United States and EU5, with
approximately 6,000 diagnosed adults in the United States; approximately 70,000 individuals in Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the
United Arab Emirates, also known as the Gulf Council Countries, or GCC; and greater than one million individuals worldwide. In addition to anemia,
patients with thalassemia can experience enlarged spleen, bone deformities, iron overload, fatigue, and infection. Prior to the approval of AQVESME™ in
the United States and PYRUKYND® in Saudi Arabia, the only treatment strategies for thalassemia included blood transfusion, splenectomy, iron chelation
therapy and bone marrow transplantation, as well as approved medicines such as Reblozyl® (luspatercept-aamt) for the treatment of beta-thalassemia or
Casgevy® and Zynteglo® for the treatment of transfusion-dependent beta-thalassemia. Activation of wild-type PKR is believed to increase ATP production
and improve red cell fitness and survival of thalassemic RBCs, by increasing the clearance globin chain aggregates through ATP-dependent proteolytic
mechanisms.
Sickle Cell Disease (SCD)
SCD is an inherited blood disorder caused by mutations in hemoglobin that enable the hemoglobin to form long polymeric chains under certain conditions
such as low oxygenation, or deoxygenation. Polymerization of this irregular hemoglobin results in RBCs taking on a sickle shape, causing them to
aggregate and obstruct small blood vessels, restricting blood flow to organs resulting in pain, cell death and organ damage. We estimate that the prevalence
of SCD is between 120,000 and 135,000 individuals in the United States and EU5, approximately 150,000 individuals in the GCC, and greater than three
million individuals worldwide. RBC deoxygenation is modulated by several factors, including the levels of 2,3-diphosphoglycerate, or 2,3-DPG, which is
found to be elevated in sickle cell patient RBCs. Current treatment strategies focus on managing and preventing acute RBC sickling, and include
hydroxyurea, L-glutamine and blood transfusions, as well as recently approved medicines such as Adakveo®, Casgevy®, and Lfygenia®. Activation of
wild-type PKR in patients with SCD is believed to reduce hemoglobin polymerization and the sickling process by at least two mechanisms. Reducing the
level of 2,3-DPG in RBCs would increase the oxygenation state of hemoglobin to reduce sickling, while increasing the levels of ATP may improve RBC
hydration status which may also inhibit the sickling process.
Lower Risk MDS (LR MDS)
MDS is a heterogeneous group of rare hematological malignancies characterized by dysfunctional hematopoiesis (or formation of blood cells), progressive
cytopenia (or lower-than-normal number of blood cells) and an increased risk of progression to acute myeloid leukemia, or AML. The most common type
of MDS is LR MDS, but many existing medicines and medicines under development focus on high risk MDS. Among patients with LR MDS, which
accounts for approximately 70% of all
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MDS cases and are less likely to progress to AML, the primary concern is symptomatic anemia. We estimate that the prevalence of LR MDS in the United
States and EU5 is between 75,000 and 80,000 individuals. We believe that activation of wild-type PK in LR MDS patients may improve deficient PK
activity in MDS erythrocytes. Current treatment options for LR MDS often require in-office visits and transfusions, and erythropoiesis stimulating agents
and Reblozyl® and Rytelo® are the only approved medicines to treat anemia in a subset of patients. Despite approved medicines in subsets of patients, LR
MDS associated anemia remains a disease with a high unmet medical need.
Other Programs
Phenylketonuria (PKU)
PKU, is a rare, genetic disease caused by deficiency of the PAH enzyme. Lack of PAH activity leads to the accumulation of phenylalanine and downstream
neurocognitive deficits. Patients with PKU are therefore often advised to consume a highly restricted diet in order to minimize phenylalanine intake, which
can further reduce patient quality of life. We estimate that the prevalence of PKU in the United States and EU5 is between 35,000 and 40,000 individuals.
Polycythemia Vera (PV)
PV is a rare blood disorder with no disease-modifying treatments that affects approximately 100,000 individuals in the United States. PV is characterized
by excessive production of RBCs, which leads to increased blood volume and viscosity, and can result in thrombosis, cardiovascular events, enlarged
spleen and death. Phlebotomy, which is the procedure of withdrawing blood, is the current standard of care for patients with PV.
PYRUKYND®/AQVESME™ (mitapivat): First-in-Class PK Activator
We are developing mitapivat for the treatment of PK deficiency and other hemolytic anemias such as thalassemia and SCD. Mitapivat is an orally available
small molecule and a potent activator of the wild-type and mutated PK enzymes.
The FDA approved mitapivat, under the brand name PYRUKYND®, for the treatment of hemolytic anemia in adults with PK deficiency in the United
States and by the European Commission for the treatment of PK deficiency in adult patients in the EU. Additionally, we received marketing authorization
in Great Britain for PYRUKYND® for the treatment of PK deficiency in adult patients under the European Commission Decision Reliance Procedure.
In December 2025, the FDA approved mitapivat under the brand name AQVESME™ for the treatment of anemia in adults with non-transfusion dependent
and transfusion-dependent alpha- or beta-thalassemia in the United States. AQVESME™ is the only FDA-approved medicine for anemia in both non-
transfusion-dependent and transfusion-dependent alpha- or beta-thalassemia. We commercially launched AQVESME™ in the United States in late January
2026 following our implementation of a Risk Evaluation and Mitigation Strategy, or REMS, to mitigate the risk of hepatocellular injury. Mitapivat will
continue to be marketed as PYRUKYND® in the United States for the PK deficiency indication, which does not require a REMS. The AQVESME™
REMS requires liver tests prior to the first AQVESME™ dose, every four weeks thereafter for 24 weeks, and then as clinically indicated. It also includes
education and certification requirements for patients, prescribing physicians, and pharmacists, which are common components of REMS.
In August 2025, we announced that the Saudi Food and Drug Authority approved PYRUKYND® for the treatment of adults with non-transfusion
dependent and transfusion-dependent alpha- or beta-thalassemia.
In December 2024, we announced that we submitted an MAA to the EMA and a regulatory application to the United Arab Emirates health authorities for
PYRUKYND® for the treatment of adult patients with non-transfusion dependent and transfusion-dependent alpha- or beta-thalassemia. In October 2025,
we announced that the CHMP of the EMA adopted a positive opinion for the new indication for PYRUKYND® in adults for the treatment of anemia
associated with transfusion-dependent and non-transfusion-dependent alpha- or beta-thalassemia. The European Commission is reviewing the CHMP’s
opinion, with the final decision expected in early 2026.
We will have a pre-sNDA meeting with the FDA in the first quarter of 2026 and intend to submit a U.S. marketing application for mitapivat in SCD
following that engagement.
In addition, we are evaluating mitapivat for the treatment of pediatric patients with PK deficiency. Additionally, mitapivat has received orphan drug
designation from the FDA for the treatment of thalassemia and SCD, and orphan medicinal product designation from the EMA for the treatment of SCD.
Mitapivat was granted orphan drug designation for the treatment of PK deficiency by the FDA and EMA.
We have full ownership rights to PYRUKYND® and AQVESME™ and expect to fund the future development and commercialization costs related to
PYRUKYND® and AQVESME™. We built our commercial infrastructure to support the commercialization of PYRUKYND® in adult PK deficiency in
the United States, and have expanded this infrastructure to support the commercial launch of AQVESME™ in thalassemia in the United States. In July
2024, we entered into a distribution
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agreement, or the NewBridge Agreement, with NewBridge Pharmaceuticals FZ-LLC, or NewBridge, pursuant to which we granted NewBridge the right to
commercialize PYRUKYND® in the GCC region. In June 2025, we entered into a distribution agreement, or the Avanzanite Agreement, with Avanzanite
Bioscience B.V., or Avanzanite, pursuant to which we granted Avanzanite the right to commercialize PYRUKYND® in the European Economic Area,
Switzerland, and the United Kingdom. Under the NewBridge Agreement and the Avanzanite Agreement, we rely on NewBridge and Avanzanite,
respectively, to assist with regulatory filings, prepare applications for pricing and reimbursement approval, negotiate with payors, conduct medical affairs
activities and import, distribute, promote and commercialize our products in accordance with applicable law in the applicable jurisdictions.
In connection with our regulatory approvals in the EU, Great Britain and Saudi Arabia, we provide access to PYRUKYND® to eligible patients through
the Avanzanite Agreement and the NewBridge Agreement, as applicable, and on either a free of charge or for charge basis for eligible patients in those
jurisdictions and other jurisdictions through a global managed access program. Revenues associated with the NewBridge Agreement, the Avanzanite
Agreement and the for charge portion of our global managed access program are included in the rest of world product revenue line within Results of
Operations. We continue to evaluate other options for the commercialization of PYRUKYND® outside of the United States, including through exploring
potential partnership opportunities.
We are evaluating mitapivat in numerous clinical trials, including the following:
•
An extension study evaluating the long-term safety, tolerability and efficacy of treatment with mitapivat in SCD patients who are 16 years of age or
older from RISE UP, our completed double-blind phase 3 study evaluating the efficacy and safety of mitapivat as a potential treatment for SCD.
RISE UP, a phase 2/3 study evaluating the efficacy and safety of mitapivat in SCD patients who are 16 years of age or older, have had between two
and 10 sickle cell pain crises, or SCPCs, in the past 12 months, and have hemoglobin within the range of 5.5 to 10.5 g/dL during screening. We
enrolled 207 patients in the phase 3 portion of the trial, which included a 52-week double blind, randomized, placebo-controlled period in which
participants were randomized in a 2:1 ratio to receive the recommended (100 mg twice daily) mitapivat dose level or the placebo. The 52-week
double-blind treatment period was completed by 87.0% (n=120/138) of patients in the mitapivat arm and 81.2% (n=56/69) of patients in the placebo
arm. All but two of these patients (174/176) opted to enter the ongoing 216-week open-label extension period of the study. The primary endpoints of
the phase 3 portion of the trial were (i) hemoglobin response, defined as ≥1 g/dL increase in average hemoglobin from week 24 through week 52
compared to baseline, and (ii) annualized rate of SCPCs. The secondary endpoints included change from baseline in hemoglobin concentration,
change from baseline in indirect bilirubin, change from baseline in Patient Reported Outcome Measurement Information System Fatigue 13a, or
PROMIS Fatigue, Short Form scores, annualized frequency of hospitalizations for SCPCs, and change from baseline in percent reticulocyte levels.
In November 2025, we announced that the phase 3 portion of the trial had achieved the primary endpoint of hemoglobin response in the mitapivat
arm, with 40.6% of patients in the mitapivat arm having achieved a hemoglobin response, compared to 2.9% of patients in the placebo arm, a
statistically significant improvement (2-sided p<0.0001). In patients who achieved a hemoglobin response in the mitapivat arm, mean change from
baseline in average hemoglobin concentration from Week 24 through Week 52 was 1.6 g/dL. The annualized rate of SCPCs, defined as acute pain
needing medical contact, acute chest syndrome, priapism, hepatic, or splenic sequestration, was 2.62 in the mitapivat arm and 3.05 in the placebo
arm (2-sided p=0.1213), with such reduction of SCPCs not achieving statistical significance for that primary endpoint. Treatment with mitapivat also
showed statistically significant improvements in two secondary endpoints: (a) the average change from baseline in hemoglobin concentration from
Week 24 through Week 52 was 7.69 g/L in the mitapivat arm and 0.26 g/L in the placebo arm, a statistically significant improvement (2-sided
p<0.0001), and (b) the average change from baseline in indirect bilirubin from Week 24 through Week 52 was -16.03 µmol/L in the mitapivat arm
and 0.88 µmol/L in the placebo arm, a statistically significant improvement (2-sided p<0.0001). The average change from baseline in PROMIS
Fatigue score from Week 24 through Week 52 was -2.72 in the mitapivat arm and -2.25 in the placebo arm (2-sided p=0.7112), indicating
improvements in fatigue, but the PROMIS Fatigue secondary endpoint was not met. No conclusions could be drawn regarding the statistical
significance of the following additional key secondary endpoints: (a) the annualized frequency of hospitalizations for SCPCs, with 1.56 in the
mitapivat arm and 1.81 in the placebo arm (2-sided nominal p=0.2498), and (b) the average change from baseline in percent reticulocyte levels from
Week 24 through Week 52, with -0.0236 (fraction of 1) in the mitapivat arm and -0.0013 (fraction of 1) in the placebo arm (2-sided nominal
p=0.0001). We also announced that in the subset of patients in the mitapivat arm achieving the primary endpoint of hemoglobin response, the
following was observed: (i) the annualized rate of SCPCs was 2.20 for hemoglobin responders and 2.98 for non-hemoglobin responders (rate ratio
[RR]=0.74, 95% confidence interval [CI]=0.58 to 0.94); (ii) the annualized frequency of hospitalizations for SCPCs was 1.16 for hemoglobin
responders and 1.76 for non-hemoglobin responders (RR=0.66, 95% CI=0.48 to 0.91); and (iii) the average change in PROMIS Fatigue score
between Week 24 and Week 52 was -5.19 for hemoglobin responders and -2.55 for non-hemoglobin responders (95% CI=-5.59 to 0.32). The results
for hemoglobin responders in the mitapivat arm exceeded -4.1, the threshold for a clinically meaningful change from
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baseline for PROMIS Fatigue score. The safety profile for mitapivat observed in the phase 3 portion of the trial was generally consistent with that
observed in prior mitapivat SCD trials. We observed as follows: (i) a similar proportion of patients on mitapivat (n=134, 97.1%) and placebo (n=68,
98.6%) had adverse events; (ii) serious TEAEs were reported in 20.3% (n=28) and 29.0% (n=20) of patients on mitapivat and placebo, respectively;
0.7% (n=1) and 0.0% (n=0), respectively, were considered treatment-related; (iii) liver abnormalities observed across the mitapivat and placebo arms
were not suggestive of drug-induced hepatocellular injury, unlike what was observed in the mitapivat ENERGIZE and ENERGIZE-T phase 3 trials;
(iv) TEAEs led to treatment discontinuation in 4.3% (n=6) of patients on mitapivat and 2.9% (n=2) on placebo; and (v) three deaths (2.2%) occurred
in patients on mitapivat, and two (2.9%) on placebo, none of which were deemed related to study treatment by the trial investigator.
•
Extension studies evaluating the long-term safety, tolerability and efficacy of treatment with mitapivat in pediatric patients from ACTIVATE-kids
and ACTIVATE-kidsT, our completed double-blind phase 3 studies evaluating the efficacy and safety of mitapivat as a potential treatment for PK
deficiency in not regularly transfused and regularly transfused patients between one and 18 years old, respectively.
We announced topline data for ACTIVATE-kidsT in August 2024. A total of 49 patients were enrolled in ACTIVATE-kidsT, with 32 randomized to
mitapivat twice-daily and 17 randomized to matched placebo. 30 patients (93.8%) in the mitapivat arm and 16 (94.1%) in the placebo arm completed
the 32-week double-blind period of the study. The primary endpoint of ACTIVATE-kidsT is transfusion reduction response, defined as ≥33%
reduction in total RBC transfusion volume from week 9 through week 32 of the double-blind period. Using Bayesian methodology, the prespecified
statistical criterion for the primary endpoint in ACTIVATE-kidsT was not met using low or moderate borrowing of data from the ACTIVATE-T
study in adults. In the study, 28.1% of patients in the mitapivat arm achieved the primary endpoint of transfusion reduction response, compared to
11.8% of patients in the placebo arm. Transfusion-free response and normal hemoglobin response were secondary endpoints in this study and only
observed in patients in the mitapivat arm. In the 32-week double-blind treatment period, mitapivat was generally safe and well-tolerated, with safety
results consistent with the safety profile for mitapivat previously observed in adults with PK deficiency who are regularly transfused.
We announced topline data for ACTIVATE-kids in February 2025. A total of 30 patients were enrolled in ACTIVATE-kids, with 19 randomized to
mitapivat twice-daily and 11 randomized to matched placebo. All patients in both treatment arms completed the 20-week double-blind period of the
study. The primary endpoint of ACTIVATE-kids is percentage of patients with hemoglobin response, defined as ≥1.5 g/dL increase in hemoglobin
concentration from baseline that is sustained at two or more scheduled assessments at weeks 12, 16, and 20 during the double-blind period. Using
Bayesian methodology, the prespecified statistical criterion for the primary endpoint in ACTIVATE-kids was met using a range of relative borrowing
from the adult ACTIVATE study, for all possible borrowing weights (ranging from 0 to 1). In addition, the pre-specified supportive analysis based on
traditional methodology comparing the hemoglobin response rate for mitapivat versus placebo provided further evidence that the primary endpoint
was met. There were 31.6% of patients in the mitapivat arm achieving a hemoglobin response compared to 0% of patients in the placebo arm; the
95% confidence interval for the difference in hemoglobin response rates between mitapivat and placebo was >0 (95% CI=10.8% to 52.7%). In
addition, improvements in changes from baseline for markers of hemolysis (indirect bilirubin, lactate dehydrogenase and haptoglobin) were
observed in the mitapivat arm compared to the placebo arm. In the 20-week double-blind period of the study, a similar proportion of patients had
AEs in the mitapivat and placebo arms and there were no discontinuations of study treatment due to AEs or for any reason. The safety results from
the trial were consistent with the safety profile for mitapivat previously observed for adult patients with PK deficiency who are not regularly
transfused.
•
An extension study evaluating the long-term safety, tolerability and efficacy of treatment with mitapivat in patients from ACTIVATE and
ACTIVATE-T, our completed pivotal trials of mitapivat in not regularly transfused and regularly transfused adult patients with PK deficiency.
•
An extension study evaluating the long-term safety, tolerability and efficacy of treatment with mitapivat in patients from DRIVE PK, our completed
global phase 2, first-in-patient, open-label safety and efficacy clinical trial of mitapivat in adult, not regularly transfused patients with PK deficiency.
•
An extension study evaluating the long-term efficacy and safety of treatment with mitapivat in patients from ENERGIZE and ENERGIZE-T, our
completed pivotal trials of mitapivat in adults with non-transfusion-dependent and transfusion-dependent alpha- or beta-thalassemia.
During the double-blind periods of ENERGIZE and ENERGIZE-T, two patients on mitapivat experienced events of hepatocellular injury. In addition,
during the open-label extension periods of both trials, a total of three patients experienced events of hepatocellular injury after switching from placebo to
mitapivat. All of these events occurred within the first six months of exposure to mitapivat and liver tests improved following discontinuation of mitapivat.
Based on the results of the ENERGIZE and ENERGIZE-T trials, we included in our regulatory applications hepatocellular injury as an important potential
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risk of mitapivat in patients with thalassemia and proposed monthly monitoring of liver tests for the first six months of treatment with mitapivat. We
updated our mitapivat clinical trial protocols across all indications to incorporate monthly monitoring of liver tests for the first six months of treatment.
Tebapivat: Novel PK Activator
We are developing tebapivat, a novel PK activator for the potential treatment of LR MDS and SCD. Tebapivat has been granted orphan drug designation
for the treatment of MDS by the FDA.
We have completed a phase 1 clinical trial evaluating tebapivat in healthy volunteers and patients with SCD, and we have completed enrollment in the
phase 2 clinical trial of tebapivat in adult patients with SCD. We expect to announce topline data for this trial in the second half of 2026.
We also initiated a phase 2a clinical trial of tebapivat in adults with LR MDS in the third quarter of 2022, and the trial has completed enrollment with 22
patients, including 12 patients classified as non-transfused and 10 patients classified as low transfusion burden. Patients received 5 mg of tebapivat once
daily for up to 16 weeks. The two primary endpoints of the trial were transfusion independence (for patients classified as low transfusion burden), defined
as transfusion-free for ≥ eight consecutive weeks during the 16-week treatment period, and hemoglobin response, defined as a ≥ 1.5 g/dL increase from
baseline in the average hemoglobin concentration measured from week 8 through week 16.
In November 2023, we announced that we achieved clinical proof-of-concept in the phase 2a portion of the trial. We observed that four of the 10 patients
with low transfusion burden achieved the transfusion independence endpoint, and one of the 22 patients achieved the hemoglobin response endpoint in the
16-week treatment period. The safety profile observed was consistent with data reported in the healthy volunteer study of tebapivat. 19 patients elected to
enroll in the extension period of the trial for up to 156 weeks. We evaluated the phase 2a trial results and assessed the impact of those results on the phase
2b portion of the protocol, and based on the data generated in the phase 2a portion of the trial, we increased the dosage levels evaluated in the phase 2b
portion of the trial, which we initiated in the third quarter of 2024. We completed enrollment in the phase 2b portion of the trial in September 2025 and
expect to announce topline data for this trial in the first half of 2026.
Other Programs
In addition to the aforementioned development programs, we are developing AG-181, a PAH stabilizer for the potential treatment of PKU, for which we
filed an investigational new drug application, or IND, in December 2023. We initiated a phase 1 clinical trial of AG-181 in healthy volunteers in the first
quarter of 2024, initiated the multiple ascending dose portion of the trial in the second quarter of 2025, and completed the trial in December 2025. We
expect to initiate a phase 1b proof of mechanism trial of AG-181 in patients with PKU in the first half of 2026 and confirm proof of mechanism in the
second half of 2026.
Also, in July 2023, we entered into a license agreement with Alnylam for the development and commercialization of products containing or comprised of
an siRNA preclinical development candidate discovered by Alnylam and targeting the TMPRSS6 gene, and we are developing a product candidate, AG-
236, for the potential treatment of patients with PV. We filed an IND with the FDA for AG-236 for the treatment of PV, which cleared in June 2025, and we
initiated a phase 1 clinical trial evaluating AG-236 in healthy volunteers in July 2025. We expect to announce topline data for this trial in the first half of
2026.
Intellectual Property
Our commercial success depends in part on our ability to obtain and maintain proprietary or intellectual property protection for our product candidates and
our core technologies, including novel biomarker and diagnostic discoveries, and other know-how, to operate without infringing on the proprietary rights of
others and to prevent others from infringing on our proprietary or intellectual property rights. Our policy is to seek to protect our proprietary and
intellectual property position by, among other methods, filing United States and foreign patent applications related to our proprietary technology, inventions
and improvements that are important to the development and implementation of our business. We also rely on confidential information, know-how, in-
licensing opportunities and continuing technological innovation to develop and maintain our proprietary and intellectual property position. We may also
choose to rely on trade secrets to protect certain aspects of our business that are not suitable or appropriate for patent protection.
We file, or may collaborate with third parties to file, patent applications directed to our key products and product candidates, including mitapivat, tebapivat,
AG-181, and AG-236, in addition to related compounds and potential back-up compounds, in an effort to establish intellectual property positions to protect
these new chemical entities and methods of using these compounds in the treatment of diseases, as well as formulations, solid state forms, and
manufacturing processes for these compounds. We may also seek patent protection for certain biomarkers that may be useful in identifying the appropriate
patient population for therapies with our product candidates.
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PK activator program
The patent portfolio for our PK activator program contains issued patents and pending patent applications directed to compositions of matter for mitapivat,
as well as to related compounds, various solid state forms of mitapivat, compositions of matter for additional PKR activators, such as tebapivat, as well as
various solid state forms, methods of use and methods of manufacture for tebapivat and other novel compounds. As of February 1, 2026, we owned 19
issued United States patents and 447 issued foreign patents, and have pending patent applications in the United States and in various foreign jurisdictions.
The patents that have issued or may issue for mitapivat will have a statutory expiration date of at least 2030 to 2042, and the patents that have issued or
may issue for tebapivat will have a statutory expiration date of at least 2038 to 2045. Patent term adjustments or patent term extensions could result in later
expiration dates. In some cases, the term of a United States patent can be shortened by the filing of a terminal disclaimer which operates to reduce the term
of a patent to that of an earlier expiring patent. We have issued patents and pending patent applications pertaining to our products/product candidates in our
PK activator program in a number of foreign jurisdictions, including Argentina, Australia, Austria, Belgium, Brazil, Canada, China, the Czech Republic,
Denmark, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Japan, Lebanon, Lithuania, Mexico, the Netherlands, Norway, Poland, Portugal,
Romania, Russia, Saudi Arabia, Slovakia, Slovenia, Spain, Sweden, Switzerland, Taiwan, Turkey, and the United Kingdom. Prosecution is a lengthy
process, during which the scope of the claims initially submitted for examination can be significantly narrowed by the time they issue, if they issue at all.
We expect this could be the case with respect to some of our pending patent applications referred to above. We are also currently involved in adversarial
proceedings before the European Patent Office. Two of the European patents in our mitapivat portfolio, neither being the primary compound patent, have
been challenged in opposition proceedings. After separate oral proceedings, both European patents were upheld by the European Opposition Division in
written decisions in November 2025 and January 2026, respectively. These decisions can be appealed and we expect that appeals will be filed for both of
the opposed European patents.
PAH stabilizer program
The patent portfolio for our PAH stabilizer program contains issued patents and pending patent applications directed to compositions of matter and methods
of use for AG-181 and other novel PAH stabilizers. As of February 1, 2026, we owned one issued United States patent and two issued foreign patents and
have pending patent applications in the United States and in various foreign jurisdictions. The patents that have issued or may issue for our PAH stabilizer
program will have a statutory expiration date of at least 2043 to 2044. Patent term adjustments or patent term extensions could result in later expiration
dates. In some cases, the term of a United States patent can be shortened by the filing of a terminal disclaimer which operates to reduce the term of a patent
to that of an earlier expiring patent. We have issued patents and pending patent applications pertaining to our products/product candidates in our PAH
stabilizer program in a number of foreign jurisdictions, including Argentina, Australia, Brazil, Canada, China, Europe, Japan, Lebanon, Mexico, Eurasia,
Saudi Arabia, and Taiwan. Prosecution is a lengthy process, during which the scope of the claims initially submitted for examination can be significantly
narrowed by the time they issue, if they issue at all. We expect this could be the case with respect to some of our pending patent applications referred to
above.
siRNA targeting TMPRSS6 program
We have exclusively licensed world-wide patent rights from Alnylam directed to compositions of matter and methods of use for AG-236. The exclusively
licensed patents that have issued or may issue will have a statutory expiration date of at least 2032 to 2042. Patent term adjustments or patent term
extensions could result in later expiration dates.
Patent Term
The term of individual patents depends upon the legal term for patents in the countries in which they are obtained. In most countries, including the United
States, the patent term is 20 years from the earliest filing date of a non-provisional patent application, although term extensions may be available. In the
United States, a patent’s term may be lengthened by patent term adjustment, which compensates a patentee for administrative delays by the United States
Patent and Trademark Office, or USPTO, in examining and granting a patent or may be shortened if a patent is terminally disclaimed over an earlier filed
patent. The term of a patent that covers a drug or biological product may also be eligible for patent term extension when FDA approval is granted, provided
statutory and regulatory requirements are met. The extension of the term of foreign patents varies, in accordance with local law. Although certain of the
patents granted by the regulatory authorities of the EU may expire at specific dates, the terms of patents granted in certain European countries may extend
beyond such EU patent expiration date if we were to obtain a supplementary protection certificate. In addition, because of the extensive time required for
clinical development and regulatory review of a product candidate we may develop, it is possible that, before any of our product candidates can be
commercialized, any related patent may expire or remain in force for only a short period following commercialization, thereby reducing any advantage of
any such patent.
In the future, if and when our product candidates receive approval by the FDA or foreign regulatory authorities, we expect to apply for patent term
extensions on issued patents covering those products, depending upon the length of the clinical trials for
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each product candidate and other factors. There can be no assurance that any of our pending patent applications will be issued or that we will benefit from
any patent term extension or favorable adjustment to the term of any of our patents.
Additional Considerations
As with other biotechnology and pharmaceutical companies, our ability to maintain and solidify our proprietary and intellectual property position for our
product, product candidates and technologies will depend on our success in obtaining effective patent claims and enforcing those claims if granted.
However, patent applications that we may file or license from third parties may not result in the issuance of patents. We also cannot predict the breadth of
claims that may be allowed or enforced in our patents. Any issued patents that we may receive in the future may be challenged, invalidated or
circumvented. For example, a third party can challenge the patentability of one or more of the claims of an issued patent in a post-grant proceeding before
the USPTO or a foreign patent office such as the European Patent Office, which can result in the loss of certain claims or the loss of an entire patent. In
addition, it is possible that a third party has filed a patent application in the United States, or abroad, that claims the same technology or chemical structures
that are claimed in our own patent applications or patents. In such cases, we may have to participate in legal proceedings or enter into a licensing
arrangement, which could result in substantial costs to us, even if the eventual outcome is favorable to us. In addition to patent protection, we also rely
upon unpatented confidential information, including confidential technical information, know-how and continuing technological innovation to develop and
maintain our competitive position. We seek to protect our proprietary information, in part, by using confidentiality agreements with our collaborators, third-
party service providers, scientific advisors, employees and consultants, and by invention assignment agreements with our employees. We also have
agreements requiring assignment of inventions with selected consultants, scientific advisors and collaborators. The confidentiality agreements are designed
to protect our proprietary information and, in the case of agreements or clauses requiring invention assignment, to grant us ownership of technologies that
are developed through a relationship with a third party. Nevertheless, confidential information and know-how can be difficult to protect. In particular, we
anticipate that at least some of our technical information and know-how will, over time, become known within the industry through independent
development, the publication of journal articles, and the movement of personnel skilled in the art from academic to industry scientific positions.
Competition
The pharmaceutical and biotechnology industries are characterized by rapidly advancing technologies, intense competition and a strong emphasis on
proprietary products. While we believe that our technology, development experience and scientific knowledge provide us with competitive advantages, we
face potential competition from many different sources, including major pharmaceutical, specialty pharmaceutical and biotechnology companies, academic
institutions and governmental agencies, and public and private research institutions. PYRUKYND®, AQVESME™ and any product candidates that we
successfully develop and commercialize will compete with existing therapies and new therapies that may become available in the future.
We compete in pharmaceutical, biotechnology and other related markets that address rare diseases, particularly hemolytic anemias, PKU and PV. There are
other companies working to develop rare disease therapies, including divisions of large pharmaceutical companies and biotechnology companies of various
sizes.
Our competitors include but are not limited to: BioMarin Pharmaceutical, Inc., or BioMarin; Bristol-Myers Squibb Company, or BMS; Cellarity, Inc., or
Cellarity; CRISPR Therapeutics AG, or CRISPR; DISC Medicine, Inc., or DISC; Emmaus Life Sciences, Inc., or Emmaus; Fulcrum Therapeutics, Inc., or
Fulcrum; Genetix Biotherapeutics Inc., or Genetix (formerly bluebird bio, Inc.); Geron Corporation, or Geron; Halia Therapeutics, Inc, Or Halia.; Incyte
Corporation, or Incyte; Ionis Pharmaceuticals, Inc., or Ionis, in collaboration with Ono Pharmaceutical Co., Ltd./Deciphera Pharmaceuticals, Inc., or
Ono/Deciphera; Italfarmaco S.p.A., or Italfarmaco; Maze Therapeutics, Inc., or Maze; Merck & Co., Inc., or Merck; NGGT Inc., or NGGT; Novartis
International AG, or Novartis; Novo Nordisk A/S, or Novo; Otsuka Pharmaceutical Co., Ltd., or Otsuka; Pfizer, Inc., or Pfizer; PharmaEssentia USA
Corporation, or PharmaEssentia; Protagonist Therapeutics, Inc., or Protagonist, in collaboration with Takeda, Pharmaceutical Company Limited, or Takeda;
PTC Therapeutics, Inc., or PTC; Sanofi S.A., or Sanofi; Silence Therapeutics plc, or Silence; Takeda, in collaboration with Keros Therapeutics, Inc.; and
Vertex Pharmaceuticals Incorporated, or Vertex.
The most common methods for treating patients with rare diseases include dietary restriction, dietary supplementation or replacement, treatment of
symptoms and complications, gene therapy, blood transfusions, phlebotomies, stem cell transplant and ERTs and there are several marketed therapies
available for treating patients with hemolytic anemias, PKU and PV. For example, recently approved treatments for thalassemia, SCD, LR MDS, PKU and
PV include Reblozyl® from Merck/BMS (formerly Acceleron/BMS); Revlimid® from BMS; Zynteglo® and Lyfgenia® from Genetix; Adakveo® from
Novartis; Casgevy® from Vertex/CRISPR; Kuvan® and Palynziq® from BioMarin; Endari® from Emmaus; Besremi® from PharmaEssentia; Jakafi®
from Incyte; Sephience™ from PTC, and Rytelo® from Geron. While our product and product candidates may compete with existing medicines and other
therapies, to the extent they are ultimately used in combination with or as an adjunct to these therapies, our product or product candidates may not be
competitive with them. In addition to currently
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marketed therapies, there are also several products that are either small molecules, biologics, ERTs or gene therapies in various stages of development to
treat hemolytic anemias, PKU and PV. For example, Novo is developing etavopivat (a PKR activator) for the treatment of hemolytic anemias, including
SCD; Pfizer is developing osivelotor (GBT-601) for the treatment of SCD; Fulcrum is developing pociredir (FTX-6058) in SCD; Sanofi is developing
rilzabrutinib for SCD; Takeda is developing TAK-226 for the treatment of anemia in LR MDS; Halia is developing HT-6184 for the treatment of LR-MDS;
a number of companies, including Otsuka are developing therapies to treat PKU; and a number of companies, including Silence, Protagonist with Takeda,
Italfarmaco S.p.A., DISC, Merck, and Ionis, in collaboration with Ono/Deciphera, are developing therapies to treat PV. These products may provide
efficacy, safety, convenience and other benefits not provided by current marketed therapies or the current standards of care. As a result, they may provide
competition for any of our product or product candidates for which we obtain market approval.
Many of our competitors may have significantly greater financial resources and expertise in research and development, manufacturing, preclinical testing,
conducting clinical trials, obtaining regulatory approvals and globally marketing approved medicines than we do. Mergers and acquisitions in the
pharmaceutical, biotechnology and diagnostic industries may result in even more resources being concentrated among a smaller number of our competitors.
These competitors also compete with us in recruiting and retaining qualified scientific and management personnel and establishing clinical trial sites and
patient registration for clinical trials, as well as in acquiring or in-licensing technologies complementary to, or necessary for, our programs. Smaller or
early-stage companies may also prove to be significant competitors, particularly through collaborative arrangements with large and established companies.
The key competitive factors affecting the success of PYRUKYND®, AQVESME™ and any of our product candidates that we develop, if approved, are
likely to be their efficacy, safety, convenience, price, the level of generic competition and the availability of reimbursement from government and other
third-party payors.
Our commercial opportunity could be reduced or eliminated if our competitors develop and commercialize medicines that are safer, more effective, have
fewer or less severe side effects, are more convenient or are less expensive than any medicines that we may develop. Our competitors also may obtain FDA
or other regulatory approval for their medicines more rapidly than we may obtain approval for ours, which could result in our competitors establishing a
strong market position before we are able to enter the market. In addition, our ability to compete may be affected in many cases by insurers or other third-
party payors seeking to encourage the use of generic or other branded medicines. There are generic medicines currently on the market for indications that
we are pursuing, and additional medicines are expected to become available on a generic basis over the coming years. We expect that PYRUKYND®,
AQVESME™ and any of our product candidates that may receive marketing approval in the future will be priced at a significant premium over
competitive generic medicines.
Manufacturing and Supply Chain
Mitapivat, tebapivat, and AG-181 are organic compounds of low molecular weight, generally called small molecules, and are dosed orally. Our siRNA
program, AG-236, targeting the TMPRSS6 gene, is an oligonucleotide intended for use as a sterile parenteral administration. Each can be manufactured in
reliable and reproducible synthetic processes from readily available starting materials. The chemistries are amenable to scale-up and do not require unusual
equipment in the manufacturing process. We expect to continue to develop product candidates that can be produced cost-effectively at contract
manufacturing facilities.
We do not own or operate, and currently have no plans to establish, any in-house manufacturing or supply chain related facilities. We currently, and expect
to continue to, rely on third parties for the manufacture and supply of our clinical and preclinical product candidates, as well as for commercial manufacture
of PYRUKYND® and AQVESME™ and any product for which we may receive marketing approval in the future. We conduct extensive prequalification
programs to ensure the compliance, quality and reliability of third-party manufacturing and supply operations.
For PYRUKYND® and AQVESME™, we have long-term commercial manufacture and supply agreements in place and we obtain our supplies from these
manufacturers on a purchase order basis.
Due to the volatility of the supply networks globally, we have gained regulatory approval for redundant supply of raw materials and active pharmaceutical
ingredient, or API, for PYRUKYND® and AQVESME™, and have an ongoing program to monitor supply, including establishing safety stocks. While we
maintain a broad safety stock of drug substance and drug product, we do not currently have arrangements in place for redundant supply of drug substance
and drug product. As we have done for PYRUKYND® and AQVESME™, for our pre-commercial programs, we intend to identify and qualify additional
manufacturing and supply related services as such programs progress through development.
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Government Regulation and Product Approvals
Government authorities in the United States, at the federal, state and local level, and in other countries and jurisdictions, including the EU, extensively
regulate, among other things, the research, development, testing, manufacture, pricing, quality control, approval, packaging, storage, recordkeeping,
labeling, advertising, promotion, distribution, marketing, post-approval monitoring and reporting, and import and export of biopharmaceutical products.
The processes for obtaining marketing approvals in the United States and in foreign countries and jurisdictions, along with compliance with applicable
statutes and regulations and other regulatory authorities, require the expenditure of substantial time and financial resources.
Approval and Regulation of Drugs in the United States
In the United States, drug products are regulated under the Federal Food, Drug and Cosmetic Act, or FDCA, and applicable implementing regulations and
guidance. A company, institution, or organization responsible for initiating and managing a clinical development program for such products, and for their
regulatory approval, is typically referred to as a sponsor.
A sponsor seeking approval to market and distribute a new drug in the United States generally must satisfactorily complete each of the following steps
before the product candidate will be approved by the FDA:
•
preclinical testing including laboratory tests, animal studies and formulation studies which must be performed in accordance with the FDA’s good
laboratory practice, or GLP, regulations and standards;
•
design of a clinical protocol and submission to the FDA of an IND for human clinical testing, which must become effective before human clinical
trials may begin;
•
approval by an independent institutional review board, or IRB, representing each clinical site before each clinical trial may be initiated;
•
performance of adequate and well-controlled human clinical trials to establish the safety and efficacy of the product candidate for each proposed
indication, in accordance with current good clinical practices, or GCP;
•
preparation and submission to the FDA of an NDA, or a sNDA for a change to a previously approved drug product, which submissions include not
only the results of the clinical trials, but also, detailed information on the chemistry, manufacture and quality controls for the product candidate and
proposed labeling for one or more proposed indication(s);
•
review of the product candidate by an FDA advisory committee, where appropriate or if applicable;
•
satisfactory completion of FDA inspection of the manufacturing facility or facilities, including those of third parties, at which the product candidate
or components thereof are manufactured to assess compliance with current good manufacturing practices, or cGMP, requirements and to assure that
the facilities, methods and controls are adequate to preserve the product’s identity, strength, quality and purity;
•
satisfactory completion of any FDA audits of the non-clinical and clinical trial sites to assure compliance with GCP and the integrity of clinical data
in support of the NDA;
•
payment of user fees pursuant to PDUFA;
•
approval of an NDA for the new drug product authorizing marketing of the new drug product for particular indications in the United States; and
•
compliance with any approval or post-approval requirements, including the potential requirement to implement REMS, and the potential
requirement to conduct any post-approval studies required by the FDA.
Preclinical Studies
Before a sponsor begins testing a product candidate with potential therapeutic value in humans, the product candidate enters the preclinical testing stage.
Preclinical tests include laboratory evaluations of product chemistry, formulation and stability and other studies to evaluate, among other things, the
toxicity of the product candidate. The conduct of the preclinical tests and formulation of the compounds for testing must comply with federal regulations
and requirements, including GLP regulations and standards, and the United States Department of Agriculture’s Animal Welfare Act, if applicable. The
results of the preclinical tests, together with manufacturing information and analytical data, are submitted to the FDA as part of an IND and are typically
referred to as IND-enabling studies. Some long-term preclinical testing, such as animal tests of reproductive adverse events and carcinogenicity, and long-
term toxicity studies, may continue after the IND is submitted.
With passage of the FDA’s Modernization Act 2.0 in December 2022, Congress eliminated provisions in both the FDCA and the Public Health Service Act,
or PHSA, that required animal testing in support of an NDA. While animal testing may still be conducted, the FDA was authorized to rely on alternative
non-clinical tests, including cell-based assays, microphysiological systems or bioprinted or computer models. In April 2025, the FDA released a roadmap
to replace animal testing in preclinical safety studies with scientifically validated new approach methodologies, such as organ-on-a-chip systems,
computational modeling, and advanced in vitro assays.
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The IND and IRB Processes
An IND is an exemption from the FDCA that allows an unapproved product candidate to be shipped in interstate commerce for use in an investigational
clinical trial and a request for FDA authorization to administer such investigational product to humans. Such authorization must be secured prior to
interstate shipment and administration of any product candidate that is not the subject of an approved NDA. In addition to reviewing an IND to assure the
safety and rights of patients, the FDA also focuses on the quality of the investigation and whether it will be adequate to permit an evaluation of the drug's
safety and efficacy. In support of a request for an IND, sponsors must submit a protocol for each clinical trial and any subsequent protocol amendments
must be submitted to the FDA as part of the IND. The FDA requires a 30-day waiting period after the filing of each IND before clinical trials may begin.
This waiting period is designed to allow the FDA to review the IND to determine whether human research subjects will be exposed to unreasonable health
risks. At any time during this 30-day period, or thereafter, the FDA may raise concerns or questions about the conduct of the trials as outlined in the IND
and impose a clinical or partial clinical hold. In this case, the IND sponsor and the FDA must resolve any outstanding concerns before clinical trials can
begin.
Following commencement of a clinical trial under an IND, the FDA may also place a clinical or partial clinical hold on that trial. A clinical hold is an order
issued by the FDA to the sponsor to delay a proposed clinical trial or to suspend an ongoing investigation. A partial clinical hold is a delay or suspension of
only part of the clinical work requested under the IND. For example, a specific protocol or part of a protocol is not allowed to proceed, while other
protocols may do so. No more than 30 days after imposition of a clinical hold or partial clinical hold, the FDA will provide the sponsor a written
explanation of the basis for the hold. Following issuance of a clinical or partial clinical hold, an investigation may only resume after the FDA has notified
the sponsor that the investigation may proceed. The FDA will base that determination on information provided by the sponsor correcting the deficiencies
previously cited or otherwise satisfying the FDA that the investigation can proceed.
A sponsor may choose, but is not required, to conduct a foreign clinical trial under an IND. When a foreign clinical trial is conducted under an IND, all
FDA IND requirements must be met unless waived. When a foreign clinical trial is not conducted under an IND, the sponsor must ensure that the study
complies with certain regulatory requirements, including GCP requirements, of the FDA to use the study as support for an IND or application for marketing
approval. The GCP requirements encompass both ethical and data integrity standards for clinical studies. The FDA’s regulations are intended to help ensure
the protection of human subjects enrolled in non-IND foreign clinical studies, as well as the quality and integrity of the resulting data. They further help
ensure that non-IND foreign studies are conducted in a manner comparable to that required for IND studies.
In addition to the foregoing IND requirements, an IRB representing each institution participating in the clinical trial must review and approve the plan for
any clinical trial before it commences at that institution, and the IRB must conduct continuing review and reapprove the study at least annually. The IRB
must review and approve, among other things, the study protocol and informed consent information to be provided to study subjects. An IRB must operate
in compliance with FDA regulations. An IRB can suspend or terminate approval of a clinical trial at its institution, or an institution it represents, if the
clinical trial is not being conducted in accordance with the IRB’s requirements or if the product candidate has been associated with unexpected serious
harm to patients.
Additionally, some trials are overseen by an independent group of qualified experts organized by the trial sponsor, known as a data monitoring committee,
or DMC. The DMC provides authorization as to whether or not a trial may move forward at designated check points based on access that only the DMC
maintains to available data from the study. Suspension or termination of development during any phase of clinical trials can occur if it is determined that
the participants or patients are being exposed to an unacceptable health risk. Other reasons for suspension or termination may be made based on evolving
business objectives and/or competitive climate.
Reporting Clinical Trial Results
Under the PHSA, sponsors of certain clinical trials of certain FDA-regulated products, including prescription drugs and biologics, are required to register
and disclose certain clinical trial information on a public registry (clinicaltrials.gov) maintained by the National Institutes of Health. Information related to
the product, patient population, phase of investigation, study sites and investigators and other aspects of the clinical trial is made public as part of the
registration of the clinical trial. The PHSA grants the Secretary of Health and Human Services, or HHS, the authority to issue a notice of noncompliance to
a responsible party to failure to submit clinical trial information as required. The responsible party, however, is allowed 30 days to correct the
noncompliance and submit the required information. As of December 30, 2025, the FDA has issued eight notices of non-compliance, signaling the
government’s willingness to enforce these requirements against non-compliant clinical trial sponsors. While these notices of non-compliance did not result
in civil monetary penalties, the failure to submit clinical trial information to clinicaltrials.gov is a prohibited act under the FDCA with violations subject to
potential civil monetary penalties of up to $10,000 for each day the violation continues. Violations may also result in injunctions and/or criminal
prosecution or disqualification from federal grants.
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Expanded Access to an Investigational Drug for Treatment Use
Expanded access, sometimes called “compassionate use,” is the use of investigational new drug products outside of clinical trials to treat patients with
serious or immediately life-threatening diseases or conditions when there are no comparable or satisfactory alternative treatment options. The rules and
regulations related to expanded access are intended to improve access to investigational drugs for patients who may benefit from investigational therapies.
FDA regulations allow access to investigational drugs under an IND by the company or the treating physician for treatment purposes on a case-by-case
basis for: individual patients (single-patient IND applications for treatment in emergency settings and non-emergency settings); intermediate-size patient
populations; and larger populations for use of the drug under a treatment protocol or Treatment IND Application.
While there is no obligation to make investigational products available for expanded access, sponsors are required to make policies for evaluating and
responding to requests for expanded access publicly available upon the earlier of initiation of a Phase 2 or Phase 3 clinical trial, or 15 days after the drug or
biologic receives designation as a breakthrough therapy, fast track product, or regenerative medicine advanced therapy. In October 2025, the FDA issued
final guidance further clarifying the statutory and regulatory requirements governing expanded access.
In addition, the Right to Try Act, among other things, provides a federal framework for certain patients to access certain investigational new drug products
that have completed a Phase 1 clinical trial and are undergoing investigation for FDA approval. Under certain circumstances, eligible patients can seek
treatment without enrolling in clinical trials and without obtaining FDA permission under the FDA expanded access program. There is no obligation for a
drug manufacturer to make its drug products available to eligible patients as a result of the Right to Try Act, but the manufacturer must develop an internal
policy and respond to patient requests according to that policy.
Human Clinical Trials in Support of an NDA
Clinical trials involve the administration of the investigational product candidate to human subjects under the supervision of a qualified investigator in
accordance with GCP requirements which include, among other things, the requirement that all research subjects provide their informed consent in writing
before their participation in any clinical trial. Clinical trials are conducted under written clinical trial protocols detailing, among other things, the objectives
of the study, inclusion and exclusion criteria, the parameters to be used in monitoring safety and the effectiveness criteria to be evaluated.
Human clinical trials are typically conducted in three sequential phases, but the phases may overlap or be combined.
Phase 1 clinical trials are initially conducted in a limited population to test the product candidate for safety, including AEs, dose tolerance, absorption,
metabolism, distribution, excretion and pharmacodynamics in healthy humans or in patients. During Phase 1 clinical trials, information about the
investigational drug product’s pharmacokinetics and pharmacological effects may be obtained to permit the design of well-controlled and scientifically
valid Phase 2 clinical trials.
Phase 2 clinical trials are generally conducted to identify possible AEs and safety risks, evaluate the efficacy of the product candidate for specific targeted
indications, and determine dose tolerance and optimal dosage. Multiple Phase 2 clinical trials may be conducted by the sponsor to obtain information prior
to beginning larger and more costly Phase 3 clinical trials. Phase 2 clinical trials are well controlled, closely monitored and conducted in a limited patient
population.
Phase 3 clinical trials proceed if the Phase 2 clinical trials demonstrate that a dose range of the product candidate is potentially effective and has an
acceptable safety profile. Phase 3 clinical trials are undertaken within an expanded patient population to further evaluate dosage, provide substantial
evidence of clinical efficacy, and further test for safety in an expanded and diverse patient population at multiple, geographically dispersed clinical trial
sites. The FDA may require more than one Phase 3 clinical trial to support approval of a product candidate. A well-controlled, statistically robust Phase 3
clinical trial may be designed to deliver the data that regulatory authorities will use to decide whether or not to approve, and, if approved, how to
appropriately label a drug; such Phase 3 clinical trials are referred to as “pivotal.” A Phase 2 clinical trial can be a “pivotal” trial if the design provides a
well-controlled and reliable assessment of clinical benefit, particularly in an area of unmet medical need. A company’s designation of the phase of a trial is
not necessarily indicative that the trial will be sufficient to satisfy the FDA requirements of that phase.
In December 2022, with the passage of the Food and Drug Omnibus Reform Act, or FDORA, Congress required sponsors to develop and submit a diversity
action plan for each Phase 3 clinical trial or any other “pivotal study” of a new drug or biological product. These plans are meant to encourage the
enrollment of more diverse patient populations in late-stage clinical trials of FDA-regulated products. Specifically, action plans must include the sponsor’s
goals for enrollment, the underlying rationale for those goals, and an explanation of how the sponsor intends to meet them. In addition to these
requirements, the legislation directs the FDA to issue new guidance on diversity action plans. In June 2024, the FDA issued draft guidance outlining the
general requirements for diversity action plans. Unlike most guidance documents issued by the FDA, the diversity action plan guidance, when finalized,
will have the force of the law because FDORA specifically dictates that the form and manner for submission of diversity action plans are specified in FDA
guidance.
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In January 2025, in response to an executive order issued by President Trump on Diversity, Equity and Inclusion programs, the FDA removed the draft
diversity action plan guidance from its website. That action, along with similar actions by the Trump administration to remove many other healthcare
webpages, is currently the subject of ongoing litigation. In July 2025, the U.S. District Court for the District of Columbia ruled that the Trump
administration’s actions to remove these webpages, including the draft diversity action plan guidance, are unlawful under the Administrative Procedure
Act. The court ordered the restoration of many of these webpages. In late July 2025, the FDA restored the draft diversity action plan guidance to its website
with a statement that information on the webpage may be modified and/or removed in the future subject to the terms of the court’s order and implemented
in accordance with applicable law. Accordingly, there is considerable uncertainty surrounding the draft guidance and how the FDA will consider diversity
action plans in connection with its review of NDAs.
In September 2025, the FDA issued final guidance with updated recommendations for GCPs aimed at modernizing the design and conduct of clinical trials.
The updates are intended to help pave the way for more efficient clinical trials to facilitate the development of medical products. The final guidance is
adopted from the International Council for Harmonisation’s updated E6(R3) draft guideline that was developed to enable the incorporation of rapidly
developing technological and methodological innovations into the clinical trial enterprise.
In October 2025, the FDA issued final guidance that focuses on patient-focused drug development. The guidance outlines how stakeholders, such as
patients, caregivers, researchers and medical product developers, can submit patient experience data in support of the development and approval of drug
products. To that end, the guidance provides an overview of clinical outcome assessments in clinical trials, and the role that clinical outcome assessments
may play in in evaluating the clinical benefit of a medical product.
In some cases, the FDA may approve an NDA for a product candidate but require the sponsor to conduct additional clinical trials to further assess the
product candidate’s safety and effectiveness after approval. Such post-approval trials are typically referred to as Phase 4 clinical trials. These trials are used
to gain additional experience from the treatment of a larger number of patients in the intended treatment group and to further document a clinical benefit in
the case of drugs approved under accelerated approval regulations. Failure to exhibit due diligence with regard to conducting Phase 4 clinical trials could
result in withdrawal of approval for products.
Progress reports detailing the results of clinical trials must be submitted annually to the FDA within 60 days of the anniversary date that the IND went into
effect and more frequently if serious AEs occur. These reports must include a development safety update report. In addition, IND safety reports must be
submitted to the FDA for any of the following: serious and unexpected suspected adverse reactions; findings from other studies or animal or in vitro testing
that suggest a significant risk in humans exposed to the product; and any clinically important increase in the case of a serious suspected adverse reaction
over that listed in the protocol or investigator brochure. Phase 1, Phase 2 and Phase 3 clinical trials may not be completed successfully within any specified
period, or at all. The FDA will typically inspect one or more clinical sites to assure compliance with GCP and the integrity of the clinical data submitted.
Interactions with the FDA During the Clinical Development Program
Following the clearance of an IND and the commencement of clinical trials, a sponsor will continue to have interactions with the FDA and the sponsor may
meet with the FDA at certain points in the clinical development program. Specifically, sponsors may meet with the FDA prior to the submission of an IND,
or a pre-IND meeting, at the end of Phase 2 clinical trial, or an EOP2 meeting, and before an NDA is submitted, or a pre-NDA meeting. Meetings at other
times may also be requested. These meetings provide an opportunity for the sponsor to share information about the data gathered to date with the FDA and
for the FDA to provide advice on the next phase of development.
There are five types of meetings that occur between sponsors and the FDA. Type A meetings are those necessary for an otherwise stalled product
development program to proceed or to address an important safety issue. Type B meetings include pre-IND and pre-NDA meetings as well as end of phase
meetings, such as EOP2 meetings. A Type C meeting is any meeting other than a Type A or Type B meeting regarding the development and review of a
product, including, for example, meetings to facilitate early consultations on the use of a biomarker as a new surrogate endpoint that has never been
previously used as the primary basis for product approval in the proposed context of use. A Type D meeting is focused on a narrow set of issues (typically
limited to no more than two focused topics) and should not require input from more than three disciplines or divisions. Finally, INitial Targeted
Engagement for Regulatory Advice on CBER products, or INTERACT, meetings are intended for novel products and development programs that present
unique challenges in the early development of an investigational product.
Such meetings may be conducted in person, via teleconference/videoconference, or written response only with minutes reflecting the questions that the
sponsor posed to the FDA and the FDA’s responses. The FDA has indicated that its responses, as conveyed in meeting minutes and advice letters, only
constitute mere recommendations and/or advice made to a sponsor and, as such, sponsors are not bound by such recommendations and/or advice.
Nonetheless, from a practical perspective, a sponsor’s
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failure to follow the FDA’s recommendations for design of a clinical program may put the program at significant risk of failure. In September 2023, the
FDA issued draft guidance outlining the terms of such meetings in more detail.
Pediatric Studies
Under the Pediatric Research Equity Act of 2003, or PREA, an NDA or supplement thereto must contain data that are adequate to assess the safety and
effectiveness of the product for the claimed indications in all relevant pediatric subpopulations, and to support dosing and administration for each pediatric
subpopulation for which the product is safe and effective. Sponsors must also submit pediatric study plans prior to the assessment data. Those plans must
contain an outline of the proposed pediatric study or studies the sponsor plans to conduct, including study objectives and design, any deferral or waiver
requests and other information required by regulation. The sponsor, the FDA, and the FDA’s internal review committee must then review the information
submitted, consult with each other and agree upon a final plan. The FDA or the sponsor may request an amendment to the plan at any time.
For drugs intended to treat a serious or life-threatening disease or condition, the FDA must, upon the request of a sponsor, meet to discuss preparation of
the initial pediatric study plan or to discuss deferral or waiver of pediatric assessments. In addition, the FDA will meet early in the development process to
discuss pediatric study plans with sponsors, and the FDA must meet with sponsors by no later than the end-of-phase 1 meeting for serious or life-
threatening diseases and by no later than ninety (90) days after the FDA’s receipt of the study plan.
The FDA may, on its own initiative or at the request of the sponsor, grant deferrals for submission of some or all pediatric data until after approval of the
product for use in adults, or full or partial waivers from the pediatric data requirements. A deferral may be granted for several reasons, including a finding
that the product or therapeutic candidate is ready for approval for use in adults before pediatric trials are complete or that additional safety or effectiveness
data needs to be collected before the pediatric trials begin. The law requires the FDA to send a PREA Non-Compliance letter to sponsors who have failed
to submit their pediatric assessments required under PREA, have failed to seek or obtain a deferral or deferral extension or have failed to request approval
for a required pediatric formulation. Unless otherwise required by regulation, the pediatric data requirements do not apply to products with orphan
designation, although the FDA has taken steps to limit what it considers abuse of this statutory exemption in PREA by announcing that it does not intend to
grant any additional orphan drug designations for rare pediatric subpopulations of what is otherwise a common disease. The FDA maintains a list of
diseases that are exempt from the requirements of the PREA. In May 2023, the FDA issued new draft guidance that further describes the pediatric study
requirements under PREA.
Filing and Review of an NDA
To obtain approval to market a drug product in the United States, a marketing application must be submitted to the FDA that provides sufficient data
establishing the safety and efficacy of the proposed drug product for its intended indication. The application must include all relevant data available from
pertinent preclinical and clinical trials, including negative or ambiguous results as well as positive findings, together with detailed information relating to
the product’s chemistry, manufacturing, controls and proposed labeling, among other things. Data can come from company-sponsored clinical trials
intended to test the safety and effectiveness of a product use, or from alternative sources, including studies initiated by investigators. To support marketing
approval, the data submitted must be sufficient in quality and quantity to establish the safety and efficacy of the drug product to the satisfaction of the FDA.
The NDA is a vehicle through which sponsors formally propose that the FDA approve a new product for marketing and sale in the United States for one or
more indications. Every new drug product candidate must be the subject of an approved NDA before it may be commercialized in the United States. Under
federal law, the submission of most NDAs is subject to an application user fee, which for federal fiscal year 2026 is approximately $4.7 million. The
sponsor of an approved NDA is also subject to an annual program fee, which for fiscal year 2026 is $442,213 per product. Certain exceptions and waivers
are available for some of these fees, such as an exception from the application fee for products with orphan designation and a waiver for certain small
businesses.
Following submission of an NDA, the FDA conducts a preliminary review of the application generally within 60 calendar days of its receipt and must
inform the sponsor at that time or before whether the application is sufficiently complete to permit substantive review. In the event that the FDA determines
that an application does not satisfy this standard, it will issue a Refusal to File determination to the sponsor. In this event, the application must be
resubmitted with the additional information. The resubmitted application is also subject to review before the FDA accepts it for filing. In October 2025, the
FDA issued internal guidance clarifying that “materially incomplete or inadequately organized” applications that would not permit timely, efficient and
complete review will be the subject of a Refusal to File determination. The internal guidance also provides that the agency will issue a Refusal to File
determination for an application that relies on a single adequate and well-controlled investigation to support approval if prior communications with the
FDA determined the need for more than one clinical study and any justification for a single investigation is inadequate.
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Once the submission is accepted for filing, the FDA begins an in-depth substantive review. Under the goals and policies agreed to by the FDA under the
PDUFA, applications seeking approval of New Molecular Entities, or NMEs, are meant to be reviewed within ten months from the date on which the FDA
accepts the application for filing. The review process and the PDUFA goal date may be extended by the FDA for three additional months to consider new
information or clarification provided by the sponsor to address an outstanding deficiency identified by the FDA following the original submission.
A sponsor is required to submit an sNDA if it wishes to make a change to a product that has already been approved under an NDA. Such changes may
include a revision of the labeling for the approved product, addition of a new indication, a change in the dosage, strength or formulation of the drug
product, or a modification of the manner in which the drug is manufactured. Under the timelines established pursuant to PDUFA, the standard review time
for an sNDA is generally 10 months from receipt of the application by the FDA.
Before approving an application, the FDA typically will inspect the facility or facilities where the product is or will be manufactured. These pre-approval
inspections may cover all facilities associated with an NDA submission, including component manufacturing, finished product manufacturing and control
testing laboratories. The FDA will not approve an application unless it determines that the manufacturing processes and facilities comply with cGMP
requirements and are adequate to assure consistent production of the product within required specifications. Under the FDA Reauthorization Act of 2017,
the FDA must implement a protocol to expedite review of responses to inspection reports pertaining to certain applications, including applications for
products in shortage or those for which approval is dependent on remediation of conditions identified in the inspection report.
Moreover, the FDA will review a sponsor’s financial relationship with the principal investigators who conducted the clinical trials in support of the NDA.
That is because, under certain circumstances, principal investigators at a clinical trial site may also serve as scientific advisors or consultants to a sponsor
and receive compensation in connection with such services. Depending on the level of that compensation and any other financial interest a principal
investigator may have in a sponsor, the sponsor may be required to report these relationships to the FDA. The FDA will then evaluate that financial
relationship and determine whether it creates a conflict of interest or otherwise affects the interpretation of the trial or the integrity of the data generated at
the principal investigator’s clinical trial site. If so, the FDA may exclude data from the clinical trial site in connection with its determination of safety and
efficacy of the investigational product.
In addition, as a condition of approval, the FDA may require a sponsor to develop a REMS. REMS use risk minimization strategies beyond the professional
labeling to ensure that the benefits of the product outweigh the potential risks. REMS could include medication guides, communication plans for health
care professionals, and elements to assure safe use, including special training or certification for prescribing or dispensing, dispensing only under certain
circumstances, special monitoring, the use of patient registries and other risk mitigation tools. Any limitations on approval, marketing or use for any of our
products could restrict the commercial promotion, distribution, prescription or dispensing of those products. To determine whether a REMS is needed, the
FDA will consider the size of the population likely to use the product, seriousness of the disease, expected benefit of the product, expected duration of
treatment, seriousness of known or potential adverse events and whether the product is an NME. For example, to mitigate the risk of hepatocellular injury,
AQVESME™ is available only through the REMS approved by the FDA.
The FDA may refer an application for a novel product which presents difficult questions of safety or efficacy to an advisory committee or explain why such
referral was not made. Typically, an advisory committee is a panel of independent experts, including clinicians and other scientific experts, that reviews,
evaluates and provides a recommendation as to whether the application should be approved and under what conditions. The FDA is not bound by the
recommendations of an advisory committee, but it considers such recommendations when making decisions.
Fast Track, Breakthrough Therapy, Priority Review and Regenerative Advanced Therapy Designations and Commissioner's National Priority Voucher
Program
The FDA is authorized to designate certain products for expedited review if they are intended to address an unmet medical need in the treatment of a
serious or life-threatening disease or condition. None of the following expedited programs changes the standards for approval but they may help expedite
the development or approval process of product candidates.
•
Fast Track Designation. The FDA may designate a product for Fast Track review if it is intended, either alone or in combination with one or more
other products, for the treatment of a serious or life-threatening disease or condition, and it demonstrates the potential to address unmet medical
needs for such a disease or condition. For Fast Track products, sponsors may have greater interactions with the FDA and the FDA may initiate
review of sections of a Fast Track product’s application before the application is complete. This rolling review process may be available if the FDA
determines, after preliminary evaluation of clinical data submitted by the sponsor, that a Fast Track product may be effective. However, the FDA’s
time period goal for reviewing a Fast Track application does not begin until the last section of the application is submitted. In addition, the Fast
Track designation may be withdrawn by the FDA if the FDA believes that the designation is no longer supported by data emerging in the clinical
trial process.
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•
Breakthrough Therapy Designation. A product may be designated as a Breakthrough Therapy if it is intended, either alone or in combination with
one or more other products, to treat a serious or life-threatening disease or condition and preliminary clinical evidence indicates that the product may
demonstrate substantial improvement over existing therapies on one or more clinically significant endpoints. The FDA may take certain actions with
respect to Breakthrough Therapies, including: holding meetings with the sponsor throughout the development process; providing timely advice to
the product sponsor regarding development and approval; involving more senior staff in the review process; assigning a cross-disciplinary project
lead for the review team; and taking other steps to design the clinical trials in an efficient manner.
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Priority Review. The FDA may designate a product for priority review if it is a product that treats a serious condition and, if approved, would
provide a significant improvement in safety or effectiveness when compared with other available therapies. Significant improvement may be
illustrated by evidence of increased effectiveness in the treatment of a condition, elimination or substantial reduction of a treatment-limiting product
reaction, documented enhancement of patient compliance that may lead to improvement in serious outcomes, and evidence of safety and
effectiveness in a new subpopulation. A priority designation is intended to direct overall attention and resources to the evaluation of such
applications, and to shorten the FDA’s goal for review of a marketing application from ten months to six months.
•
Regenerative Advanced Therapy Designation. A product is eligible for regenerative advanced therapies designation if it is a regenerative medicine
therapy that is intended to treat, modify, reverse or cure a serious or life-threatening disease or condition, and preliminary clinical evidence indicates
that the product has the potential to address unmet medical needs for such disease or condition. The benefits of a regenerative advanced therapy
designation include early interactions with FDA to expedite development and review, benefits available to breakthrough therapies, potential
eligibility for priority review and accelerated approval based on surrogate or intermediate endpoints.
•
Commissioner’s National Priority Voucher. In June 2025, the FDA created a new voucher program called the Commissioner’s National Priority
Voucher, or CNPV, to expedite the development and approval of new drug products. Vouchers may reportedly be redeemed by sponsors to shorten
the review time of an NDA from approximately 10-12 months to 1-2 months. The FDA has indicated that the new CNPV process will convene
experts from the FDA’s offices for a team-based review rather than using the standard review system of a drug application being sent to numerous
FDA offices. Clinical information will be reviewed by a multidisciplinary team of physicians and scientists who will pre-review the submitted
information and convene for a 1-day meeting.
Even if a product candidate qualifies for one or more of these designations or programs, there is no guarantee it would result in approval of our marketing
applications or that such approval, if granted, would be on an expedited basis.
Accelerated Approval Pathway
Drug or biologic products studied for their safety and effectiveness in treating serious or life-threatening illnesses and that provide meaningful therapeutic
benefit over existing treatments may receive accelerated approval. Accelerated approval means that a product candidate may be approved on the basis of
adequate and well controlled clinical trials establishing that the product candidate has an effect on a surrogate endpoint that is reasonably likely to predict a
clinical benefit, or on the basis of an effect on a clinical endpoint other than survival or irreversible morbidity or mortality or other clinical benefit, taking
into account the severity, rarity and prevalence of the condition and the availability or lack of alternative treatments. As a condition of approval, the FDA
may require that a sponsor of a drug or biologic product candidate receiving accelerated approval perform adequate and well controlled post-marketing
clinical trials. In addition, the FDA currently requires as a condition for accelerated approval pre-approval of promotional materials.
With the passage of FDORA in December 2022, Congress modified certain provisions governing accelerated approval of drug and biologic products.
Specifically, the new legislation authorized the FDA to: (i) require a sponsor to have its confirmatory clinical trial underway before accelerated approval is
awarded, (ii) require a sponsor of a product granted accelerated approval to submit progress reports on its post-approval studies to the FDA every six
months until the study is completed; and (iii) use expedited procedures to withdraw accelerated approval of an NDA or biologics license application if
certain conditions are not met, including where a confirmatory trial fails to verify the product’s clinical benefit or where evidence demonstrates the product
is not shown to be safe or effective under the conditions of use. The FDA may also use such procedures to withdraw an accelerated approval if a sponsor
fails to conduct any required post-approval trial of the product with due diligence, including with respect to “conditions specified by the Secretary.” The
new procedures include the provision of due notice and an explanation for a proposed withdrawal, and opportunities for a meeting with the FDA
Commissioner or the Commissioner’s designee and a written appeal, among other things.
In March 2023, the FDA issued draft guidance that outlines its views and approach to accelerated approval. The FDA indicated that the accelerated
approval pathway is commonly used for approval of oncology drugs due to the serious and life-threatening nature of cancer. Although single-arm trials
have been commonly used to support accelerated approval, a randomized controlled trial is the preferred approach, as it provides a more robust efficacy
and safety assessment and allows for direct
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comparisons to an available therapy. To that end, the FDA outlined considerations for designing, conducting, and analyzing data for trials intended to
support accelerated approvals of oncology therapeutics. Subsequently, in December 2024 and January 2025, the FDA issued additional draft guidance
relating to accelerated approval. This guidance describes the FDA’s views on what it means to conduct a confirmatory trial with due diligence and how the
agency plans to interpret whether such a study needs to be underway at the time of approval. While this guidance is currently only in draft form and will
ultimately not be legally binding even when finalized, sponsors typically observe the FDA’s guidance closely to ensure that their investigational products
qualify for accelerated approval.
The FDA’s Decision on an NDA
Based on its evaluation of the application and accompanying information, including the results of the inspection of the manufacturing facilities, the FDA
may issue an approval letter or a complete response letter. An approval letter authorizes commercial marketing of the product with specific prescribing
information for the approved indications. A complete response letter generally indicates that the review cycle is complete and outlines the deficiencies in
the submission, and may require substantial additional testing or information in order for the FDA to reconsider the application. A sponsor has one year to
respond to the deficiencies identified in the complete response letter. The FDA has committed to reviewing such resubmissions in two or six months
depending on the type of information included. Even with submission of this additional information, the FDA ultimately may decide that the application
does not satisfy the regulatory criteria for approval.
If the FDA approves a new product, it may limit the approved indications for use of the product. The FDA may also require contraindications, warnings or
precautions be included in the product labeling, require post-approval trials, require testing and surveillance programs to monitor the product after
commercialization, or impose other conditions, including distribution and use restrictions or other risk management mechanisms, including REMS, to help
ensure that the benefits of the product outweigh the potential risks. The FDA may prevent or limit further marketing of a product based on the results of
post-marketing trials or surveillance programs. After approval, many types of changes to the approved product, such as adding new indications,
manufacturing changes and additional labeling claims, are subject to further testing requirements and FDA review and approval.
Under the Ensuring Innovation Act, signed into law in 2021, the FDA must publish action packages summarizing its decisions to approve new drugs within
30 days of approval of such drugs. While complete response letters were previously treated by the FDA as confidential and were only disclosed in action
packages for approved products, the FDA announced in September 2025 that it will now release complete response letters promptly after they are issued to
sponsors.
Post-Approval Regulation
If regulatory approval for marketing of a product or new indication for an existing product is obtained, the sponsor will be required to comply with all
regular post-approval regulatory requirements as well as any post-approval requirements that the FDA may have imposed as part of the approval process.
The sponsor will be required to report, among other things, certain adverse reactions and manufacturing problems to the FDA, provide updated safety and
efficacy information and comply with requirements concerning advertising and promotional labeling requirements. Manufacturers and certain of their
subcontractors are required to register their establishments with the FDA and certain state agencies, and are subject to periodic unannounced inspections by
the FDA and certain state agencies for compliance with ongoing regulatory requirements, including cGMP regulations. Accordingly, the sponsor and its
third-party manufacturers must continue to expend time, money and effort in the areas of production and quality control to maintain compliance with
cGMP and other regulatory requirements.
In May 2025, the FDA disclosed plans to expand its use of unannounced inspections of foreign manufacturing facilities that produce drugs and biologics
distributed in the United States. Subsequently, in August 2025, the FDA introduced a “PreCheck” program with the intention of supporting companies as
they build new manufacturing facilities in the United States. The PreCheck program provides manufacturers with more frequent FDA communication at
critical development stages, including facility design, construction, and pre-production. These FDA initiatives flow from an executive order issued by
President Trump in May 2025, calling for actions to reduce regulatory barriers to pharmaceutical manufacturing in the United States.
A product may also be subject to official lot release, meaning that the manufacturer is required to perform certain tests on each lot of the product before it is
released for distribution. If the product is subject to official release, the manufacturer must submit samples of each lot, together with a release protocol
showing a summary of the history of manufacture of the lot and the results of all the manufacturer’s tests performed on the lot, to the FDA. The FDA may
in addition perform certain confirmatory tests on lots of some products before releasing the lots for distribution. Finally, the FDA will conduct laboratory
research related to the safety, purity, potency and effectiveness of pharmaceutical products.
Once an approval is granted, the FDA may withdraw the approval if compliance with regulatory requirements is not maintained or if problems occur after
the product reaches the market. Later discovery of previously unknown problems with a product, including adverse events of unanticipated severity or
frequency, with manufacturing processes, or failure to comply with regulatory requirements, may result in: revisions to the approved labeling to add new
safety information; imposition of post-
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market studies or clinical trials to assess safety risks; or imposition of distribution or other restrictions under a REMS. Other potential consequences
include, among other things:
•
restrictions on the marketing or manufacturing of the product, complete withdrawal of the product from the market or product recalls;
•
fines, warning letters or holds on post-approval clinical trials;
•
refusal of the FDA to approve pending applications or supplements to approved applications, or suspension or revocation of product license
approvals;
•
product seizure or detention, or refusal to permit the import or export of products; or
•
injunctions or the imposition of civil or criminal penalties.
The FDA strictly regulates the marketing, labeling, advertising and promotion of prescription drug products placed on the market. This regulation includes,
among other things, standards and regulations for direct-to-consumer advertising, communications regarding unapproved uses, industry-sponsored
scientific and educational activities, and promotional activities involving the Internet and social media. Promotional claims about a drug’s safety or
effectiveness are prohibited before the drug is approved. After approval, a drug product generally may not be promoted for uses that are not approved by
the FDA, as reflected in the product’s prescribing information, although it may be permissible, under very specific, narrow conditions, for a manufacturer
to engage in nonpromotional, non-misleading communication regarding off-label information, such as distributing scientific or medical journal
information. In the United States, health care professionals are generally permitted to prescribe drugs for such uses not described in the drug’s labeling,
known as off-label uses, because the FDA does not regulate the practice of medicine. However, FDA regulations impose rigorous restrictions on
manufacturers’ communications, prohibiting the promotion of off-label uses.
For example, in September 2025, President Trump issued a Memorandum directing HHS to ensure transparency and accuracy in direct-to-consumer
prescription drug advertising, including by increasing the amount of information regarding any risks associated with the use of any such prescription drug
required to be provided in prescription drug advertisements. To that end, the FDA announced that it is initiating a rulemaking process “to eliminate the
‘adequate provision’ loophole that allows pharmaceutical advertisements to hide safety information by placing it in another format or location.” In this
context, the FDA declared that it will no longer tolerate what it characterized as “deceptive practices” in prescription drug advertising and that it would
“aggressively deploy” its available enforcement tools, with “heightened scrutiny” of fair balance and disclosures in social media promotions. The FDA also
issued a generic notice letter directing companies to remove any noncompliant advertising and bring all promotional communications into compliance.
In September 2021, the FDA published final regulations that describe the types of evidence that the FDA will consider in determining the intended use of a
drug or biologic. Moreover, with passage of the Pre-Approval Information Exchange Act in December 2022, sponsors of products that have not been
approved may proactively communicate to payors certain information about products in development to help expedite patient access upon product
approval. In addition, in January 2025, the FDA published final guidance outlining its policies governing the distribution of scientific information on
unapproved uses of approved products to healthcare providers. The final guidance calls for such communications to be truthful, non-misleading, and
scientifically sound and to include all information necessary for healthcare providers to interpret the strengths and weaknesses and validity and utility of the
information about the unapproved use of the approved product. If a company engages in such communications consistent with the guidance’s
recommendations, the FDA indicated that it will not treat such communications as evidence of unlawful promotion of a new intended use for the approved
product. While this guidance only applies to communications about unapproved uses of approved products, it may be helpful in understanding the FDA’s
approach to communications about unapproved products.
If a company is found to have promoted off-label uses, it may become subject to adverse public relations and administrative and judicial enforcement by
the FDA, the Department of Justice, or the DOJ, or the Office of the Inspector General of the Department of HHS, as well as state authorities. This could
subject a company to a range of penalties that could have a significant commercial impact, including civil and criminal fines, and agreements that
materially restrict the manner in which a company promotes or distributes drug products. The federal government has levied large civil and criminal fines
against companies for alleged improper promotion, and has also requested that companies enter into consent decrees or permanent injunctions under which
specified promotional conduct is changed or curtailed.
In addition, the distribution of prescription pharmaceutical products is subject to the Prescription Drug Marketing Act, or PDMA, and its implementing
regulations, as well as the Drug Supply Chain Security Act, or DSCSA, which regulate the distribution and tracing of prescription drug samples at the
federal level, and set minimum standards for the regulation of drug distributors by the states. The PDMA, its implementing regulations and state laws limit
the distribution of prescription pharmaceutical product samples, and the DSCSA imposes requirements to ensure accountability in distribution and to
identify and remove counterfeit and other illegitimate products from the market. Manufacturers are required to have such systems and processes in place to
comply with the DSCSA, but, so as not to disrupt supply chains, the FDA has granted certain exemptions
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from enhanced drug distribution security requirements for eligible trading partners for particular periods of time. For wholesale drug distributors, the final
DSCSA deadline was August 27, 2025, marking the date for mandatory transition to a fully electronic, interoperable system for tracking prescription drugs
at the package level throughout the United States.
Section 505(b)(2) NDAs
NDAs for most new drug products are based on two full clinical trials which must contain substantial evidence of the safety and efficacy of the proposed
new product for the proposed use. These applications are submitted under Section 505(b)(1) of the FDCA. The FDA is, however, authorized to approve an
alternative type of NDA under Section 505(b)(2) of the FDCA. This type of application allows the applicant to rely, in part, on the FDA’s previous findings
of safety and efficacy for a similar product, or published literature. Specifically, Section 505(b)(2) applies to NDAs for a drug for which the investigations
made to show whether or not the drug is safe for use and effective in use and relied upon by the sponsor for approval of the application “were not
conducted by or for the sponsor and for which the sponsor has not obtained a right of reference or use from the person by or for whom the investigations
were conducted.”
Section 505(b)(2) authorizes the FDA to approve an NDA based on safety and efficacy data that were not developed by the sponsor. NDAs filed under
Section 505(b)(2) may provide an alternate and potentially more expeditious pathway to FDA approval for new or improved formulations or new uses of
previously approved products. If the 505(b)(2) sponsor can establish that reliance on the FDA’s previous approval is scientifically appropriate, the sponsor
may eliminate the need to conduct certain preclinical studies or clinical trials of the new product. The FDA may also require companies to perform
additional studies or measurements to support the change from the approved product. The FDA may then approve the new drug candidate for all or some of
the label indications for which the referenced product has been approved, as well as for any new indication sought by the Section 505(b)(2) sponsor.
Generic Drugs and Regulatory Exclusivity
The Hatch-Waxman Amendments to the FDCA authorize the FDA to approve generic drugs that are shown to contain the same active ingredients as, and to
be bioequivalent to, drugs previously approved by the FDA pursuant to NDAs. Such previously approved drugs are known as the reference listed drugs, or
RLDs. Abbreviated new drug applications, or ANDAs, for generic drugs generally do not include preclinical and clinical data to demonstrate safety and
effectiveness. Instead, the sponsor may rely on the preclinical and clinical testing previously conducted for the RLD.
Under the Hatch-Waxman Act, the FDA may not approve an ANDA or 505(b)(2) application until any applicable period of non-patent exclusivity for the
RLD has expired. The FDCA provides a period of five years of regulatory exclusivity for a new drug containing a new chemical entity, or NCE. For the
purposes of this provision, an NCE is a drug that contains no active moiety that has previously been approved by the FDA in any other NDA. An active
moiety is the molecule or ion responsible for the physiological or pharmacological action of the drug substance. In cases where such NCE exclusivity has
been granted, a generic or follow-on drug application may not be filed with the FDA until the expiration of five years unless the submission is accompanied
by a Paragraph IV certification, in which case the sponsor may submit its application four years following the original product approval.
The FDCA also provides for a period of three years of regulatory exclusivity if the NDA includes reports of one or more new clinical trials, other than
bioavailability or bioequivalence studies, that were conducted by or for the sponsor and are essential to the approval of the application. This three-year
exclusivity period often protects changes to a previously approved drug product, such as new indications, dosage forms, route of administration,
combination of ingredients. Three-year exclusivity would be available for a drug product that contains a previously approved active moiety, provided the
statutory requirement for a new clinical trial is satisfied. Unlike five-year NCE exclusivity, an award of three-year exclusivity does not block the FDA from
accepting ANDAs or 505(b)(2) NDAs seeking approval for generic versions of the drug as of the date of approval of the original drug product; rather, this
three-year exclusivity covers only the conditions of use associated with the new clinical trials and, as a general matter, does not prohibit the FDA from
approving follow-on applications for drugs containing the original active ingredient.
Upon submission of an NDA or a supplement thereto, NDA sponsors are required to list with the FDA each patent with claims that cover the sponsor’s
product or an approved method of using the product. Upon approval of a new drug, each of the patents listed by the NDA sponsor is published in the FDA's
publication "Approved Drug Products with Therapeutic Equivalence Evaluations," also referred to as the Orange Book. When an ANDA sponsor files its
application with the FDA, the applicant is required to certify to the FDA concerning any patents listed for the reference product in the Orange Book.
Specifically, the sponsor must certify: (i) the required patent information has not been filed, (ii) the listed patent has expired, (iii) the listed patent has not
expired, but will expire on a particular date and approval is sought after patent expiration or (iv) the listed patent is invalid, unenforceable or will not be
infringed by the new product. To the extent that the Section 505(b)(2) sponsor is relying on studies conducted for an already approved product, the sponsor
is required to certify to the FDA concerning any patents listed for the approved product in the Orange Book to the same extent that an ANDA sponsor
would.
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A certification that the new product will not infringe the already approved product’s listed patents or that such patents are invalid or unenforceable is called
a Paragraph IV certification. If the sponsor does not challenge the listed patents, the ANDA or 505(b)(2) NDA will not be approved until all the listed
patents claiming the referenced product have expired.
If the ANDA sponsor or the 505(b)(2) sponsor has provided a Paragraph IV certification to the FDA, the sponsor must also send notice of the Paragraph IV
certification to the NDA owner and patent holders once the ANDA or 505(b)(2) NDA has been accepted for filing by the FDA. The NDA owner and patent
holders may then initiate a patent infringement lawsuit in response to the notice of the Paragraph IV certification. The filing of a patent infringement
lawsuit within 45 days after the receipt of a Paragraph IV certification automatically prevents the FDA from approving the ANDA or 505(b)(2) NDA until
the earlier of 30 months after the receipt of the Paragraph IV notice, expiration of the patent, or a decision in the infringement case that is favorable to the
ANDA or 505(b)(2) sponsor.
In October 2025, the FDA introduced a new program to expedite review of ANDAs and approval of generic drug products. Under this new initiative, a
sponsor of an ANDA would qualify for faster review and approval if it conducts bioequivalence studies in the United States, exclusively sources the active
pharmaceutical ingredient in the United States and manufactures the finished drug product within the United States.
Pediatric Exclusivity
Pediatric exclusivity is another type of non-patent marketing exclusivity in the United States and, if granted, provides for the attachment of an additional
six months to the term of any existing patent or regulatory exclusivity for drug products. This six-month exclusivity may be granted if an NDA sponsor
submits pediatric data that fairly respond to a written request from the FDA for such data. The data do not need to show the product to be effective in the
pediatric population studied; rather, if the clinical trial is deemed to fairly respond to the FDA’s request, the additional protection is granted. If reports of
requested pediatric studies are submitted to and accepted by the FDA within the statutory time limits, whatever statutory or regulatory periods of
exclusivity or patent protection cover the product are extended by six months. This is not a patent term extension, but effectively extends the regulatory
period during which the FDA cannot approve another application. With regard to patents, the six-month pediatric exclusivity period will not attach to any
patents for which a generic (ANDA or 505(b)(2) NDA) sponsor submitted a Paragraph IV certification, unless the NDA sponsor or patent owner first
obtains a court determination that the patent is valid and infringed by a proposed generic product.
Orphan Drug Designation and Exclusivity
Under the Orphan Drug Act, the FDA may designate a drug product as an “orphan drug” if it is intended to treat a rare disease or condition, generally
meaning that it affects fewer than 200,000 individuals in the United States, or more in cases in which there is no reasonable expectation that the cost of
developing and making a product available in the United States for treatment of the disease or condition will be recovered from sales of the product. A
company must seek orphan drug designation before submitting an NDA for the candidate product. If the request is granted, the FDA will disclose the
identity of the therapeutic agent and its potential use. Orphan drug designation does not shorten the PDUFA goal dates for the regulatory review and
approval process, although it does convey certain advantages such as tax benefits and exemption from the PDUFA application fee.
If a product with orphan designation receives the first FDA approval for the disease or condition for which it has such designation, or for a select indication
or use within the rare disease or condition for which it was designated, the product generally will receive orphan drug exclusivity. Orphan drug exclusivity
means that the FDA may not approve another sponsor’s marketing application for the same drug for the same condition for seven years, except in certain
limited circumstances. Orphan exclusivity does not block the approval of a different product for the same rare disease or condition, nor does it block the
approval of the same product for different conditions. If a drug designated as an orphan drug ultimately receives marketing approval for an indication
broader than what was designated in its orphan drug application, it may not be entitled to exclusivity.
Orphan drug exclusivity will also not bar approval of another product under certain circumstances, including if a subsequent product with the same drug for
the same condition is shown to be clinically superior to the approved product on the basis of greater efficacy or safety, or providing a major contribution to
patient care, or if the company with orphan drug exclusivity is not able to meet market demand. This is the case despite an earlier court opinion holding that
the Orphan Drug Act unambiguously required the FDA to recognize orphan exclusivity regardless of a showing of clinical superiority.
The FDA and Congress may further reevaluate the Orphan Drug Act and its regulations and policies.
Patent Term Restoration and Extension
A patent claiming a new drug product, its method of use or its method of manufacture may be eligible for a limited patent term extension under the Hatch-
Waxman Act, which permits a patent restoration of up to five years for patent term lost during product development and the FDA regulatory review. The
restoration period granted on a patent covering a product is typically one-half the time between the effective date of when a clinical trial involving human
beings has begun and the submission date
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of an application for approval, plus the time between the submission date of an application and the ultimate approval date. Patent term restoration cannot be
used to extend the remaining patent term past a total of 14 years from the product’s approval date. Only one patent applicable to an approved product is
eligible for the extension, and the application for the extension must be submitted prior to the expiration of the patent in question. A patent that covers
multiple products for which approval is sought can only be extended in connection with one of the approvals. The USPTO reviews and approves the
application for any patent term extension or restoration in consultation with the FDA.
Health Care Law and Regulation
Health care providers and third-party payors play a primary role in the recommendation and prescription of drug products that are granted marketing
approval. Arrangements with providers, consultants, third-party payors and customers are subject to broadly applicable fraud and abuse, anti-kickback,
false claims laws, patient privacy laws and regulations and other health care laws and regulations that may constrain business and/or financial
arrangements. Restrictions under applicable federal and state health care laws and regulations, include the following:
•
the federal Anti-Kickback Statute, which prohibits, among other things, persons and entities from knowingly and willfully soliciting, offering,
paying, receiving or providing remuneration, directly or indirectly, in cash or in kind, to induce or reward either the referral of an individual for, or
the purchase, order or recommendation of, any good or service, for which payment may be made, in whole or in part, under a federal health care
program such as Medicare and Medicaid;
•
the federal civil and criminal false claims laws, including the civil False Claims Act, and civil monetary penalties laws, which prohibit individuals or
entities from, among other things, knowingly presenting, or causing to be presented, to the federal government, claims for payment that are false,
fictitious or fraudulent or knowingly making, using or causing to made or used a false record or statement to avoid, decrease or conceal an obligation
to pay money to the federal government;
•
the federal Health Insurance Portability and Accountability Act of 1996, or HIPAA, which created additional federal criminal laws that prohibit,
among other things, knowingly and willfully executing, or attempting to execute, a scheme to defraud any health care benefit program or making
false statements relating to health care matters;
•
HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act, and their respective implementing regulations,
including the Final Omnibus Rule published in January 2013, which impose obligations, including mandatory contractual terms, with respect to
safeguarding the privacy, security and transmission of individually identifiable health information;
•
the federal false statements statute, which prohibits knowingly and willfully falsifying, concealing or covering up a material fact or making any
materially false statement in connection with the delivery of or payment for health care benefits, items or services;
•
the Foreign Corrupt Practices Act, or FCPA, which prohibits companies and their intermediaries from making, or offering or promising to make
improper payments to non-U.S. officials for the purpose of obtaining or retaining business or otherwise seeking favorable treatment;
•
the federal transparency requirements known as the federal Physician Payments Sunshine Act, under the Patient Protection and Affordable Care Act,
as amended by the Health Care Education Reconciliation Act, or the ACA, which requires certain manufacturers of drugs, devices, biologics and
medical supplies to report annually to the Centers for Medicare & Medicaid Services, or CMS, within the United States Department of HHS,
information related to payments and other transfers of value made by that entity to physicians, other healthcare providers and teaching hospitals, as
well as ownership and investment interests held by physicians and their immediate family members; and
•
analogous state and foreign laws and regulations, such as state anti-kickback and false claims laws, which may apply to health care items or services
that are reimbursed by non-government third-party payors, including private insurers.
Further, some state laws require pharmaceutical companies to comply with the pharmaceutical industry’s voluntary compliance guidelines and the relevant
compliance guidance promulgated by the federal government in addition to requiring manufacturers to report information related to payments to physicians
and other health care providers or marketing expenditures. Additionally, some state and local laws require the registration of pharmaceutical sales
representatives in the jurisdiction. State and foreign laws also govern the privacy and security of health information in some circumstances, many of which
differ from each other in significant ways and often are not preempted by HIPAA, thus complicating compliance efforts.
Violations of these laws are punishable by criminal and/or civil sanctions, including, in some instances, exclusion from participation in federal and state
health care programs, such as Medicare and Medicaid.
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Pharmaceutical Insurance Coverage and Health Care Reform
In the United States and other countries, patients who are prescribed treatments for their conditions and providers performing the prescribed services
generally rely on third-party payors to reimburse all or part of the associated health care costs. Significant uncertainty exists as to the coverage and
reimbursement status of products approved by the FDA and other government authorities. Thus, even if a product candidate is approved, sales of the
product will depend, in part, on the extent to which third-party payors, including government health programs in the United States such as Medicare and
Medicaid, commercial health insurers and managed care organizations, provide coverage and establish adequate reimbursement levels for the product. The
process for determining whether a payor will provide coverage for a product may be separate from the process for setting the price or reimbursement rate
that the payor will pay for the product once coverage is approved. Third-party payors are increasingly challenging the prices charged, examining the
medical necessity and reviewing the cost-effectiveness of medical products and services and imposing controls to manage costs. Third-party payors may
limit coverage to specific products on an approved list, also known as a formulary, which might not include all the approved products for a particular
indication.
In order to secure coverage and reimbursement for any product that might be approved for sale, a company may need to conduct expensive
pharmacoeconomic studies to demonstrate the medical necessity and cost-effectiveness of the product, in addition to the costs required to obtain FDA or
other comparable marketing approvals. Nonetheless, product candidates may not be considered medically necessary or cost effective. A decision by a third-
party payor not to cover a product could reduce physician utilization once the product is approved and have a material adverse effect on sales, results of
operations and financial condition. Additionally, a payor’s decision to provide coverage for a product does not imply that an adequate reimbursement rate
will be approved. Further, one payor’s determination to provide coverage for a product does not assure that other payors will also provide coverage and
reimbursement for the product, and the level of coverage and reimbursement can differ significantly from payor to payor.
The containment of health care costs also has become a priority of federal, state and foreign governments, and the prices of products have been a focus in
this effort. Governments have shown significant interest in implementing cost-containment programs, including price controls, restrictions on
reimbursement and requirements for substitution of generic products. Adoption of price controls and cost-containment measures, and adoption of more
restrictive policies in jurisdictions with existing controls and measures, could further limit a company’s revenue generated from the sale of any approved
products. Coverage policies and third-party reimbursement rates may change at any time. Even if favorable coverage and reimbursement status is attained
for one or more products for which a company or its collaborators receive marketing approval, less favorable coverage policies and reimbursement rates
may be implemented in the future.
There have been several federal and state proposals during the last few years regarding the pricing of pharmaceutical and biopharmaceutical products,
limiting coverage and reimbursement for drugs, biologics and other medical products, government control and other changes to the health care system in
the United States.
In March 2010, the United States Congress enacted the ACA, which, among other things, includes changes to the coverage and payment for drug products
under government health care programs. Among the provisions of the ACA of importance to our potential product candidates are:
•
an annual, nondeductible fee on any entity that manufactures or imports specified branded prescription drugs and biologic agents, apportioned
among these entities according to their market share in certain government healthcare programs;
•
expansion of eligibility criteria for Medicaid programs by, among other things, allowing states to offer Medicaid coverage to certain individuals with
income at or below 133% of the federal poverty level, thereby potentially increasing a manufacturer’s Medicaid rebate liability;
•
expanded manufacturers’ rebate liability under the Medicaid Drug Rebate Program, or MDRP, by increasing the minimum rebate for both branded
and generic drugs, and revising the definition of “average manufacturer price,” or AMP, for calculating and reporting Medicaid drug rebates on
outpatient prescription drug prices;
•
addressed a new methodology by which rebates owed by manufacturers under the MDRP are calculated for drugs that are inhaled, infused, instilled,
implanted or injected;
•
expanded the types of entities eligible for the 340B drug discount program;
•
established the Medicare Part D coverage gap discount program by requiring manufacturers to provide a point-of-sale-discount (currently 70%) off
the negotiated price of applicable brand drugs to eligible beneficiaries during their coverage gap period as a condition for the manufacturers’
outpatient drugs to be covered under Medicare Part D; and
•
a new Patient-Centered Outcomes Research Institute to oversee, identify priorities in, and conduct comparative clinical effectiveness research, along
with funding for such research.
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Other legislative changes have been proposed and adopted in the United States since the ACA was enacted. In August 2011, the Budget Control Act of
2011, among other things, created measures for spending reductions by Congress. A Joint Select Committee on Deficit Reduction, tasked with
recommending a targeted deficit reduction of at least $1.2 trillion for the years 2013 through 2021, was unable to reach required goals, thereby triggering
the legislation’s automatic reduction to several government programs. This includes aggregate reductions of Medicare payments to providers up to 2% per
fiscal year, which will now remain in effect for six months into 2032.
Since enactment of the ACA, there have been, and continue to be, numerous legal challenges and Congressional actions to repeal and replace provisions of
the law. For example, with enactment of the Tax Cuts and Jobs Act of 2017 on December 22, 2017, Congress repealed the “individual mandate.” The repeal
of this provision, which requires most Americans to carry a minimal level of health insurance, became effective in 2019. On June 17, 2021, the Supreme
Court dismissed the most recent judicial challenge to the ACA after finding that the plaintiffs did not have standing to challenge the ACA’s minimum
essential coverage provision at issue in the case. Litigation and legislation over the ACA are likely to continue, with unpredictable and uncertain results.
Pharmaceutical Prices
The costs of prescription pharmaceuticals have also been the subject of considerable discussion in the United States. To date, there have been several recent
U.S. congressional inquiries, as well as proposed and enacted state and federal legislation designed to, among other things, bring more transparency to drug
pricing, review the relationship between pricing and manufacturer patient programs, and reduce the costs of drugs under Medicare and Medicaid.
In addition, the HHS and the FDA published a final rule allowing states and other entities to develop a Section 804 Importation Program to import certain
prescription drugs from Canada into the United States. That regulation was challenged in a lawsuit by the Pharmaceutical Research and Manufacturers of
America, or PhRMA, but the case was dismissed by a federal district court in February 2023 after the court found that PhRMA did not have standing to sue
HHS. Several states have passed legislation establishing workgroups to examine the impact of a state importation program. Several other states have passed
laws allowing for the importation of drugs from Canada. Certain of these states have submitted Section 804 Importation Program proposals to the FDA. On
January 5, 2024, the FDA approved Florida’s plan for Canadian drug importation. Florida now has authority to import certain products from Canada for a
period of two years once certain conditions are met. Florida will first need to submit a pre-import request for each product selected for importation, which
must be approved by the FDA. Florida will also need to relabel the products and perform quality testing of the products to meet FDA standards. On May
21, 2025, the FDA announced that it would offer individual states the opportunity to submit a draft proposal for pre-review and meet with the FDA to
obtain initial feedback prior to formally submitting their Section 804 Importation Program proposal. The intent of these meetings is to assist states in
developing their proposals by further clarifying requirements, enhancing the quality of proposals submitted to the FDA and ultimately shortening the
review timeline.
Further, the HHS finalized a regulation removing safe harbor protection for price reductions from pharmaceutical manufacturers to plan sponsors under
Part D, either directly or through pharmacy benefit managers, unless the price reduction is required by law. The final rule would also eliminate the current
safe harbor for Medicare drug rebates and create new safe harbors for beneficiary point-of-sale discounts and pharmacy benefit manager service fees. It
originally was set to go into effect on January 1, 2022, but with passage of the Inflation Reduction Act of 2022, or IRA, has been delayed by Congress to
January 1, 2032.
The IRA has implications for Medicare Part D, which is a program available to individuals who are entitled to Medicare Part A or enrolled in Medicare
Part B to give them the option of paying a monthly premium for outpatient prescription drug coverage. Among other things, the IRA requires
manufacturers of certain drugs to engage in price negotiations with Medicare (beginning in 2026), with prices that can be negotiated subject to a cap;
imposes rebates under Medicare Part B and Medicare Part D to penalize price increases that outpace inflation (first due in 2023); and replaces the Part D
coverage gap discount program with a new discounting program (beginning in 2025). The IRA permits the Secretary of the HHS to implement many of
these provisions through guidance, as opposed to regulation, for the initial years.
Specifically, with respect to price negotiations, Congress authorized Medicare to negotiate lower prices for certain costly single-source drug and biologic
products that do not have competing generics or biosimilars and are reimbursed under Medicare Part B and Part D. CMS may negotiate prices for ten high-
cost drugs paid for by Medicare Part D starting in 2026, followed by 15 Medicare Part D drugs in 2027, 15 Medicare Part B or Part D drugs in 2028, and
20 Medicare Part B or Part D drugs in 2029 and beyond. This provision applies to drug products that have been approved for at least 9 years and biologics
that have been licensed for 13 years. Drugs and biologics that have been approved for a single rare disease or condition were originally categorically
excluded from price negotiation. With passage of the One Big Beautiful Bill Act, or OBBBA, in July 2025, Congress extended this exemption to drugs and
biologics with multiple orphan drug designations. Further, the legislation subjects drug manufacturers to civil monetary penalties and a potential excise tax
for failing to comply with the legislation by offering a price that is not equal to or less than the negotiated “maximum fair price” under the law or for taking
price increases
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that exceed inflation. The legislation also requires manufacturers to pay rebates for drugs in Medicare Part D whose price increases exceed inflation. The
new law also caps Medicare out-of-pocket drug costs at an estimated $2,000, which began in 2025.
On August 15, 2024, HHS published the results of the first Medicare drug price negotiations for ten selected drugs that treat a range of conditions,
including diabetes, chronic kidney disease and rheumatoid arthritis. The prices of these ten drugs will become effective January 1, 2026. On January 17,
2025, CMS announced the selection of 15 additional drugs covered by Medicare Part D for the second cycle of negotiations. Any negotiated prices for this
second set of drugs will be effective starting January 1, 2027. CMS issued a public statement on January 29, 2025, declaring that lowering the cost of
prescription drugs is a top priority of the Trump administration and CMS is committed to considering opportunities to bring greater transparency in the
negotiation program.
In June 2023, Merck filed a lawsuit against HHS and CMS asserting that, among other things, the IRA’s Drug Price Negotiation Program for Medicare
constitutes an uncompensated taking in violation of the Fifth Amendment of the Constitution. Subsequently, several other parties, including the U.S.
Chamber of Commerce and pharmaceutical companies, also filed lawsuits in various courts with similar constitutional claims against HHS and CMS. HHS
has generally won the substantive disputes in these cases, and various federal district court judges have expressed skepticism regarding the merits of the
legal arguments being pursued by the pharmaceutical industry. Most of these cases are now on appeal. In October 2024, the Court of Appeals for the Third
Circuit heard oral argument in three of these cases, and in April 2025, the U.S. Court of Appeals for the Second Circuit and the U.S. Court of Appeals for
the Third Circuit heard arguments in an additional three cases. In May 2025, the U.S. Court of Appeals for the Third Circuit rejected a challenge to the
Medicare price negotiation program, finding that the program did not violate the company’s due process rights under the Constitution since there is no
protected property interest in selling goods to Medicare beneficiaries at a price higher than what the government is willing to pay in reimbursement.
Litigation involving these and other provisions of the IRA will continue with unpredictable and uncertain results.
In April 2025, President Trump issued an executive order which directs HHS to take steps to reduce the prices of pharmaceutical products. The executive
order repeats many of the proposals advanced during the first Trump Administration, including directing the FDA to streamline and improve its existing
drug importation program so as to make it easier for states to obtain approval without sacrificing the safety or quality of drug products. Other provisions of
the executive order relate to the 340B drug discount program. Specifically, one provision calls on the Secretary of HHS to determine the hospital
acquisition cost for covered outpatient drugs at hospital outpatient departments and to consider and propose any appropriate adjustments for Medicare
payment. With respect to the IRA’s Medicare drug pricing program, the executive order, among other things, calls for alignment in “the treatment of small
molecule prescription drugs with that of biological products, ending the distortion that undermines relative investment in small molecule prescription drugs,
coupled with other reforms to prevent any increase in overall costs to Medicare and its beneficiaries.”
Further, in May 2025, the President issued an additional executive order calling on pharmaceutical manufacturers to voluntarily reduce the prices of
medicines in the United States. The executive order directs the Secretary of HHS to communicate most-favored-nation, or MFN, price targets to
pharmaceutical manufacturers to bring prices in line with comparably developed nations. The executive order further provides that if such actions do not
lower the costs of pharmaceuticals, the Secretary of HHS would pursue other actions, including proposing a rulemaking that imposes MFN pricing in the
United States. Subsequently, HHS indicated that the proposed MFN pricing will apply only to brand products without generic or biosimilar competition and
the referenced foreign countries will include only those in which the branded product similarly does not have generic or biosimilar competition. HHS also
indicated that the MFN target price will be the lowest price in a country that is a member of the Organization for Economic Co-operation and Development,
or OECD, with a gross domestic product per capita of at least 60% of the U.S. gross domestic product per capita. Based on previous estimates, there are
likely at least 22 OECD countries that would satisfy this criterion. The implications of these actions remain unclear and could result in litigation.
More recently, in July 2025, the President issued letters to 17 pharmaceutical companies reiterating the requirements of the May 2025 executive order and
demanding that such companies extend MFN pricing to Medicaid patients, guarantee MFN pricing for newly-launched drug products, repatriate increased
revenues earned abroad to lower prices for American patients and provide for direct purchasing at MFN pricing. The letters also urged these companies to
stipulate that they will not offer other developed nations lower prices for new drugs than the prices offered for such products in the United States. The
letters called for engagement with the FDA and CMS within 60 days to implement these changes and threatened to take action to address what the letters
characterized as “abusive drug pricing practices.” Subsequently, the Trump administration has announced deals with nearly all such companies to reduce
the costs of drugs.
At the state level, individual states are increasingly aggressive in passing legislation and implementing regulations designed to control pharmaceutical and
biological product pricing, including price or patient reimbursement constraints, discounts, restrictions on certain product access and marketing cost
disclosure and transparency measures, and, in some cases, designed to encourage importation from other countries and bulk purchasing. This is
increasingly true with respect to products approved
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pursuant to the accelerated approval pathway. State Medicaid programs and other payors are developing strategies and implementing significant coverage
barriers, or refusing to cover these products outright, arguing that accelerated approval drugs have insufficient or limited evidence despite meeting the
FDA’s standards for accelerated approval. Many states have required drug manufacturers and other entities in the drug supply chain, including health
carriers, pharmacy benefit managers and wholesale distributors, to disclose information about pricing of pharmaceuticals. In addition, regional health care
authorities and individual hospitals are increasingly using bidding procedures to determine what pharmaceutical products and which suppliers will be
included in their prescription drug and other health care programs.
Federal and State Data Privacy Laws
There are numerous U.S. federal and state laws and regulations related to the privacy and security of personal information. In particular, regulations
promulgated pursuant to HIPAA establish privacy and security standards that limit the use and disclosure of individually identifiable health information, or
protected health information, and require the implementation of administrative, physical and technological safeguards to protect the privacy of protected
health information and ensure the confidentiality, integrity and availability of electronic protected health information. Determining whether protected health
information has been handled in compliance with applicable privacy standards and our contractual obligations can be complex and may be subject to
changing interpretation. If a sponsor fails to comply with applicable privacy laws, including applicable HIPAA privacy and security standards, it could face
civil and criminal penalties. HHS enforcement activity can result in financial liability and reputational harm, and responses to such enforcement activity
can consume significant internal resources. In addition, state attorneys general are authorized to bring civil actions seeking either injunctions or damages in
response to violations that threaten the privacy of state residents.
In addition to potential enforcement by the HHS, a sponsor is also potentially subject to privacy enforcement from the Federal Trade Commission, or FTC.
The FTC has been particularly focused on the unpermitted processing of health and genetic data through its recent enforcement actions and is expanding
the types of privacy violations that it interprets to be “unfair” under Section 5 of the FTC Act, as well as the types of activities it views to trigger the Health
Breach Notification Rule (which the FTC also has the authority to enforce). The agency is also in the process of developing rules related to commercial
surveillance and data security. Sponsors will need to account for the FTC’s evolving rules and guidance for proper privacy and data security practices in
order to mitigate risk for a potential enforcement action, which may be costly.
A number of states have passed comprehensive privacy laws, which are either in effect or will go into effect sometime over the next several years. These
laws create obligations related to the processing of personal information, as well as special obligations for the processing of “sensitive” data, which
includes health data in some cases. Some of the provisions of these laws may apply to our business activities. Other states are or will be considering similar
laws in the future, and Congress has also been debating passing a federal privacy law. There are also states that are specifically regulating health
information that may affect our business. These laws may impact our business activities, including our identification of research subjects, relationships with
business partners and ultimately the marketing and distribution of our products.
Plaintiffs’ lawyers are also increasingly using privacy-related statutes at both the state and federal level to bring lawsuits against companies for their data-
related practices. In particular, there have been a significant number of cases filed against companies for their use of pixels and other web trackers. These
cases often allege violations of the California Invasion of Privacy Act and other state laws regulating wiretapping, as well as the federal Video Privacy
Protection Act.
Review and Approval of Medicinal Products in the European Union
In order to market any product outside of the United States, a sponsor must also comply with numerous and varying regulatory requirements of other
countries and jurisdictions regarding quality, safety and efficacy, and governing, among other things, clinical trials, marketing authorization, commercial
sales and distribution of products. Whether or not it obtains FDA approval for a product, a sponsor will need to obtain the necessary approvals by the
comparable regulatory authorities of foreign countries or economic areas, such as the EU, before it can commence clinical trials or marketing of the product
in those countries or jurisdictions. Specifically, the process governing approval of medicinal products in the EU generally follows the same lines as in the
United States. It entails satisfactory completion of preclinical studies and adequate and well-controlled clinical trials to establish the safety and efficacy of
the product for each proposed indication. It also requires the submission to the relevant competent authorities of an MAA and granting of a marketing
authorization by these authorities before the product can be marketed and sold in the EU.
Preclinical Studies
Non-clinical studies are performed to demonstrate the health or environmental safety of new chemical or biological substances. Non-clinical (pharmaco-
toxicological) studies must be conducted in compliance with GLP principles as set forth in EU Directive 2004/10/EC (unless otherwise justified for certain
particular medicinal products – e.g., radio-pharmaceutical precursors for radio-labeling purposes). In particular, non-clinical studies, both in vitro and in
vivo, must be planned, performed, monitored, recorded, reported and archived in accordance with the GLP principles, which define a set of rules and
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criteria for a quality system for the organizational process and the conditions for non-clinical studies. These GLP standards reflect the Organisation for
Economic Co-operation and Development requirements.
Clinical Trial Approval
Under the Clinical Trials Regulation (EU) No 536/2014, or the Clinical Trials Regulation, the sponsor of a clinical trial to be conducted in more than one
Member State of the EU, or EU Member State, is only required to submit a single application for approval.
Sponsors must also obtain prior approval from the competent national authority of the EU Member State in which the clinical trial is to be conducted. If the
clinical trial is conducted in different EU Member States, the competent authorities in each of these EU Member States must provide their approval for the
conduct of the clinical trial. Furthermore, the sponsor may only start a clinical trial at a specific clinical site after the applicable ethics committee has issued
a favorable opinion.
As of January 31, 2025, all clinical trials (including those which are ongoing) are subject to the provisions of the Clinical Trials Regulation.
Parties conducting certain clinical trials must, as in the United States, post clinical trial information in the EU at the EudraCT website.
Priority Medicines (PRIME) Designation in the EU
The EMA has implemented the priority medicines, or PRIME, scheme which is intended to encourage drug development in areas of unmet medical need
and provides accelerated assessment of products representing substantial innovation reviewed under the centralized procedure. Products from small- and
medium-sized enterprises may qualify for earlier entry into the PRIME scheme than larger companies. Many benefits accrue to sponsors of product
candidates with PRIME designation, including but not limited to, early and proactive regulatory dialogue with the EMA, frequent discussions on clinical
trial designs and other development program elements, and accelerated MAA assessment once a dossier has been submitted. Importantly, a dedicated
agency contact and rapporteur from the Committee for Human Medicinal Products, or CHMP, or Committee for Advanced Therapies are appointed early in
the PRIME scheme facilitating increased understanding of the product at EMA’s Committee level.
Marketing Authorization
To obtain a marketing authorization for a product under EU regulatory systems, a sponsor must submit an MAA either under a centralized procedure
administered by the EMA, or one of the procedures administered by competent authorities in the EU Member States; decentralized procedure; or mutual
recognition procedure.
The centralized procedure provides for the grant of a single marketing authorization by the EMA that is valid in all EU Member States, as well as Iceland,
Liechtenstein and Norway. The centralized procedure is compulsory for specific products, including for medicines produced by certain biotechnological
processes, products designated as orphan medicinal products, advanced therapy medicinal products, and products with a new active substance indicated for
the treatment of certain diseases. For products with a new active substance indicated for the treatment of other diseases and products that are highly
innovative or for which a centralized process is in the interest of patients, the centralized procedure may be optional. The centralized procedure may at the
request of the sponsor also be used in certain other cases. The centralized procedure is optional for products that represent a significant therapeutic,
scientific or technical innovation, or whose authorization would be in the interest of public health.
Under the centralized procedure, the maximum timeframe for the evaluation of an MAA is 210 days, excluding clock stops, when additional information or
written or oral explanation is to be provided by the sponsor in response to questions of the CHMP. Accelerated assessment might be granted by the CHMP
in exceptional cases, when a medicinal product is of major interest from the point of view of public health and from the viewpoint of therapeutic
innovation. The timeframe for the evaluation of an MAA under the accelerated assessment procedure is 150 days, excluding clock stops.
There are also two other possible routes to authorize medicinal products in several EU countries, which are available for investigational medicinal products
that fall outside the scope of the centralized procedure:
•
Decentralized procedure. Using the decentralized procedure, a sponsor may apply for simultaneous authorization in more than one EU country of
medicinal products that have not yet been authorized in any EU country and that do not fall within the mandatory scope of the centralized procedure.
The sponsor may choose a member state as the reference member state to lead the scientific evaluation of the application.
•
Mutual recognition procedure. In the mutual recognition procedure, a medicine is first authorized in one EU Member State (which acts as the
reference member state), in accordance with the national procedures of that country. Following this, further marketing authorizations can be
progressively sought from other EU countries in a procedure whereby the
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countries concerned agree to recognize the validity of the original, national marketing authorization produced by the reference member state.
Under the above-described procedures, before granting the marketing authorization, the EMA or the competent authorities of the Member States of the
European Economic Area, or EEA, make an assessment of the risk-benefit balance of the product on the basis of scientific criteria concerning its quality,
safety and efficacy.
Conditional Approval
The European Commission may also grant a so-called “conditional marketing authorization” prior to obtaining the comprehensive clinical data required for
an application for a full marketing authorization. Such conditional marketing authorizations may be granted for product candidates (including medicines
designated as orphan medicinal products), if (i) the product candidate is intended for the treatment, prevention or medical diagnosis of seriously debilitating
or life-threatening diseases, (ii) the risk-benefit balance of the product candidate is positive; (iii) it is likely that the sponsor will be in a position to provide
the required comprehensive clinical trial data; (iv) the product fulfills an unmet medical need; and (v) the benefit to public health of the immediate
availability on the market of the medicinal product concerned outweighs the risk inherent in the fact that additional data are still required. A conditional
marketing authorization may contain specific obligations to be fulfilled by the marketing authorization holder, including obligations with respect to the
completion of ongoing or new clinical trials, and with respect to the collection of pharmacovigilance data. Conditional marketing authorizations are valid
for one year, and may be renewed annually, if the risk-benefit balance remains positive, and after an assessment of the need for additional or modified
conditions and/or specific obligations. The timelines for the centralized procedure described above also apply with respect to the review by the CHMP of
applications for a conditional marketing authorization, but applicants can also request the EMA to conduct an accelerated assessment, for instance in cases
of unmet medical needs.
Exceptional Circumstances
A marketing authorization may also be granted “under exceptional circumstances” when the applicant can show that it is unable to provide comprehensive
data on the efficacy and safety under normal conditions of use even after the product has been authorized and subject to specific procedures being
introduced. This may arise in particular when the intended indications are very rare and, in the present state of scientific knowledge, it is not possible to
provide comprehensive information, or when generating data may be contrary to generally accepted ethical principles. This marketing authorization is
similar to the conditional marketing authorization, as it is reserved for medicinal products to be approved for severe diseases or unmet medical needs and
the applicant does not hold the complete data set legally required for the grant of a marketing authorization. However, unlike the conditional marketing
authorization, the applicant does not have to provide the missing data and will never have to. Although the marketing authorization “under exceptional
circumstances” is granted definitively, the risk-benefit balance of the medicinal product is reviewed annually and the marketing authorization is withdrawn
in case the risk-benefit ratio is no longer favorable. Under these procedures, before granting the marketing authorization, the EMA or the competent
authorities of the member states make an assessment of the risk-benefit balance of the product on the basis of scientific criteria concerning its quality,
safety, and efficacy. Except conditional marketing authorizations, marketing authorizations have an initial duration of five years. After these five years, the
authorization may be renewed on the basis of a reevaluation of the risk-benefit balance.
Regulatory Data Protection in the EU
In the EU, innovative medicinal products approved based on a complete independent data package qualify for eight years of data exclusivity upon
marketing authorization and an additional two years of market exclusivity pursuant to Directive 2001/83/EC. Regulation (EC) No 726/2004 repeats this
entitlement for medicinal products authorized in accordance with the centralized authorization procedure. Data exclusivity prevents sponsors for
authorization of generics of these innovative products from referencing the innovator’s data to assess a generic (abridged) application for a period of eight
years. During an additional two-year period of market exclusivity, a generic MAA can be submitted and authorized, and the innovator’s data may be
referenced, but no generic medicinal product can be placed on the EU market until the expiration of the market exclusivity. The overall ten-year period will
be extended to a maximum of 11 years if, during the first eight years of those ten years, the marketing authorization holder obtains an authorization for one
or more new therapeutic indications which, during the scientific evaluation prior to their authorization, are held to bring a significant clinical benefit in
comparison with existing therapies. Even if a compound is considered to be an NCE so that the innovator gains the prescribed period of data exclusivity,
another company nevertheless could also market another version of the product if such company obtained marketing authorization based on an MAA with a
complete independent data package of pharmaceutical, preclinical and clinical trials.
The EU pharmaceutical legislation is currently undergoing a complete review process, in the context of the Pharmaceutical Strategy for Europe initiative.
The European Commission’s proposal for revision of several legislative instruments related to medicinal products was published in April 2023 and
includes, among other things, provisions that would potentially reduce the duration of regulatory data protection. In December 2025, the European
Parliament and European Council reached a provisional political agreement on the revision of EU pharmaceutical legislation, which is expected to be
adopted by mid-2026. Key
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changes include updating regulatory data exclusivity to a new system with a regulatory data protection period of eight years and a reduced market
exclusivity period of one year (which can be extended if specific conditions are fulfilled), adding launch/supply obligations, incentivizing antibiotic
innovation with transferable vouchers and streamlining approval procedures in the EU. If the legislation is finalized in line with the provisional political
agreement, it will have a significant impact on the pharmaceutical industry.
Periods of Authorization and Renewals
A marketing authorization has an initial validity for five years in principle. The marketing authorization may be renewed after five years based on a re-
evaluation of the risk-benefit balance by the EMA or by the competent authority of the EU Member State. To this end, the marketing authorization holder
must provide the EMA or the competent authority with a consolidated version of the file in respect of quality, safety and efficacy, including all variations
introduced since the marketing authorization was granted, at least six months before the marketing authorization ceases to be valid. The European
Commission or the competent authorities of the EU Member States may decide, on justified grounds relating to pharmacovigilance, to proceed with one
additional five-year period of marketing authorization. Once subsequently definitively renewed, the marketing authorization shall be valid for an unlimited
period. Any authorization which is not followed by the actual placing of the medicinal product on the EU market (in case of centralized procedure) or on
the market of the authorizing EU Member State within three years after authorization ceases to be valid (the so-called sunset clause).
Pediatric Studies and Exclusivity
Prior to obtaining a marketing authorization in the EU, sponsors must demonstrate compliance with all measures included in an EMA-approved Pediatric
Investigation Plan, or PIP, covering all subsets of the pediatric population, unless the EMA has granted a product-specific waiver, a class waiver, or a
deferral for one or more of the measures included in the PIP. The respective requirements for all marketing authorization procedures are laid down in
Regulation (EC) No 1901/2006, the so-called Pediatric Regulation. This requirement also applies when a company wants to add a new indication,
pharmaceutical form or route of administration for a medicine that is already authorized. The Pediatric Committee of the EMA, or PDCO, may grant
deferrals for some medicines, allowing a company to delay development of the medicine for children until there is enough information to demonstrate its
effectiveness and safety in adults. The PDCO may also grant waivers when development of a medicine for children is not needed or not appropriate, such
as for diseases that only affect the adult population. Before an MAA can be filed or an existing marketing authorization can be amended, the EMA requests
that companies comply with the agreed studies and measures listed in each relevant PIP. If a sponsor obtains a marketing authorization in all EU Member
States, or a marketing authorization is granted in the centralized procedure by the European Commission, and the study results for the pediatric population
are included in the product information, even when negative, the medicine is then eligible for an additional six month period of qualifying patent protection
through extension of the term of the Supplementary Protection Certificate, or SPC, or alternatively a one year extension of the regulatory market
exclusivity from ten to eleven years, as selected by the marketing authorization holder.
Orphan Drug Designation and Exclusivity
Regulation (EC) No. 141/2000, as implemented by Regulation (EC) No. 847/2000 provides that a drug can be designated as an orphan drug by the
European Commission if its sponsor can establish that the product is intended for the diagnosis, prevention or treatment of: (1) a life-threatening or
chronically debilitating condition affecting not more than five in 10,000 persons in the EU when the application is made; or (2) a life-threatening, seriously
debilitating or serious and chronic condition in the EU and that without incentives it is unlikely that the marketing of the drug in the EU would generate
sufficient return to justify the necessary investment. For either of these conditions, the sponsor must demonstrate that there exists no satisfactory method of
diagnosis, prevention or treatment of the condition in question that has been authorized in the EU or, if such method exists, the drug will be of significant
benefit to those affected by that condition.
Once authorized, orphan medicinal products are entitled to 10 years of market exclusivity in all EU Member States and a range of other benefits during the
development and regulatory review process, including scientific assistance for study protocols, authorization through the centralized marketing
authorization procedure covering all member countries, and a reduction or elimination of registration and marketing authorization fees. However,
marketing authorization may be granted to a similar medicinal product with the same orphan indication during the 10-year period with the consent of the
marketing authorization holder for the original orphan medicinal product or if the manufacturer of the original orphan medicinal product is unable to supply
sufficient quantities. Marketing authorization may also be granted to a similar medicinal product with the same orphan indication if this product is safer,
more effective or otherwise clinically superior to the original orphan medicinal product. The period of market exclusivity may, in addition, be reduced to
six years if it can be demonstrated on the basis of available evidence that the original orphan medicinal product is sufficiently profitable not to justify
maintenance of market exclusivity.
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Patent Term Extensions
The EU also provides for patent term extension through SPCs. The rules and requirements for obtaining an SPC are similar to those in the United States.
An SPC may extend the term of a patent for up to five years after its originally scheduled expiration date and can provide up to a maximum of 15 years of
marketing exclusivity for a drug. In certain circumstances, these periods may be extended for six additional months if pediatric exclusivity is obtained.
Although SPCs are available throughout the EU, sponsors must apply on a country by country basis. Similar patent term extension rights exist in certain
other foreign jurisdictions outside the EU.
Regulatory Requirements after a Marketing Authorization has been Obtained
When an authorization for a medicinal product in the EU is obtained, the holder of the marketing authorization is required to comply with a range of
requirements applicable to the manufacturing, marketing, promotion and sale of medicinal products. These include:
•
The EU’s pharmacovigilance or safety reporting rules, which can impose post-authorization studies and additional monitoring obligations.
•
The manufacturing of authorized medicinal products, for which a separate manufacturer’s license is mandatory, must also be conducted in strict
compliance with the applicable EU laws, regulations and guidance, including Directive 2001/83/EC, Directive 2003/94/EC, Regulation (EC) No
726/2004 and the European Commission Guidelines for Good Manufacturing Practice. These requirements include compliance with EU cGMP
standards when manufacturing medicinal products and API, including the manufacture of API outside of the EU with the intention to import the API
into the EU.
•
The marketing and promotion of authorized drugs, including industry-sponsored continuing medical education and advertising directed toward the
prescribers of drugs and/or the general public, are strictly regulated in the EU notably under Directive 2001/83EC, as amended, and EU Member
State laws. Direct-to-consumer advertising of prescription medicines is prohibited across the EU.
General Data Protection Regulation
Many countries outside of the United States maintain rigorous laws governing the privacy and security of personal information. The collection, use,
disclosure, transfer, or other processing of personal data, including personal health data, regarding individuals who are located in the EEA, and the
processing of personal data that takes place in the EEA, is subject to the GDPR. The GDPR is wide-ranging in scope and imposes numerous requirements
on companies that process personal data, including requirements relating to processing health and other sensitive data, obtaining consent of the individuals
to whom the personal data relates, providing information to individuals regarding data processing activities, implementing safeguards to protect the security
and confidentiality of personal data, providing notification of data breaches, and taking certain measures when engaging third-party processors. The GDPR
also imposes strict rules on the transfer of personal data to countries outside the EEA, including the United States, permits data protection authorities to
impose large penalties for violations of the GDPR, and also confers a private right of action on data subjects and consumer associations to lodge complaints
with supervisory authorities, seek judicial remedies, and obtain compensation for damages resulting from violations. Compliance with the GDPR will be a
rigorous and time-intensive process that may increase the cost of doing business or require companies to change their business practices to ensure full
compliance. There are ongoing concerns about the ability of companies to transfer personal data from the EU to other countries.
In July 2023, the European Commission adopted an adequacy decision for the EU-U.S. Data Privacy Framework. This adequacy decision permits U.S.
companies who self-certify under the EU-U.S. Data Privacy Framework to rely on it as a valid data transfer mechanism for data transfers from the
European Union to the United States. However, some privacy advocacy groups have suggested that they will be challenging the EU-U.S. Data Privacy
Framework, and there is currently one pending litigation against the EU-U.S. Data Privacy Framework before the Court of Justice of the European Union.
If these challenges are successful, they may not only impact the EU-U.S. Data Privacy Framework, but also further limit the viability of the so-called
standard contractual clauses and other data transfer mechanisms. The uncertainty around this issue has the potential to impact our business.
Beyond GDPR, there are privacy and data security laws in a growing number of countries around the world. While many loosely follow GDPR as a model,
other laws contain different or conflicting provisions. These laws will impact our ability to conduct our business activities, including both our clinical trials
and any eventual sale and distribution of commercial products.
Pricing Decisions for Approved Products
In the EU, pricing and reimbursement schemes vary widely from country to country. Some countries provide that products may be marketed only after a
reimbursement price has been agreed. Some countries may require the completion of additional studies
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that compare the cost-effectiveness of a particular product candidate to currently available therapies or so-called health technology assessments, in order to
obtain reimbursement or pricing approval. For example, the EU provides options for its Member States to restrict the range of products for which their
national health insurance systems provide reimbursement and to control the prices of medicinal products for human use. Member States may approve a
specific price for a product or it may instead adopt a system of direct or indirect controls on the profitability of the company placing the product on the
market. Other Member States allow companies to fix their own prices for products, but monitor and control prescription volumes and issue guidance to
physicians to limit prescriptions. Recently, many countries in the EU have increased the amount of discounts required on pharmaceuticals, and these efforts
could continue as countries attempt to manage health care expenditures, especially in light of the severe fiscal and debt crises experienced by many
countries in the EU. The downward pressure on health care costs in general, particularly prescription products, has become intense. As a result,
increasingly high barriers are being erected to the entry of new products. Political, economic and regulatory developments may further complicate pricing
negotiations, and negotiations may continue after reimbursement has been obtained. Reference pricing used by various Member States, and parallel trade
(i.e., arbitrage between low-priced and high-priced Member States), can further reduce prices. There can be no assurance that any country with price
controls or reimbursement limitations for pharmaceutical products will allow favorable reimbursement and pricing arrangements for any products, if
approved in those countries.
Segment Reporting and Geographical Information
We are engaged solely in the discovery and development of medicines in the field of cellular metabolism. Accordingly, we have determined that we operate
in one operating segment.
Employees and Human Capital
As of December 31, 2025, we had 539 full-time employees and 1 part-time employee. Three employees are based in Switzerland, with the remainder
located in the United States. Of our employee base, 129 held advanced degrees (Ph.D., Pharm.D. or M.D.). None of our employees are represented by a
labor union or covered under a collective bargaining agreement. We engage independent contractors to help achieve our organizational goals. We prioritize
our employee experience and take pride in maintaining strong relationships with all employees and contractors.
We understand that attracting, retaining, engaging and supporting our talented team, and maintaining an inclusive organization is critical to our success and
our ability to increase the value we can provide for patients, shareholders and all stakeholders.
We strive to cultivate a positive, respectful and fair work environment guided by the following three pillars:
•
Flexibility: We provide flexible work arrangements which result in happier, more engaged and more productive employees. We encourage a
culture that promotes different perspectives, different work styles, health and wellness, care of families and productivity.
•
Psychological safety: We aim to ensure our teams experience psychological safety – the belief that risk-taking and failure will not be punished,
which leads to higher performing teams, more creativity, candor and better results.
•
Deliberate development: We emphasize providing ongoing opportunities for employees to grow professionally, whether through bringing in
external speakers, offering preceptorships in different departments, and providing tuition reimbursement and leadership skills training.
To incentivize and reward strong performance, we have adopted a pay for performance philosophy and provide a competitive and balanced compensation
and benefits package, including short-term and long-term incentives, a discretionary paid time off policy, generous parental and family leave plans and
premium medical benefits.
We are committed to fostering a welcoming and inclusive workplace in which individuals from a variety of backgrounds can thrive. Our Valuing
Differences Framework focuses on valuing three types of differences:
•
Representative differences (demographic diversity, such as gender, race, ethnicity, sexual orientation)
•
Experiential differences (identities based on life experiences that may change over time)
•
Cognitive differences (unique ways of understanding and interpreting the world)
We set goals and track our progress to ensure that we continue to incorporate different voices across the business. We have an active cross-functional
diversity council that furthers our commitment to building an inclusive organization by:
•
Representing and reflecting the different voices in the Agios community
•
Deepening the focus on inclusion at Agios and in our communities
•
Working in partnership with our leadership, human resources and employee resource groups to share, drive and lead our inclusion and belonging
efforts
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We are a majority female organization and maintain significant representation at all levels, including the Board of Directors. As of December 31, 2025,
61% of our workforce were women and 35% of our workforce were ethnically diverse, with 34% of all new hires that joined the Company in 2025 being
ethnically diverse.
We regularly evaluate the effectiveness of our human capital management practices through employee surveys and fostering a culture of ongoing feedback
and two-way dialogue. We regularly solicit feedback from employees that helps inform our approach to programs and identify opportunities to improve the
employee experience. In addition, we track important human capital metrics such as turnover rate. Voluntary and involuntary turnover rates across all levels
(executives / senior managers, mid-level managers and professionals) are aligned with industry norms.
We continue to provide employees with an opportunity to choose the right working arrangement for them based on their role: whether remote, hybrid, or
onsite in our Cambridge office, and regularly evaluate how we can enhance these arrangements to support an optimal employee experience. The
opportunity to work remotely has continued to enable us to hire individuals from different locations and backgrounds and with a variety of responsibilities
in their personal lives. In 2025, 85% of our new hires chose to work remotely and our overall organization continues to have a majority population working
in a remote capacity representing 71% of all employees.
We believe our ability to evolve with the ever-changing environment, coupled with our long-standing culture and values around flexibility and connection,
continue to help us deliver for patients.
Our Corporate Information
Our executive offices are located at 88 Sidney Street, Cambridge, Massachusetts 02139, and our telephone number is (617) 649-8600. Our website address
is www.agios.com. References to our website are inactive textual references only and the content of our website should not be deemed incorporated by
reference into this Annual Report on Form 10-K.
Available Information
Our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and any amendments to these reports filed or furnished
pursuant to Section  13(a) or 15(d) of the Securities Exchange Act of 1934, as amended, are available free of charge on our website located at
www.agios.com as soon as reasonably practicable after they are filed with or furnished to the Securities and Exchange Commission, or SEC. These reports
are also available at the SEC’s website at www.sec.gov.
A copy of our Corporate Governance Guidelines, Code of Business Conduct and Ethics and the charters of the Audit Committee, Compensation and People
Committee, Nominating and Corporate Governance Committee, and Science and Technology Committee are posted on our website, www.agios.com, under
the heading “Corporate Governance” and are available in print to any person who requests copies by contacting us by calling (617) 649-8600 or by writing
to Agios Pharmaceuticals, Inc., 88 Sidney Street, Cambridge, Massachusetts 02139.
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Item 1A. Risk Factors
The following risk factors and other information included in this Annual Report on Form 10-K should be carefully considered. The risks and uncertainties
described below are not the only risks and uncertainties we face. Additional risks and uncertainties not presently known to us or that we presently deem
less significant may also impair our business operations. Please see page 1 of this Annual Report on Form 10-K for a discussion of some of the forward-
looking statements that are qualified by these risk factors. If any of the following risks occur, our business, financial condition, results of operations and
future growth prospects could be materially and adversely affected.
Risks Related to the Discovery, Development, and Commercialization of our Products and Product Candidates
If we do not successfully commercialize PYRUKYND®, AQVESME™ and other products for which we receive approval, our prospects may be
substantially harmed.
Our ability to generate meaningful revenue from PYRUKYND® and AQVESME™ will depend heavily on our successful development and
commercialization of the product. We generated $54.0 million, $36.5 million and $26.8 million of net product revenues from sales of PYRUKYND® in the
years ended December 31, 2025, 2024 and 2023, respectively. We commercially launched AQVESME™ in the United States in late January 2026. In
connection with our regulatory approvals in the EU, Great Britain and Saudi Arabia, we are currently providing access to PYRUKYND® through the
Avanzanite Agreement and the NewBridge Agreement, as applicable, and on a for charge and free of charge basis for eligible patients in those jurisdictions
and other jurisdictions through a global managed access program. Revenues associated with the NewBridge Agreement, the Avanzanite Agreement and our
global managed access program are included in the rest of world product revenue line within Results of Operations. We continue to evaluate other options
for the commercialization of PYRUKYND® outside of the United States, including through exploring potential partnership opportunities.
The development and commercialization of PYRUKYND® or AQVESME™ could be unsuccessful if:
•
the medical community and third-party payors do not accept PYRUKYND® or AQVESME™ as safe, efficacious and cost-effective in the
approved jurisdictions and indications;
•
we fail to maintain the necessary financial resources and expertise to manufacture, market and sell PYRUKYND® or AQVESME™;
•
we fail to develop, implement and maintain effective marketing, sales and distribution strategies and operations for the development and
commercialization of PYRUKYND® or AQVESME™, including PYRUKYND® under the NewBridge Agreement and the Avanzanite
Agreement;
•
we fail to continue to develop, validate and maintain commercially viable manufacturing processes for PYRUKYND® or AQVESME™ that are
compliant with current good manufacturing practices, or cGMP;
•
we fail to successfully obtain third party reimbursement and generate and sustain commercial demand that results in expected sales of
PYRUKYND® or AQVESME™;
•
PYRUKYND® or AQVESME™ become subject to unfavorable pricing regulations and third-party reimbursement practices;
•
we encounter any third-party patent interference, derivation, inter partes review, post-grant review, reexamination or patent infringement claims
with respect to PYRUKYND® or AQVESME™;
•
we fail to comply with regulatory and legal requirements applicable to the sale of PYRUKYND® or AQVESME™;
•
competing drug products are approved for the same indications or in the same jurisdictions as PYRUKYND® or AQVESME™;
•
significant safety, manufacturing and/or quality risks are identified;
•
PYRUKYND® or AQVESME™ fail to gain and/or maintain sufficient market acceptance by physicians, patients, healthcare payors and others in
the medical community;
•
a significant number of eligible patients are not prescribed PYRUKYND® or AQVESME™ and, if they are, such patients do not stay on
treatment;
•
the product does not demonstrate acceptable safety and efficacy in current or future clinical trials, or otherwise does not meet applicable regulatory
standards for approval in other indications; or
•
the requirements of the AQVESME™ REMS make it more difficult and/or time-consuming for physicians to prescribe AQVESME™ and for
patients to subsequently use AQVESME™.
If we experience significant delays or an inability to successfully develop and commercialize PYRUKYND® and AQVESME™, our business would be
materially harmed.
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We depend heavily on the success of our clinical-stage product candidates, including the potential approval of mitapivat for the treatment of
thalassemia in the EU, or SCD in the United States and in other jurisdictions. Clinical trials of our product candidates may not be successful for a
number of important reasons. If we or our collaborators are unable to commercialize our product candidates or experience significant delays in doing
so, our business will be materially harmed.
We have invested a significant portion of our efforts and financial resources in the identification of our product candidates and the development of our most
advanced clinical programs, including mitapivat and tebapivat. Our ability to generate meaningful product revenue will depend heavily on the successful
clinical development and eventual commercialization of our current and any future product candidates, including mitapivat. We cannot be certain that we
will obtain marketing approval of mitapivat in jurisdictions with pending or potential future marketing applications for thalassemia, nor can we be certain
that we will obtain marketing approval of mitapivat for SCD or for any other indication.
We, and any collaborators, are not permitted to commercialize, market, promote or sell any product candidate in the United States without obtaining
marketing approval from the FDA. Foreign regulatory authorities, such as the EMA, impose similar requirements in foreign jurisdictions. Before obtaining
marketing approval from regulatory authorities for the sale of our product candidates, we must complete preclinical development and then conduct
extensive clinical trials to demonstrate the safety and efficacy of our product candidates in humans.
Clinical testing is expensive, difficult to design and implement, can take many years to complete and is uncertain as to outcome. We cannot guarantee that
any clinical trials will be conducted as planned or completed on schedule, if at all. The clinical development of our product candidates is susceptible to the
risk of failure inherent at any stage of product development. Moreover, we, or any collaborators, may experience any of a number of possible unforeseen
adverse events in connection with clinical trials, many of which are beyond our control, including:
•
we, or our collaborators, may fail to demonstrate efficacy in a clinical trial or across a broad population of patients;
•
it is possible that even if one or more of our product candidates has a beneficial effect, that effect will not be detected during clinical evaluation as
a result of one or more of a variety of factors, including the size, duration, design, measurements, conduct or analysis of our clinical trials.
Conversely, as a result of the same factors, our clinical trials may indicate an apparent positive effect of a product candidate that is greater than the
actual positive effect, if any. For example, many compounds that initially showed promise in earlier stage testing for treating specific indications
have later been found to cause side effects that prevented further development of the compound;
•
our product candidates may have undesirable side effects or other unexpected characteristics or otherwise expose participants to unacceptable
health risks, causing us, our collaborators or our investigators, regulators or institutional review boards or the data safety monitoring board for
such trial to halt, delay, interrupt, suspend or terminate the trials or cause us, or any collaborators, to abandon or limit development of that product
candidate to certain uses or subpopulations in which the undesirable side effects or other characteristics are less prevalent, less severe or more
acceptable from a risk-benefit perspective;
•
if our product candidates have undesirable side effects, it could result in a more restrictive label or the addition of safety warnings, or it could
result in the delay or denial of marketing approval by the FDA or comparable foreign regulatory authorities. For example, the U.S. Prescribing
Information, or USPI, for PYRUKYND® includes a warning regarding the risk of potential hepatocellular injury, and the USPI for AQVESME™
contains a boxed warning regarding the potential for hepatocellular injury. In addition, the FDA has required and might in the future require the
development and submission of REMS for our products. For example, to mitigate the risk of hepatocellular injury, AQVESME™ is available only
through the REMS approved by the FDA;
•
clinical trials of our product candidates may produce negative or inconclusive results, and we, or our collaborators, may decide, or regulators may
require us, to conduct additional clinical trials, including testing in more subjects, or abandon product development programs;
•
regulators or institutional review boards may not authorize us, our collaborators or our investigators to commence a clinical trial or conduct a
clinical trial at a prospective trial site;
•
we or our collaborators may have delays in reaching or failing to reach agreement on acceptable clinical trial contracts or clinical trial protocols
with prospective trial sites;
•
the number of patients required for clinical trials of our product candidates may be larger than we anticipate; enrollment in these clinical trials,
which may be particularly challenging for some of the orphan diseases we target in our rare disease programs, may be slower than we anticipate;
or participants may drop out of these clinical trials at a higher rate than we anticipate;
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•
third-party contractors used by us or our collaborators may fail to comply with regulatory requirements or meet their contractual obligations in a
timely manner, or at all;
•
significant preclinical study or clinical trial delays could shorten any periods during which we, or any collaborators, may have the exclusive right
to commercialize our product candidates or allow our competitors, or the competitors of any collaborators, to bring products to market before we,
or any collaborators, do;
•
the cost of clinical trials of our product candidates may be greater than anticipated; and
•
the supply or quality of our product candidates or other materials necessary to conduct clinical trials of our product candidates may be insufficient
or inadequate.
In December 2016, we withdrew our IND for AG-519, our second PK activator, following verbal notification of a clinical hold from the FDA relating to a
previously disclosed case of drug-induced cholestatic hepatitis which occurred in our phase 1 clinical trial of AG-519 in healthy volunteers. Although these
decisions and this hepatic adverse event finding do not affect our ongoing clinical trials for mitapivat or tebapivat, we cannot provide any assurances that
there will not be other treatment-related severe adverse events in our other clinical trials, or that our other trials will not be placed on clinical hold in the
future.
Our failure to successfully complete clinical trials of our product candidates and obtain regulatory approval to market any of our product candidates could
significantly harm our business.
PYRUKYND®, AQVESME™ or any of our product candidates that may receive marketing approval in the future, may fail to achieve the degree of
market acceptance by physicians, patients, healthcare payors and others in the medical community necessary for commercial success.
PYRUKYND®, AQVESME™ or any of our product candidates that may receive marketing approval in the future, may fail to gain and/or maintain
sufficient market acceptance by physicians, patients, healthcare payors and others in the medical community, which could limit our ability to generate
product revenue and impact our ability to become profitable. The degree of market acceptance of PYRUKYND®, AQVESME™ and any of our product
candidates, if approved for commercial sale, will depend on a number of factors, including:
•
efficacy and potential advantages compared to alternative treatments;
•
the prevalence and severity of any side effects;
•
the ability to offer our medicines for sale at competitive prices;
•
convenience and ease of administration compared to alternative treatments;
•
the willingness of the target patient population to try new therapies and of physicians to prescribe these therapies;
•
ensuring uninterrupted product supply;
•
the strength of sales, marketing and distribution support, including under any distribution agreement with third parties;
•
sufficient third-party coverage or reimbursement;
•
product labeling or product insert requirements of the FDA or other regulatory authorities, including any limitations or warnings contained in a
product’s approved labeling, such as the USPI for AQVESME™ containing a boxed warning regarding the potential for hepatocellular injury; and
•
a requirement to implement a REMS, such as the REMS required for AQVESME™. Failure of physicians, prescribers, pharmacies or patients to
enroll in our REMS program or to successfully complete and comply with its requirements may result in regulatory action from the FDA or
decreased sales of AQVESME™.
If we are unable to maintain sales and marketing capabilities or enter into agreements with third parties to sell and market our product candidates, we
may not be successful in commercializing PYRUKYND®, AQVESME™ or any of our product candidates if they are approved.
We have limited experience in the sale, marketing and distribution of pharmaceutical products. To achieve commercial success for approved medicines for
which we retain sales and marketing responsibilities, we must either continue to develop our sales and marketing organization or outsource these functions
to other third parties. We have established sales and marketing capabilities to support our commercialization of PYRUKYND® for the treatment of
hemolytic anemia in adults with PK deficiency in the United States and have expanded these capabilities to support the commercial launch of
AQVESME™ for the treatment of anemia in adults with non-transfusion dependent and transfusion-dependent alpha- or beta-thalassemia in the United
States.
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We may need to further build our sales and marketing infrastructure, either directly or with third-party partners to commercialize PYRUKYND® in
additional markets outside of the United States, or to commercialize any of our other product candidates for which we obtain marketing approval. For
example, we have entered into distribution agreements with third parties for the commercialization of PYRUKYND® in certain jurisdictions outside of the
United States, including the NewBridge Agreement and the Avanzanite Agreement.
There are risks involved with both establishing our own sales and marketing capabilities and entering into arrangements with third parties to perform these
services. For example, recruiting and training a sales force is expensive, time consuming and could delay any product launch. If the commercial launch of a
product candidate for which we recruit a sales force and establish marketing capabilities is delayed or does not occur for any reason, we would have
prematurely or unnecessarily incurred these commercialization expenses. This may be costly, and our investment would be lost if we cannot retain or
reposition our sales and marketing personnel.
Factors that may inhibit our efforts to commercialize our medicines on our own include:
•
our inability to recruit and retain adequate numbers of effective sales and marketing personnel;
•
the inability of sales personnel to obtain access to physicians or persuade adequate numbers of physicians to prescribe any future medicines;
•
the lack of complementary medicines to be offered by sales personnel, which may put us at a competitive disadvantage relative to companies with
more extensive product lines; and
•
unforeseen costs and expenses associated with creating an independent sales and marketing organization.
If we enter into arrangements with third parties to perform sales, marketing and distribution services, our product revenue or the profitability of product
revenue to us are likely to be lower than if we were to market and sell any medicines that we develop ourselves. In addition, we may not be successful in
entering into such arrangements with third parties or we may be unable to do so on terms that are favorable to us. We likely will have little control over
such third parties, and any of them may fail to devote the necessary resources and attention to sell and market our medicines effectively. If we do not
establish or maintain sales and marketing capabilities successfully, either on our own or in collaboration with third parties, we will not be successful in
commercializing PYRUKYND®, AQVESME™ or any of our product candidates for which we obtain marketing approval.
We may engage in in-licensing transactions or acquisitions that could disrupt our business, cause dilution to our stockholders or reduce our financial
resources.
We may engage in transactions to in-license products, technologies or assets or to acquire other products, technologies, assets or businesses. As part of our
strategy, we plan to prioritize in-licensing or acquiring assets for future pipeline growth. For example, in July 2023, we entered into a license agreement
with Alnylam for the development and commercialization of products containing or comprised of an siRNA development candidate discovered by Alnylam
and targeting the TMPRSS6 gene, and we are developing a product candidate, AG-236, for the potential treatment of patients with PV.
Our ability to successfully in-license or acquire assets and develop product candidates following such transactions is unproven. If we do identify additional
suitable candidates or assets for in-licensing transactions or acquisitions, we may not be able to make such transactions on favorable terms, or at all. Such
transactions may require us to relinquish rights to develop product candidates in certain indications, limit our ability to pursue certain targets or require us
to make significant milestone or royalty payments to third parties upon achievement of certain events. For example, we are responsible for paying up to
$130.0 million in potential development and regulatory milestones, in addition to sales milestones as well as tiered royalties on annual net sales, if any, of
any licensed products, under our license agreement with Alnylam. Further, any in-licensing transaction or acquisitions we undertake may not strengthen our
competitive position, and these transactions may be viewed negatively by customers or investors. We may decide to incur debt in connection with an
acquisition or an in-licensing transaction or issue our common stock or other equity securities to the stockholders of the counterparty, which would reduce
the percentage ownership of our existing stockholders. We could incur losses resulting from undiscovered liabilities of the acquired business, product or
technology that are not covered by the indemnification we may obtain from the seller. In addition, we may not be able to successfully integrate the acquired
personnel, technologies and operations into our existing business in an effective, timely and non-disruptive manner. Such transactions may also divert
management attention from day-to-day responsibilities, increase our expenses and reduce our cash available for operations and other uses. We cannot
ensure that following any transaction we would achieve the expected synergies to justify the transactions. We cannot predict the number, timing or size of
future transactions or the effect that any such transactions might have on our operating results.
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If we experience delays or difficulties in the enrollment of patients in clinical trials, our receipt of necessary regulatory approvals could be delayed or
prevented.
We or our collaborators may not be able to initiate, continue or complete clinical trials for our product candidates if we or they are unable to locate and
enroll a sufficient number of eligible patients to participate in these trials as required by the FDA or analogous regulatory authorities outside the United
States.
Patient enrollment is affected by factors including:
•
prevalence and severity of the disease under investigation;
•
availability and efficacy of approved medications for the disease under investigation;
•
eligibility criteria for the study in question;
•
perceived risks and benefits of the product candidate under study;
•
efforts to facilitate timely enrollment in clinical trials;
•
patient referral practices of physicians;
•
the ability to monitor patients adequately during and after treatment;
•
proximity and availability of clinical trial sites for prospective patients; and
•
the impact of any health epidemics, pandemics or other contagious outbreaks or geopolitical events, such as war.
We generally focus our development activities on genetically or biomarker defined patients most likely to respond to our therapies. As a result, the potential
patient populations for our clinical trials are narrowed, and we may experience difficulties in identifying and enrolling a sufficient number of patients in our
clinical trials.
In addition, some of our competitors may have ongoing or planned clinical trials for product candidates that would treat the same indications as our product
candidates, and patients who would otherwise be eligible for our clinical trials may instead enroll in clinical trials of our competitors’ product candidates.
Competition for eligible patients may make it particularly difficult for us to enroll a sufficient number of patients to complete our clinical trials for our
product candidates in a timely and cost-effective manner.
Ongoing or unanticipated geopolitical events in countries where we may to have clinical trial sites could also negatively impact our ability to initiate, enroll
and retain patients in, and conduct clinical trials.
We rely on CROs and clinical trial sites to ensure the proper and timely conduct of our clinical trials, and while we have agreements governing their
committed activities, we have limited influence over their actual performance. Our or our collaborators’ inability to enroll a sufficient number of patients
for our clinical trials would result in significant delays or may require us to abandon one or more clinical trials altogether, or result in increased
development costs for our product candidates, which could have an adverse effect on our business, results of operations and financial condition.
Results of preclinical studies and early clinical trials may not be predictive of results of later-stage clinical trials.
The outcome of our preclinical studies and early clinical trials may not be predictive of the success of our later clinical trials, and positive results of our
completed clinical trials do not necessarily predict success in our future clinical trials. Many companies in the pharmaceutical and biotechnology industries
have suffered significant setbacks in late-stage clinical trials after achieving positive results in earlier stages of development, and we could face similar
setbacks. The design of a clinical trial can determine whether its results will support approval of a product and flaws in the design of a clinical trial may not
become apparent until the clinical trial is well advanced. In addition, preclinical and clinical data are often susceptible to varying interpretations and
analyses. Many companies that believed their product candidates performed satisfactorily in preclinical studies and clinical trials have nonetheless failed to
obtain marketing approval for the product candidates. Even if we or our collaborators believe that the results of clinical trials for our product candidates
warrant marketing approval, the FDA or comparable foreign regulatory authorities may disagree and may not grant marketing approval of our product
candidates.
In some instances, there can be significant variability in safety or efficacy results between different clinical trials of the same product candidate due to
numerous factors, including changes in trial procedures set forth in protocols, differences in the size and type of the patient populations, changes in and
adherence to the dosing regimen and other clinical trial protocols and the rate of dropout among clinical trial participants. If we fail to receive positive
results in clinical trials of our product candidates, the development timeline and regulatory approval and commercialization prospects for our most
advanced product candidates, and, correspondingly, our business and financial prospects would be negatively impacted.
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Interim and preliminary data from clinical trials that we announce or publish from time to time may change as more patient data becomes available
and are subject to audit and verification procedures that could result in material changes in the final data.
From time to time, we may announce or publish interim or preliminary data from our clinical trials. Interim or preliminary data from clinical trials are
subject to the risk that one or more of the clinical outcomes may materially change as patient enrollment continues and more patient data become available.
We also make assumptions, estimations, calculations, and conclusions as part of our analyses of data, and we may not have received or had the opportunity
to fully evaluate all data. Preliminary or interim data also remain subject to audit and verification procedures that may result in the final data being
materially different from the preliminary data we have previously published. As a result, interim and preliminary data should be viewed with caution until
the final data are available. Adverse differences between preliminary or interim data and final data could be material and could significantly harm our
reputation and business prospects.
We conduct clinical trials at sites outside the United States. The FDA may not accept data from trials conducted in such locations, and the conduct of
trials outside the United States could subject us to additional delays and expense.
We conduct and plan to conduct one or more clinical trials with one or more trial sites that are located outside the United States. The acceptance by the
FDA or other regulatory authorities of study data from clinical trials conducted outside their jurisdiction may be subject to certain conditions or may not be
accepted at all.
Where the foreign study data are not intended to serve as the sole basis for approval, the FDA will not accept the data as support for an application for
marketing approval unless the study is well-designed and well-conducted in accordance with GCP requirements and the FDA is able to validate the data
from the study through an onsite inspection if deemed necessary. Many foreign regulatory authorities have similar approval requirements. In addition, such
foreign trials would be subject to the applicable local laws of the foreign jurisdictions where the trials are conducted. There can be no assurance that the
FDA or any comparable foreign regulatory authority will accept data from trials conducted outside of the United States or the applicable jurisdiction. If the
FDA or any comparable foreign regulatory authority does not accept such data, it would result in the need for additional trials, which could be costly and
time-consuming, and may result in current or future product candidates that we may develop not receiving approval for commercialization in the applicable
jurisdiction.
Conducting clinical trials outside the United States also exposes us to additional risks, including risks associated with foreign exchange fluctuations,
compliance with foreign manufacturing, customs, shipment and storage requirements, cultural differences in medical practice and clinical research,
diminished protection of intellectual property in some countries, and interruptions or delays in our trials resulting from geopolitical events, such as war or
terrorism.
We may expend our limited resources to pursue a particular product candidate or indication and fail to capitalize on product candidates or indications
that may be more profitable or for which there is a greater likelihood of success.
Because we have limited financial and managerial resources, we focus on research programs and product candidates that we identify for specific
indications. As a result, we may forego or delay pursuit of opportunities with other product candidates or for other indications that later prove to have
greater commercial potential. We are prioritizing investment in advancing our late lead-optimization research, while continuing to progress our registration-
enabling clinical programs. Our resource allocation decisions may cause us to fail to capitalize on viable commercial medicines or profitable market
opportunities. Our spending on current and future research and development programs and product candidates for specific indications may not yield any
commercially viable medicines. If we do not accurately evaluate the commercial potential or target market for a particular product candidate, we may
relinquish valuable rights to that product candidate through collaboration, licensing or other royalty arrangements in cases in which it would have been
more advantageous for us to retain sole development and commercialization rights to such product candidate.
We or others may later discover that PYRUKYND®, AQVESME™ or any of our product candidates that may receive marketing approval in the future,
is less effective than previously believed or causes undesirable side effects that were not previously identified, which could compromise our ability, or
that of any collaborators, to market the product.
It is possible that our clinical trials, or those of any collaborators, may indicate an apparent positive effect of a product candidate that is greater than the
actual positive effect, if any, or alternatively fail to identify undesirable side effects. If, following approval of a product candidate, including
PYRUKYND® and AQVESME™, we, or others, discover that the product is less effective than previously believed or causes undesirable side effects that
were not previously identified, any of the following adverse events could occur:
•
regulatory authorities may withdraw their approval of the product or seize the product;
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•
we, or any collaborators, may be required to recall the product, change the way the product is administered or conduct additional clinical trials;
•
additional restrictions may be imposed on the marketing of, or the manufacturing processes for, the particular product;
•
we may be subject to fines, injunctions or the imposition of civil or criminal penalties;
•
regulatory authorities may require the addition of warnings on the product label, require a REMS or or modify an existing REMS;
•
we, or any collaborators, may be required to create a Medication Guide outlining the risks of the previously unidentified side effects for
distribution to patients;
•
we, or any collaborators, could be sued and held liable for harm caused to patients;
•
the product may become less competitive; and
•
our reputation may suffer.
For example, the USPI for PYRUKYND® includes a warning regarding the risk of potential hepatoceullar injury, and the USPI for AQVESME™ contains
a boxed warning regarding the potential for hepatocellular injury. In addition, to mitigate the risk of hepatocellular injury, AQVESME™ is available only
through the REMS program approved by the FDA. If we are unable to comply with any REMS imposed on any of our products, we may face additional
restrictions, limitations or substantial penalties, any of which may materially adversely affect our business and results of operations. We cannot predict
whether the FDA will request, seek to require or ultimately require modifications to, or impose additional requirements on, the AQVESME™ REMS.
We provide certain development estimates related to the development and regulatory approval of our product candidates, including mitapivat. If we do
not achieve our projected development or regulatory approval estimates in the timeframes we announce and expect, the commercialization of our
products may be delayed and, as a result, our stock price may decline.
From time to time, we provide estimates related to the development of mitapivat and our other product candidates. We also estimate the timing of the
anticipated accomplishment of various scientific, preclinical, clinical, regulatory and other product development goals. These estimates may include the
commencement or completion of clinical trials, the timing of completing enrollment, the timing for reporting clinical trial results and the timing of
submission of regulatory filings in various jurisdictions. From time to time, we may publicly announce our estimates, including the timing of certain
milestones related to our product candidates. All of these estimates are and will be based on numerous assumptions. The actual results and timing of our
preclinical studies, clinical trials and regulatory submissions can vary dramatically compared to our estimates, in some cases for reasons beyond our
control. If our estimates change or we do not meet the timing of our estimates as publicly announced, or at all, the commercialization of our products may
be delayed or never achieved and, as a result, our stock price may decline.
We face substantial competition, which may result in others discovering, developing or commercializing products before or more successfully than we
do.
We face competition with respect to PYRUKYND®, AQVESME™, mitapivat, tebapivat and our other product candidates, and we will face competition
with respect to any product candidates that we may seek to develop or commercialize in the future. Potential competitors may include major
pharmaceutical companies, specialty pharmaceutical companies, biotechnology companies, academic institutions, government agencies and other public
and private research organizations that conduct research, seek patent protection and establish collaborative arrangements for research, development,
manufacturing and commercialization. There are a number of large pharmaceutical and biotechnology companies that currently market and sell products or
are pursuing the development of products for the treatment of the indications for which we are developing our product or our product candidates, such as
PK deficiency, thalassemia, SCD, LR MDS, PKU, and PV. For example, Merck and Bristol-Myers Squibb Company, or BMS, are marketing a therapy to
treat beta thalassemia and LR MDS, and are conducting clinical trials for alpha thalassemia and LR MDS patients that are erythropoiesis-stimulating agent
naïve and non-transfusion dependent; Geron Corporation has an FDA approved treatment for adults with LR MDS with transfusion-dependent anemia;
Halia is developing HT-6184 for the treatment of LR-MDS; Takeda Pharmaceutical Company Limited, or Takeda, in collaboration with Keros
Therapeutics, Inc., are developing a therapy to treat LR-MDS; Novartis International AG is marketing a therapy and has another molecule in clinical trials
to treat SCD; Emmaus Life Sciences is marketing a therapy to treat SCD; BioMarin Pharmaceutical Inc. is marketing and conducting clinical trials for
therapies to treat PKU; PTC has an approved treatment for PKU; Pfizer, CSL Behring, and Cellarity, Inc. are conducting clinical trials for therapies in
SCD; Novo Nordisk A/S is conducting clinical trials for the treatment of alpha and beta thalassemia and SCD; Sanofi is conducting clinical trials for a
therapy in SCD; Genetix Biotherapeutics Inc. (formerly bluebird bio) is marketing a gene therapy to treat transfusion-dependent beta-thalassemia and SCD;
Vertex, with CRISPR, is marketing a gene therapy targeting SCD and transfusion-
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dependent beta-thalassemia; DISC Medicine, Inc., or DISC, is conducting a clinical trial for a potential treatment for SCD; Fulcrum Therapeutics Inc. is
conducting clinical trials for a potential treatment for SCD; BMS is conducting clinical trials for a potential treatment for SCD; Otsuka Pharmaceutical Co.,
Ltd., NGGT Inc., and Maze Therapeutics, Inc. are conducting clinical trials for potential treatments for PKU; PharmaEssentia Corp and Incyte Corporation
are marketing therapies to treat PV, and Protagonist Therapeutics in collaboration with Takeda, Ionis in collaboration with Ono/Deciphera, Italfarmaco
S.p.A., DISC, Merck, and Silence Therapeutics are developing therapies to treat PV; and a number of other biotechnology companies have product
candidates in clinical development in similar indications as ours.
There are a variety of treatment options available, including a number of marketed enzyme replacement therapies, or ERTs, for treating patients with rare
diseases. In addition to currently marketed therapies, there are also a number of products that are either ERTs, gene therapies or PK activators in various
stages of clinical development to treat rare diseases. These products in development may provide efficacy, safety, convenience and other benefits that are
not provided by currently marketed therapies or for which there are no approved treatments. As a result, they may provide significant competition for any
of our product candidates for which we obtain marketing approval.
Our competitors may develop products that are more effective, safer, more convenient or less costly than PYRUKYND®, AQVESME™ or any product
candidates that we are developing or that would render PYRUKYND®, AQVESME™ or our product candidates obsolete or non-competitive. In addition,
our competitors may discover biomarkers that more efficiently measure metabolic pathways than our methods, which may give them a competitive
advantage in developing potential products. Our competitors may also obtain marketing approval from the FDA or other regulatory authorities for their
products more rapidly than we may obtain approval for ours, which could result in our competitors establishing a strong market position before we are able
to enter the market.
Many of our competitors have significantly greater financial resources and expertise in research and development, manufacturing, preclinical testing,
conducting clinical trials, obtaining regulatory approvals and globally marketing approved products than we do. Mergers and acquisitions in the
pharmaceutical and biotechnology industries may result in even more resources being concentrated among a smaller number of our competitors. Smaller
and clinical stage companies may also prove to be significant competitors, particularly through collaborative arrangements with large and established
companies. These companies compete with us in recruiting and retaining qualified scientific and management personnel, establishing clinical trial sites and
patient registration for clinical trials, as well as in acquiring or in-licensing technologies complementary to, or necessary for, our programs.
If the FDA does not grant our products, if and when approved, appropriate periods of regulatory exclusivity before approving generic or follow-on
versions of our products, the sales of our products could be adversely affected.
With FDA approval of an NDA, the product covered by the application is specified as a “reference-listed drug” in the FDA’s publication, “Approved Drug
Products with Therapeutic Equivalence Evaluations,” or the Orange Book. Manufacturers may seek approval of generic versions of reference-listed drugs
through submission of abbreviated new drug applications, or ANDAs, in the United States.
In support of an ANDA, a generic manufacturer need not conduct clinical trials. Rather, the sponsor generally must show that its product has the same
active ingredient(s), dosage form, strength, route of administration and conditions of use or labeling as the reference-listed drug and that the generic version
is bioequivalent to the reference-listed drug, meaning it is absorbed in the body at the same rate and to the same extent. Generic products may be
significantly less costly to bring to market than the reference-listed drug and companies that produce generic products are generally able to offer them at
lower prices. Thus, following the introduction of a generic drug, a significant percentage of the sales of any reference-listed drug may be lost to the generic
product.
A manufacturer may also submit an NDA under section 505(b)(2) of the Federal Food, Drug and Cosmetic Act, or FDCA, that references the FDA’s prior
approval of the innovator product or preclinical studies and/or clinical trials that were not conducted by, or for, the sponsor and for which the sponsor has
not obtained a right of reference. A 505(b)(2) NDA product, or follow-on-product, may be for a new or improved version of the original reference listed
drug.
The FDA may not approve an ANDA or 505(b)(2) NDA until any applicable period of regulatory exclusivity for the reference-listed drug has expired,
subject to certain exceptions.
In the event that a generic or follow-on manufacturer is somehow able to obtain FDA approval without adherence to the periods of regulatory exclusivity,
the competition that our approved products may face from generic and follow-on versions could negatively impact our future revenue, profitability and
cash flows and substantially limit our ability to obtain a return on our investments in those product candidates.
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In addition, if there are patents listed for our drug products in the Orange Book, ANDAs and 505(b)(2) NDAs would be required to include a certification
as to each listed patent indicating whether the sponsor intends to challenge the patent. We cannot predict which, if any, patents in our current portfolio or
patents we may obtain in the future will be eligible for listing in the Orange Book, how any generic or follow-on competitor would address such patents,
whether we would sue on any such patents or the outcome of any such suit.
Product liability lawsuits against us or any collaborators could cause us or our collaborators to incur substantial liabilities and could limit
commercialization of any medicines that we or they may develop.
We and any collaborators face a risk of product liability exposure related to our product candidates in human clinical trials and face an even greater risk as
we or they commercially sell any medicines, including PYRUKYND® and AQVESME™. If we or any collaborators cannot successfully defend ourselves
or themselves against claims that our product candidates or medicines caused injuries, we or they could incur substantial costs and liabilities. Regardless of
merit or eventual outcome, liability claims may also result in, among other things, decreased demand for any product candidates or medicines that we may
develop, reputational harm and lost revenue.
Although we maintain product liability insurance coverage, it may not be adequate to cover all liabilities that we may incur.
Our internal information technology systems, or those of any third parties with which we contract, may fail or suffer security breaches, loss of data or
other disruptions which could result in a material disruption of our product development programs, compromise sensitive information related to our
business or prevent us from accessing critical information, trigger legal obligations, potentially exposing us to liability, competitive or reputational
harm or otherwise adversely affecting our business and financial results.
Despite the implementation of security measures, our internal information technology systems and those of third parties with which we contract are
vulnerable to damage from computer viruses, worms and other destructive or disruptive software, unauthorized access, natural disasters, terrorism, war and
telecommunication and electrical failures. Such systems are also vulnerable to service interruptions or to security breaches from inadvertent or intentional
actions by our employees, third-party vendors or business partners, or from cyber incidents by malicious third parties. Cybersecurity incidents are
increasing in their frequency, sophistication and intensity, and have become increasingly difficult to detect. Cybersecurity incidents could include the
deployment of harmful malware, ransomware, denial-of-service attacks, unauthorized access to or deletion of files, social engineering and other means to
affect service reliability and threaten the confidentiality, integrity and availability of information. Cybersecurity incidents also could include phishing
attempts or e-mail fraud to cause payments or information to be transmitted to an unintended recipient. Attackers may use artificial intelligence and
machine learning to launch more automated, targeted and coordinated attacks against targets. We could be subject to risks caused by misappropriation,
misuse, leakage, falsification or intentional or accidental release or loss of information maintained in the information systems and networks of our
company, including personal information of our employees. We may not be able to anticipate all types of security threats, and we may not be able to
implement preventive measures effective against all such security threats. The techniques used by cyber criminals change frequently, may not be
recognized until launched, and can originate from a wide variety of sources, including outside groups such as external service providers, organized crime
affiliates, terrorist organizations or hostile foreign governments or agencies.
System failures, accidents, cybersecurity incidents or security breaches could cause interruptions in our operations, and could result in a material disruption
of our clinical and commercialization activities and business operations, whether due to a loss of our trade secrets or other proprietary information or other
similar disruptions, in addition to possibly requiring substantial expenditures of resources to remedy. For example, the loss of clinical trial data from
completed or future trials could result in delays in our regulatory approval efforts and significantly increase our costs to recover or reproduce the data. To
the extent that any disruption or security breach were to result in a loss of, or damage to, our data or applications, or inappropriate disclosure of confidential
or proprietary information, we could incur liability, our competitive position could be harmed and our product research, development and
commercialization efforts could be delayed. In addition, we may not have adequate insurance coverage to provide compensation for any losses associated
with such events.
If a material breach of our security or that of our vendors occurs, the market perception of the effectiveness of our security measures could be harmed, and,
as a result, we could lose business and our reputation and credibility could be damaged. We could be required to expend significant amounts of money and
other resources to repair or replace information systems or networks. Although we develop and maintain processes, systems and controls designed to
prevent these events from occurring, and we have a process to assess, identify and manage threats, the development and maintenance of these systems,
controls and processes is costly and requires ongoing monitoring and updating as technologies change and efforts to overcome security measures become
more sophisticated. Moreover, despite our efforts, the possibility of these events occurring cannot be
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eliminated entirely. We cannot guarantee that the measures we have taken to date, and actions we may take in the future, will be sufficient to prevent any
cyber-attacks or security breaches.
We are subject to stringent privacy laws, information security laws, regulations, policies and contractual obligations related to data privacy and security
and changes in such laws, regulations, policies, contractual obligations and failure to comply with such requirements could subject us to significant
fines and penalties, which may have a material adverse effect on our business, financial condition or results of operations.
We are subject to data privacy and protection laws and regulations that apply to the collection, transmission, storage and use of personally-identifying
information, which among other things, impose certain requirements relating to the privacy, security and transmission of personal information, including
comprehensive regulatory systems in the United States and the EU. The legislative and regulatory landscape for privacy and data protection continues to
evolve in jurisdictions worldwide, and we must devote significant resources and funds to understanding and complying with this changing landscape. Our
efforts to comply with the evolving data protection rules may be unsuccessful. It is possible that these laws may be interpreted, enforced and applied in a
manner that is inconsistent with our practices.
There are numerous U.S. federal and state laws and regulations related to the privacy and security of personal information. In particular, regulations
promulgated pursuant to the federal Health Insurance Portability and Accountability Act of 1996, or HIPAA, establish privacy and security standards that
limit the use and disclosure of individually identifiable health information, or protected health information, and require the implementation of
administrative, physical and technological safeguards to protect the privacy of protected health information and ensure the confidentiality, integrity and
availability of electronic protected health information.
The FTC has been particularly focused on the unpermitted processing of health and genetic data through its recent enforcement actions and is expanding
the types of privacy violations that it interprets to be “unfair” under Section 5 of the FTC Act of 1914, as well as the types of activities it views to trigger
the Health Breach Notification Rule. The FTC is also in the process of developing rules related to commercial surveillance and data security that may
impact our business.
A number of states have passed comprehensive privacy laws and other states are strongly considering or in the process of enacting such laws. These laws
create obligations related to the processing of personal information, as well as special obligations for the processing of “sensitive” data (which includes
health data in some cases). In addition, Congress has also been debating passing a federal privacy law, and there are also states that are specifically
regulating health information. These laws may impact our business activities, including our identification of research subjects, relationships with business
partners and ultimately the marketing and distribution of our products.
There are also significant privacy and data security laws that apply in Europe and other countries. The collection, use, disclosure, transfer, or other
processing of personal data, including personal health data, regarding individuals who are located in the European Economic Area, or EEA, and the
processing of personal data that takes place in the EEA, is regulated by the GDPR. The GDPR imposes onerous accountability obligations requiring data
controllers and processors to maintain a record of their data processing and policies. While many other countries outside of the EEA loosely follow GDPR
as a model, other laws contain different or conflicting provisions.
Failure to comply with any of these laws and regulations could result in litigation, regulatory investigations or enforcement actions against us, orders to
changes our practices, systems or policies, breaches of our contracts, fines, imprisonment of company officials and public censure, civil or criminal
penalties, claims for damages by affected individuals, damage to our reputation and loss of goodwill, any of which could have a material adverse effect on
our business, financial condition, results of operations or prospects. Even if we are not determined to have violated these laws, litigation or government
investigations into these issues typically require the expenditure of significant resources and generate negative publicity.
Risks Related to Our Financial Position
We face challenges as a less diversified company.
The success of our rare disease business is subject to various risks and uncertainties, including the possibility that we may not be able to successfully
commercialize PYRUKYND® and AQVESME™, the possibility that mitapivat is not approved for SCD, the possibility that mitapivat is not approved for
thalassemia in additional jurisdictions, the possibility of adverse post-approval, clinical and other developments in respect of PYRUKYND®,
AQVESME™, mitapivat, tebapivat or our other
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product candidates, and unanticipated changes in applicable laws and regulations that may adversely affect the rare disease business.
We may be more susceptible to changing market conditions, including fluctuations and risks particular to the markets for patients with rare diseases, than a
more diversified company, which could adversely affect our business, financial condition and results of operations. Our results of operations, cash flows,
working capital and financing requirements may be subject to increased volatility and our ability to fund capital expenditures and investments or satisfy
other financial commitments may be diminished.
Raising additional capital may restrict our operations, require us to relinquish rights to our technologies or product candidates or cause dilution to our
stockholders.
Until such time, if ever, as we can generate substantial product revenue, including from potential future sales of PYRUKYND® and AQVESME™, we
expect to finance our cash needs primarily through cash on hand, potential royalty payments with respect to annual U.S. net sales of vorasidenib in excess
of $1.0 billion, or the Retained Earn-Out Rights, and, potentially, collaborations, strategic alliances, licensing arrangements and other nondilutive strategic
transactions. In addition, we may pursue opportunistic debt offerings, and equity or equity-linked offerings. We do not have any committed external source
of funds other than the potential Retained Earn-Out Rights described above and we cannot be certain we will ever receive any payments as a result of the
Retained Earn-Out Rights. To the extent that we raise additional capital through the sale of equity or convertible debt securities, the ownership interest of
our stockholders will be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect the rights of our
common stockholders. Debt financing, if available, may require us to enter into agreements that include covenants limiting or restricting our ability to take
specific actions, such as incurring additional debt, selling or licensing our assets, making capital expenditures or declaring dividends. In addition, securing
financing could require a substantial amount of time and attention from our management and may divert a disproportionate amount of their attention away
from day-to-day activities, which may adversely affect our management’s ability to oversee the development of our product candidates.
If we raise funds through collaborations, strategic alliances or licensing arrangements with third parties, we may have to relinquish valuable rights to our
technologies, future revenue streams, research programs or product candidates or to grant licenses on terms that may not be favorable to us.
If our existing capital is insufficient to fund our operating expenses and capital expenditures, we will need to raise capital, and if we are unable to raise
capital when needed, we would be forced to delay, reduce or eliminate our product development programs or commercialization efforts.
We expect to incur significant expenses as we continue to advance our ongoing activities. Our estimate as to what extent we expect our existing cash, cash
equivalents, and marketable securities to be available to fund our operating expenses and capital expenditures is based on assumptions that may prove to be
wrong, and we could use our available capital resources sooner than we currently expect. Further, changing circumstances, some of which may be beyond
our control, could cause us to consume capital significantly faster than we currently anticipate, and we may need to seek additional funds. If we are unable
to raise additional funds when needed or on attractive terms, we may be required to delay, limit, reduce or terminate our product development or future
commercialization efforts, or grant rights to develop and market product candidates that we would otherwise prefer to develop and market ourselves. Our
future capital requirements will depend on many factors, including:
•
the amount and timing of future revenue received from commercial sales of PYRUKYND®, AQVESME™ or any of our other product candidates
for which we may receive marketing approval;
•
the amount of payments, if any, we may receive on account of the Retained Earn-Out Rights;
•
the costs and timing of our ongoing and future commercialization activities, including product manufacturing, sales, marketing and distribution,
for PYRUKYND® and AQVESME™ in the approved jurisdictions and indications and for any product candidate for which we may receive
approval;
•
the scope, progress, results and costs of preclinical development, laboratory testing and clinical trials for our product candidates;
•
the costs associated with in-licensing or acquiring assets for pipeline growth, including the amount and timing of future milestone and royalty
payments payable to Alnylam pursuant to the license agreement;
•
the costs, timing and outcome of regulatory review of our product candidates;
•
the costs of preparing, filing and prosecuting patent applications, maintaining and enforcing our intellectual property rights and defending
intellectual property-related claims;
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•
our ability to establish and maintain collaborations on favorable terms, if at all;
•
our ability to successfully execute on our strategic plans; and
•
operational delays, disruptions and/or increased costs associated with public health pandemics, global economic and political developments.
We have historically incurred operating losses. We expect to incur losses in the future and may never achieve or maintain profitability.
We have a history of incurring operating losses. Our net loss for the year ended December 31, 2025 was $412.8 million, our net income for the year ended
December 31, 2024 was $673.7 million, and our net loss for the year ended December 31, 2023 was $352.1 million. As of December 31, 2025, we had an
accumulated deficit of $561.7 million. The net income we generated in the year ended December 31, 2024 was primarily due to our receipt of the Upfront
Payment related to the sale of the Vorasidenib Royalty Rights and our receipt of the Vorasidenib Milestone Payment. We are commercializing
PYRUKYND® for the treatment of hemolytic anemia in adults with PK deficiency in the United States. Following the receipt of marketing approval in
December 2025, we commercially launched AQVESME™ in the United States in late January 2026.
In connection with our regulatory approvals in the EU, Great Britain and Saudi Arabia, we provide access to PYRUKYND® to eligible patients through
the Avanzanite Agreement and the NewBridge Agreement, as applicable, and on either a free of charge or for charge basis for eligible patients in those
jurisdictions and other jurisdictions through a global managed access program. We continue to evaluate other options for the commercialization of
PYRUKYND® outside of the United States, including through exploring potential partnership opportunities.
We expect to finance our operations primarily through cash on hand, potential royalty payments with respect to the Retained Earn-Out Rights, and,
potentially, collaborations, strategic alliances, licensing arrangements and other nondilutive strategic transactions. In addition, we may pursue opportunistic
debt offerings, and equity or equity-linked offerings. We expect to continue to incur significant expenses and net losses until such time as we are able to
report profitable results. The net losses we incur may fluctuate significantly from quarter to quarter and year to year. We anticipate that we will incur
significant expenses if and as we:
•
commercialize PYRUKYND® and AQVESME™ for approved indications in approved jurisdictions;
•
continue to establish and maintain a sales, marketing and distribution infrastructure to commercialize PYRUKYND®, AQVESME™ and other
product candidates for which we may obtain marketing approval;
•
initiate and continue clinical trials for our products and product candidates;
•
continue our research and preclinical development of our product candidates and seek to identify additional product candidates;
•
seek marketing approvals for our product candidates that successfully complete clinical trials;
•
require the manufacture of larger quantities of product candidates for clinical development and commercialization;
•
maintain, expand and protect our intellectual property portfolio;
•
add additional personnel to support our product research and development and planned future commercialization efforts and our operations; and
•
acquire or in-license other product candidates, medicines and technologies.
We may never achieve or maintain profitability. To become and remain profitable, we must develop and successfully commercialize medicines with
significant market potential. This will require us to be successful in a range of challenging activities, including completing preclinical testing and clinical
trials of our product candidates, obtaining marketing approval for these product candidates, manufacturing, marketing and selling those medicines for
which we may obtain marketing approval and satisfying any post-marketing requirements. If we do achieve profitability, we may not be able to sustain or
increase profitability on a quarterly or annual basis. Our failure to become and remain profitable would decrease the value of our company and could
impair our ability to raise capital, maintain our research and development efforts, expand our business or continue our operations. A decline in the value of
our company could also cause our stockholders to lose all or part of their investment.
Changes in tax laws or in their implementation or interpretation may adversely affect our business and financial condition.
Income, sales, use or other tax laws, statutes, rules, or regulations could be enacted or amended at any time, which could affect our business or financial
condition, including causing potentially adverse impacts to our effective tax rate, tax liabilities, and
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cash tax obligations. For example, the Inflation Reduction Act, or IRA, was signed into law in August 2022, and the One Big Beautiful Bill Act, or
OBBBA, was signed into law in July 2025. The OBBBA contains numerous tax provisions which may affect our business or financial condition.
Regulatory guidance under the IRA, the OBBBA, and other tax-related legislation is and continues to be forthcoming, and such guidance could ultimately
increase or lessen the impact of these laws on our business and financial condition. In addition, it is uncertain if and to what extent various states will
conform to changes to federal tax legislation.
Risks Related to Our Dependence on Third Parties
We rely and expect to continue to rely on third parties to conduct our clinical trials and some aspects of our research and preclinical testing, and those
third parties may not perform satisfactorily, including failing to meet deadlines for the completion of such trials, research or testing.
We do not independently conduct clinical trials of any of our product candidates. We rely and expect to continue to rely on third parties, such as CROs,
clinical data management organizations, medical institutions and clinical investigators, to conduct our clinical trials. In addition, we currently rely and
expect to continue to rely on third parties to conduct some aspects of our research and preclinical testing. Any of these third parties may terminate their
engagements with us, some in the event of an uncured material breach and some at any time. If any of our relationships with these third parties terminate,
we may not be able to enter into similar arrangements with alternative third-parties or to do so on commercially reasonable terms. Switching or adding
additional third parties involves additional cost and requires management time and focus. As a result, delays may occur in our product development
activities. Although we seek to carefully manage our relationships with our CROs, we could encounter such challenges or delays that could have a material
adverse impact on our business, financial condition and prospects.
Our reliance on third parties for research and development activities reduces our control over these activities but does not relieve us of our responsibilities.
For example, we are responsible for ensuring that each of our studies is conducted in accordance with the applicable protocol and legal, regulatory and
scientific standards, and our reliance on third parties does not relieve us of our responsibility to comply with any such standards. We and these third parties
are required to comply with current good clinical practices, or cGCP, which are regulations and guidelines enforced by the FDA, the competent authorities
of the member states of the EEA and comparable foreign regulatory authorities for all of our product candidates in clinical development. We cannot be
certain that a given regulatory authority will determine that any of our clinical trials comply with cGCP regulations. Regulatory authorities enforce these
cGCPs through periodic inspections of trial sponsors, principal investigators and trial sites. If we or any of these third parties fail to comply with applicable
cGCPs, the clinical data generated in our clinical trials may be deemed unreliable and the FDA, the EMA, or comparable foreign regulatory authorities may
require us to perform additional clinical trials before approving our marketing applications. We are exposed to risk of fraud or other misconduct by such
third parties.
Furthermore, third parties on whom we rely may also have relationships with other entities, some of which may be our competitors. In addition, these third
parties are not our employees, and except for remedies available to us under our agreements with such third parties, we cannot control whether or not they
devote sufficient time and resources to our ongoing clinical, nonclinical, and preclinical programs.
If these third parties do not successfully carry out their contractual duties or obligations or meet expected deadlines, or if they need to be replaced or if the
quality or accuracy of the clinical data they obtain is compromised, our clinical trials may be extended, delayed or terminated and we may not be able to
obtain, or may be delayed in obtaining, marketing approvals for our product candidates and will not be able to, or may be delayed in our efforts to
successfully commercialize our medicines.
If either we or any third parties on which we rely are adversely impacted by geopolitical events, delays may occur in our product development activities,
which delays could have a material adverse impact on our business, financial condition and prospects.
Any performance failure on the part of our distributors could delay clinical development or marketing approval of our product candidates or
commercialization of our medicines, producing additional losses and depriving us of potential product revenue.
We contract with third parties for the manufacture of our product candidates for preclinical and clinical testing and for commercialization.
We do not have any manufacturing or supply chain-related facilities. We currently rely, and expect to continue to rely, on third-party manufacturers for the
materials and manufacture of our product candidates for preclinical and clinical testing and for commercial supply of PYRUKYND®, AQVESME™ and
any product candidate for which we obtain marketing approval.
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Although we have entered into long-term supply agreements for commercial supply of PYRUKYND® and AQVESME™ with third-party manufacturers,
we may be unable to establish similar long-term supply agreements with third-party manufacturers with respect to our other product candidates or to do so
on acceptable terms. Even if we are able to establish such agreements, reliance on third-party manufacturers entails additional risks, including: reliance on
the third party for regulatory compliance, quality assurance, environmental and safety and pharmacovigilance reporting; the possible breach of the
manufacturing agreement by the third party; and the possible termination or nonrenewal of the agreement by the third party at a time that is costly or
inconvenient for us.
Third-party manufacturers may not be able to comply with cGMPs, regulations or similar regulatory requirements on a global basis. Our failure, or the
failure of our third-party manufacturers, to comply with currently applicable regulations, or regulations or specifications to which we become subject in the
future, could result in sanctions being imposed on us, including fines, injunctions, civil penalties, delays, suspension or withdrawal of approvals, license
revocation, seizures or recalls of product candidates or medicines, operating restrictions and criminal prosecutions, any of which could significantly and
adversely affect supplies of our medicines and harm our business and results of operations.
In addition, we currently rely on foreign third-party manufacturers and/or CROs, including those in China, and will likely continue to rely on foreign third-
party manufacturers and/or CROs in the future. Foreign third-party manufacturers and/or CROs may be subject to U.S. legislation, including sanctions,
trade restrictions and other foreign regulatory requirements which could increase the cost or reduce the supply of material or services available to us, delay
the procurement or supply of such material or services, or have an adverse effect on our ability to secure significant commitments from governments to
purchase our potential therapies.
In December 2025, as part of the National Defense Authorization Act for FY 2026, President Trump signed into law the BIOSECURE Act, which
prohibits, subject to limited exceptions, the direct or indirect use of U.S. federal government contract, grant, and loan funds for purchasing biotechnology
equipment and services from certain Chinese biotechnology companies of concern, or BCCs. Under the BIOSECURE Act, U.S. government agencies
cannot (i) buy or obtain biotechnology equipment or services provided by a BCC, (ii) enter into, extend, or renew a contract with any entity using
biotechnology equipment or services provided by a BCC to perform a government contract, or (iii) expend loan or grant funds for biotechnology equipment
or services provided by a BCC. Instead of specifying particular Chinese entities as BCCs, the BIOSECURE Act treats any biotechnology companies that
have been identified on the so-called 1260H List by the U.S. Department of Defense as Chinese Military Companies Operating in the United States as
BCCs. The legislation allows for other biotechnology companies, possibly including WuXi entities, to be added to the federal funding prohibitions at a later
time.
If either we or any third parties on which we rely are adversely impacted by restrictions resulting from the emergence of public health epidemics, by rising
global energy costs or energy shortages or rationing and/or geopolitical events, our supply chain may be disrupted, limiting our ability to manufacture our
product candidates for our clinical trials and research and development operations and our product for commercialization.
Any performance failure on the part of our existing or future manufacturers could delay preclinical development, clinical development, marketing approval
or our commercialization efforts. Due to the volatility of the supply networks globally, we have obtained regulatory approval for redundant supply of raw
materials for PYRUKYND® and AQVESME™, and have an ongoing program to monitor supply, including establishing safety stocks. While we maintain
a broad safety stock of drug substance and drug product, we do not currently have arrangements in place for redundant supply of drug substance and drug
product. If any one of our current contract manufacturers cannot perform as agreed, we may be required to replace that manufacturer. Although we believe
that there are several potential alternative manufacturers who could manufacture our product or our product candidates, we may incur added costs and
delays in identifying and qualifying any such replacement.
Our current and anticipated future dependence upon others for the manufacture of our product candidates or medicines may adversely affect our future
profit margins and our ability to commercialize any medicines that receive marketing approval on a timely and competitive basis.
We may depend on collaborations with third parties for the development and commercialization of our product candidates. If those collaborations are
not successful, we may not be able to capitalize on the market potential of these product candidates.
We may seek collaborations for the development and commercialization of our product candidates with large and mid-size pharmaceutical companies and
biotechnology companies or with other third parties. We face significant competition in seeking appropriate collaborators. Collaborations are complex and
time-consuming to negotiate and document. Whether we reach a definitive agreement for a collaboration will depend, among other things, upon our
assessment of the collaborator’s resources and expertise, the terms and conditions of the proposed collaboration and the proposed collaborator’s evaluation
of a number of
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factors. We may not be able to negotiate collaborations on a timely basis, on acceptable terms, or at all. Collaborators may have rights that restrict us from
entering into future agreements on certain terms with potential collaborators.
If we enter into any such arrangements with collaborators, we will likely have limited control over the amount and timing of resources that our
collaborators dedicate to the development or commercialization of our product candidates. Collaborators may not pursue development and
commercialization of our product candidates or may elect not to continue or renew development or commercialization programs based on clinical trial
results, changes in the collaborator’s strategic focus or available funding, or external factors such as an acquisition that diverts resources or creates
competing priorities. Collaborators may delay clinical trials, provide insufficient funding for a clinical trial program, stop a clinical trial or abandon a
product candidate, repeat or conduct new clinical trials or require a new formulation of a product candidate for clinical testing, which may result in a need
for additional capital to pursue further development or commercialization of the applicable product candidate. Collaborators may not properly maintain or
defend our intellectual property rights or may use our proprietary information in such a way as to invite litigation that could jeopardize or invalidate our
proprietary information or expose us to potential litigation. Disputes may arise between the collaborators and us that result in the delay or termination of the
research, development or commercialization of our medicines or product candidates or that result in costly litigation or arbitration that diverts management
attention and resources. In addition, our ability to enter into arrangements with collaborators in specific regions, such as the Middle East, may be affected
by localized geopolitical unrest or military conflict, such as the current armed conflict in the region.
We use a third-party service provider to assist in the administration of the REMS for AQVESME™. If we or a third-party service provider acting on our
behalf fail to effectively implement, monitor, report and administer the REMS for our products, we may be required to, among other things, modify such
REMS, and we may be subject to FDA enforcement actions, such as seizure of the product, injunction against distribution, or to civil monetary penalties. If
the FDA considers the conduct especially egregious, the FDA can refer the matter to the Department of Justice to pursue civil remedies, criminal
prosecution or both. Additionally, if the third-party service provider fails to effectively administer the REMS, we could experience a material disruption to
our commercial operations.
In addition, we do not have direct experience commercializing products outside of the United States and such efforts may depend on our ability to find a
suitable distribution partner. For example, we have entered into the NewBridge Agreement and the Avanzanite Agreement for the commercialization of
PYRUKYND® in certain jurisdictions outside of the United States. Pursuant to the NewBridge Agreement and the Avanzanite Agreement, we rely on our
partners, in the GCC and in the EU and U.K., respectively, to assist with regulatory filings, prepare applications for pricing and reimbursement approval,
negotiate with payors, conduct medical affairs activities and import, distribute, promote and commercialize our products in accordance with applicable law.
If our distribution partners do not fulfill their obligations under these arrangements, or if they experience a change in strategic focus or available funding,
our ability to generate revenue outside of the United States could be adversely affected.
Risks Related to Our Intellectual Property
If we are unable to obtain and maintain patent or trade secret protection for our medicines and technology, or if the scope of the patent protection
obtained is not sufficiently broad, our competitors could develop and commercialize medicines and technology similar or identical to ours, and our
ability to successfully commercialize our medicines and technology may be adversely affected.
Our success depends in large part on our ability to obtain and maintain patent protection in the United States and other countries with respect to our
proprietary medicines and technology. We seek to protect our proprietary position by filing patent applications in the United States and abroad related to
our novel technologies and medicines that are important to our business. We do not yet have issued patents for all our most advanced product candidates in
all markets in which we intend to commercialize but we continue to actively pursue patent protection for our assets around the world.
The patent prosecution process is costly and time-consuming, and we may not be able to file and prosecute all necessary or desirable patent applications at
a reasonable cost or in a timely manner. It is also possible that we will fail to identify and/or file patent applications on every aspect of our research and
development output that is or may be eligible for patent protection. Although we enter into non-disclosure and confidentiality agreements with parties who
may have access to patentable aspects of our research and development output, such as our employees, corporate collaborators, outside scientific
collaborators, CROs, contract manufacturers, consultants, advisors and other third parties, any of these parties may breach the agreements and disclose such
output before a patent application is filed, thereby jeopardizing our ability to seek patent protection. There is also the possibility that loss or theft of data or
records may jeopardize the ability to seek patent protection or impede the progress or drafting of patent applications.
We have licensed patent rights, and in the future may license additional patent rights, from third parties. Such licenses may be accompanied by milestone
and/or royalty payment obligations. These licensed patent rights may be valuable to our business,
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and we may not have the right to control the preparation, filing and prosecution of patent applications, or to maintain the patents, covering technology or
medicines underlying such licenses. We cannot be certain that these patents and applications will be prosecuted and enforced in a manner consistent with
the best interests of our business. If any such licensors fail to maintain such patents, or lose rights to those patents, the rights we have licensed may be
reduced or eliminated and our right to develop and commercialize any of our products that are the subject of such licensed rights could be adversely
affected. In addition to the foregoing, the risks associated with patent rights that we license from third parties also apply to patent rights we own.
The patent position of biotechnology and pharmaceutical companies generally is highly uncertain, involves complex legal and factual questions and has in
recent years been the subject of much litigation. As a result, the issuance, scope, validity, enforceability and commercial value of our patent rights are
highly uncertain. Our pending and future patent applications may not result in patents being issued that protect our technology or medicines or that
effectively prevent others from commercializing competitive technologies and medicines. Changes in either the patent laws or interpretation of the patent
laws in the United States and other countries may diminish the value of our patents or narrow the scope of our patent protection. The laws of foreign
countries may not protect our rights to the same extent as the laws of the United States. Publications of discoveries in the scientific literature often lag
behind the actual discoveries, and patent applications in the United States and other jurisdictions are typically not published until 18 months after filing, or
in some cases not at all. Therefore, we cannot be certain that we were the first to make the inventions claimed in our owned or licensed patents or pending
patent applications, or that we were the first to file for patent protection of such inventions.
The United States maintains a first inventor to file system in which, assuming the other requirements for patentability are met, the first inventor to file a
patent application will be entitled to the patent. We may be subject to a third-party pre-issuance submission of prior art to the U.S. Patent and Trademark
Office, or USPTO, or become involved in opposition, derivation, revocation, reexamination, post-grant and inter partes review or interference proceedings
challenging our patent rights or the patent rights of others. An adverse determination in any such submission, proceeding or litigation could reduce the
scope of, or invalidate, our patent rights, allow third parties to commercialize our technology or products and compete directly with us, without payment to
us, or result in our inability to manufacture or commercialize medicines without infringing third-party patent rights.
Even if our patent applications issue as patents, they may not issue in a form that will provide us with any meaningful protection, prevent competitors or
other third parties from competing with us or otherwise provide us with any competitive advantage. Our competitors or other third parties may be able to
circumvent our patents by developing similar or alternative technologies or products in a non-infringing manner.
The issuance of a patent is not conclusive as to its inventorship, scope, validity or enforceability, and our patents may be challenged in the courts or patent
offices in the United States and abroad. Such challenges may result in loss of the patent or in one or more patent claims being narrowed or invalidated,
which could limit our ability to stop others from using or commercializing similar or identical technology and products, or limit the duration of the patent
protection of our technology and medicines. Given the significant amount of time required for the discovery, development, preclinical and clinical testing
and regulatory review and approval of new product candidates, patents protecting such candidates might expire before or shortly after such candidates are
commercialized. As a result, our intellectual property may not provide us with sufficient rights to exclude others from commercializing products similar or
identical to ours. In such circumstances we would be relying primarily on regulatory or marketing exclusivity to exclude others from commercializing a
generic version of our products.
We may become involved in lawsuits to protect or enforce our patents and other intellectual property rights, which could be expensive, time consuming
and unsuccessful.
Competitors may infringe our patents and other intellectual property rights. To counter infringement or unauthorized use, we may be required to file
infringement claims, which can be expensive, time consuming and have uncertain outcomes. For example, we may file patent infringement suits against
any company that files an ANDA containing a Paragraph IV patent certification for mitapivat. In addition, a court may decide that a patent of ours is
invalid or unenforceable, or may refuse to stop the other party from using the technology at issue on the grounds that our patents do not cover the
technology in question. An adverse result in any litigation proceeding could put one or more of our patents at risk of being invalidated or interpreted
narrowly. Furthermore, because of the substantial amount of discovery required in connection with intellectual property litigation, there is a risk that some
of our confidential information could be compromised by disclosure during this type of litigation.
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Third parties may initiate legal proceedings alleging that we or our collaborators are infringing their intellectual property rights, the outcome of which
would be uncertain and could have a material adverse effect on the success of our business.
The biotechnology and pharmaceutical industries are characterized by extensive litigation regarding patents and other intellectual property rights. Our
commercial success depends upon our ability and the ability of our collaborators to develop, manufacture, market and sell our product and product
candidates and use our proprietary technologies without infringing the proprietary rights and intellectual property of third parties. We have in the past, are
and may in the future become party to, or threatened with, adversarial proceedings or litigation regarding intellectual property rights with respect to our
medicines and technology, including opposition, derivation, revocation, reexamination, post-grant and inter partes review or interference proceedings
before the USPTO or other patent offices around the world. For example, two of the European patents in our mitapivat portfolio, neither being the primary
compound patent, have been challenged in opposition proceedings. The revocation of either of these European patents could potentially allow additional
competitor drugs, if approved, to enter the European marketplace earlier than anticipated. After separate oral proceedings, both European patents were
upheld by the European Opposition Division in written decisions in November 2025 and January 2026, respectively. These decisions can be appealed and
we expect that appeals will be filed for both of the opposed European patents.
Third parties may assert infringement claims against us based on existing patents or patents that may be granted in the future. If we or one of our
collaborators are found to infringe a third party’s intellectual property rights, we or they could be required to obtain a license from such third party to
continue developing and marketing our medicines and technology. However, we or our collaborators may not be able to obtain any required license on
commercially reasonable terms or at all. Even if we or our collaborators were able to obtain a license, it could be non-exclusive, thereby giving our
competitors and other third parties access to the same technologies licensed to us. We or our collaborators could be forced, including by court order, to
cease developing and commercializing the infringing technology or medicine. In addition, we or our collaborators could be found liable for monetary
damages. A finding of infringement could prevent us or our collaborators from commercializing our product and product candidates or force us to cease
some of our business operations, which could materially harm our business. Claims that we or our collaborators have misappropriated the confidential
information or trade secrets of third parties could have a similar negative impact on our business.
We may be subject to claims that our employees have wrongfully used or disclosed alleged trade secrets of their former employers.
Many of our employees, consultants or advisors are currently or were previously employed at universities or other biotechnology or pharmaceutical
companies, including our competitors or potential competitors. Although we try to ensure that our employees, consultants and advisors do not use the
proprietary information or know-how of others in their work for us, we may be subject to claims that we or these individuals have used or disclosed
intellectual property, including trade secrets or other proprietary information, of any such individual’s current or former employer. Litigation may be
necessary to defend against these claims. If we fail in defending any such claims, in addition to paying monetary damages, we may lose valuable
intellectual property rights or personnel. Even if we are successful in defending against such claims, litigation could result in substantial costs and be a
distraction to our organization.
Intellectual property litigation could cause us to spend substantial resources and distract our personnel from their normal responsibilities.
Even if resolved in our favor, litigation or other legal proceedings relating to intellectual property claims may cause us to incur significant expenses, and
could distract our technical and management personnel from their normal responsibilities. In addition, there could be public announcements of the results
of hearings, motions or other interim proceedings or developments and if securities analysts or investors perceive these results to be negative, it could have
a substantial adverse effect on the price of our common stock. Such litigation or proceedings could substantially increase our operating losses and reduce
the resources available for development activities or any future sales, marketing or distribution activities. We may not have sufficient financial or other
resources to adequately conduct such litigation or proceedings. Some of our competitors may be able to sustain the costs of such litigation or proceedings
more effectively than we can because of their greater financial resources and more mature and developed intellectual property portfolios. Uncertainties
resulting from the initiation and continuation of patent litigation or other proceedings could have a material adverse effect on our ability to compete in the
marketplace.
If we are unable to protect the confidentiality of our confidential information related to our proprietary platforms and technology, our business and
competitive position could be harmed.
In addition to seeking patents for some of our technology and medicines, we also rely on maintaining the confidentiality of unpatented know-how,
technology and other proprietary information, to maintain our competitive position. For example, we consider the confidential information and know-how
related to our cellular metabolism technology platform to be our primary intellectual property assets in this space. Unpatented proprietary technical
information and know-how can be difficult to protect.
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We seek to protect this proprietary technical information and know-how, in part, by entering into non-disclosure and confidentiality agreements with parties
who have access to them, such as our employees, corporate collaborators, outside scientific collaborators, CROs, contract manufacturers, consultants,
advisors and other third parties. We also enter into confidentiality and invention or patent assignment agreements with our employees and consultants.
Despite these efforts, any of these parties may breach the agreements and disclose our proprietary information (including through use of generative
artificial intelligence technologies), and we may not be able to obtain adequate remedies for such breaches. Enforcing a claim that a party illegally
disclosed or misappropriated proprietary information is difficult, expensive and time-consuming, and the outcome is unpredictable. If any of our
proprietary technical information and know-how were to be lawfully obtained or independently developed by a competitor or other third party, we would
have no right to prevent them from using that technology or information to compete with us. Moreover, we anticipate that with respect to this platform, at
least some of this technical information and know-how will, over time, be disseminated within the industry through independent development, the
publication of journal articles describing the methodology, and the movement of personnel skilled in the art from academic to industry scientific positions.
Risks Related to Regulatory Approval of Our Product Candidates and Other Legal Compliance Matters
The marketing approval process is expensive, time-consuming and uncertain, and may prevent us from obtaining approvals for the commercialization
of some or all of our product candidates. If we or our collaborators are not able to obtain, or if there are delays in obtaining, required regulatory
approvals, we or they will not be able to commercialize, or will be delayed in commercializing, our product candidates, and our ability to generate
revenue will be materially impaired.
Our product candidates and the activities associated with their development and commercialization, including their design, testing, manufacture, safety,
efficacy, record keeping, labeling, storage, approval, advertising, promotion, sale and distribution, export and import, are subject to comprehensive
regulation by the FDA and other regulatory agencies in the United States and by the EMA and comparable regulatory authorities in other countries.
Securing marketing approval requires the submission of extensive preclinical and clinical data and supporting information to the various regulatory
authorities for each therapeutic indication to establish the product candidate’s safety and efficacy. Securing regulatory approval also requires the submission
of information about the product manufacturing process to, and inspection of manufacturing facilities by, the relevant regulatory authority. Our product
candidates may not be effective, may be only moderately effective or may prove to have undesirable or unintended side effects, toxicities or other
characteristics that may preclude our obtaining marketing approval or prevent or limit commercial use.
In addition, varying interpretations of the data obtained from preclinical and clinical testing could delay, limit or prevent marketing approval of a product
candidate. Any marketing approval we or our collaborators ultimately obtain may be limited or subject to restrictions or post-approval commitments that
render the approved medicine not commercially viable.
The FDA, EMA and other foreign regulatory authorities have substantial discretion in the approval process. Accordingly, it is possible that the FDA or
EMA may refuse to accept for substantive review any NDA, sNDA or MAA that we submit for our product candidates, or may conclude after review of
our data that our marketing application is insufficient to obtain marketing approval of our product candidates. The applicable regulator may require that we
conduct additional clinical trials, preclinical studies or manufacturing validation studies and submit that data before reconsidering our applications.
Depending on the extent of these or any other FDA- or EMA-required trials or studies, approval of any marketing applications that we submit may be
delayed by several years, or may require us to expend more resources than we planned. It is also possible that additional trials or studies, if performed and
completed, may not be considered sufficient by the FDA or EMA to approve any marketing applications. For example, to mitigate the risk of hepatocellular
injury, AQVESME™ is available only through the REMS program approved by the FDA. The FDA might require the development and submission of
additional REMS for our products or modification of existing REMS.
We may not be successful in obtaining FDA or EMA approval of our product candidates on a timely basis, or ever. We have limited experience in filing and
supporting the applications necessary to gain marketing approvals and expect to rely on third-party CROs to assist us in this process.
Moreover, principal investigators for our clinical trials may serve as scientific advisors or consultants to us and receive compensation in connection with
such services. Under certain circumstances, we may be required to report some of these relationships to the FDA or comparable foreign regulatory
authorities. The FDA or a comparable foreign regulatory authority may conclude that a financial relationship between us and a principal investigator has
created a conflict of interest or otherwise affected interpretation of the study. The FDA or comparable foreign regulatory authority may therefore question
the integrity of the data generated at the applicable clinical trial site and the utility of the clinical trial itself may be jeopardized. This could result in a delay
in approval, or rejection, of our marketing applications by the FDA or comparable foreign regulatory authority, as the case may be, and may ultimately lead
to the denial of marketing approval of one or more of our product candidates.
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Further, the process of obtaining marketing approvals, both in the United States and abroad, is expensive, may take many years if additional clinical trials
are required, if approval is obtained at all, and can vary substantially based upon a variety of factors, including the type, complexity and novelty of the
product candidates involved. Changes in marketing approval policies during the development period, changes in or the enactment of additional statutes or
regulations, or changes in regulatory review for each submitted product application, may cause delays in the approval or rejection of an application.
In addition, recent and potential future courts decisions and administrative law cases may result in additional legal challenges to regulations and guidance
issued by federal regulatory agencies, including the FDA and CMS, that we have relied on and intend to rely on in the future. Any such challenges, if
successful, could have a material impact on our business. In addition to potential changes to regulations and agency guidance as a result of legal challenges,
these decisions may result in increased regulatory uncertainty and delays in and other impacts to the agency rulemaking process, any of which could
adversely impact our business and operations.
Additionally, our ability to develop and market new drug products may be impacted based on current or future litigation in the federal court system
challenging the FDA’s approval of other companies' drugs. Depending on the outcome of this type of litigation, our ability to develop new drug product
candidates and to maintain approval of existing drug products could be at risk and our efforts to develop and market new drug products could be delayed,
undermined or subject to protracted litigation.
If we or our collaborators experience delays in obtaining approval or if we or they fail to obtain approval of our product candidates, the commercial
prospects for our product candidates may be harmed and our ability to generate revenue will be materially impaired.
Failure to obtain marketing approval in foreign jurisdictions would prevent our medicines from being marketed in such jurisdictions and any of our
medicines that are approved for marketing in such jurisdictions will be subject to risk associated with foreign operations.
In December 2024, we announced that we submitted an MAA to the EMA and a regulatory application to the United Arab Emirates health authorities for
PYRUKYND® for the treatment of adult patients with non-transfusion dependent and transfusion-dependent alpha- or beta-thalassemia. In October 2025,
we announced that the CHMP of the EMA adopted a positive opinion for the new indication for PYRUKYND® in adults for the treatment of anemia
associated with transfusion-dependent and non-transfusion-dependent alpha- or beta-thalassemia. The European Commission is now reviewing the
CHMP’s opinion, with the final decision expected by early 2026. In order to market and sell our medicines in the EU and many other foreign jurisdictions,
we or our collaborators must obtain separate marketing approvals and comply with numerous and varying regulatory requirements. The approval procedure
varies among countries and can involve additional testing. The time required to obtain approval may differ substantially from that required to obtain FDA
approval. The regulatory approval process outside the United States generally includes all of the risks associated with obtaining FDA approval. In addition,
in many foreign countries, a product must be approved for reimbursement before the product can be approved for sale in that country. We or our
collaborators may not obtain approvals from regulatory authorities outside the United States on a timely basis, if at all. Moreover, approval by the FDA
does not ensure approval by regulatory authorities in other countries or jurisdictions, and approval by one regulatory authority outside the United States
does not ensure approval by regulatory authorities in other countries or jurisdictions or by the FDA. Although we have received marketing authorization for
PYRUKYND® for the treatment of adults with PK deficiency in the EU and Great Britain and for PYRUKYND® for the treatment of adult patients with
non-transfusion dependent and transfusion-dependent alpha- or beta-thalassemia in Saudi Arabia, we may not be able to file for additional marketing
approvals and may not receive necessary approvals to commercialize our medicines in any other foreign market.
In addition, foreign regulatory authorities may change their approval policies and new regulations may be enacted. For instance, in December 2025, the
European Parliament and European Council reached a provisional political agreement on the revision of EU pharmaceutical legislation, which is expected
to be adopted by mid-2026. If the legislation is finalized in line with the provisional political agreement, it will have a significant impact on the EU
pharmaceutical industry, which could impact our business.
We expect that we will be subject to additional risks in commercializing any of our product candidates that receive marketing approval outside the United
States, including tariffs and trade barriers; economic weakness, including inflation, or political instability in particular foreign economies and markets;
compliance with tax, employment, immigration and labor laws for employees living or traveling abroad; foreign currency fluctuations, which could result
in increased operating expenses and reduced revenue; and workforce uncertainty in countries where labor unrest is more common than in the United States.
In addition, we do not have direct experience commercializing products outside of the United States and such efforts may depend on our ability to find a
suitable distribution partner. For example, we have entered into the NewBridge Agreement and the Avanzanite Agreement for the commercialization of
PYRUKYND® in certain jurisdictions outside of the United States.
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Fast track designation, priority review designation, PRIME designation or other expedited review designations or vouchers may not actually lead to a
faster development or regulatory review or approval process, nor does it ensure approval of the product candidate.
We may seek fast track designation, priority review designation and/or other expedited review designations or vouchers for our product candidates. The
FDA has broad discretion on whether to grant fast track designation, priority review designation and/or other expedited review designations or vouchers for
a product candidate, so even if we believe a particular product candidate is eligible for such designation or status, the FDA may decide not to grant it. Even
if our product candidates receive fast track designation, priority review designation, and/or other expedited designations or vouchers, we may not
experience a faster development process, review or approval, if at all, compared to conventional FDA procedures. The FDA may withdraw fast track
designation if it believes that the designation is no longer supported by data from our clinical development program.
In addition, we may seek PRIME designation in the EU for our product candidates. The benefits of a PRIME designation include, among other things, the
potential to qualify product for accelerated review. Even if our product candidates receive PRIME designation, we may not experience a faster development
process, review or approval compared to conventional EMA procedures and it does not ensure or increase the likelihood of the EMA’s grant of a marketing
authorization.
We, or any collaborators, may not be able to obtain or maintain orphan drug designation or orphan drug exclusivity for our drug candidates and, even
if we do, that exclusivity may not prevent the FDA or the EMA from approving competing drugs.
Regulatory authorities in some jurisdictions, including the United States and the EU, may designate drugs and biologics for relatively small patient
populations as orphan drugs. Generally, if a product with an orphan drug designation subsequently receives the first marketing approval for the indication
for which it has such designation, the product is entitled to a period of marketing exclusivity, which precludes the EMA or the FDA from approving another
marketing application for the same product for that time period, except in certain limited circumstances. Orphan drug exclusivity may be lost if the FDA or
EMA determines that the request for designation was materially defective or if the manufacturer is unable to assure sufficient quantity of the product to
meet the needs of patients with the rare disease or condition. Moreover, even after an orphan drug is approved, the FDA can subsequently approve a
different product for the same condition if the FDA concludes that the later product is clinically superior in that it is shown to be safer, more effective or
makes a major contribution to patient care.
We do not know if, when, or how the FDA or Congress may reevaluate or change the orphan drug regulations and policies in the future, and it is uncertain
how any changes might affect our business or if we will be adversely impacted.
Any product or product candidate for which we or our collaborators obtain marketing approval could be subject to restrictions or withdrawal from the
market and we may be subject to substantial penalties if we fail to comply with regulatory requirements or if we experience unanticipated problems with
our medicines, when and if any of them are approved.
Any product or product candidate for which we or our collaborators obtain marketing approval, along with the manufacturing processes, post-approval
clinical data, labeling, advertising and promotional activities for such medicine, will be subject to continual requirements of and review by the FDA and
other regulatory authorities. These requirements include submissions of safety and other post-marketing information and reports, registration and listing
requirements, cGMP requirements relating to quality control and manufacturing, quality assurance and corresponding maintenance of records and
documents, and requirements regarding the distribution of samples to physicians and record keeping. Even if marketing approval of a product candidate is
granted, the approval may be subject to limitations on the indicated uses for which the medicine may be marketed or to the conditions of approval, or
contain requirements for costly post-marketing testing and surveillance to monitor the safety or efficacy of the medicine, including the requirement to
implement a REMS, such as the required REMS for AQVESME™.
The FDA and other agencies, including the Department of Justice, or DOJ, closely regulate and monitor the post-approval marketing and promotion of
products to ensure that they are marketed and distributed only for the approved indications and in accordance with the provisions of the approved labeling.
The FDA and DOJ impose stringent restrictions on manufacturers’ communications regarding off-label use and if we market our medicines for uses other
than their respective approved indications, we may be subject to enforcement actions for off-label marketing. Violations of the FDCA and other statutes,
including the False Claims Act, relating to the promotion and advertising of prescription drugs may lead to investigations and enforcement actions alleging
violations of federal and state health care fraud and abuse laws, as well as state consumer protection laws, which violations may result in the imposition of
significant administrative, civil and criminal penalties. We will need to carefully navigate the FDA’s regulations and this guidance to ensure compliance
with the FDA’s provisions governing promotion of our products.
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Disruptions at the FDA and other government agencies from funding cuts, personnel losses, regulatory reform, government shutdowns and other
developments could hinder our ability to obtain guidance from the FDA regarding our clinical development program and develop and secure approval
of our product candidates in a timely manner, which would negatively impact our business.
If oversight and review activities by the FDA and comparable foreign regulatory authorities are disrupted due to funding cuts, personnel losses, reductions
in force, regulatory reform or government shutdown, then our ability to develop and/or secure timely approval of our product candidates could be impacted
in a negative manner. For example, the recent loss of FDA leadership and personnel, including due to significant reduction in force, could lead to
disruptions and delays in FDA guidance, review and approval of our product candidates.
Further, while the FDA’s review of marketing applications and other activities for new drugs and biologics is largely funded through the user fee program
established under PDUFA, it remains unclear how the administration’s RIF and budget cuts will impact this program and the ability of the FDA to provide
guidance and review our product candidates in a timely manner.
There is also substantial uncertainty as to how regulatory reform measures being implemented by the Trump administration across the government will
impact the FDA and other federal agencies with jurisdiction over our activities. For example, President Trump has issued a number of executive orders that
could have a significant impact on the manner in which the FDA conducts its operations and engages in regulatory and oversight activities. If these or other
orders or executive actions impose constraints on the FDA’s ability to engage in oversight and implementation activities in the normal course, our business
may be negatively impacted.
Accordingly, if any of the foregoing developments and others impact the ability of the FDA to provide us with guidance or delay the FDA’s review and
processing of our regulatory submissions, our business would be negatively impacted.
Our relationships with healthcare providers, physicians and third-party payors are subject to applicable anti-kickback, fraud and abuse and other
healthcare laws and regulations, which, in the event of a violation, could expose us to criminal sanctions, civil penalties, contractual damages,
reputational harm and diminished future profits and future earnings.
Healthcare providers, physicians and third-party payors will play a primary role in the recommendation and prescription of PYRUKYND®, AQVESME™
and any product candidates for which we obtain marketing approval. Our future arrangements with healthcare providers, physicians and third-party payors
may expose us to broadly applicable fraud and abuse and other healthcare laws and regulations that may constrain the business or financial arrangements
and relationships through which we market, sell and distribute PYRUKYND®, AQVESME™ and any other medicines for which we obtain marketing
approval. Such laws and regulations include the federal Anti-Kickback Statue; the federal False Claims Act; HIPAA, as amended by the Health Information
Technology for Economic and Clinical Health Act; the federal Physician Payments Sunshine Act; and analogous state and foreign laws and regulations.
Some state laws require pharmaceutical companies to comply with the pharmaceutical industry’s voluntary compliance guidelines and the relevant
compliance guidance promulgated by the federal government and may require drug manufacturers to report information related to payments and other
transfers of value to physicians and other healthcare providers or marketing expenditures.
Efforts to ensure that our business arrangements with third parties will comply with applicable healthcare laws and regulations will involve substantial
costs. It is possible that governmental authorities will conclude that our business practices may not comply with current or future statutes, regulations or
case law involving applicable fraud and abuse or other healthcare laws and regulations. If our operations are found to be in violation of any of these laws or
any other governmental regulations that may apply to us, we may be subject to significant civil, criminal and administrative penalties, damages, fines,
imprisonment, exclusion of products from government funded healthcare programs, such as Medicare and Medicaid, and the curtailment or restructuring of
our operations. If any of the physicians or other healthcare providers or entities with whom we expect to do business are found to be not in compliance with
applicable laws, they may be subject to criminal, civil or administrative sanctions, including exclusions from government funded healthcare programs.
The provision of benefits or advantages to physicians to induce or encourage the prescription, recommendation, endorsement, purchase, supply, order or
use of medicinal products is also prohibited in the EU. The provision of benefits or advantages to physicians is governed by the national anti-bribery laws
of member states of the EU, or the EU Member States, such as the U.K. Bribery Act 2010. Infringement of these laws could result in substantial fines and
imprisonment.
Payments made to physicians in certain EU Member States must be publicly disclosed. Moreover, agreements with physicians often must be the subject of
prior notification and approval by the physician’s employer, his or her competent professional organization and/or the regulatory authorities of the
individual EU Member States. These requirements are provided in the
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national laws, industry codes or professional codes of conduct, applicable in the EU Member States. Failure to comply with these requirements could result
in reputational risk, public reprimands, administrative penalties, fines or imprisonment.
PYRUKYND®, AQVESME™ or any product candidate that we commercialize may become subject to unfavorable pricing regulations and third-party
reimbursement practices, which would harm our business.
We built our commercial infrastructure to support the commercialization of PYRUKYND® in adult PK deficiency in the United States, and have expanded
this infrastructure to support the commercial launch of AQVESME™ in thalassemia in the United States. The commercial success of PYRUKYND®,
AQVESME™ or of any of our product candidates will depend substantially, both domestically and abroad, on the extent to which the costs of our product
candidates will be paid by third-party payors, including government health administration authorities and private health coverage insurers. If coverage and
reimbursement are not available, or reimbursement is available only to limited levels, we, or any collaborators, may not be able to successfully
commercialize PYRUKYND®, AQVESME™ or our product candidates. Even if coverage is provided, the approved reimbursement amount may not be
high enough to allow us, or any future collaborators, to establish or maintain pricing sufficient to realize a sufficient return on our or their investments.
In the United States, no uniform policy of coverage and reimbursement for products exists among third-party payors, and coverage and reimbursement for
products can differ significantly from payor to payor. As a result, the coverage determination process is often a time-consuming and costly process that
requires us to provide scientific and clinical support for the use of our products to each payor separately, with no assurance that coverage and adequate
reimbursement will be applied consistently or obtained in the first instance. Pricing and reimbursement for new drug products vary widely from country to
country. Some countries require approval of the sale price of a drug before it can be marketed. In many countries, the pricing review period begins after
marketing or product licensing approval is granted. In some foreign markets, prescription pharmaceutical pricing remains subject to continuing
governmental control even after initial approval is granted. In these countries, pricing negotiations with governmental authorities can take considerable
time after the receipt of marketing approval for a product. To obtain reimbursement or pricing approval in some countries, we may be required to conduct a
clinical trial that compares the cost effectiveness of our product candidates to other available therapies. If reimbursement of our products is unavailable or
limited in scope or amount, or if pricing is set at unsatisfactory levels, our ability to generate revenues and become profitable could be impaired.
As a result, we, or any collaborators, might obtain marketing approval for a product in a particular country, but then be subject to price regulations that
delay commercial launch of the product, possibly for lengthy time periods, which may negatively impact the revenue we are able to generate from the sale
of the product in that country. Adverse pricing limitations may hinder our ability or the ability of any collaborators to recoup our or their investment in one
or more product candidates, even if our product candidates obtain marketing approval.
Patients who are provided medical treatment for their conditions generally rely on third-party payors to reimburse all or part of the costs associated with
their treatment. Third-party payors decide which medications they will cover and establish reimbursement levels. The healthcare industry is acutely focused
on cost containment, both in the United States and elsewhere. Government authorities and other third-party payors have attempted to control costs by
limiting coverage and the amount of reimbursement for particular medications, which could affect our ability or that of any collaborators to sell
PYRUKYND®, AQVESME™ or our product candidates profitably. These payors may not view our products as cost-effective, and coverage and
reimbursement may not be available to our customers, or those of any collaborators, or may not be sufficient to allow our products to be marketed on a
competitive basis. Cost-control initiatives could cause us, or any collaborators, to decrease the price we, or they, might establish for products, which could
result in lower than anticipated product revenue. If the prices for our products decrease or if governmental and other third-party payors do not provide
coverage or adequate reimbursement, our prospects for revenue and profitability will suffer.
In addition, increasingly, third-party payors are requiring higher levels of evidence of the benefits and clinical outcomes of new technologies and are
challenging the prices charged. We cannot be sure that coverage will be available for PYRUKYND®, AQVESME™ or any product candidate that we, or
any collaborator, may commercialize and, if available, that the reimbursement rates will be adequate. Further, the net reimbursement for drug products may
be subject to additional reductions if there are changes to laws that presently restrict imports of drugs from countries where they may be sold at lower prices
than in the United States. An inability to promptly obtain coverage and adequate payment rates from both government-funded and private payors for
PYRUKYND®, AQVESME™ or any of our product candidates for which we, or any collaborator, may obtain marketing approval could significantly
harm our operating results, our ability to raise capital needed to commercialize products and our overall financial condition.
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Current and future healthcare reform legislation may increase the difficulty and cost for us and any collaborators to commercialize our drug
candidates.
In the United States and foreign jurisdictions, there have been a number of legislative and regulatory changes and proposed changes regarding the
healthcare system that could prevent or delay marketing approval of our product candidates, restrict or regulate post-approval activities and affect our
ability, or the ability of any collaborators, to profitably sell PYRUKYND®, AQVESME™ or any other product candidate for which we, or they, obtain
marketing approval. We expect that current laws, as well as other healthcare reform measures that may be adopted in the future, may result in more
rigorous coverage criteria and additional downward pressure on the price that we, or any collaborators, may receive for any approved products. If
reimbursement of our products is unavailable or limited in scope, our business could be materially harmed.
In August 2011, the Budget Control Act of 2011, among other things, created measures for spending reductions by Congress. This legislation resulted in
aggregate reductions to Medicare payments to providers of up to 2% per fiscal year, which will remain in effect for six months into fiscal year 2032. The
American Taxpayer Relief Act of 2012, among other things, reduced Medicare payments to several providers and increased the statute of limitations period
for the government to recover overpayments to providers from three to five years. These laws may result in additional reductions in Medicare and other
healthcare funding and otherwise affect the prices we may obtain for any of our product candidates for which we may obtain regulatory approval or the
frequency with which any such product candidate is prescribed or used.
Since enactment of the Patient Protection and Affordable Care Act, as amended by the Health Care and Education Affordability Reconciliation Act, or
collectively, the ACA, there have been, and continue to be, numerous legal challenges and Congressional actions to repeal and replace provisions of the
law. President Trump recently revoked numerous executive orders issued by President Biden, including at least two executive orders which where were
designed to further implement the ACA. Litigation and legislation over the ACA are likely to continue, with unpredictable and uncertain results.
The prices of prescription pharmaceuticals in the United States and foreign jurisdictions are subject to considerable legislative and executive actions
and could impact the prices we obtain for our drug products, if and when approved, and/or the sustainability of those prices.
The prices of prescription pharmaceuticals have also been the subject of considerable discussion in the United States.
We cannot predict with certainty what impact any federal or state health reforms will have on us, but such changes could impose new or more stringent
regulatory requirements on our activities or result in reduced reimbursement for our products, any of which could adversely affect our business, results of
operations and financial condition.
On April 15, 2025, President Trump issued an executive order which directs HHS to take steps to reduce the prices of pharmaceutical products and repeats
many of the proposals advanced during the first Trump administration, including directing the FDA to streamline and improve its existing drug importation
program so as to make it easier for states to obtain approval without sacrificing the safety or quality of drug products. Other provisions of the executive
order relate to the 340B program. With respect to the IRA’s Medicare drug pricing program, the executive order, among other things, calls for alignment in
“the treatment of small molecule prescription drugs with that of biological products, ending the distortion that undermines relative investment in small
molecule prescription drugs, coupled with other reforms to prevent any increase in overall costs to Medicare and its beneficiaries.” In May 2025, President
Trump issued an additional executive order calling on pharmaceutical manufacturers to voluntarily reduce the prices of medicines in the United States. The
executive order directs the Secretary of HHS to communicate MFN price targets to pharmaceutical manufacturers to bring prices in line with comparably
developed nations. The executive order further provides that if such actions do not lower the costs of pharmaceuticals, the Secretary of HHS would pursue
other actions, including proposing a rulemaking that imposes MFN pricing in the United States. Subsequently, HHS indicated that the proposed MFN
pricing will apply only to brand products without generic or biosimilar competition and the referenced foreign countries will include only those in which
the branded product similarly does not have generic or biosimilar competition. HHS also indicated that the MFN target price will be the lowest price in a
country that is a member of the Organization for Economic Co-operation and Development with a gross domestic product per capita of at least 60% of the
U.S. gross domestic product per capita. The implications of these actions remain unclear and our business could be negatively impacted.
At the state level, individual states are increasingly aggressive in passing legislation and implementing regulations designed to control pharmaceutical and
biological product pricing, including price or patient reimbursement constraints, discounts, restrictions on certain product access and marketing cost
disclosure and transparency measures, and, in some cases, designed to encourage importation from other countries and bulk purchasing. In addition,
regional health care authorities and individual hospitals are increasingly using bidding procedures to determine what pharmaceutical products and which
suppliers will be included in their prescription drug and other health care programs. These measures could reduce the ultimate demand for our products,
once approved, or put pressure on our product pricing. We expect that additional state and federal healthcare reform
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measures will be adopted in the future, any of which could limit the amounts that federal and state governments will pay for healthcare products and
services, which could result in reduced demand for our product or product candidates or additional pricing pressures.
In the EU, similar political, economic and regulatory developments may affect our ability to profitably commercialize our product candidates, if approved.
In markets outside of the United States and the EU, reimbursement and healthcare payment systems vary significantly by country, and many countries have
instituted price ceilings on specific products and therapies. In many countries, including those of the EU, the pricing of prescription pharmaceuticals is
subject to governmental control and access. If pricing is set at unsatisfactory levels, our business could be materially harmed.
We are subject to U.S. and foreign export control, import, sanctions, anti-corruption and anti-money laundering laws with respect to our operations,
and non-compliance with such laws can subject us to criminal and/or civil liability and harm our business.
We are subject to export control and import laws and regulations, including the U.S. Export Administration Regulations, U.S. Customs regulations, various
economic and trade sanctions regulations administered by the U.S. Treasury Department’s Office of Foreign Assets Control, the U.S. Foreign Corrupt
Practices Act of 1977, as amended, the U.S. domestic bribery statute contained in 18 U.S.C. § 201, the U.S. Travel Act, the USA PATRIOT Act, and other
state and national anti-bribery and anti-money laundering laws in countries in which we conduct activities. Anti-corruption laws are interpreted broadly and
prohibit companies and their employees, agents, third-party intermediaries, joint venture partners and collaborators from authorizing, promising, offering,
or providing, directly or indirectly, improper payments or benefits to recipients in the public or private sector. We may have direct or indirect interactions
with officials and employees of government agencies or government-affiliated hospitals, universities, and other organizations. In addition, we may engage
third party intermediaries to promote our clinical research activities abroad and/or to obtain necessary permits, licenses, and other regulatory approvals. We
have entered into distribution agreements with third parties for the commercialization of PYRUKYND® in certain jurisdictions outside of the United
States. We can be held liable for the corrupt or other illegal activities of these third-party intermediaries, our employees, representatives, contractors,
partners, and agents, even if we do not explicitly authorize or have actual knowledge of such activities.
Noncompliance with such laws could subject us to whistleblower complaints, investigations, sanctions, settlements, prosecution, other enforcement actions,
disgorgement of profits, significant fines, damages, other civil and criminal penalties or injunctions, suspension and/or debarment from contracting with
certain persons, the loss of export privileges, reputational harm, adverse media coverage, and other collateral consequences. If any subpoenas,
investigations, or other enforcement actions are launched, or governmental or other sanctions are imposed, or if we do not prevail in any possible civil or
criminal litigation, our business, results of operations and financial condition could be materially harmed. In addition, responding to any action will likely
result in a materially significant diversion of management’s attention and resources and significant defense and compliance costs and other professional
fees. In certain cases, enforcement authorities may even cause us to appoint an independent compliance monitor which can result in added costs and
administrative burdens.
Changes in and uncertainty surrounding U.S. trade policy could have a material adverse impact on our business, financial condition and results of
operations.
The Trump administration recently initiated a series of tariff-related actions against U.S. trading partners. On April 2, 2025, the President issued an
executive order announcing a “baseline” reciprocal tariff of 10% on all U.S. trading partners effective April 5, 2025, and higher individualized reciprocal
tariffs on 57 countries (with certain product exemptions for pharmaceutical-related products, among others). Previously, the administration had imposed a
25% tariff on Canada and Mexico for goods not covered by the United States-Mexico-Canada Agreement, or USMCA, and tariffs equaling 20% on China.
In response, several countries threatened retaliatory measures, including Canada and China, which then imposed retaliatory tariffs. Prior to when the
country-specific reciprocal tariffs were scheduled to take effect, the administration delayed the effective date of such tariffs for all countries except China.
Several countries, including the United Kingdom, Japan, South Korea, among others, and the European Union, have reached deals with the U.S. that
include reduced tariff rates and other measures. President Trump also issued an executive order detailing new reciprocal tariff rates for individual countries
that took effect on August 7, 2025. The new reciprocal rates, which are consistent with the rates reflected in the trade deals already announced, range from
10% to 41%. The new rates do not apply to Canada, China, Mexico and a few other countries.
The U.S. and China reached a tentative agreement that resulted in the suspension of the higher reciprocal tariffs on China until November 10, 2026. For
China, the 10% baseline reciprocal tariff announced in April remains in effect, in addition to a minimum of an additional 10%, effective November 10,
2025. For Mexico, the rate remains 25% for goods that are not covered by the USMCA, and for Canada, the rate is 35% for goods that are not covered by
the USMCA. Sustained uncertainty about, or the further escalation of, trade and political tensions between the United States and China could result in a
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disadvantageous research and manufacturing environment in China, particularly for U.S. based companies, including retaliatory restrictions that hinder or
potentially inhibit our ability to rely on contract development and manufacturing organizations and other service providers that operate in China. Certain
countries, including the European Union, Japan, South Korea and the United Kingdom, have reached agreements with the U.S. that cap pharmaceutical
tariffs at 15%.
Separately, in April 2025, the U.S. Department of Commerce announced an investigation under Section 232 of the Trade Expansion Act of 1962 into the
impact on U.S. national security of the imports of pharmaceuticals and pharmaceutical ingredients, including finished drug products, medical
countermeasures, critical inputs such as active pharmaceutical ingredients, and key starting materials, and derivative products of those items. In September
2025, via a post on Truth Social, the President announced that, beginning October 1, 2025, all branded or patented drugs imported in the U.S. would face a
100% tariff. The President indicated that the tariffs could be avoided by building pharmaceutical manufacturing facilities in the U.S. Thereafter, the
President delayed the October 1st effective date of the tariffs and announced that the administration had “begun preparing” tariffs on manufacturers that do
not build in the U.S. or enter into a most-favored-nation drug pricing agreement with the administration. Certain trading partners, including the European
Union, South Korea and Japan, negotiated exemptions from the Section 232 tariffs on pharmaceuticals. A host of other U.S. tariff actions remain possible,
including an additional 25% tariff on products from countries that do business with Iran.
As a result of changes in tariffs that have been announced and/or implemented, and the underlying uncertainty currently surrounding international trade, we
could experience a negative impact to our costs of materials and production processes, and supply chain disruptions and delays as a result of any new tariff
policies or trade restrictions. If we are unable to obtain necessary raw materials or product components in sufficient quantity and in a timely manner due to
disruptions in the global supply chain caused by macroeconomic events and conditions, the development, testing and clinical trials of our product
candidates may be delayed or infeasible, and regulatory approval or commercial launch of any resulting product may be delayed or not obtained, which
could significantly harm our business. We cannot yet predict the effect of the recently imposed U.S. tariffs on imports, or the extent to which other
countries will impose quotas, duties, tariffs, taxes or other similar restrictions upon imports or exports in the future, nor can we predict future trade policy
or the terms of any renegotiated trade agreements and their impact on our business.
The CREATES Act exposes us to possible litigation and damages by competitors who may claim that we are not providing sufficient quantities of our
approved products on commercially reasonable, market-based terms for testing in support of their ANDAs and 505(b)(2) applications.
The Creating and Restoring Equal Access to Equivalent Samples Act of 2019, or the CREATES Act, authorizes sponsors of ANDAs and 505(b)(2)
applications to file lawsuits against companies holding NDAs that decline to provide sufficient quantities of an approved reference drug on commercially
reasonable, market-based terms, subject to certain exemptions.
If a sponsor were to bring an action under the statute and prevail in litigation, it is entitled to a court order directing the NDA holder to provide, without
delay, sufficient quantities of the applicable product on commercially reasonable, market-based terms, plus reasonable attorney fees and costs. Additionally,
the statutory provisions authorize a federal court to award the sponsor an amount “sufficient to deter” the NDA holder from refusing to provide sufficient
product quantities on commercially reasonable, market-based terms if the court finds, by a preponderance of the evidence, that the NDA holder did not
have a legitimate business justification to delay providing the product or failed to comply with the court’s order.
Although we intend to fully comply with the terms of these statutory provisions, we are still exposed to potential litigation and damages by competitors
who may claim that we are not complying. Such litigation would subject us to additional costs, damages and reputational harm, which could lead to lower
revenues. The CREATES Act may enable generic competition with PYRUKYND®, AQVESME™ and any of our product candidates, if approved, which
could impact our ability to maximize product revenue.
If we fail to comply with environmental, health and safety laws and regulations, we could become subject to fines or penalties or incur costs that could
have a material adverse effect on the success of our business.
We are subject to numerous environmental, health and safety laws and regulations, including those governing laboratory procedures and the handling, use,
storage, treatment and disposal of hazardous materials and wastes. Our operations involve the use of hazardous and flammable materials, including
chemicals and biological and radioactive materials. Our operations also produce hazardous waste products. We generally contract with third parties for the
disposal of these materials and wastes. We cannot eliminate the risk of contamination or injury from these materials. In the event of contamination or injury
resulting from our use of hazardous materials, we could be held liable for any resulting damages, and any liability could exceed our resources. We also
could incur significant costs associated with civil or criminal fines and penalties.
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Although we maintain workers’ compensation insurance to cover us for costs and expenses we may incur due to injuries to our employees resulting from
the use of hazardous materials, this insurance may not provide adequate coverage against potential liabilities. We do not maintain insurance for
environmental liability or toxic tort claims that may be asserted against us in connection with our storage or disposal of biological, hazardous or radioactive
materials. In addition, we may incur substantial costs in order to comply with current or future environmental, health and safety laws and regulations. These
current or future laws and regulations may impair our research, development or production efforts. Failure to comply with these laws and regulations also
may result in substantial fines, penalties or other sanctions.
Risks Related to Employee Matters and Managing Growth
Our future success depends on our ability to retain our key executives and scientific leadership and to attract, retain and motivate qualified personnel.
We are highly dependent on the principal members of our management and scientific teams, each of whom is employed “at will,” meaning we or they may
terminate the employment relationship at any time. We do not maintain “key person” insurance for any of our executives or other employees. The loss of
the services of any of these persons could impede the achievement of our research, development and commercialization objectives. We cannot predict the
likelihood, timing or effect of future transitions among our executive leadership.
Recruiting and retaining qualified scientific, clinical, manufacturing, regulatory and sales and marketing personnel will also be critical to our success. We
may not be able to attract and retain these personnel on acceptable terms given the competition among numerous pharmaceutical and biotechnology
companies and universities and research institutions for similar personnel. Our consultants and advisors who assist us in formulating our research and
development and commercialization strategy may be employed by employers other than us and may have commitments under consulting or advisory
contracts with other entities that may limit their availability to us. Furthermore, our flexible workplace policy which allows employees to work from home
may make it difficult for us to maintain our corporate culture.
In the future we may experience growth in the number of our development, regulatory and sales and marketing personnel. To manage any anticipated future
growth, we must continue to implement and improve our managerial, operational and financial systems, expand our facilities and continue to recruit and
train additional qualified personnel. Any inability to manage growth could delay the execution of our business plans or disrupt our operations.
Our employees may engage in misconduct or other improper activities, including noncompliance with regulatory standards and requirements, which
could have a material adverse effect on our business.
We are exposed to the risk of employee fraud or other misconduct. Misconduct by employees could include intentional failures to comply with FDA
regulations or regulations in other jurisdictions, provide accurate information to the FDA or other regulatory authorities, comply with manufacturing
standards we have established, comply with federal and state healthcare fraud and abuse laws and regulations, report financial information or data
accurately, disclose unauthorized activities to us, or comply with securities laws. Employee misconduct could also involve the improper use of information
obtained in the course of clinical trials or interactions with the FDA or other regulatory authorities, including for illegal insider trading activities, which
could result in regulatory sanctions and serious harm to our reputation. We have adopted a Code of Business Conduct and Ethics, but it is not always
possible to identify and deter employee misconduct, and the precautions we take to detect and prevent this activity may not be effective in controlling
unknown or unmanaged risks or losses or in protecting us from governmental investigations or other actions or lawsuits stemming from a failure to be in
compliance with such laws or regulations. If any such actions are instituted against us, and we are not successful in defending ourselves or asserting our
rights, those actions could have a significant impact on our business and results of operations, including the imposition of significant fines or other
sanctions.
Risks Related to Our Common Stock and Other Matters
Provisions in our corporate charter documents and under Delaware law could make an acquisition of us, which may be beneficial to our stockholders,
more difficult and may prevent attempts by our stockholders to replace or remove our current management.
Provisions in our corporate charter and our bylaws may discourage, delay or prevent a merger, acquisition or other change in control of us that stockholders
may consider favorable, including transactions in which stockholders might otherwise receive a premium for their shares. These provisions could also limit
the price that investors might be willing to pay in the future for shares of our common stock, thereby depressing the market price of our common stock. In
addition, because our Board of Directors is responsible for appointing the members of our management team, these provisions may frustrate or prevent any
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attempts by our stockholders to replace or remove our current management by making it more difficult for stockholders to replace members of our Board of
Directors. Among other things, these provisions:
•
establish a classified board of directors such that not all members of the board are elected at one time;
•
allow the authorized number of our directors to be changed only by resolution of our Board of Directors;
•
limit the manner in which stockholders can remove directors from our Board of Directors;
•
establish advance notice requirements for stockholder proposals that can be acted on at stockholder meetings and nominations to our Board of
Directors;
•
require that stockholder actions must be effected at a duly called stockholder meeting and prohibit actions by our stockholders by written consent;
•
limit who may call stockholder meetings;
•
authorize our Board of Directors to issue preferred stock without stockholder approval, which could be used to institute a shareholder rights plan,
or so-called “poison pill,” that would work to dilute the stock ownership of a potential hostile acquirer, effectively preventing acquisitions that
have not been approved by our Board of Directors; and
•
require the approval of the holders of at least 75% of the votes that all our stockholders would be entitled to cast to amend or repeal certain
provisions of our charter or bylaws.
Moreover, because we are incorporated in Delaware, we are governed by the provisions of Section 203 of the Delaware General Corporation Law, which
prohibits a person who owns in excess of 15% of our outstanding voting stock from merging or combining with us for a period of three years after the date
of the transaction in which the person acquired in excess of 15% of our outstanding voting stock, unless the merger or combination is approved in a
prescribed manner.
The price of our common stock is volatile, which could result in substantial losses for purchasers of our common stock.
The trading price of our common stock has been, and may continue to be, volatile and could be subject to wide fluctuations in response to various factors,
some of which are beyond our control. The stock market in general and the market for biopharmaceutical companies in particular have experienced
extreme volatility that has often been unrelated to the operating performance of particular companies. While the full extent of the economic impact of the
recent increases in inflation rates (particularly as it relates to clinical- or manufacturing-related costs) may be difficult to assess or predict, such impacts
have already caused, and are likely to result in further, significant disruption of global financial markets, which may reduce our ability to access capital
either at all or on favorable terms.
The market price for our common stock may be influenced by many factors, including:
•
our success in launching and commercializing PYRUKYND® and AQVESME™;
•
announcements by us or our competitors of significant acquisitions, in-licensing arrangements, strategic partnerships, joint ventures,
collaborations or capital commitments;
•
the timing and results of clinical trials of product candidates, or our competitors’ product candidates;
•
regulatory actions with respect to our or our competitors’ products or product candidates;
•
commencement or termination of collaborations for our development programs;
•
failure or discontinuation of any of our development programs;
•
regulatory or legal developments in the United States and other countries;
•
developments or disputes concerning patent applications, issued patents or other proprietary rights;
•
the recruitment or departure of key personnel;
•
the level of expenses related to any of our products, product candidates or development programs;
•
the results of our efforts to develop additional product candidates and products;
•
actual or anticipated changes in estimates as to financial results or development timelines;
•
announcement or expectation of additional financing efforts;
•
sales of our common stock by us, our insiders or other stockholders;
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•
variations in our financial results or results of companies that are perceived to be similar to us;
•
changes in estimates, evaluations or recommendations by securities analysts, that cover our stock or the failure by one or more securities analysts
to continue to cover our stock;
•
changes in the structure of healthcare payment systems;
•
market conditions in the pharmaceutical and biotechnology sectors;
•
general economic, political, industry and market conditions; and
•
the other factors described in this “Risk Factors” section.
In the past, following periods of volatility in the market price of a company's securities, securities class-action litigation often has been instituted against
that company. Such litigation, if instituted against us, could cause us to incur substantial costs to defend such claims and divert managements' attention and
resources, which could seriously harm our business, financial condition, results of operations and prospects.
We also cannot guarantee that an active trading market for our shares will be sustained. An inactive trading market for our common stock may impair our
ability to raise capital to continue to fund our operations by selling shares and may impair our ability to acquire other companies or technologies by using
our shares as consideration.
Our financial condition and operating results also may fluctuate from quarter to quarter and year to year due to a variety of factors, many of which are
beyond our control. Accordingly, our stockholders should not rely upon the results of any quarterly or annual periods as indications of future operating
performance.
Our executive officers, directors and principal stockholders maintain the ability to significantly influence all matters submitted to stockholders for
approval.
As of December  31, 2025, our executive officers, directors and principal stockholders, in the aggregate, beneficially owned shares representing a
significant percentage of our capital stock. As a result, if these stockholders were to choose to act together, they would be able to significantly influence all
matters submitted to our stockholders for approval, as well as our management and affairs. For example, these persons could significantly influence the
election of directors and approval of any merger, consolidation or sale of all or substantially all of our assets. This concentration of voting power could
delay or prevent an acquisition of our company on terms that other stockholders may desire.
Our ability to use our net operating loss carryforwards and certain other tax attributes may be limited.
Under Sections 382 and 383 of the Code and corresponding provisions of state law, if a company undergoes an “ownership change,” generally defined as a
greater than 50% change (by value) in its equity ownership by certain stockholders over a three-year period, the company’s ability to use its pre-change net
operating loss carryforwards and other pre-change tax attributes (such as research tax credits) to offset its post-change taxable income may be limited. Our
prior equity offerings and other changes in our stock ownership, some of which are outside of our control, may have resulted or could in the future result in
an ownership change. We completed a review of our changes in ownership through December 31, 2025, and determined that we did not have a qualified
ownership change since our last review as of December 31, 2024. Future ownership changes under Section 382 may limit the amount of net operating loss
and tax credit carryforwards that we could potentially utilize to reduce future tax liabilities.
There is also a risk that due to regulatory changes, such as suspensions on the use of net operating losses, or other unforeseen reasons, our existing net
operating losses could expire or otherwise become unavailable to offset future income tax liabilities. The Tax Act, as amended by the Coronavirus Aid,
Relief, and Economic Security Act, includes changes to U.S. federal tax rates and the rules governing net operating loss carryforwards that may
significantly impact our ability to utilize our net operating losses to offset taxable income in the future. In addition, state net operating losses generated in
one state cannot be used to offset income generated in another state. For these reasons we may be unable to use a material portion of our net operating
losses and other tax attributes.
Our effective tax rate may fluctuate, and we may incur obligations in tax jurisdictions in excess of accrued amounts.
We are subject to taxation in numerous U.S. states and territories. As a result, our effective tax rate is derived from a combination of applicable tax rates in
the various places that we operate. In preparing our financial statements, we estimate the amount of tax that will become payable in each of such places.
Nevertheless, our effective tax rate may be different from previous periods or our current expectations due to numerous factors, including as a result of
changes in the mix of our profitability from state to state, the results of examinations and audits of our tax filings, our inability to secure or sustain
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acceptable agreements with tax authorities, changes in accounting for income taxes and changes in tax laws. Any of these factors may result in tax
obligations in excess of amounts accrued in our financial statements.
We incur costs as a result of operating as a public company, and our management is required to devote substantial time to compliance initiatives and
corporate governance practices.
We have incurred and will continue to incur significant legal, accounting and other expenses as a public company. The Sarbanes-Oxley Act of 2002, the
Dodd-Frank Wall Street Reform and Consumer Protection Act, the listing requirements of The Nasdaq Global Select Market and other applicable securities
rules and regulations impose various requirements on public companies, including establishment and maintenance of effective disclosure and financial
controls and corporate governance practices. Stockholder activism, the current political environment and the current high level of government intervention
and regulatory reform may lead to substantial new regulations. Our management and other personnel devote, and will need to continue to devote, a
substantial amount of time to these compliance initiatives. Moreover, these rules and regulations increase our legal and financial compliance costs and
make some activities more time-consuming and costly.
Because we do not anticipate paying any cash dividends on our capital stock in the foreseeable future, capital appreciation, if any, will be the sole
source of gain for our stockholders.
We have never declared or paid cash dividends on our capital stock. We currently intend to retain all of our future earnings, if any, to finance the growth
and development of our business. As a result, capital appreciation, if any, of our common stock will be the sole source of gain for our stockholders for the
foreseeable future.
Item 1B. Unresolved Staff Comments
None.
Item 1C. Cybersecurity
We have certain processes for assessing, identifying and managing cybersecurity risks, which are built into our overall information technology function and
are designed to help protect our information assets and operations from internal and external cyber threats, and protect employee, collaborator and patient
information from unauthorized access or attack, as well as secure our networks and systems. Such processes include physical, procedural and technical
safeguards, response plans, regular tests on our systems, incident simulations and routine review of our policies and procedures to identify risks and refine
our practices. We engage certain external parties, including consultants, computer security firms and risk management advisors, peer companies, industry
groups and governance experts, to enhance our cybersecurity oversight including by gaining valuable insights into the ever-evolving cybersecurity
landscape. We consider the internal risk oversight programs of third-party service providers before engaging them in order to help protect us from any
related vulnerabilities.
We do not believe that there are currently any known risks from cybersecurity threats that are reasonably likely to materially affect us or our business
strategy, results of operations or financial condition.
The Audit Committee of our Board of Directors provides direct oversight over cybersecurity risk, and provides updates to the Board of Directors regarding
such oversight. The Audit Committee receives periodic updates from management regarding cybersecurity matters, and is notified between such updates
regarding significant new cybersecurity threats or incidents.
Our Senior Director, Technology Services, referred to herein as the Head of Cybersecurity, leads the operational oversight of company-wide cybersecurity
strategy, policy, standards and processes and works across relevant departments to assess and help prepare us and our employees to address cybersecurity
risks. Our Head of Cybersecurity has worked in the information technology field for over 30 years at both biotechnology companies and internet service
providers, and holds a Bachelor of Science in Mathematics. We also maintain a team of experienced senior level engineers who design, implement and
operate our information technology ecosystem, helping to implement cybersecurity best practices throughout our information technology infrastructure and
governance processes. We periodically assess our processes against cybersecurity frameworks, such as the National Institute of Standards and Technology,
or NIST, Cybersecurity Framework, Center for Internet Security, or CIS, Controls, International Organization for Standardization, or ISO, 27001 and the
MITRE ATT&CK framework.
In an effort to deter and detect cyber threats, we annually provide all employees, including part-time and temporary employees, with a data protection,
cybersecurity and incident response and prevention training and compliance program, which covers timely and relevant topics, including social
engineering, phishing, password protection, confidential data protection, asset use and mobile security, and educates employees on the importance of
reporting all incidents immediately. We also use technology-based tools that are designed to mitigate cybersecurity risks and to bolster our employee-based
cybersecurity programs.
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Item 2. Properties
We currently lease approximately 146,000 square feet at 88 Sidney Street, 43,000 square feet at 64 Sidney Street, and 13,000 square feet at 38 Sidney
Street, Cambridge, Massachusetts. All leases, as amended, expire on February 29, 2028. At the end of the initial lease period, we have the option to extend
the leases at all facilities for two consecutive five-year periods at the fair market rent at the time of the extension. In July 2025, we entered into a long-term
sublease agreement with a new tenant for 7,407 square feet of office space on the first floor of 64 Sidney Street, Cambridge, Massachusetts, which began in
November 2025 with the term of the sublease running through February 2028. We believe our existing facilities are adequate for our current needs.
Item 3. Legal Proceedings
As of December 31, 2025, we were not a party to any material legal or arbitration proceedings. No governmental proceedings are pending or, to our
knowledge, contemplated against us. We are not a party to any material proceedings in which any director, member of senior management or affiliate of
ours is either a party adverse to us or our subsidiaries or has a material interest adverse to us or our subsidiaries.
Item 4. Mine Safety Disclosures
Not applicable.
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PART II
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
Market Information
Our common stock has been publicly traded on the Nasdaq Global Select Market under the symbol “AGIO” since July 24, 2013. Prior to that time, there
was no public market for our common stock.
Holders
As of February 6, 2026, there were ten holders of record of our common stock. This number does not include beneficial owners whose shares are held by
nominees in street name.
Dividends
We have not declared or paid any cash dividends on our capital stock since our inception. We intend to retain future earnings, if any, to finance the
operation and expansion of our business and do not anticipate paying any cash dividends to holders of common stock in the foreseeable future.
Securities Authorized for Issuance under Equity Compensation Plans
Information about our equity compensation plans is incorporated herein by reference to Item 12, Security Ownership of Certain Beneficial Owners and
Management and Related Stockholder Matters, of this Annual Report on Form 10-K.
Performance Graph
The following performance graph and related information shall not be deemed to be “soliciting material” or to be “filed” with the Securities and Exchange
Commission, or SEC, for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or the Exchange Act, or otherwise subject to the
liabilities under that Section, nor shall such information be incorporated by reference into any future filing under the Exchange Act or the Securities Act of
1933, as amended, or the Securities Act, except to the extent that we specifically incorporate it by reference into such filing.
The following graph compares the performance of our common stock to the NASDAQ Composite Index and the NASDAQ Biotechnology Index from
December  31, 2020 through December  31, 2025. The comparison assumes $100 was invested after the market closed on December  31, 2020 in our
common stock and in each of the foregoing indices, and it assumes reinvestment of dividends, if any. The stock price performance included in this graph is
not necessarily indicative of future stock price performance.
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Recent Sales of Unregistered Securities
None.
Purchases of Equity Securities by the Issuer or Affiliated Purchasers
None.
Item 6. Reserved.
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Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
You should read the following discussion and analysis of our financial condition and results of operations together with our consolidated financial
statements and the related notes and other financial information included elsewhere in this Annual Report on Form 10-K. Some of the information
contained in this discussion and analysis or set forth elsewhere in this Annual Report on Form 10-K, including information with respect to our plans and
strategy for our business, includes forward-looking statements that involve risks and uncertainties. You should review "Item 1A, Risk Factors" of this
Annual Report on Form 10-K for a discussion of important factors that could cause actual results to differ materially from the results described in or
implied by the forward-looking statements contained in the following discussion and analysis.
Overview
We are a commercial-stage biopharmaceutical company dedicated to redefining the future of rare disease treatment. Fueled by connections, we build
trusted partnerships with communities, collaborating to develop and deliver innovative medicines with the potential to transform lives. With a foundation in
hematology, we combine biological expertise with real-world insights to advance a growing pipeline of rare disease medicines that reflect the priorities of
the people we serve.
The lead product candidate in our portfolio, mitapivat, is an activator of both wild-type and mutant pyruvate kinase, or PK, enzymes for the potential
treatment of hemolytic anemias. Mitapivat is approved in the United States by the U.S. Food and Drug Administration, or FDA, under the brand name
AQVESME™ for the treatment of anemia in adults with non-transfusion dependent and transfusion-dependent alpha- or beta-thalassemia and in Saudi
Arabia under the brand name PYRUKYND® for the treatment of adult patients with non-transfusion-dependent and transfusion-dependent alpha- or beta-
thalassemia. Mitapivat is also approved under the brand name PYRUKYND® in the United States by the FDA for the treatment of hemolytic anemia in
adults with PK deficiency and in the European Union, or EU, and Great Britain for the treatment of PK deficiency in adults.
In December 2024, we announced that we submitted a marketing authorization application, or MAA, to the European Medicines Agency, or EMA, and a
regulatory application to the United Arab Emirates health authorities for PYRUKYND® for the treatment of adult patients with non-transfusion dependent
and transfusion-dependent alpha- or beta-thalassemia. In October 2025, we announced that the Committee for Medicinal Products for Human Use, or the
CHMP, of the EMA adopted a positive opinion for the new indication for PYRUKYND® in adults for the treatment of anemia associated with transfusion-
dependent and non-transfusion-dependent alpha- or beta-thalassemia. The European Commission is reviewing the CHMP’s opinion, with the final decision
expected in early 2026.
We will have a pre-supplemental New Drug Application, or sNDA, meeting with the FDA in the first quarter of 2026 and intend to submit a U.S. marketing
application for mitapivat in sickle cell disease, or SCD, following that engagement.
In addition, we are evaluating mitapivat for the treatment of pediatric patients with PK deficiency. We are also developing (i) tebapivat, a novel PK
activator, for the potential treatment of lower-risk myelodysplastic syndromes, or LR MDS, and SCD; (ii) AG-181, our phenylalanine hydroxylase, or PAH,
stabilizer for the potential treatment of phenylketonuria, or PKU; and (iii) AG-236, an siRNA in-licensed from Alnylam Pharmaceuticals, Inc., or Alnylam,
targeting the transmembrane serine protease 6, or TMPRSS6, gene for the potential treatment of polycythemia vera, or PV.
Alnylam License Agreement
On July 28, 2023, we entered into a license agreement with Alnylam under which we acquired the rights to develop and commercialize Alnylam’s novel
preclinical siRNA targeting the TMPRSS6 gene, which we refer to as AG-236, as a potential disease-modifying treatment for patients with PV.
In accordance with the license agreement, we made an up-front payment to Alnylam and recognized in-process research and development of $17.5 million
in the year ended December 31, 2023. We will also pay Alnylam for certain expenses associated with the development of AG-236, and these will be
recorded in our consolidated statements of operations as incurred. Additionally, we are responsible to pay up to $130.0 million in potential development
and regulatory milestones, in addition to sales milestones as well as tiered royalties on annual net sales, if any, of licensed products, which may be subject
to specified reductions and offsets. In the year ended December 31, 2025, we achieved a regulatory milestone that triggered a $10.0 million payment to
Alnylam, which was recorded in research and development expense within our consolidated statements of operations and classified as investing activities
within our consolidated statements of cash flows. Because the acquired assets under the license agreement with Alnylam do not meet the definition of a
business in accordance with Accounting Standards Codification, or ASC, 805, Business Combinations, we accounted for the agreement as an asset
acquisition.
Sale of Oncology Business to Servier Pharmaceuticals, LLC (Servier) and Sale of Contingent Payments
On March 31, 2021, we completed the sale of our oncology business to Servier Pharmaceuticals, LLC, or Servier. The transaction included the sale of our
entire oncology business, including our clinical-stage product candidate vorasidenib, for a payment of approximately $1.8 billion in cash at the closing,
subject to certain adjustments, and a payment of $200.0 million in
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cash, if, prior to January 1, 2027, vorasidenib is granted new drug application, or NDA, approval from the FDA with an approved label that permits
vorasidenib’s use as a single agent for the adjuvant treatment of patients with Grade 2 glioma that have an isocitrate dehydrogenase, or IDH, 1 or 2
mutation (and, to the extent required by such approval, the vorasidenib companion diagnostic test is granted an FDA premarket approval), or the
Vorasidenib Milestone Payment, and a royalty of 15% of U.S. net sales of vorasidenib from the first commercial sale of vorasidenib through loss of
exclusivity, or the Vorasidenib Royalty Rights. The Vorasidenib Milestone Payment and Vorasidenib Royalty Rights are referred to as contingent payments
and recognized as income when realizable.
In August 2024, the FDA approved vorasidenib for adult and pediatric patients 12 years and older with Grade 2 astrocytoma or oligodendroglioma with a
susceptible IDH1 or IDH2 mutation, following surgery including biopsy, sub-total resection, or gross total resection. In September 2024, we received the
Vorasidenib Milestone Payment from Servier and recognized income of $200.0 million within the milestone payment from gain on sale of oncology
business line item in our consolidated statements of operations for the year ended December 31, 2024. In May 2024, we entered into a purchase and sale
agreement to sell the Vorasidenib Royalty Rights to Royalty Pharma Investments 2019 ICAV, or Royalty Pharma, for $905.0 million in cash, or the Upfront
Payment. The sale was contingent upon FDA approval of vorasidenib and other customary closing conditions.
Upon consummation of the sale in August 2024, Royalty Pharma acquired 100% of the Vorasidenib Royalty Rights payments made by Servier on account
of up to $1.0 billion in U.S. net sales for each calendar year. In addition, any such Vorasidenib Royalty Rights payments made by Servier on account of
U.S. net sales in each calendar year in excess of $1.0 billion will be split, with Royalty Pharma having the rights to a 12% earn-out on those excess
payments and Agios retaining the rights to a 3% earn-out on those excess payments, or the Retained Earn-Out Rights. As a result of the sale, we recognized
income of $889.1 million ($905.0 million net of fees of $15.9 million) within the gain on sale of contingent payments line item in our consolidated
statements of operations for the year ended December 31, 2024. Royalty income related to the Retained Earn-Out Rights, if any, will be recognized in the
period when realizable.
Financial Operations Overview
General
Since inception, our operations have primarily focused on organizing and staffing our company, business planning, raising capital, assembling our core
capabilities in cellular metabolism and classical hematology, identifying potential product candidates, undertaking preclinical studies, conducting clinical
trials, establishing a commercial infrastructure, preparing for and executing on the commercial launches of PYRUKYND® and AQVESME™ and, prior to
the sale of our oncology business to Servier on March 31, 2021, marketing TIBSOVO® and IDHIFA®. Through March 31, 2021, we financed our
operations primarily through proceeds from the sale of our royalty rights, commercial sales of TIBSOVO®, funding received from our collaboration
agreements, private placements of our preferred stock, our initial public offering of our common stock and concurrent private placement of common stock
to an affiliate of Celgene, and our follow-on public offerings. Following the sale of our oncology business to Servier on March 31, 2021, we have financed
and expect to continue to finance our operations primarily through cash on hand, potential royalty payments with respect to the Retained Earn-Out Rights,
the actual and potential future sales of PYRUKYND®, the potential future sales of AQVESME™ if successfully launched by us and, potentially,
collaborations, strategic alliances, licensing arrangements and other nondilutive strategic transactions. In addition, we may pursue opportunistic debt
offerings, and equity or equity-linked offerings.
Additionally, since inception, we have historically incurred significant operating losses. Our net loss for the year ended December 31, 2025 was $412.8
million, our net income for the year ended December 31, 2024 was $673.7 million and our net loss for the year ended December 31, 2023 was $352.1
million. As of December 31, 2025, we had an accumulated deficit of $561.7 million. The net income we generated in the year ended December 31, 2024
was primarily due to the sale of the Vorasidenib Royalty Rights to Royalty Pharma and our receipt of the Vorasidenib Milestone Payment discussed above
in Overview. We expect to continue to incur significant expenses and net losses until such time we are able to report profitable results. We may never
achieve or maintain profitability, and our net losses may fluctuate significantly from year to year. We expect that we will continue to incur significant
expenses as we continue to advance and expand our commercialization activities for PYRUKYND®; continue our commercialization activities for
AQVESME™; continue to advance clinical development and regulatory activities for mitapivat, tebapivat, AG-181 and AG-236; expand and protect our
intellectual property portfolio, including by in-licensing or acquiring assets for pipeline growth; and hire additional commercial and development
personnel.
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Revenues
Our wholly owned product, PYRUKYND®, received approval from the FDA on February 17, 2022, for the treatment of hemolytic anemia in adults with
PK deficiency in the United States. Upon FDA approval of PYRUKYND® in the United States, we began generating product revenue from sales of
PYRUKYND®. We sell PYRUKYND® to a limited number of specialty distributors and specialty pharmacy providers, or collectively, the Customers.
These Customers subsequently resell PYRUKYND® to pharmacies or dispense PYRUKYND® directly to patients. In addition to distribution agreements
with Customers, we enter into arrangements with healthcare providers and payors that provide for government-mandated and/or privately-negotiated
rebates, chargebacks and discounts with respect to the purchase of PYRUKYND®.
In July 2024, we entered into a distribution agreement, or the NewBridge Agreement, with NewBridge Pharmaceuticals FZ-LLC, or NewBridge, pursuant
to which we granted NewBridge the right to commercialize PYRUKYND® in Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the United Arab Emirates,
also known as the Gulf Council Countries, or GCC. In June 2025, we entered into a distribution agreement, or the Avanzanite Agreement, with Avanzanite
Bioscience B.V., or Avanzanite, pursuant to which we granted Avanzanite the right to commercialize PYRUKYND® in the European Economic Area,
Switzerland, and the U.K. For further discussion of our revenue recognition policy, see Note 2, Summary of Significant Accounting Polices and Note 8,
Product Revenue, to the consolidated financial statements in this Annual Report on Form 10-K.
In the future, we expect to continue to generate revenue from product sales of PYRUKYND®. We commercially launched AQVESME™ in the United
States in late January 2026 and we anticipate generating revenue from product sales of AQVESME™ in the future. We may also generate revenue from
milestone payments, upfront payments or royalties on product sales under collaborations or licensing agreements that we may enter into in the future.
Cost of Sales
Cost of sales consists primarily of manufacturing costs for sales of PYRUKYND®. Based on our policy to expense costs associated with the manufacturing
of our products prior to regulatory approval, certain of the manufacturing costs associated with product shipments of PYRUKYND® recorded during the
years ended December 31, 2025, December 31, 2024 and December 31, 2023 were expensed prior to February 17, 2022, and, therefore, are not included in
costs of sales during the years ended December 31, 2025, December 31, 2024 and December 31, 2023. The amounts excluded from cost of sales were not
significant during the years ended December 31, 2025, December 31, 2024 and December 31, 2023.
Inventories are reviewed periodically to identify excess or obsolete inventory based on projected sales activity as well as product shelf-life. Expired
inventory is disposed of, and the related costs are recognized as cost of sales in our consolidated statements of operations, when, based on the expiry date,
we do not believe we are able to sell the inventory. We have not reserved for excess or obsolete inventory during the years ended December 31, 2025 and
December 31, 2024.
Research and Development Expenses
Research and development activities are central to our business model. Product candidates in later stages of clinical development generally have higher
development costs than those in earlier stages of clinical development, primarily due to the increased size and duration of later-stage clinical trials. We
expect research and development costs related to our portfolio to increase as our product candidate development programs progress. However, the
successful development of our product candidates is highly uncertain. As such, at this time, we cannot reasonably estimate or know the nature, timing and
estimated costs of the efforts that will be necessary to complete the development of and to commercialize these product candidates. We are unable to
predict the amount of net cash inflows from any of our products or product candidates. This is due to the numerous risks and uncertainties associated with
developing medicines, including the uncertainty of:
•
establishing an appropriate safety profile with an investigational new drug application, or IND, and/or NDA-enabling toxicology and
clinical trials;
•
successfully enrolling in, and completion of, clinical trials;
•
receiving marketing approvals from applicable regulatory authorities;
•
establishing compliant commercial manufacturing capabilities or making arrangements with third-party manufacturers;
•
obtaining and maintaining patent and trade secret protection and regulatory exclusivity for our product candidates;
•
launching commercial sales of the products, if and when approved, in the United States or in other jurisdictions, whether alone or in
collaboration with others, including pursuant to the NewBridge Agreement and Avanzanite Agreement;
•
maintaining an acceptable safety profile of the products following approval; and
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•
complying with any approval or post-approval requirements.
A change in the outcome of any of these variables with respect to the development of any of our product candidates would significantly change the costs
and timing associated with the development of that product candidate.
Research and development expenses consist primarily of costs incurred for our research activities, including our drug discovery efforts, and the
development of our product candidates, which include:
•
employee-related expenses, including salaries, benefits and stock-based compensation expense;
•
expenses incurred under agreements with third parties, including contract research organizations, or CROs, that conduct research and
development and both preclinical and clinical activities on our behalf, and the cost of consultants;
•
the cost of lab supplies and acquiring, developing and manufacturing preclinical study and clinical trial materials; and
•
facilities, depreciation, and other expenses, which include direct and allocated expenses for rent and the maintenance of facilities, insurance
and other operating costs.
The following summarizes our products and most advanced programs:
PYRUKYND®/AQVESME™ (mitapivat): First-in-Class PK Activator
We are developing mitapivat for the treatment of PK deficiency and other hemolytic anemias such as thalassemia and SCD. Mitapivat is an orally available
small molecule and a potent activator of the wild-type and mutated PK enzymes.
The FDA approved mitapivat, under the brand name PYRUKYND®, for the treatment of hemolytic anemia in adults with PK deficiency in the United
States and by the European Commission for the treatment of PK deficiency in adult patients in the EU. Additionally, we received marketing authorization
in Great Britain for PYRUKYND® for the treatment of PK deficiency in adult patients under the European Commission Decision Reliance Procedure.
In December 2025, the FDA approved mitapivat under the brand name AQVESME™ for the treatment of anemia in adults with non-transfusion dependent
and transfusion-dependent alpha- or beta-thalassemia in the United States. AQVESME™ is the only FDA-approved medicine for anemia in both non-
transfusion-dependent and transfusion-dependent alpha- or beta-thalassemia. We commercially launched AQVESME™ in the United States in late January
2026 following our implementation of a Risk Evaluation and Mitigation Strategy, or REMS, to mitigate the risk of hepatocellular injury. Mitapivat will
continue to be marketed as PYRUKYND® in the United States for the PK deficiency indication, which does not require a REMS. The AQVESME™
REMS requires liver tests prior to the first AQVESME™ dose, every four weeks thereafter for 24 weeks, and then as clinically indicated. It also includes
education and certification requirements for patients, prescribing physicians, and pharmacists, which are common components of REMS.
In August 2025, we announced that the Saudi Food and Drug Authority approved PYRUKYND® for the treatment of adults with non-transfusion
dependent and transfusion-dependent alpha- or beta-thalassemia.
In December 2024, we announced that we submitted an MAA to the EMA and a regulatory application to the United Arab Emirates health authorities for
PYRUKYND® for the treatment of adult patients with non-transfusion dependent and transfusion-dependent alpha- or beta-thalassemia. In October 2025,
we announced that the CHMP of the EMA adopted a positive opinion for the new indication for PYRUKYND® in adults for the treatment of anemia
associated with transfusion-dependent and non-transfusion-dependent alpha- or beta-thalassemia. The European Commission is reviewing the CHMP’s
opinion, with the final decision expected in early 2026.
We will have a pre-sNDA meeting with the FDA in the first quarter of 2026 and intend to submit a U.S. marketing application for mitapivat in SCD
following that engagement.
In addition, we are evaluating mitapivat for the treatment of pediatric patients with PK deficiency. Additionally, mitapivat has received orphan drug
designation from the FDA for the treatment of thalassemia and SCD, and orphan medicinal product designation from the EMA for the treatment of SCD.
Mitapivat was granted orphan drug designation for the treatment of PK deficiency by the FDA and EMA.
We have full ownership rights to PYRUKYND® and AQVESME™ and expect to fund the future development and commercialization costs related to
PYRUKYND® and AQVESME™. We built our commercial infrastructure to support the commercialization of PYRUKYND® in adult PK deficiency in
the United States, and have expanded this infrastructure to support the commercial launch of AQVESME™ in thalassemia in the United States. In July
2024, we entered into a distribution agreement, or the NewBridge Agreement, with NewBridge Pharmaceuticals FZ-LLC, or NewBridge, pursuant to
which we granted NewBridge the right to commercialize PYRUKYND® in the GCC region. In June 2025, we entered into a distribution
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agreement, or the Avanzanite Agreement, with Avanzanite Bioscience B.V., or Avanzanite, pursuant to which we granted Avanzanite the right to
commercialize PYRUKYND® in the European Economic Area, Switzerland, and the United Kingdom. Under the NewBridge Agreement and the
Avanzanite Agreement, we rely on NewBridge and Avanzanite, respectively, to assist with regulatory filings, prepare applications for pricing and
reimbursement approval, negotiate with payors, conduct medical affairs activities and import, distribute, promote and commercialize our products in
accordance with applicable law in the applicable jurisdictions.
In connection with our regulatory approvals in the EU, Great Britain and Saudi Arabia, we provide access to PYRUKYND® to eligible patients through
the Avanzanite Agreement and the NewBridge Agreement, as applicable, and on either a free of charge or for charge basis for eligible patients in those
jurisdictions and other jurisdictions through a global managed access program. Revenues associated with the NewBridge Agreement, the Avanzanite
Agreement and the for charge portion of our global managed access program are included in the rest of world product revenue line within Results of
Operations. We continue to evaluate other options for the commercialization of PYRUKYND® outside of the United States, including through exploring
potential partnership opportunities.
We are evaluating mitapivat in numerous clinical trials, including the following:
•
An extension study evaluating the long-term safety, tolerability and efficacy of treatment with mitapivat in SCD patients who are 16 years of age or
older from RISE UP, our completed double-blind phase 3 study evaluating the efficacy and safety of mitapivat as a potential treatment for SCD.
RISE UP, a phase 2/3 study evaluating the efficacy and safety of mitapivat in SCD patients who are 16 years of age or older, have had between two
and 10 sickle cell pain crises, or SCPCs, in the past 12 months, and have hemoglobin within the range of 5.5 to 10.5 g/dL during screening. We
enrolled 207 patients in the phase 3 portion of the trial, which included a 52-week double blind, randomized, placebo-controlled period in which
participants were randomized in a 2:1 ratio to receive the recommended (100 mg twice daily) mitapivat dose level or the placebo. The 52-week
double-blind treatment period was completed by 87.0% (n=120/138) of patients in the mitapivat arm and 81.2% (n=56/69) of patients in the placebo
arm. All but two of these patients (174/176) opted to enter the ongoing 216-week open-label extension period of the study. The primary endpoints of
the phase 3 portion of the trial were (i) hemoglobin response, defined as ≥1 g/dL increase in average hemoglobin from week 24 through week 52
compared to baseline, and (ii) annualized rate of SCPCs. The secondary endpoints included change from baseline in hemoglobin concentration,
change from baseline in indirect bilirubin, change from baseline in Patient Reported Outcome Measurement Information System Fatigue 13a, or
PROMIS Fatigue, Short Form scores, annualized frequency of hospitalizations for SCPCs, and change from baseline in percent reticulocyte levels.
In November 2025, we announced that the phase 3 portion of the trial had achieved the primary endpoint of hemoglobin response in the mitapivat
arm, with 40.6% of patients in the mitapivat arm having achieved a hemoglobin response, compared to 2.9% of patients in the placebo arm, a
statistically significant improvement (2-sided p<0.0001). In patients who achieved a hemoglobin response in the mitapivat arm, mean change from
baseline in average hemoglobin concentration from Week 24 through Week 52 was 1.6 g/dL. The annualized rate of SCPCs, defined as acute pain
needing medical contact, acute chest syndrome, priapism, hepatic, or splenic sequestration, was 2.62 in the mitapivat arm and 3.05 in the placebo
arm (2-sided p=0.1213), with such reduction of SCPCs not achieving statistical significance for that primary endpoint. Treatment with mitapivat also
showed statistically significant improvements in two secondary endpoints: (a) the average change from baseline in hemoglobin concentration from
Week 24 through Week 52 was 7.69 g/L in the mitapivat arm and 0.26 g/L in the placebo arm, a statistically significant improvement (2-sided
p<0.0001), and (b) the average change from baseline in indirect bilirubin from Week 24 through Week 52 was -16.03 µmol/L in the mitapivat arm
and 0.88 µmol/L in the placebo arm, a statistically significant improvement (2-sided p<0.0001). The average change from baseline in PROMIS
Fatigue score from Week 24 through Week 52 was -2.72 in the mitapivat arm and -2.25 in the placebo arm (2-sided p=0.7112), indicating
improvements in fatigue, but the PROMIS Fatigue secondary endpoint was not met. No conclusions could be drawn regarding the statistical
significance of the following additional key secondary endpoints: (a) the annualized frequency of hospitalizations for SCPCs, with 1.56 in the
mitapivat arm and 1.81 in the placebo arm (2-sided nominal p=0.2498), and (b) the average change from baseline in percent reticulocyte levels from
Week 24 through Week 52, with -0.0236 (fraction of 1) in the mitapivat arm and -0.0013 (fraction of 1) in the placebo arm (2-sided nominal
p=0.0001). We also announced that in the subset of patients in the mitapivat arm achieving the primary endpoint of hemoglobin response, the
following was observed: (i) the annualized rate of SCPCs was 2.20 for hemoglobin responders and 2.98 for non-hemoglobin responders (rate ratio
[RR]=0.74, 95% confidence interval [CI]=0.58 to 0.94); (ii) the annualized frequency of hospitalizations for SCPCs was 1.16 for hemoglobin
responders and 1.76 for non-hemoglobin responders (RR=0.66, 95% CI=0.48 to 0.91); and (iii) the average change in PROMIS Fatigue score
between Week 24 and Week 52 was -5.19 for hemoglobin responders and -2.55 for non-hemoglobin responders (95% CI=-5.59 to 0.32). The results
for hemoglobin responders in the mitapivat arm exceeded -4.1, the threshold for a clinically meaningful change from baseline for PROMIS Fatigue
score. The safety profile for mitapivat observed in the phase 3 portion of the trial was generally consistent with that observed in prior mitapivat SCD
trials. We observed as follows: (i) a similar proportion of
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patients on mitapivat (n=134, 97.1%) and placebo (n=68, 98.6%) had adverse events; (ii) serious TEAEs were reported in 20.3% (n=28) and 29.0%
(n=20) of patients on mitapivat and placebo, respectively; 0.7% (n=1) and 0.0% (n=0), respectively, were considered treatment-related; (iii) liver
abnormalities observed across the mitapivat and placebo arms were not suggestive of drug-induced hepatocellular injury, unlike what was observed
in the mitapivat ENERGIZE and ENERGIZE-T phase 3 trials; (iv) TEAEs led to treatment discontinuation in 4.3% (n=6) of patients on mitapivat
and 2.9% (n=2) on placebo; and (v) three deaths (2.2%) occurred in patients on mitapivat, and two (2.9%) on placebo, none of which were deemed
related to study treatment by the trial investigator.
•
Extension studies evaluating the long-term safety, tolerability and efficacy of treatment with mitapivat in pediatric patients from ACTIVATE-kids
and ACTIVATE-kidsT, our completed double-blind phase 3 studies evaluating the efficacy and safety of mitapivat as a potential treatment for PK
deficiency in not regularly transfused and regularly transfused patients between one and 18 years old, respectively.
We announced topline data for ACTIVATE-kidsT in August 2024. A total of 49 patients were enrolled in ACTIVATE-kidsT, with 32 randomized to
mitapivat twice-daily and 17 randomized to matched placebo. 30 patients (93.8%) in the mitapivat arm and 16 (94.1%) in the placebo arm completed
the 32-week double-blind period of the study. The primary endpoint of ACTIVATE-kidsT is transfusion reduction response, defined as ≥33%
reduction in total RBC transfusion volume from week 9 through week 32 of the double-blind period. Using Bayesian methodology, the prespecified
statistical criterion for the primary endpoint in ACTIVATE-kidsT was not met using low or moderate borrowing of data from the ACTIVATE-T
study in adults. In the study, 28.1% of patients in the mitapivat arm achieved the primary endpoint of transfusion reduction response, compared to
11.8% of patients in the placebo arm. Transfusion-free response and normal hemoglobin response were secondary endpoints in this study and only
observed in patients in the mitapivat arm. In the 32-week double-blind treatment period, mitapivat was generally safe and well-tolerated, with safety
results consistent with the safety profile for mitapivat previously observed in adults with PK deficiency who are regularly transfused.
We announced topline data for ACTIVATE-kids in February 2025. A total of 30 patients were enrolled in ACTIVATE-kids, with 19 randomized to
mitapivat twice-daily and 11 randomized to matched placebo. All patients in both treatment arms completed the 20-week double-blind period of the
study. The primary endpoint of ACTIVATE-kids is percentage of patients with hemoglobin response, defined as ≥1.5 g/dL increase in hemoglobin
concentration from baseline that is sustained at two or more scheduled assessments at weeks 12, 16, and 20 during the double-blind period. Using
Bayesian methodology, the prespecified statistical criterion for the primary endpoint in ACTIVATE-kids was met using a range of relative borrowing
from the adult ACTIVATE study, for all possible borrowing weights (ranging from 0 to 1). In addition, the pre-specified supportive analysis based on
traditional methodology comparing the hemoglobin response rate for mitapivat versus placebo provided further evidence that the primary endpoint
was met. There were 31.6% of patients in the mitapivat arm achieving a hemoglobin response compared to 0% of patients in the placebo arm; the
95% confidence interval for the difference in hemoglobin response rates between mitapivat and placebo was >0 (95% CI=10.8% to 52.7%). In
addition, improvements in changes from baseline for markers of hemolysis (indirect bilirubin, lactate dehydrogenase and haptoglobin) were
observed in the mitapivat arm compared to the placebo arm. In the 20-week double-blind period of the study, a similar proportion of patients had
AEs in the mitapivat and placebo arms and there were no discontinuations of study treatment due to AEs or for any reason. The safety results from
the trial were consistent with the safety profile for mitapivat previously observed for adult patients with PK deficiency who are not regularly
transfused.
•
An extension study evaluating the long-term safety, tolerability and efficacy of treatment with mitapivat in patients from ACTIVATE and
ACTIVATE-T, our completed pivotal trials of mitapivat in not regularly transfused and regularly transfused adult patients with PK deficiency.
•
An extension study evaluating the long-term safety, tolerability and efficacy of treatment with mitapivat in patients from DRIVE PK, our completed
global phase 2, first-in-patient, open-label safety and efficacy clinical trial of mitapivat in adult, not regularly transfused patients with PK deficiency.
•
An extension study evaluating the long-term efficacy and safety of treatment with mitapivat in patients from ENERGIZE and ENERGIZE-T, our
completed pivotal trials of mitapivat in adults with non-transfusion-dependent and transfusion-dependent alpha- or beta-thalassemia.
During the double-blind periods of ENERGIZE and ENERGIZE-T, two patients on mitapivat experienced events of hepatocellular injury. In addition,
during the open-label extension periods of both trials, a total of three patients experienced events of hepatocellular injury after switching from placebo to
mitapivat. All of these events occurred within the first six months of exposure to mitapivat and liver tests improved following discontinuation of mitapivat.
Based on the results of the ENERGIZE and ENERGIZE-T trials, we included in our regulatory applications hepatocellular injury as an important potential
risk of mitapivat in patients with thalassemia and proposed monthly monitoring of liver tests for the first six months of
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treatment with mitapivat. We updated our mitapivat clinical trial protocols across all indications to incorporate monthly monitoring of liver tests for the first
six months of treatment.
Tebapivat: Novel PK Activator
We are developing tebapivat, a novel PK activator for the potential treatment of LR MDS and SCD. Tebapivat has been granted orphan drug designation
for the treatment of MDS by the FDA.
We have completed a phase 1 clinical trial evaluating tebapivat in healthy volunteers and patients with SCD, and we have completed enrollment in the
phase 2 clinical trial of tebapivat in adult patients with SCD. We expect to announce topline data for this trial in the second half of 2026.
We also initiated a phase 2a clinical trial of tebapivat in adults with LR MDS in the third quarter of 2022, and the trial has completed enrollment with 22
patients, including 12 patients classified as non-transfused and 10 patients classified as low transfusion burden. Patients received 5 mg of tebapivat once
daily for up to 16 weeks. The two primary endpoints of the trial were transfusion independence (for patients classified as low transfusion burden), defined
as transfusion-free for ≥ eight consecutive weeks during the 16-week treatment period, and hemoglobin response, defined as a ≥ 1.5 g/dL increase from
baseline in the average hemoglobin concentration measured from week 8 through week 16.
In November 2023, we announced that we achieved clinical proof-of-concept in the phase 2a portion of the trial. We observed that four of the 10 patients
with low transfusion burden achieved the transfusion independence endpoint, and one of the 22 patients achieved the hemoglobin response endpoint in the
16-week treatment period. The safety profile observed was consistent with data reported in the healthy volunteer study of tebapivat. 19 patients elected to
enroll in the extension period of the trial for up to 156 weeks. We evaluated the phase 2a trial results and assessed the impact of those results on the phase
2b portion of the protocol, and based on the data generated in the phase 2a portion of the trial, we increased the dosage levels evaluated in the phase 2b
portion of the trial, which we initiated in the third quarter of 2024. We completed enrollment in the phase 2b portion of the trial in September 2025 and
expect to announce topline data for this trial in the first half of 2026.
Other Programs
In addition to the aforementioned development programs, we are developing AG-181, a PAH stabilizer for the potential treatment of PKU, for which we
filed an investigational new drug application, or IND, in December 2023. We initiated a phase 1 clinical trial of AG-181 in healthy volunteers in the first
quarter of 2024, initiated the multiple ascending dose portion of the trial in the second quarter of 2025, and completed the trial in December 2025. We
expect to initiate a phase 1b proof of mechanism trial of AG-181 in patients with PKU in the first half of 2026 and confirm proof of mechanism in the
second half of 2026.
Also, in July 2023, we entered into a license agreement with Alnylam for the development and commercialization of products containing or comprised of
an siRNA preclinical development candidate discovered by Alnylam and targeting the TMPRSS6 gene, and we are developing a product candidate, AG-
236, for the potential treatment of patients with PV. We filed an IND with the FDA for AG-236 for the treatment of PV, which cleared in June 2025, and we
initiated a phase 1 clinical trial evaluating AG-236 in healthy volunteers in July 2025. We expect to announce topline data for this trial in the first half of
2026.
Selling, General and Administrative Expenses
Selling, general and administrative expenses consist primarily of salaries and other related costs, including stock-based compensation, for personnel in
executive, finance, business development, commercial, legal, information technology and human resources functions. Other significant costs include
facility-related costs not otherwise included in research and development expenses, legal fees relating to patent and corporate matters, and fees for
accounting and consulting services.
We anticipate that our selling, general and administrative expenses will increase in the future to support continued research and development activities, and
ongoing and future commercialization activities related to our portfolio, including the ongoing commercialization of PYRUKYND®, AQVESME™ and
any of our other product candidates, which may include the hiring of additional personnel.
Critical Accounting Policies and Significant Judgments and Estimates
Our management’s discussion and analysis of our financial condition and results of operations are based on our consolidated financial statements, which we
have prepared in accordance with accounting principles generally accepted in the United States. The preparation of these consolidated financial statements
requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities
at the date of the financial statements, as well as the reported amounts of revenue and expenses during the reporting periods. On an ongoing basis, we
evaluate our estimates and judgments. We base our estimates on historical experience and various other factors that we believe are reasonable under the
circumstances, the results of which form the basis for making judgments about the carrying value of
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assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or
conditions.
While our significant accounting policies are described in more detail in the notes to our consolidated financial statements included in this Annual Report
on Form 10-K, we believe that the following accounting policies are the most critical in fully understanding and evaluating our financial condition and
results of operations and are policies that require a significant level of judgment and estimates.
Revenue recognition
Under ASC 606, Revenue from Contracts with Customers, or ASC 606, revenue is recognized when the customer obtains control of promised goods or
services, in an amount that reflects the consideration that we expect to receive in exchange for those goods or services. To determine revenue recognition
for arrangements that have been determined to be within the scope of ASC 606, we perform the following five steps: (i) identify the contract(s) with a
customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance
obligations in the contract; and (v) recognize revenue when (or as) we satisfy a performance obligation. We only apply the five-step model to contracts
when it is probable that we will collect the consideration we are entitled to in exchange for the goods or services we transfer to the customer.
This standard applies to all contracts with customers, except for contracts that are within the scope of other standards, such as leases, insurance,
collaboration arrangements and financial instruments.
Once the contract is determined to be within the scope of ASC 606, we assess the goods or services promised within each contract and determine those that
are performance obligations, and assess whether each promised good or service is distinct. We will then recognize as revenue the amount of the transaction
price that is allocated to the respective performance obligation when (or as) the performance obligation is satisfied.
Product Revenue
We generate product revenue from sales of PYRUKYND® in the United States to a limited number of specialty distributors and specialty pharmacy
providers, and to Avanzanite and NewBridge outside of the United States, or collectively, the Customers. These Customers subsequently resell
PYRUKYND® to pharmacies or dispense PYRUKYND® directly to patients. In addition to distribution agreements with Customers, we enter into
arrangements with healthcare providers and payors that provide for government-mandated and/or privately-negotiated rebates, chargebacks and discounts
with respect to the purchase of PYRUKYND®.
The performance obligation related to the sale of PYRUKYND® is satisfied and revenue is recognized when the Customer obtains control of the product,
which occurs at a point in time, typically upon delivery to the Customer.
Revenues from product sales are recorded at the net sales price, or transaction price, which includes estimates of variable consideration for which reserves
are established and result from contractual adjustments, government rebates, returns and other allowances that are offered within the contracts with our
Customers, healthcare providers, payors and other indirect customers relating to the sale of our products.
Contractual Adjustments. We generally provide Customers with discounts, including prompt pay discounts, and allowances that are explicitly stated
in the contracts and are recorded as a reduction of revenue in the period the related product revenue is recognized. In addition, we receive sales order
management, data and distribution services from certain Customers.
Chargebacks and discounts represent the estimated obligations resulting from contractual commitments to sell products to qualified healthcare
providers at prices lower than the list prices charged to Customers who directly purchase the product from us. Customers charge us for the difference
between what they pay for the product and the ultimate selling price to the qualified healthcare providers. These reserves are estimated using the
expected value method, based upon a range of possible outcomes that are probability-weighted for the estimated channel mix and are established in
the same period that the related revenue is recognized, resulting in a reduction of product revenue.
Government Rebates. Government rebates include Medicare, TriCare, and Medicaid rebates, which we estimate using the expected value method,
based upon a range of possible outcomes that are probability-weighted for the estimated payor mix. These reserves are recorded in the same period
the related revenue is recognized, resulting in a reduction of product revenue.
Returns. We estimate the amount of product sales that may be returned by Customers and record this estimate as a reduction of revenue in the period
the related product revenue is recognized. We currently estimate product return liabilities using the expected value method, based on available
industry data, including our visibility into the inventory remaining in the distribution channel.
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Accrued Research and Development Expenses
As part of the process of preparing our consolidated financial statements, we are required to estimate our accrued expenses. This process involves
reviewing quotations and contracts, identifying services that have been performed on our behalf and estimating the level of service performed and the
associated cost incurred for the service when we have not yet been invoiced or otherwise notified of the actual cost. Certain service providers invoice us in
arrears for services performed or when contractual milestones are met. We make estimates of our accrued expenses as of each balance sheet date in our
financial statements based on facts and circumstances known to us at that time. We periodically confirm the accuracy of our estimates with the service
providers and make adjustments, if necessary. Examples of estimated accrued research and development expenses include fees paid to: (i) CROs and other
third parties in connection with clinical trials and preclinical development activities; (ii) investigative sites in connection with clinical trials; and (iii) third
parties related to product manufacturing, development and distribution of clinical supplies.
We base our expenses related to CROs on our estimates of the services received and efforts expended pursuant to quotes and contracts with CROs that
conduct research and development on our behalf. The financial terms of these agreements are subject to negotiation, vary from contract to contract and may
result in uneven payment flows. There may be instances in which payments made to our vendors will exceed the level of services provided and result in a
prepayment of the research and development expense. In accruing service fees, we estimate the time period over which services will be performed and the
level of effort to be expended in each period. If the actual timing of the performance of services or the level of effort varies from our estimate, we adjust the
accrual or prepaid accordingly. Although we do not expect our estimates to be materially different from amounts actually incurred, our understanding of the
status and timing of services performed relative to the actual status and timing of services performed may vary and could result in us reporting amounts that
are too high or too low in any particular period.
Stock-based Compensation
We account for stock-based compensation awards in accordance with ASC 718, Compensation –Stock Compensation, or ASC 718. For stock-based awards
granted to employees, non-employees and members of the board of directors for their services and for participation in our employee stock purchase plan,
we estimate the grant date fair value of each option award using the Black-Scholes option-pricing model. The use of the Black-Scholes option-pricing
model requires us to make assumptions with respect to the expected term of the option, the expected volatility of the common stock consistent with the
expected life of the option, risk-free interest rates and expected dividend yields of the common stock.
Expected term. We use the “simplified method” as prescribed by the SEC Staff Accounting Bulletin No. 107, Share Based Payments, to estimate
the expected term of stock option grants. Under this approach, the weighted-average expected life is presumed to be the average of the contractual
term of ten years and the weighted-average vesting term of the stock options, taking into consideration multiple vesting tranches. We utilize this
method due to the plain-vanilla nature of our share-based awards.
Volatility. The expected volatility has been determined using our historical volatilities for a period equal to the expected term of the option grant.
Risk-free rate. The risk-free rate is based on the yield curve of U.S. Treasury securities with periods commensurate with the expected term of the
options being valued.
Dividends. We have never paid, and do not anticipate paying, any cash dividends in the foreseeable future, and, therefore, use an expected
dividend yield of zero in the option-pricing model.
Forfeitures. We account for forfeitures as they occur and, therefore, do not estimate forfeitures.
For awards subject to service-based vesting conditions, we recognize stock-based compensation expense equal to the grant date fair value of stock options
on a straight-line basis over the requisite service period. For awards subject to performance-based vesting conditions, we recognize stock-based
compensation expense if the performance condition is considered probable of achievement using management’s best estimates.
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Results of Operations
Comparison of years ended December 31, 2025, 2024 and 2023
Revenues
(In thousands)
2025
2024
2023
Revenues:
Product revenue, net
U.S.
$
49,170  $
36,395  $
26,823 
Rest of world
4,858 
103 
— 
Total product revenue, net
54,028 
36,498 
26,823 
Total revenue
$
54,028  $
36,498  $
26,823 
Total Revenue – 2025 vs. 2024 – The increase in total revenue of $17.5 million in 2025 compared to 2024 was due to an increase of $12.8 million in U.S.
product revenue and an increase of $4.7 million in rest of world product revenue. The increase in U.S. product revenue was primarily due to increased
volume associated with PYRUKYND®, and the increase in rest of world product revenue was primarily due to increased volume associated with the
Avanzanite Agreement discussed above in Overview.
Total Revenue – 2024 vs. 2023 – The increase in total revenue of $9.7 million in 2024 compared to 2023 was primarily due to increased U.S. product
revenue as a result of increased volume associated with PYRUKYND®.
Total Operating Expenses
(In thousands)
2025
2024
2023
Operating expenses
Cost of sales
$
6,345 
$
4,165  $
2,881 
Research and development
339,535 
301,286 
295,526 
Selling, general and administrative
180,280 
156,784 
119,903 
Total operating expenses
$
526,160 
$
462,235  $
418,310 
Total Operating Expenses – 2025 vs. 2024 – The increase in total operating expenses of $63.9 million in 2025 compared to 2024 was primarily due to an
increase of $38.2 million in research and development expenses, which is described below under Research and Development Expenses, and an increase of
$23.5 million in selling, general and administrative expenses, driven by an increase in commercial-related activities as we prepared for the approval of
AQVESME™ in thalassemia, which was approved by the FDA on December 23, 2025.
Total Operating Expenses – 2024 vs 2023 – The increase in total operating expenses of $43.9 million in 2024 compared to 2023 was primarily due to an
increase of $36.9 million in selling, general and administrative expenses, driven by an increase in commercial-related activities as we prepared for the
potential approval of PYRUKYND® in thalassemia, and an increase of $5.8 million in research and development expenses, which is described below
under Research and Development Expenses.
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Research and Development Expenses
Our research and development expenses, by major program, are outlined in the table below: 
(In thousands)
2025
2024
2023
PK activator (PYRUKYND®/AQVESME™)
$
108,087 
$
112,720  $
101,322 
Novel PK activator (tebapivat)
31,639 
14,544 
18,267 
PAH stabilizer (AG-181)
5,992 
2,912 
740 
siRNA targeting TMPRSS6 (AG-236)
12,490 
11,985 
2,664 
In-process research and development
10,000 
— 
17,500 
Other research and platform programs
7,820 
5,833 
8,088 
Total direct research and development expenses
176,028 
147,994 
148,581 
Compensation and related expenses
121,645 
114,618 
108,484 
Facilities and IT related expenses & other
41,862 
38,674 
38,461 
Total indirect research and development expenses
163,507 
153,292 
146,945 
Total research and development expense
$
339,535 
$
301,286  $
295,526 
Total Research and Development Expenses – 2025 vs. 2024 – The increase in research and development expenses of $38.2 million in 2025 compared to
2024 was due to a $28.0 million increase in our direct expenses and a $10.2 million increase in our indirect expenses. The increase in direct expenses was
primarily due to an increase of $17.1 million in tebapivat costs, driven by increased costs associated with clinical trials of tebapivat in patients with SCD
and LR MDS and higher process development expenses, and an increase in in-process research and development as a result of the $10.0 million milestone
payment associated with the agreement with Alnylam discussed above under Overview. The increase in indirect expenses was primarily due to a $7.0
million increase in compensation and related expenses due to an increase in workforce related expenses.
Total Research and Development Expenses – 2024 vs 2023 – The increase in research and development expenses of $5.8 million in 2024 compared to 2023
was due to a $6.3 million increase in our indirect expenses, partially offset by a $0.6 million decrease in our direct expenses. The increase in indirect
expenses was primarily due to a $6.1 million increase in compensation and related expenses due to an increase in workforce related expenses. The decrease
in direct expenses was due to the $17.5 million up-front payment in 2023 associated with the Alnylam license agreement discussed above under Overview
and a decrease of $3.7 million in tebapivat costs due to decreased costs associated with clinical trials of tebapivat in patients with SCD and LR MDS, offset
by an $11.4 million increase in PYRUKYND® costs and a $9.3 million increase in AG-236, the in-licensed siRNA TMPRSS6 program for PV, primarily
driven by higher process development expenses. The increase in PYRUKYND® costs was primarily due to increased process development expenses and
increased costs associated with clinical trials for patients with SCD, partially offset by lower costs associated with the phase 3 clinical trials of
PYRUKYND® in patients with thalassemia, ENERGIZE and ENERGIZE-T.
Other Income and Expense
(In thousands)
2025
2024
2023
Gain on sale of contingent payments
$
— 
$
889,136  $
— 
Milestone payment from gain on sale of oncology business
— 
200,000 
— 
Interest income, net
56,379 
48,083 
33,344 
Other income, net
1,956 
6,487 
6,055 
Other Income and Expense – 2025 vs. 2024 – The decrease in gain on sale of contingent payments in 2025 compared to 2024 was due to the sale of the
Vorasidenib Royalty Rights in 2024 discussed above in Overview. The decrease in milestone payment from gain on sale of oncology business was due to
the receipt of the Vorasidenib Milestone Payment in 2024 as discussed above in Overview. The $8.3 million increase in interest income, net in 2025
compared to 2024 is primarily attributable to increased return on our investments.
Other Income and Expense – 2024 vs 2023 – The increase in gain on sale of contingent payments in 2024 compared to 2023 was due to the sale of the
Vorasidenib Royalty Rights in 2024 discussed above in Overview. The increase in milestone payment from gain on sale of oncology business was due to
the receipt of the Vorasidenib Milestone Payment in 2024 as discussed above in Overview. The $14.7 million increase in interest income, net in 2024
compared to 2023 is primarily attributable to increased return on our investments.
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Net (Loss) Income
(In thousands)
2025
2024
2023
Net (loss) income before taxes
$
(413,797)
$
717,969  $
(352,088)
Income tax (benefit) expense
(1,016)
44,244 
— 
Net (loss) income
$
(412,781)
$
673,725  $
(352,088)
Net (Loss) Income – 2025 vs 2024 – The change in net (loss) income in 2025 compared to 2024 was primarily driven by the sale of the Vorasidenib Royalty
Rights in 2024 discussed above in Overview and the receipt of the Vorasidenib Milestone Payment in 2024 discussed above in Overview, partially offset by
the decrease in income tax expense as a result of the income related to the sale of the Vorasidenib Royalty Rights and the receipt of the Vorasidenib
Milestone Payment in 2024.
Net (Loss) Income – 2024 vs 2023 – The increase in net income in 2024 compared to 2023 was primarily driven by the sale of the Vorasidenib Royalty
Rights in 2024 discussed above in Overview and the receipt of the Vorasidenib Milestone Payment in 2024 discussed above in Overview, partially offset by
the increase in income tax expense as a result of the income related to the sale of the Vorasidenib Royalty Rights and the receipt of the Vorasidenib
Milestone Payment.
Liquidity and Capital Resources
Sources of Liquidity
Since our inception, and through March 31, 2021, we financed our operations primarily through proceeds from the sale of our royalty rights, commercial
sales of TIBSOVO®, funding received from our collaboration agreements, private placements of our preferred stock, our initial public offering of our
common stock and concurrent private placement of common stock to an affiliate of Celgene, and our follow-on public offerings. Following the sale of our
oncology business to Servier on March 31, 2021, we have financed and expect to continue to finance our operations primarily through cash on hand,
potential royalty payments with respect to the Retained Earn-Out Rights, the actual and potential future sales of PYRUKYND®, the potential future sales
of AQVESME™ if successfully launched by us and, potentially, collaborations, strategic alliances, licensing arrangements and other nondilutive strategic
transactions. In addition, we may pursue opportunistic debt offerings, and equity or equity-linked offerings.
On March 31, 2021, we completed the sale of our oncology business to Servier. The transaction included the sale of our entire oncology business, including
our clinical-stage product candidate vorasidenib, for a payment of approximately $1.8 billion in cash at the closing, subject to certain adjustments, and the
right to the Vorasidenib Milestone Payment and the Vorasidenib Royalty Rights. The Vorasidenib Milestone Payment and Vorasidenib Royalty Rights are
referred to as contingent payments and recognized as income when realizable.
In August 2024, the FDA approved vorasidenib for adult and pediatric patients 12 years and older with Grade 2 astrocytoma or oligodendroglioma with a
susceptible IDH1 or IDH2 mutation, following surgery including biopsy, sub-total resection, or gross total resection. In September 2024, we received the
Vorasidenib Milestone Payment from Servier and recognized income of $200.0 million within the milestone payment from gain on sale of oncology
business line item in our consolidated statements of operations for the year ended December 31, 2024. In May 2024, we entered into a purchase and sale
agreement to sell the Vorasidenib Royalty Rights to Royalty Pharma Investments 2019 ICAV, or Royalty Pharma, for $905.0 million in cash, or the Upfront
Payment. The sale was contingent upon FDA approval of vorasidenib and other customary closing conditions.
Upon consummation of the sale in August 2024, Royalty Pharma acquired 100% of the Vorasidenib Royalty Rights payments made by Servier on account
of up to $1.0 billion in U.S. net sales for each calendar year. In addition, any such Vorasidenib Royalty Rights payments made by Servier on account of
U.S. net sales in each calendar year in excess of $1.0 billion will be split, with Royalty Pharma having the rights to a 12% earn-out on those excess
payments and Agios retaining the rights to a 3% earn-out on those excess payments, or the Retained Earn-Out Rights. As a result of the sale, we recognized
income of $889.1 million ($905.0 million net of fees of $15.9 million) within the gain on sale of contingent payments line item in our consolidated
statements of operations for the year ended December 31, 2024. Royalty income related to the Retained Earn-Out Rights, if any, will be recognized in the
period when realizable.
Our cash, cash equivalents and marketable securities balance was $1.2 billion at December 31, 2025. The Retained Earn-Out Rights discussed above are
our only committed potential external sources of funds. We cannot predict what success, if any, Servier may have in the United States with respect to the
sale of vorasidenib, and consequently, we cannot estimate the amount of payments, if any, we may receive on account of the Retained Earn-Out Rights.
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Cash Flows
The following table provides information regarding our cash flows for the years ended December 31, 2025, 2024 and 2023:
(In thousands)
2025
2024
2023
Net cash used in operating activities
$
(372,977)
$
(389,841)
$
(296,062)
Net cash provided by investing activities
377,184 
363,441 
239,575 
Net cash provided by financing activities
8,676 
14,442 
5,433 
Net change in cash and cash equivalents
$
12,883 
$
(11,958)
$
(51,054)
Net cash used in operating activities
Cash used in operating activities of $373.0 million during the year ended December 31, 2025 was primarily due to operating expenses driven by research
and development costs described above under Research and Development Expenses, partially offset by cash received related to interest income of $59.0
million and cash received from product revenues of $50.5 million.
Cash used in operating activities of $389.8 million during the year ended December 31, 2024 was primarily due to operating expenses driven by research
and development costs described above under Research and Development Expenses, partially offset by cash received related to interest income of $43.5
million and cash received from product revenues of $37.8 million.
Cash used in operating activities of $296.1 million during the year ended December 31, 2023 was primarily due to operating expenses driven by research
and development costs described above under Research and Development Expenses, partially offset by cash received related to interest income of $31.2
million and cash received from revenues of $28.6 million.
Net cash provided by investing activities
Cash provided by investing activities of $377.2 million during the year ended December 31, 2025 was primarily due to higher proceeds from maturities and
sales of marketable securities than purchases of marketable securities.
Cash provided by investing activities of $363.4 million during the year ended December 31, 2024 was primarily due to the proceeds from the Upfront
Payment from Royalty Pharma and the Vorasidenib Milestone Payment from Servier, partially offset by higher purchases of marketable securities than
proceeds from maturities and sales of marketable securities as a result of the proceeds from the Upfront Payment and the Vorasidenib Milestone Payment.
Cash provided by investing activities for the year ended December 31, 2023 was primarily due to higher proceeds from maturities and sales of marketable
securities than purchases of marketable securities, partially offset by the $17.5 million up-front payment associated with the Alnylam license agreement
discussed above under Overview.
Net cash provided by financing activities
Cash provided by financing activities for the year ended December 31, 2025 was due to $8.7 million of proceeds received from stock option exercises and
purchases made pursuant to our employee stock purchase plan.
Cash provided by financing activities for the year ended December 31, 2024 was due to $14.4 million of proceeds received from stock option exercises and
purchases made pursuant to our employee stock purchase plan.
Cash provided by financing activities for the year ended December 31, 2023 was due to $5.4 million of proceeds received from stock option exercises and
purchases made pursuant to our employee stock purchase plan.
Funding Requirements
We expect our expenses to increase as we continue the research, development and clinical trials of, seek marketing approvals for, and commercialize our
product candidates in our portfolio, including as we continue to commercialize PYRUKYND® and AQVESME™ for their approved indications. If we
obtain additional marketing approvals for mitapivat in sickle cell disease or in other indications, or for any of our other product candidates, we expect to
incur significant commercialization expenses related to product sales, marketing, manufacturing and distribution.
We expect that our existing cash, cash equivalents and marketable securities as of December 31, 2025, together with anticipated product revenue and
interest income, will provide the financial independence to commercially launch AQVESME™ in the United States, prepare for the potential U.S.
commercial launch of mitapivat in SCD, advance our existing clinical programs, and opportunistically expand our pipeline through both internally and
externally discovered assets. Our expectations regarding
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our long-term funding requirements are based on assumptions that may prove to be wrong, and we may need additional capital resources to fund our
operating plans and capital expenditure requirements.
Our future capital requirements will depend on many factors, including:
•
the amount and timing of future revenue received from commercial sales of PYRUKYND®, AQVESME™ or any of our other product
candidates for which we may receive marketing approval;
•
the amount of payments, if any, we may receive on account of the Retained Earn-Out Rights;
•
the costs and timing of our ongoing and future commercialization activities, including product manufacturing, sales, marketing and
distribution for PYRUKYND® and AQVESME™ in the approved jurisdictions and indications and for any product candidate for which we
may receive approval;
•
the scope, progress, results and costs of preclinical development, laboratory testing and clinical trials for our product candidates;
•
the costs associated with in-licensing or acquiring assets for pipeline growth, including the amount and timing of future milestone and
royalty payments potentially payable to Alnylam pursuant to the license agreement;
•
the costs, timing and outcome of regulatory review of our product candidates;
•
the costs of preparing, filing and prosecuting patent applications, maintaining and enforcing our intellectual property rights and defending
intellectual property-related claims;
•
our ability to establish and maintain collaborations on favorable terms, if at all;
•
our ability to successfully execute on our strategic plans;
•
operational delays due to public health epidemics; and
•
operational delays, disruptions and/or increased costs associated with global economic and political developments.
Until such time, if ever, as we can generate substantial product revenue, we expect to finance our cash needs primarily through cash on hand, potential
royalty payments with respect to the Retained Earn-Out Rights, the actual and potential future sales of PYRUKYND®, the potential future sales of
AQVESME™ if successfully launched by us and, potentially, collaborations, strategic alliances, licensing arrangements and other nondilutive strategic
transactions. In addition, we may pursue opportunistic debt offerings, and equity or equity-linked offerings. We do not have any committed external source
of funds other than the Retained Earn-Out Rights. To the extent that we raise additional capital through the sale of equity or convertible debt securities, the
ownership interest of our stockholders will be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect
the rights of our common stockholders. Debt financing, if available, may involve agreements that include covenants limiting or restricting our ability to
take specific actions, such as incurring additional debt, selling or licensing our assets, making capital expenditures or declaring dividends.
If we raise funds through collaborations, strategic alliances or licensing arrangements with third parties, we may have to relinquish valuable rights to our
technologies, future revenue streams, research programs or product candidates, or grant licenses on terms that may not be favorable to us. If we are unable
to raise additional funds through equity or debt financings when needed or on attractive terms, we may be required to delay, limit, reduce or terminate our
product development or future commercialization efforts, or grant rights to develop and market product candidates that we would otherwise prefer to
develop and market ourselves.
Off-Balance Sheet Arrangements
We did not have, during the periods presented, and we do not currently have, any off-balance sheet arrangements, as defined under applicable SEC rules.
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Contractual Obligations
The following table summarizes our significant contractual obligations as of the payment due date by period at December 31, 2025:
Payments due by period
(In thousands)
Total
Less
than

1 year
1-3
years
3-5
years
More
than

5 years
Operating lease obligations (1)
$
42,745 
$
18,511 
$
24,234 
$
— 
$
— 
Manufacturing arrangements (2)
674 
337 
337 
— 
— 
Service arrangements (3)
4,351 
1,088 
2,175 
1,088 
— 
(1) Relates to payment obligations under lease agreements covering approximately 146,000 square feet at 88 Sidney Street, 43,000 square feet at 64 Sidney Street, and 13,000 square feet at 38
Sidney Street, Cambridge, Massachusetts. All leases, as amended, expire on February 29, 2028. At the end of the initial lease period, we have the option to extend the leases at all facilities for
two consecutive five-year periods at the fair market rent at the time of the extension.
(2) Relates to payment obligations under a packaging and supply agreement for drug product.
(3) Relates to payment obligations under a development and manufacturing services agreement for drug product. Arrangement is for a remaining contractual term of four years, however, the total
funds can be allocated in any manner to meet the agreement terms.
We also enter into agreements in the normal course of business with CROs for clinical trials and contract manufacturing organizations, or CMOs, for
supply manufacturing, and with vendors for preclinical research studies and other services and products for operating purposes. These contractual
obligations are cancelable at any time by us, generally upon prior written notice to the vendor, and are thus not included in the contractual obligations table.
In July 2023, we entered into a license agreement with Alnylam as discussed above under Overview and under Note 1, Nature of Business, to our
consolidated financial statements. Under the license agreement, we may be required to pay up to an additional $120.0 million in potential development and
regulatory milestones, in addition to sales milestones as well as tiered royalties on annual net sales, if any, of licensed products, which may be subject to
specified reductions and offsets. Such payment obligations are contingent upon the occurrence of future events and the timing and likelihood of such
potential obligations are not known.
Item 7A. Quantitative and Qualitative Disclosures about Market Risk
We are exposed to market risk related to changes in interest rates. As of December 31, 2025 and December 31, 2024, we had cash, cash equivalents and
marketable securities of $1.2 billion and $1.5 billion, respectively, consisting primarily of investments in U.S. Treasuries, government securities, corporate
debt securities and certificates of deposit. Our primary exposure to market risk is interest rate sensitivity, which is affected by changes in the general level
of U.S. interest rates, particularly because our investments are primarily in short-term marketable securities. Our marketable securities are subject to
interest rate risk and could fall in value if market interest rates increase. Due to the short-term duration of our investment portfolio and the low risk profile
of our investments, we do not believe an immediate and uniform 100 basis point change in interest rates would have a material effect on the fair market
value of our investment portfolio.
We are also exposed to market risk related to changes in foreign currency exchange rates. We have contracts with CROs and CMOs that are located in Asia
and Europe and are denominated in foreign currencies. We are subject to fluctuations in foreign currency rates in connection with these agreements. We do
not currently hedge our foreign currency exchange rate risk. As of December  31, 2025 and December  31, 2024, we had minimal or no liabilities
denominated in foreign currencies.
Item 8. Financial Statements and Supplementary Data
The financial statements required to be filed pursuant to this Item 8 are appended to this Annual Report on Form 10-K. An index of those financial
statements is found in Item 15, Exhibits and Financial Statement Schedules, of this Annual Report on Form 10-K.
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
None.
Item 9A. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
Our management, with the participation of our principal executive officer and our principal financial officer, evaluated, as of the end of the period covered
by this Annual Report on Form 10-K, the effectiveness of our disclosure controls and procedures.
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Based on that evaluation of our disclosure controls and procedures as of December 31, 2025, our principal executive officer and principal financial officer
concluded that our disclosure controls and procedures as of such date are effective at the reasonable assurance level. The term “disclosure controls and
procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended, or the Exchange Act, means controls
and other procedures of a company that are designed to ensure that information required to be disclosed by a company in the reports that it files or submits
under the Exchange Act are recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Disclosure
controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by us in the
reports we file or submit under the Exchange Act is accumulated and communicated to our management, including our principal executive officer and
principal financial officer, as appropriate to allow timely decisions regarding required disclosure. Management recognizes that any controls and procedures,
no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and our management necessarily applies its
judgment in evaluating the cost-benefit relationship of possible controls and procedures.
Management’s Annual Report on Internal Control over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over our financial reporting. Internal control over financial
reporting is defined in Rules 13a-15(f) and 15d-15(f) promulgated under the Exchange Act as a process designed by, or under the supervision of, our
principal executive and principal financial officers and effected by our board of directors, management and other personnel to provide reasonable assurance
regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with U.S. GAAP. Our internal
control over financial reporting includes those policies and procedures that:
•
pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect our transactions and dispositions of our assets;
•
provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with U.S.
GAAP, and that our receipts and expenditures are being made only in accordance with authorizations of our management and directors; and
•
provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a
material effect on our financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Projections of any evaluation of
effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of
compliance with the policies or procedures may deteriorate.
Our management assessed the effectiveness of our internal control over financial reporting as of December  31, 2025. In making this assessment,
management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in its 2013 Internal Control –
  Integrated Framework. Based on our assessment, our management has concluded that, as of December  31, 2025, our internal control over financial
reporting is effective based on those criteria.
The effectiveness of our internal control over financial reporting as of  December  31, 2025, has been audited by PricewaterhouseCoopers LLP, an
independent registered public accounting firm, as stated in their report, which is included herein.
Changes in Internal Control over Financial Reporting
There were no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the
fiscal quarter ended December 31, 2025 that have materially affected, or are reasonably likely to materially affect, our internal control over financial
reporting.
Item 9B. Other Information
(b) Director and Officer Trading Arrangements
A significant portion of the compensation of our directors and officers (as defined in Rule 16a-1(f) under the Exchange Act) is in the form of equity awards
and, from time to time, directors and officers engage in open-market transactions with respect to the securities acquired pursuant to such equity awards or
other of our securities, including to satisfy tax withholding obligations when equity awards vest or are exercised, and for diversification or other personal
reasons.
Transactions in our securities by directors and officers are required to be made in accordance with our insider trading policy, which requires that the
transactions be in accordance with applicable U.S. federal securities laws that prohibit trading while in possession of material nonpublic information. Rule
10b5-1 under the Exchange Act provides an affirmative defense that enables directors and officers to prearrange transactions in our securities in a manner
that avoids concerns about initiating transactions while in possession of material nonpublic information.
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Each Rule 10b5-1 trading arrangement described below was entered into in accordance with our insider trading policy, and only permitted or permits
transactions upon the expiration of the applicable mandatory cooling-off periods under Rule 10b5-1 of the Exchange Act. Actual transactions are required
to be disclosed publicly in Section 16 filings with the SEC.
The following table describes, for the fourth quarter of 2025, each trading arrangement for the sale or purchase of Company securities adopted or
terminated by our directors and officers that is either (1) a contract, instruction or written plan intended to satisfy the affirmative defense conditions of Rule
10b5-1(c) (a “Rule 10b5-1 trading arrangement”) or (2) a “non-Rule 10b5-1 trading arrangement” (as defined in Item 408(c) of Regulation S-K):
Name (Title)
Action Taken (Date of
Action)
Type of Trading
Arrangement
Nature of Trading
Arrangement
Duration of Trading
Arrangement
Aggregate Number of
Securities
Rahul Ballal
(Director)
Adoption (November 3,
2025)
Rule 10b5-1 trading
arrangement
Sale
Through and
including February 8,
2027
Up to 28,995 shares
Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections
Not applicable.
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PART III
Item 10. Directors, Executive Officers and Corporate Governance
The information required by this Item 10 will be included in our definitive proxy statement to be filed with the Securities and Exchange Commission, or
SEC, with respect to our 2026 Annual Meeting of Stockholders and is incorporated herein by reference. 
Item 11. Executive Compensation
The information required by this Item 11 will be included in our definitive proxy statement to be filed with the SEC with respect to our 2026 Annual
Meeting of Stockholders and, other than the information required by Item 402(v) of Regulation S-K, is incorporated herein by reference.
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
The information required by this Item 12 will be included in our definitive proxy statement to be filed with the SEC with respect to our 2026 Annual
Meeting of Stockholders and is incorporated herein by reference.
Item 13. Certain Relationships and Related Transactions, and Director Independence
The information required by this Item 13 will be included in our definitive proxy statement to be filed with the SEC with respect to our 2026 Annual
Meeting of Stockholders and is incorporated herein by reference.
Item 14. Principal Accountant Fees and Services
The information required by this Item 14 will be included in our definitive proxy statement to be filed with the SEC with respect to our 2026 Annual
Meeting of Stockholders and is incorporated herein by reference.
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PART IV
Item 15. Exhibits and Financial Statement Schedules
(1)   Financial Statements
The following documents are included on pages F-1 through F-28 attached hereto and are filed as part of this Annual Report on Form 10-K.
Report of Independent Registered Public Accounting Firm (PCAOB ID 238)
F-2
Consolidated Balance Sheets
F-4
Consolidated Statements of Operations
F-5
Consolidated Statements of Comprehensive (Loss) Income
F-6
Consolidated Statements of Stockholders’ Equity
F-7
Consolidated Statements of Cash Flows
F-8
Notes to Consolidated Financial Statements
F-9
(2)   Financial Statement Schedules
Schedules have been omitted since they are either not required or not applicable or the information is otherwise included herein.
(3)   Exhibits
Exhibit
Number
Description of Exhibit
Incorporated by Reference
Filed
Herewith
Form
File
Number
Date of Filing
Exhibit
Number
2.1
Purchase and Sale Agreement, dated as of
December 20, 2020, by and among the Registrant,
Servier Pharmaceuticals, LLC, and, solely for
purposes of guaranteeing certain obligations of the
Purchaser, Servier S.A.S
8-K
001-36014
December 22, 2020
2.1
2.2**
Purchase and Sale Agreement, dated October 27,
2022, by and among the Registrant, Sagard
Healthcare Royalty Partners, LP and Sagard
Healthcare Partners Co-Invest Designated Activity
Company
10-K
001-36014
February 23, 2023
2.2

3.1
Restated Certificate of Incorporation of the
Registrant
8-K
001-36014
July 30, 2013
3.1
3.2
Third Amended and Restated By-Laws
8-K
001-36014
March 3, 2023
3.1
4.1
Specimen Stock Certificate evidencing the shares
of common stock
S-1
333-189216
June 24, 2013
4.1
4.2
Description of Securities Registered Under Section
12 of the Securities Exchange Act of 1934
X
10.1#
2013 Stock Incentive Plan
S-1
333-189216
June 24, 2013
10.4
10.2#
Form of Incentive Stock Option Agreement under
2013 Stock Incentive Plan
S-1
333-189216
June 24, 2013
10.5
10.3#
Form of Nonstatutory Stock Option Agreement
under 2013 Stock Incentive Plan
S-1
333-189216
June 24, 2013
10.6
10.4#
Amended and Restated 2013 Employee Stock
Purchase Plan
10-K
001-36014
February 13, 2025
10.4
88

Table of Contents
10.5
Form of Indemnification Agreement between the
Registrant and each of its Executive Officers and
Directors
S-1
333-189216
July 11, 2013
10.12
10.6
Lease, dated as of September 15, 2014, between
the Registrant and Forest City 88 Sidney, LLC
8-K
001-36014
September 19, 2014
10.1
10.7
First Amendment to Lease for 88 Sidney Street,
dated as of November 21, 2014, between the
Registrant and Forest City 88 Sidney, LLC
8-K
001-36014
November 26, 2014
10.1
10.8#
Summary Description of Annual Cash Incentive
Program
10-Q
001-36014
May 11, 2015
10.1
10.9
Second Amendment to Lease for 88 Sidney Street,
dated July 20, 2015, by and between the Registrant
and Forest City 88 Sidney Street, LLC
8-K
001-36014
July 23, 2015
10.1
10.10#
Form of Performance Share Unit Agreement under
2013 Stock Incentive Plan
10-K
001-36014
February 26, 2016
10.25
10.11
Lease, dated as of November 17, 2017, between
the Registrant and UP 64 Sidney Street, LLC
8-K
001-36014
November 22, 2017
10.1
10.12
Third Amendment to Lease for 88 Sidney Street,
dated November 17, 2017, by and between the
Registrant and Forest City 88 Sidney Street, LLC
8-K
001-36014
November 22, 2017
10.2
10.13
First Amendment of Lease, dated April 11, 2018,
by and between UP 64 Sidney Street, LLC and
Agios Pharmaceuticals. Inc.
8-K
001-36014
April 13, 2018
10.1
10.14#
Form of Restricted Stock Unit Agreement under
2013 Stock Incentive Plan (for employees)
10-Q
001-36014
May 4, 2018
10.1
10.15#
Form of Restricted Stock Unit Agreement under
2013 Stock Incentive Plan (for directors)
10-K
001-36014
February 14, 2019
10.32
10.16
Lease, dated as of April 11, 2019, by and between
the Registrant and Thirty-Eight Sidney Street
Limited LLC
10-Q
001-36014
August 1, 2019
10.1
10.17
Fourth Amendment to Lease, dated as of April 11,
2019, by and between the Registrant and Forest
City 88 Sidney Street, LLC
10-Q
001-36014
August 1, 2019
10.2
10.18
Third Amendment of Lease, dated as of April 11,
2019, by and between the Registrant and UP 64
Sidney Street, LLC
10-Q
001-36014
August 1, 2019
10.3
10.19#
Letter Agreement, dated July 8, 2022, between the
Registrant and Brian Goff
10-Q
001-36014
August 4, 2022
10.2
10.20#
Form of Inducement Stock Option Agreement for
Brian Goff
10-Q
001-36014
August 4, 2022
10.3
10.21#
Form of Inducement Restricted Stock Unit
Agreement for Brian Goff
10-Q
001-36014
August 4, 2022
10.4
10.22#**
Form of Inducement Performance Stock Unit
Agreement for Brian Goff
10-Q
001-36014
August 4, 2022
10.5
10.23#
Letter Agreement, dated as of September 16, 2022,
between the Registrant and Cecilia Jones
10-Q
001-36014
November 3, 2022
10.5
89

Table of Contents
10.24#
Form of Inducement Stock Option Agreement for
Cecilia Jones
S-8
333- 267624
September 26, 2022
99.1
10.25#
Form of Inducement Restricted Stock Unit
Agreement for Cecilia Jones
S-8
333- 267624
September 26, 2022
99.2
10.26#**
Form of Inducement Performance Stock Unit
Agreement for Cecilia Jones
S-8
333- 267624
September 26, 2022
99.3
10.27#
Amended and Restated Severance Benefits Plan
8-K
001-36014
October 7, 2022
10.1
10.28#
Letter Agreement, dated as of December 5, 2022,
between the Registrant and Tsveta Milanova
10-K
001-36014
February 23, 2023
10.38
10.29#
Form of Inducement Stock Option Agreement for
Tsveta Milanova
S-8
333- 269018
January 3, 2023
99.1
10.30#
Form of Inducement Restricted Stock Unit
Agreement for Tsveta Milanova
S-8
333- 269108
January 3, 2023
99.2
10.31#**
Form of Inducement Performance Stock Unit
Agreement for Tsveta Milanova
S-8
333- 269108
January 3, 2023
99.3
10.32#
2023 Stock Incentive Plan, as amended
S-8
333-288151
June 18, 2025
99.1
10.33#
Form of Stock Option Agreement Under 2023
Stock Incentive Plan
10-Q
001-36014
August 3, 2023
10.2
10.34#
Form of Restricted Stock Unit Agreement Under
2023 Stock Incentive Plan
10-Q
001-36014
August 3, 2023
10.3
10.35#
Form of Restricted Stock Unit Agreement
(Performance-Based) Under 2023 Stock Incentive
Plan
10-Q
001-36014
August 3, 2023
10.4
10.36**
Purchase and Sale Agreement, dated May 24,
2024, by and between the Registrant and Royalty
Pharma Investments 2019 ICAV
10-Q
001-36014
August 1, 2024
10.1
10.37#
Letter Agreement, dated January 31, 2025,
between the Registrant and Krishnan Viswanadhan
X
10.38#
Form of Inducement Stock Option Agreement for
Krishnan Viswanadhan
S-8
333-285585
March 5, 2025
99.1
10.39#
Form of Inducement Restricted Stock Unit
Agreement for Krishnan Viswanadhan
S-8
333-285585
March 5, 2025
99.2
10.40#
Form of Inducement Performance Stock Unit
Agreement for Krishnan Viswanadhan
S-8
333-285585
March 5, 2025
99.3
10.41
Sublease Agreement, dated June 5, 2025, between
the Registrant and GNS Healthcare, Inc. d/b/a
Aitia (64 Sidney Street)
10-Q
001-36014
July 31, 2025
10.2
19.1
Insider Trading Policy
10-K
001-36014
February 13, 2025
19.1
21.1
Subsidiaries of the Registrant
X
23.1
Consent of PricewaterhouseCoopers LLP, an
Independent Registered Public Accounting Firm
X
31.1
Certification of principal executive officer
pursuant to Rule 13a-14(a)/15d-14(a) of the
Securities Exchange Act of 1934, as amended
X
90

Table of Contents
31.2
Certification of principal financial officer pursuant
to Rule 13a-14(a)/15d-14(a) of the Securities
Exchange Act of 1934, as amended.
X
32.1*
Certification of principal executive officer
pursuant to 18 U.S.C. §1350, as adopted pursuant
to Section 906 of the Sarbanes-Oxley Act of 2002.
X
32.2*
Certification of principal financial officer pursuant
to 18 U.S.C. §1350, as adopted pursuant to Section
906 of the Sarbanes-Oxley Act of 2002.
X
97.1
Dodd-Frank Compensation Recovery Policy
10-K
001-36014
February 15, 2024
97.1
101.INS
XBRL Instance Document
X
101.SCH
XBRL Taxonomy Extension Schema Document
X
101.CAL
XBRL Taxonomy Calculation Linkbase Document
X
101.DEF
XBRL Taxonomy Extension Definition Linkbase
Document
X
101.LAB
XBRL Taxonomy Label Linkbase Document
X
101.PRE
XBRL Taxonomy Presentation Linkbase
Document
X
104
Cover Page Interactive Data File (formatted as
Inline XBRL and contained in Exhibit 101)
X
#
Indicates management contract or compensatory plan or arrangement.
*
This certification will not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or the
Exchange Act, or otherwise subject to the liability of that section. Such certification will not be deemed to be incorporated by reference into
any filing under the Securities Act of 1933, as amended, or the Exchange Act, except to the extent specifically incorporated by reference
into such filing.
**
Portions of this exhibit have been omitted pursuant to Item 601(b)(10)(iv) of Regulation S-K.
Item 16. Form 10-K Summary
None.
91

Table of Contents
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
AGIOS PHARMACEUTICALS, INC.
February 12, 2026
By:
/s/ Brian Goff
Brian Goff
Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of
the registrant and in the capacities and on the dates indicated.
Signature
Title
Date
/s/ Brian Goff
Chief Executive Officer
(Principal executive officer)
February 12, 2026
Brian Goff
/s/ Cecilia Jones
Chief Financial Officer
(Principal financial officer)
February 12, 2026
Cecilia Jones
/s/ T.J. Washburn
Vice President, Controller
(Principal accounting officer)
February 12, 2026
T.J. Washburn

/s/ Jacqualyn A. Fouse
Chair of the Board of Directors
February 12, 2026
Jacqualyn A. Fouse, Ph.D.
/s/ Jay Backstrom
Director
February 12, 2026
Jay Backstrom, M.D., M.P.H.

/s/ Rahul Ballal
Director
February 12, 2026
Rahul Ballal, Ph.D.

/s/ Jeffrey Capello
Director
February 12, 2026
Jeffrey Capello
/s/ Kaye Foster
Director
February 12, 2026
Kaye Foster

/s/ Maykin Ho
Director
February 12, 2026
Maykin Ho, Ph.D.

/s/ Catherine Owen Adams
Director
February 12, 2026
Catherine Owen Adams
/s/ David Scadden
Director
February 12, 2026
David Scadden, M.D.
/s/ Cynthia Smith
Director
February 12, 2026
Cynthia Smith
92

Table of Contents
Agios Pharmaceuticals, Inc.
Index to Consolidated Financial Statements
Report of Independent Registered Public Accounting Firm (PCAOB ID 238)
F-2
Consolidated Balance Sheets
F-4
Consolidated Statements of Operations
F-5
Consolidated Statements of Comprehensive (Loss) Income
F-6
Consolidated Statements of Stockholders’ Equity
F-7
Consolidated Statements of Cash Flows
F-8
Notes to Consolidated Financial Statements
F-9
F-1

Table of Contents
Report of Independent Registered Public Accounting Firm
To the Board of Directors and Stockholders of Agios Pharmaceuticals, Inc.
Opinions on the Financial Statements and Internal Control over Financial Reporting
We have audited the accompanying consolidated balance sheets of Agios Pharmaceuticals, Inc. and its subsidiaries (the “Company”) as of December 31,
2025 and 2024, and the related consolidated statements of operations, of comprehensive (loss) income, of stockholders’ equity and of cash flows for each
of the three years in the period ended December 31, 2025, including the related notes (collectively referred to as the “consolidated financial statements”).
We also have audited the Company's internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control -
Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of
December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2025 in
conformity with accounting principles generally accepted in the United States of America. Also in our opinion, the Company maintained, in all material
respects, effective internal control over financial reporting as of December  31, 2025, based on criteria established in Internal Control - Integrated
Framework (2013) issued by the COSO.
Basis for Opinions
The Company's management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting,
and for its assessment of the effectiveness of internal control over financial reporting, included in Management's Annual Report on Internal Control over
Financial Reporting appearing under Item 9A. Our responsibility is to express opinions on the Company’s consolidated financial statements and on the
Company's internal control over financial reporting based on our audits. We are a public accounting firm registered with the Public Company Accounting
Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities
laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable
assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud, and whether effective
internal control over financial reporting was maintained in all material respects.
Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated
financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test
basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting
principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. Our
audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a
material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also
included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our
opinions.
Definition and Limitations of Internal Control over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting
and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control
over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly
reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit
preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are
being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding
prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial
statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of
effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of
compliance with the policies or procedures may deteriorate.
Critical Audit Matters
The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was
communicated or required to be communicated to the audit committee and that (i) relates to accounts or
F-2

Table of Contents
disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments. The
communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by
communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.
Revenue Recognition - PYRUKYND® Product Revenue
As described in Notes 2 and 8 to the consolidated financial statements, the Company generates product revenue from sales of PYRUKYND® to a limited
number of specialty distributors and specialty pharmacy providers, or collectively, the Customers. These Customers subsequently resell PYRUKYND® to
pharmacies or dispense directly to patients. The performance obligation related to the sale of PYRUKYND® is satisfied and revenue is recognized when
the Customer obtains control of the product, which occurs at a point in time, typically upon delivery to the Customer. Revenues from product sales are
recorded at the net sales price, or transaction price, which includes estimates of variable consideration for which reserves are established and result from
contractual adjustments, government rebates, returns and other allowances that are offered within the contracts with the Customers, healthcare providers,
payors and other indirect customers relating to the sale of its products. For the year ended December 31, 2025, the Company recognized $54.0 million of
net product revenue relating to the sale of PYRUKYND®.
The principal consideration for our determination that performing procedures relating to PYRUKYND® product revenue recognition is a critical audit
matter is a high degree of auditor effort in performing procedures related to the Company’s product revenue recognition. Addressing the matter involved
performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These
procedures included testing the effectiveness of controls relating to the revenue recognition process, including controls over the recording of
PYRUKYND® product revenue at the transaction price once control passes to the customer. These procedures also included, among others, (i) evaluating
management’s revenue recognition policy and (ii) testing the completeness, accuracy, and occurrence of revenue recognized for a sample of product
revenue transactions by obtaining and inspecting source documents, such as purchase orders, invoices, proof of delivery, and subsequent cash receipts.
/s/ PricewaterhouseCoopers LLP
Boston, Massachusetts
February 12, 2026
We have served as the Company’s auditor since 2017.
F-3

Table of Contents
Agios Pharmaceuticals, Inc.
Consolidated Balance Sheets
(In thousands, except share and per share data) December 31:
2025
2024
Assets
Current assets:
Cash and cash equivalents
$
89,130 
$
76,247 
Marketable securities
765,295 
817,463 
Accounts receivable, net
10,577 
4,109 
Inventory
32,920 
27,616 
Prepaid expenses and other current assets
44,130 
40,165 
Total current assets
942,052 
965,600 
Marketable securities
310,013 
638,321 
Operating lease assets
30,454 
42,879 
Property and equipment, net
10,775 
11,675 
Other non-current assets
3,931 
4,724 
Total assets
$
1,297,225 
$
1,663,199 
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable
$
18,355 
$
16,643 
Accrued expenses
45,459 
46,861 
Income taxes payable
— 
871 
Operating lease liabilities
18,392 
16,781 
Total current liabilities
82,206 
81,156 
Operating lease liabilities, net of current portion
21,815 
40,207 
Other non-current liabilities
90 
880 
Total liabilities
104,111 
122,243 
Commitments and contingent liabilities (Note 14)
Stockholders’ equity:
Preferred stock, $0.001 par value; 25,000,000 shares authorized, no shares issued and outstanding at December
31, 2025 and 2024
— 
— 
Common stock, $0.001 par value; 125,000,000 shares authorized; 74,665,003 shares issued and 58,448,592
outstanding at December 31, 2025 and 73,372,696 shares issued and 57,156,285 outstanding at December 31,
2024
75 
73 
Additional paid-in capital
2,555,037 
2,493,811 
Accumulated other comprehensive income (loss)
2,193 
(1,518)
Accumulated deficit
(561,705)
(148,924)
Treasury stock, at cost (16,216,411 shares at December 31, 2025 and December 31, 2024)
(802,486)
(802,486)
Total stockholders’ equity
1,193,114 
1,540,956 
Total liabilities and stockholders’ equity
$
1,297,225 
$
1,663,199 
See accompanying Notes to Consolidated Financial Statements.
F-4

Table of Contents
Agios Pharmaceuticals, Inc.
Consolidated Statements of Operations
 
(In thousands, except share and per share data) Years Ended December 31:
2025
2024
2023
Revenues:
Product revenue, net
$
54,028 
$
36,498 
$
26,823 
Total revenue
54,028 
36,498 
26,823 
Operating expenses
Cost of sales
$
6,345 
$
4,165 
$
2,881 
Research and development
339,535 
301,286 
295,526 
Selling, general and administrative
180,280 
156,784 
119,903 
Total operating expenses
526,160 
462,235 
418,310 
Loss from operations
(472,132)
(425,737)
(391,487)
Gain on sale of contingent payments
— 
889,136 
— 
Milestone payment from gain on sale of oncology business
— 
200,000 
— 
Interest income, net
56,379 
48,083 
33,344 
Other income, net
1,956 
6,487 
6,055 
Net (loss) income before taxes
(413,797)
717,969 
(352,088)
Income tax (benefit) expense
(1,016)
44,244 
— 
Net (loss) income
$
(412,781)
$
673,725 
$
(352,088)
Net (loss) income per share - basic
$
(7.12)
$
11.86 
$
(6.33)
Net (loss) income per share - diluted
$
(7.12)
$
11.64 
$
(6.33)
Weighted-average number of common shares used in computing net (loss) income per share –
basic
57,972,004 
56,807,415 
55,651,487 
Weighted-average number of common shares used in computing net (loss) income per share –
diluted
57,972,004 
57,889,255 
55,651,487 
 See accompanying Notes to Consolidated Financial Statements.
F-5

Table of Contents
Agios Pharmaceuticals, Inc.
Consolidated Statements of Comprehensive (Loss) Income
 
(In thousands) Years Ended December 31:
2025
2024
2023
Net (loss) income
$
(412,781)
$
673,725 
$
(352,088)
Other comprehensive (loss) income
Unrealized gain (loss) on available-for-sale securities
3,711 
(1,077)
12,094 
Comprehensive (loss) income
$
(409,070)
$
672,648 
$
(339,994)
See accompanying Notes to Consolidated Financial Statements.
F-6

Table of Contents
Agios Pharmaceuticals, Inc.
Consolidated Statements of Stockholders’ Equity
 
 

Common Stock
Additional

Paid-In

Capital
Accumulated

Other

Comprehensive

Income (Loss)
Accumulated

Deficit
Treasury
Total

Stockholders’

Equity
(In thousands, except share amounts)
Shares
Amount
Shares
Amount
Balance at December 31, 2022
71,256,118 
$
71 
$
2,386,325 
$
(12,535)
$
(470,561)
(16,216,411)
$
(802,486)
$
1,100,814 
Unrealized gain on available-for-sale
securities
— 
— 
— 
12,094 
— 
— 
— 
12,094 
Net loss
— 
— 
— 
— 
(352,088)
— 
— 
(352,088)
Stock-based compensation expense
— 
— 
44,766 
— 
— 
— 
— 
44,766 
Common stock issued under stock
incentive plan and ESPP
905,371 
1 
5,432 
— 
— 
— 
— 
5,433 
Balance at December 31, 2023
72,161,489 
$
72 
$
2,436,523 
$
(441)
$
(822,649)
(16,216,411)
$
(802,486)
$
811,019 
Unrealized loss on available-for-sale
securities
— 
— 
— 
(1,077)
— 
— 
— 
(1,077)
Net income
— 
— 
— 
— 
673,725 
— 
— 
673,725 
Stock-based compensation expense
— 
— 
42,847 
— 
— 
— 
— 
42,847 
Common stock issued under stock
incentive plan and ESPP
1,211,207 
1 
14,441 
— 
— 
— 
— 
14,442 
Balance at December 31, 2024
73,372,696 
$
73 
$
2,493,811 
$
(1,518)
$
(148,924)
(16,216,411)
$
(802,486)
$
1,540,956 
Unrealized gain on available-for-sale
securities
— 
— 
— 
3,711 
— 
— 
— 
3,711 
Net loss
— 
— 
— 
— 
(412,781)
— 
— 
(412,781)
Stock-based compensation expense
— 
— 
52,552 
— 
— 
— 
— 
52,552 
Common stock issued under stock
incentive plan and ESPP
1,292,307 
2 
8,674 
— 
— 
— 
— 
8,676 
Balance at December 31, 2025
74,665,003 
$
75 
$
2,555,037 
$
2,193 
$
(561,705)
(16,216,411)
$
(802,486)
$
1,193,114 
See accompanying Notes to Consolidated Financial Statements.
F-7

Table of Contents
Agios Pharmaceuticals, Inc.
Consolidated Statements of Cash Flows
(In thousands) Years Ended December 31:
2025
2024
2023
Operating activities
Net (loss) income
$
(412,781)
$
673,725 
$
(352,088)
Adjustments to reconcile net (loss) income to net cash used in operating activities:
Depreciation and amortization
5,177 
5,653 
6,623 
Stock-based compensation expense
52,552 
42,847 
44,766 
Net accretion of discount on marketable securities
(7,195)
(14,486)
(5,051)
Gain on sale of contingent payments
— 
(889,136)
— 
Loss (gain) on disposal of property and equipment
5 
(39)
553 
Non-cash operating lease expense
12,425 
11,530 
10,720 
Expense associated with license agreement
10,000 
— 
17,500 
Realized gain on investments
(118)
(167)
(28)
Milestone payment from gain on sale of oncology business
— 
(200,000)
— 
Changes in operating assets and liabilities:
Accounts receivable, net
(6,468)
(1,299)
(604)
Inventory
(5,304)
(8,540)
(10,584)
Prepaid expenses and other current and non-current assets
(3,172)
(5,811)
3,833 
Accounts payable
1,746 
6,601 
(8,733)
Accrued expenses
(1,402)
3,694 
12,817 
Income taxes payable
(871)
871 
— 
Operating lease liabilities
(16,781)
(15,008)
(13,663)
Other liabilities
(790)
(276)
(2,123)
Net cash used in operating activities
(372,977)
(389,841)
(296,062)
Investing activities
Purchases of marketable securities
(641,759)
(1,542,433)
(417,930)
Proceeds from maturities and sales of marketable securities
1,033,259 
818,383 
674,679 
Proceeds from sale of contingent payments
— 
889,136 
— 
Proceeds from milestone payment from gain on sale of oncology business
— 
200,000 
— 
Payments associated with license agreement
(10,000)
— 
(17,500)
Purchases of property and equipment
(4,316)
(1,685)
(999)
Proceeds from sale of equipment
— 
40 
1,325 
Net cash provided by investing activities
377,184 
363,441 
239,575 
Financing activities
Net proceeds from stock option exercises and employee stock purchase plan
8,676 
14,442 
5,433 
Net cash provided by financing activities
8,676 
14,442 
5,433 
Net change in cash and cash equivalents
12,883 
(11,958)
(51,054)
Cash and cash equivalents at beginning of the period
76,247 
88,205 
139,259 
Cash and cash equivalents at end of the period
$
89,130 
$
76,247 
$
88,205 
Supplemental disclosure of non-cash investing and financing transactions:
Additions to property and equipment in accounts payable and accrued expenses
$
283 
$
317 
$
55 
Net cash taxes paid
$
628 
$
43,150 
$
1,569 
See accompanying Notes to Consolidated Financial Statements.
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Agios Pharmaceuticals, Inc.
Notes to Consolidated Financial Statements
Note 1. Nature of Business
Note Regarding Certain References in this Annual Report on Form 10-K
Throughout this Annual Report on Form 10-K, “Agios,” “the Company,” “we,” “us,” and “our,” and similar expressions, except where the context requires
otherwise, refer to Agios Pharmaceuticals, Inc. and its consolidated subsidiaries, and “our Board of Directors” refers to the board of directors of Agios
Pharmaceuticals, Inc. 
In addition, unless otherwise stated or the context indicates otherwise, all references in this Annual Report on Form 10-K to “AQVESME™ (mitapivat)” or
“AQVESME™” refer to our FDA-approved medicine for the treatment of anemia in adults with non-transfusion dependent and transfusion-dependent
alpha- or beta-thalassemia in the United States; references to “PYRUKYND® (mitapivat)”, “PYRUKYND®”, or “mitapivat” refer to all other
commercially available mitapivat products or mitapivat product candidates for which we are exploring further applications and indications, as the context
requires. 
Overview
We are a commercial-stage biopharmaceutical company dedicated to redefining the future of rare disease treatment. Fueled by connections, we build
trusted partnerships with communities, collaborating to develop and deliver innovative medicines with the potential to transform lives. With a foundation in
hematology, we combine biological expertise with real-world insights to advance a growing pipeline of rare disease medicines that reflect the priorities of
the people we serve. We are located in Cambridge, Massachusetts.
The lead product candidate in our portfolio, mitapivat, is an activator of both wild-type and mutant pyruvate kinase, or PK, enzymes for the potential
treatment of hemolytic anemias. Mitapivat is approved in the United States by the U.S. Food and Drug Administration, or FDA, under the brand name
AQVESME™ for the treatment of anemia in adults with non-transfusion dependent and transfusion-dependent alpha- or beta-thalassemia and in Saudi
Arabia under the brand name PYRUKYND® for the treatment of adult patients with non-transfusion-dependent and transfusion-dependent alpha- or beta-
thalassemia. Mitapivat is also approved under the brand name PYRUKYND® in the United States by the FDA for the treatment of hemolytic anemia in
adults with PK deficiency and in the European Union, or EU, and Great Britain for the treatment of PK deficiency in adults.
In December 2024, we announced that we submitted a marketing authorization application, or MAA, to the European Medicines Agency, or EMA, and a
regulatory application to the United Arab Emirates health authorities for PYRUKYND® for the treatment of adult patients with non-transfusion dependent
and transfusion-dependent alpha- or beta-thalassemia. In October 2025, we announced that the Committee for Medicinal Products for Human Use, or the
CHMP, of the EMA adopted a positive opinion for the new indication for PYRUKYND® in adults for the treatment of anemia associated with transfusion-
dependent and non-transfusion-dependent alpha- or beta-thalassemia. The European Commission is reviewing the CHMP’s opinion, with the final decision
expected in early 2026.
We will have a pre-supplemental New Drug Application, or sNDA, meeting with the FDA in the first quarter of 2026 and intend to submit a U.S. marketing
application for mitapivat in sickle cell disease, or SCD, following that engagement.
In addition, we are evaluating mitapivat for the treatment of pediatric patients with PK deficiency. We are also developing (i) tebapivat, a novel PK
activator, for the potential treatment of lower-risk myelodysplastic syndromes, or LR MDS, and SCD; (ii) AG-181, our phenylalanine hydroxylase, or PAH,
stabilizer for the potential treatment of phenylketonuria, or PKU; and (iii) AG-236, an siRNA in-licensed from Alnylam Pharmaceuticals, Inc., or Alnylam,
targeting the transmembrane serine protease 6, or TMPRSS6, gene for the potential treatment of polycythemia vera, or PV.
We are subject to risks common to companies in our industry including, but not limited to, uncertainties relating to conducting preclinical and clinical
research and development, the manufacture and supply of products for clinical and commercial use, obtaining and maintaining regulatory approvals and
pricing and reimbursement for our products, market acceptance, managing global growth and operating expenses, availability of additional capital,
competition, obtaining and enforcing patents, stock price volatility, dependence on collaborative relationships and third-party service providers, dependence
on key personnel, potential litigation, potential product liability claims and potential government investigations.
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Alnylam License Agreement
On July 28, 2023, we entered into a license agreement with Alnylam under which we acquired the rights to develop and commercialize Alnylam’s novel
preclinical siRNA targeting the TMPRSS6 gene, which we refer to as AG-236, as a potential disease-modifying treatment for patients with PV.
In accordance with the license agreement, in the year ended December 31, 2023, we made an up-front payment to Alnylam and recognized in-process
research and development of $17.5 million which was recorded in research and development expense within our consolidated statements of operations and
classified as investing activities within our consolidated statements of cash flows. We will also pay Alnylam for certain expenses associated with the
development of AG-236, and these will be recorded in our consolidated statements of operations as incurred. Additionally, we are responsible to pay up to
$130.0 million in potential development and regulatory milestones, in addition to sales milestones as well as tiered royalties on annual net sales, if any, of
licensed products, which may be subject to specified reductions and offsets. In the year ended December 31, 2025, we achieved a regulatory milestone that
triggered a $10.0 million payment to Alnylam, which was recorded in research and development expense within our consolidated statements of operations
and classified as investing activities within our consolidated statements of cash flows.
Sale of Oncology Business to Servier and Sale of Contingent Payments
On March 31, 2021, we completed the sale of our oncology business to Servier Pharmaceuticals, LLC, or Servier. The transaction included the sale of our
entire oncology business, including our clinical-stage product candidate vorasidenib, for a payment of approximately $1.8 billion in cash at the closing,
subject to certain adjustments, and a payment of $200.0 million in cash, if, prior to January 1, 2027, vorasidenib is granted new drug application, or NDA,
approval from the FDA with an approved label that permits vorasidenib’s use as a single agent for the adjuvant treatment of patients with Grade 2 glioma
that have an isocitrate dehydrogenase, or IDH, 1 or 2 mutation (and, to the extent required by such approval, the vorasidenib companion diagnostic test is
granted an FDA premarket approval), or the Vorasidenib Milestone Payment, and a royalty of 15% of U.S. net sales of vorasidenib from the first
commercial sale of vorasidenib through loss of exclusivity, or the Vorasidenib Royalty Rights. The Vorasidenib Milestone Payment and Vorasidenib
Royalty Rights are referred to as contingent payments and recognized as income when realizable.
In August 2024, the FDA approved vorasidenib for adult and pediatric patients 12 years and older with Grade 2 astrocytoma or oligodendroglioma with a
susceptible IDH1 or IDH2 mutation, following surgery including biopsy, sub-total resection, or gross total resection. In September 2024, we received the
Vorasidenib Milestone Payment from Servier and recognized income of $200.0  million within the milestone payment from gain on sale of oncology
business line item in our consolidated statements of operations for the year ended December 31, 2024. In May 2024, we entered into a purchase and sale
agreement to sell the Vorasidenib Royalty Rights to Royalty Pharma Investments 2019 ICAV, or Royalty Pharma, for $905.0 million in cash, or the Upfront
Payment. The sale was contingent upon FDA approval of vorasidenib and other customary closing conditions.
Upon consummation of the sale in August 2024, Royalty Pharma acquired 100% of the Vorasidenib Royalty Rights payments made by Servier on account
of up to $1.0 billion in U.S. net sales for each calendar year. In addition, any such Vorasidenib Royalty Rights payments made by Servier on account of
U.S. net sales in each calendar year in excess of $1.0 billion will be split, with Royalty Pharma having the rights to a 12% earn-out on those excess
payments and Agios retaining the rights to a 3% earn-out on those excess payments, or the Retained Earn-Out Rights. As a result of the sale, we recognized
income of $889.1  million ($905.0  million net of fees of $15.9  million) within the gain on sale of contingent payments line item in our consolidated
statements of operations for the year ended December 31, 2024. Royalty income related to the Retained Earn-Out Rights, if any, will be recognized in the
period when realizable.
Liquidity
As of December 31, 2025, we had cash, cash equivalents and marketable securities of $1.2 billion. Although we have incurred recurring losses and expect
to continue to incur losses for the foreseeable future, we expect our cash, cash equivalents and marketable securities to be sufficient to fund current
operations for at least the next twelve months from the issuance of the financial statements. If we are unable to raise additional funds through equity or debt
financings, we may be required to delay, limit, reduce or terminate product development or future commercialization efforts, or grant rights to develop and
market products or product candidates that we would otherwise prefer to develop and market ourselves.
Note 2. Summary of Significant Accounting Policies
Principles of consolidation
The consolidated financial statements include our accounts and the accounts of our wholly owned subsidiaries, Agios Securities Corporation, Agios
International Sarl (GmbH), Agios Germany GmbH, Agios Netherlands B.V., Agios Italy S.R.L., Agios
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France SARL, and Agios Limited. All intercompany transactions have been eliminated in consolidation. The consolidated financial statements have been
prepared in conformity with U.S. generally accepted accounting principles, or U.S. GAAP.
Use of estimates
The preparation of our consolidated financial statements requires us to make estimates, judgments and assumptions that may affect the reported amounts of
assets, liabilities, equity, revenues and expenses and related disclosure of contingent assets and liabilities. On an ongoing basis we evaluate our estimates,
judgments and methodologies. We base our estimates on historical experience and on various other assumptions that we believe are reasonable, the results
of which form the basis for making judgments about the carrying values of assets, liabilities and equity and the amount of revenues and expenses.
Cash and cash equivalents
We consider highly liquid investments with a maturity of three months or less when purchased to be cash equivalents. Cash equivalents are stated at fair
value.
Accounts receivable, net
Our trade accounts receivable arise from product sales and represent amounts due from specialty distributors and specialty pharmacy providers in the U.S.
and our distribution partners outside the U.S. We monitor the financial performance and creditworthiness of our customers so that we can properly assess
and respond to changes in their credit profile. We reserve against these receivables for estimated losses that may arise from a customer’s inability to pay.
Amounts determined to be uncollectible are charged or written-off against the reserve.
Inventory
Inventory is stated at the lower of cost or estimated net realizable value on a first-in, first-out basis. Prior to the regulatory approval of our product
candidates, we incur expenses for the manufacture of drug product that could potentially be available to support the commercial launch of those products.
Until the date at which regulatory approval has been received or is otherwise considered probable, we record all such costs as research and development
expenses. Upon approval of our wholly owned product, PYRUKYND®, by the FDA on February 17, 2022 for the treatment of hemolytic anemia in adults
with PK deficiency in the United States, we began to capitalize inventories of PYRUKYND®. Additionally, upon approval of our wholly owned product,
AQVESME™, by the FDA on December 23, 2025 for the treatment of anemia in adults with non-transfusion dependent and transfusion-dependent alpha-
or beta-thalassemia in the United States, we began to capitalize inventories of AQVESME™.
Revenue recognition
Under ASC 606, Revenue from Contracts with Customers, or ASC 606, revenue is recognized when the customer obtains control of promised goods or
services, in an amount that reflects the consideration that we expect to receive in exchange for those goods or services. To determine revenue recognition
for arrangements that have been determined to be within the scope of ASC 606, we perform the following five steps: (i) identify the contract(s) with a
customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance
obligations in the contract; and (v) recognize revenue when (or as) we satisfy a performance obligation. We only apply the five-step model to contracts
when it is probable that we will collect the consideration we are entitled to in exchange for the goods or services we transfer to the customer.
This standard applies to all contracts with customers, except for contracts that are within the scope of other standards, such as leases, insurance,
collaboration arrangements and financial instruments.
Once the contract is determined to be within the scope of ASC 606, we assess the goods or services promised within each contract and determine those that
are performance obligations, and assess whether each promised good or service is distinct. We will then recognize as revenue the amount of the transaction
price that is allocated to the respective performance obligation when (or as) the performance obligation is satisfied.
Product Revenue
We generate product revenue from sales of PYRUKYND® in the United States to a limited number of specialty distributors and specialty pharmacy
providers, and to Avanzanite and NewBridge outside of the United States, or collectively, the Customers. These Customers subsequently resell
PYRUKYND® to pharmacies or dispense PYRUKYND® directly to patients. In addition to distribution agreements with Customers, we enter into
arrangements with healthcare providers and payors that provide for government-mandated and/or privately-negotiated rebates, chargebacks and discounts
with respect to the purchase of PYRUKYND®.
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The performance obligation related to the sale of PYRUKYND® is satisfied and revenue is recognized when the Customer obtains control of the product,
which occurs at a point in time, typically upon delivery to the Customer.
Revenues from product sales are recorded at the net sales price, or transaction price, which includes estimates of variable consideration for which reserves
are established and result from contractual adjustments, government rebates, returns and other allowances that are offered within the contracts with our
Customers, healthcare providers, payors and other indirect customers relating to the sale of our products.
Contractual Adjustments. We generally provide Customers with discounts, including prompt pay discounts, and allowances that are explicitly stated
in the contracts and are recorded as a reduction of revenue in the period the related product revenue is recognized. In addition, we receive sales order
management, data and distribution services from certain Customers.
Chargebacks and discounts represent the estimated obligations resulting from contractual commitments to sell products to qualified healthcare
providers at prices lower than the list prices charged to Customers who directly purchase the product from us. Customers charge us for the difference
between what they pay for the product and the ultimate selling price to the qualified healthcare providers. These reserves are estimated using the
expected value method, based upon a range of possible outcomes that are probability-weighted for the estimated channel mix and are established in
the same period that the related revenue is recognized, resulting in a reduction of product revenue.
Government Rebates. Government rebates include Medicare, TriCare, and Medicaid rebates, which we estimate using the expected value method,
based upon a range of possible outcomes that are probability-weighted for the estimated payor mix. These reserves are recorded in the same period
the related revenue is recognized, resulting in a reduction of product revenue.
Returns. We estimate the amount of product sales that may be returned by Customers and record this estimate as a reduction of revenue in the period
the related product revenue is recognized. We currently estimate product return liabilities using the expected value method, based on available
industry data, including our visibility into the inventory remaining in the distribution channel.
Cost of sales
Cost of sales consists primarily of manufacturing costs for sales of PYRUKYND®. Based on our policy to expense costs associated with the manufacturing
of our products prior to regulatory approval, certain of the manufacturing costs associated with product shipments of PYRUKYND® recorded during the
years ended December 31, 2025, 2024 and 2023 were expensed prior to February 17, 2022 and, therefore, are not included in costs of sales during the years
ended December 31, 2025, 2024 and 2023. The amounts excluded from cost of sales were not significant during the years ended December 31, 2025, 2024
and 2023.
Inventories are reviewed periodically to identify excess or obsolete inventory based on projected sales activity as well as product shelf-life. Expired
inventory is disposed of, and the related costs are recognized as cost of sales in our consolidated statements of operations, when, based on the expiry date,
we do not believe we are able to sell the inventory. We have not reserved for excess or obsolete inventory during the years ended December 31, 2025 and
2024.
Marketable securities
Marketable securities at December 31, 2025 and 2024 consisted of investments in corporate debt securities, U.S. Treasuries, government securities, and
certificates of deposit. We determine the appropriate classification of the securities at the time they are acquired and evaluate the appropriateness of such
classifications at each balance sheet date. We classify our marketable securities as available-for-sale pursuant to ASC 320, Investments – Debt and Equity
Securities. Marketable securities are recorded at fair value. Unrealized gains and losses are included as a component of accumulated other comprehensive
income (loss) in the consolidated balance sheets and statements of stockholders’ equity and a component of total comprehensive (loss) income in the
consolidated statements of comprehensive (loss) income, until realized. Realized gains and losses are included in interest income, net on a specific-
identification basis.
At December 31, 2025 and 2024, we held both current and non-current investments. Investments classified as current are those that: (i) have a maturity of
less than one year, or (ii) have a maturity of greater than one year but we intend to liquidate within the next twelve months. Investments classified as non-
current are those that: (i) have a maturity of greater than one year, and (ii) we do not intend to liquidate within the next one year, although these funds are
available for use and therefore classified as available-for-sale.
We review marketable securities for impairment whenever the fair value of a marketable security is less than the amortized cost and evidence indicates that
a marketable security’s carrying amount is not recoverable. Unrealized losses are evaluated for
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impairment under ASC 326, Financial Instruments - Credit Losses, to determine if the impairment is credit-related or noncredit-related. Credit-related
impairment is recognized as an allowance on the balance sheet with a corresponding adjustment to earnings, and noncredit-related impairment is
recognized in other comprehensive (loss) income, net of taxes. Evidence considered in this assessment includes reasons for the impairment, compliance
with our investment policy, the severity of the impairment, collectability of the security, and any adverse conditions specifically related to the security, an
industry, or geographic area.
Fair value measurements
We record cash equivalents and marketable securities at fair value. ASC 820, Fair Value Measurements and Disclosures, establishes a fair value hierarchy
for those instruments measured at fair value that distinguishes between assumptions based on market data (observable inputs) and our own assumptions
(unobservable inputs). The hierarchy consists of three levels:
Level 1 – Unadjusted quoted prices in active markets for identical assets or liabilities.
Level 2 – Quoted prices for similar assets and liabilities in active markets, quoted prices in markets that are not active, or inputs which are
observable, either directly or indirectly, for substantially the full term of the asset or liability.
Level 3 – Unobservable inputs that reflect our own assumptions about the assumptions market participants would use in pricing the asset or liability
in which there is little, if any, market activity for the asset or liability at the measurement date.
Our financial assets, which include cash equivalents and marketable securities, have been initially valued at the transaction price, and subsequently
revalued at the end of each reporting period, utilizing third-party pricing services or other observable market data. The pricing services utilize industry
standard valuation models, including both income and market based approaches, and observable market inputs to determine value. After completing our
validation procedures, we did not adjust or override any fair value measurements provided by the pricing services as of December 31, 2025 or 2024. Fair
value information for these assets, including their classification in the fair value hierarchy is included in Note 3, Fair Value Measurements.
There have been no changes to the valuation methods during the years ended December 31, 2025 and 2024. We evaluate transfers between levels at the end
of each reporting period.
The carrying amounts of prepaid expenses and other current assets, accounts payable, and accrued expenses approximate their fair values due to their short-
term maturities.
Concentrations of credit risk
Financial instruments which potentially subject us to credit risk consist primarily of cash, cash equivalents, and marketable securities. We hold these
investments in highly rated financial institutions, and, by policy, limit the amounts of credit exposure to any one financial institution. These amounts at
times may exceed federally insured limits. We have not experienced any credit losses in such accounts and do not believe we are exposed to any significant
credit risk on these funds. We have no off-balance sheet concentrations of credit risk, such as foreign currency exchange contracts, option contracts, or
other hedging arrangements.
Property and equipment
Property and equipment consist of laboratory equipment, computer equipment and software, leasehold improvements, furniture and fixtures, and office
equipment. Costs of major additions and betterment are capitalized; maintenance and repairs, which do not improve or extend the life of the respective
assets, are charged to expense as incurred. Upon retirement or sale, the cost of the disposed asset and the related accumulated depreciation are removed
from the accounts and the resulting gain or loss is recognized.
Property and equipment is stated at cost, and depreciated using the straight-line method over the estimated useful lives of the respective assets:
Years
Laboratory equipment
5
Computer equipment and software
3
Furniture and fixtures
5
Office equipment
5
Leasehold improvements are amortized over the lesser of the remaining lease term or the estimated useful life of the improvement.
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Impairment of long-lived assets
We periodically evaluate our long-lived assets for potential impairment in accordance with ASC 360, Property, Plant and Equipment. Potential impairment
is assessed when there is evidence that events or changes in circumstances indicate that the carrying amount of an asset may not be recovered.
Recoverability of these assets is assessed based on the undiscounted expected future cash flows from the assets, considering a number of factors, including
past operating results, budgets and economic projections, market trends and product development cycles. If impairments are identified, assets are written
down to their estimated fair value. We did not recognize any impairment charges through December 31, 2025.
Leases
We determine if an arrangement is a lease at inception. An arrangement is determined to contain a lease if the contract conveys the right to control the use
of an identified property or equipment for a period of time in exchange for consideration. If we can benefit from the various underlying assets of a lease on
their own or together with other resources that are readily available, or if the various underlying assets are neither highly dependent on nor highly
interrelated with other underlying assets in the arrangement, they are considered to be a separate lease component. In the event multiple underlying assets
are identified, the lease consideration is allocated to the various components based on each of the component’s relative fair value.
Operating lease assets represent our right to use an underlying asset for the lease term and operating lease liabilities represent our obligation to make lease
payments arising from the leasing arrangement. Operating lease assets and operating lease liabilities are recognized at commencement date based on the
present value of lease payments over the lease term. As most of our leases do not provide an implicit rate, in determining the operating lease liabilities we
use an estimate of our incremental borrowing rate. The incremental borrowing rate is determined using two alternative credit scoring models to estimate
our credit rating, adjusted for collateralization. The calculation of the operating lease assets includes any lease payments made and excludes any lease
incentives. Our lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option.
For operating leases, we record operating lease assets and lease liabilities in our consolidated balance sheets. Lease expense for lease payments is
recognized on a straight-line basis over the lease term. Short-term leases, or leases that have a lease term of 12 months or less at commencement date, are
excluded from this treatment and are recognized on a straight-line basis over the term of the lease.
Research and development costs
Research and development costs, including those accrued as of each balance sheet date, are expensed as incurred. These costs include salaries and
personnel-related costs, consulting fees, fees paid for contract research services, fees paid to contract research organizations, or CROs, and other third
parties in connection with clinical trials and preclinical development activities, fees paid to investigative sites in connection with clinical trials, the costs
associated with the product manufacturing, development, and distribution of clinical supplies, the costs of laboratory equipment and facilities, and other
external costs.
Nonrefundable advance payments for goods or services to be received in the future for use in research and development activities are deferred and
capitalized. Additionally, there may be instances as of a given balance sheet date in which payments made to our vendors will exceed the level of services
provided, and result in a prepayment of the research and development expense. The capitalized amounts are expensed as the related goods are delivered or
the services are performed. We estimate the time period over which services will be performed and the level of effort to be expended in each period. If the
actual timing of the performance of services or the level of effort varies from our estimate, we adjust the accrual or prepaid accordingly.
Stock-based compensation
We account for stock-based compensation awards in accordance with ASC 718, Compensation –Stock Compensation, or ASC 718. For stock-based awards
granted to employees, non-employees and members of the board of directors for their services and for participation in our employee stock purchase plan,
we estimate the grant date fair value of each option award using the Black-Scholes option-pricing model. The use of the Black-Scholes option-pricing
model requires us to make assumptions with respect to the expected term of the option, the expected volatility of the common stock consistent with the
expected life of the option, risk-free interest rates and expected dividend yields of the common stock. For awards subject to service-based vesting
conditions, we recognize stock-based compensation expense equal to the grant date fair value of stock options on a straight-line basis over the requisite
service period. For awards subject to performance-based vesting conditions, we recognize stock-based compensation expense if the performance condition
is considered probable of achievement using management’s best estimates.
Income taxes
Income taxes are recorded in accordance with ASC 740, Accounting for Income Taxes, or ASC 740, which provides for deferred taxes using an asset and
liability approach. We recognize deferred tax assets and liabilities for the expected future tax
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consequences of events that have been included in our financial statements or tax returns. We determine our deferred tax assets and liabilities based on
differences between the financial reporting and tax bases of assets and liabilities, which are measured using the enacted tax rates and laws that will be in
effect when the differences are expected to reverse. Valuation allowances are provided, if based upon the weight of available evidence, it is more likely than
not that some or all of the deferred tax assets will not be realized.
We also account for uncertain tax positions in accordance with the provisions of ASC 740. When uncertain tax positions exist, we recognize the tax benefit
of tax positions to the extent that the benefit will more likely than not be realized. The determination as to whether the tax benefit will more likely than not
be realized is based upon the technical merits of the tax position as well as consideration of the available facts and circumstances.
Comprehensive (loss) income
Comprehensive (loss) income is defined as the change in equity of a business enterprise during a period from transactions, and other events and
circumstances, and currently consists of net (loss) income and unrealized gains and losses on available-for-sale securities. Accumulated other
comprehensive income (loss) consists entirely of unrealized gains and losses from available-for-sale securities as of December 31, 2025 and 2024.
Net (loss) income per share
Basic net (loss) income per share is calculated by dividing net (loss) income by the weighted-average shares outstanding during the period, without
consideration for common stock equivalents. Diluted net (loss) income per share is calculated by adjusting the weighted-average shares outstanding for the
dilutive effect of common stock equivalents outstanding for the period, determined using the treasury stock method. For purposes of the dilutive net (loss)
income per share calculation, stock options, restricted stock units, or RSUs, and performance-based stock units, or PSUs, for which the performance and
market vesting conditions, respectively, have been deemed probable, and the Amended and Restated 2013 Employee Stock Purchase Plan shares are
considered to be common stock equivalents, while PSUs with performance and market vesting conditions, respectively, that were not deemed probable as
of December 31, 2025 are not considered to be common stock equivalents.
We utilize the control number concept in the computation of diluted earnings per share to determine whether potential common stock equivalents are
dilutive. The control number used is net (loss) income from continuing operations. The control number concept requires that the same number of
potentially dilutive securities applied in computing diluted earnings per share from continuing operations be applied to all other categories of income or
loss, regardless of their anti-dilutive effect on such categories. Since we had a net loss for the years ended December 31, 2025 and 2023, no dilutive effect
was recognized in the calculation of loss per share and basic and diluted net loss per share was the same for those periods.
Segment information
Operating segments are identified as components of an enterprise about which separate discrete financial information is available for evaluation by the
chief operating decision maker, or CODM, or decision-making group in making decisions on how to allocate resources and assess performance. Our
CODM is our chief executive officer, or CEO. Our CEO views our operations and manages our business as one operating segment, which derives its
revenues from the development and commercialization of therapies for patients with rare diseases.
Treasury stock
Treasury stock purchases are accounted for under the cost method whereby the entire cost of the acquired stock is recorded as treasury stock. Repurchases
of our common stock are accounted for as of the settlement date, and are held as treasury stock until they are retired or re-issued. There were no
repurchases, retirements or re-issuances of treasury stock during the years ended December 31, 2025 and 2024.
Recent accounting pronouncements
In December 2023, the Financial Accounting Standards Board, or FASB, issued Accounting Standards Update, or ASU, 2023-09, Income Taxes (Topics
740): Improvements to Income Tax Disclosures, to expand the disclosure requirements for income taxes. Upon adoption, companies will be required to
disclose additional specified categories in the rate reconciliation. Companies will also be required to disclose the amount of income taxes paid
disaggregated by jurisdiction, among other disclosure requirements. The standard is effective for annual periods beginning after December 15, 2024, and
can be applied either prospectively or retrospectively. We adopted the standard during our 2025 annual period and have included required disclosures in
Note 11, Income Taxes.
In November 2024, the FASB issued ASU 2024-03, Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures
(Subtopic 220-40): Disaggregation of Income Statement Expenses, to improve disclosures around
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an entity’s expenses. Upon adoption, companies will be required to disclose in the notes to the financial statements a disaggregation of certain expense
categories included within the expense captions on the face of the income statement. The standard is effective for annual periods beginning after December
15, 2026 and interim periods beginning after December 15, 2027, with early adoption permitted, and can be applied either prospectively or retrospectively.
We plan to adopt the standard in our 2027 annual period and are currently assessing its effect on our financial statement disclosures.
In September 2025, the FASB issued ASU No. 2025-07 Derivatives Scope Refinements and Scope Clarification for Share-Based Noncash Consideration
from a Customer in a Revenue Contract. The amendments provide for a new scope exception to the derivatives guidance for underlyings based on the
operations or activities specific to one of the parties to the contract, and also clarifies that share-based noncash consideration received from a customer as
consideration for the transfer of goods or services in a revenue contract is subject to the revenue guidance and not the financial instruments guidance unless
and until the company’s right to receive or retain the share-based noncash consideration is unconditional as defined in the ASU. The amendments are
effective for annual reporting periods beginning after December 15, 2026, including interim periods within those fiscal years, with early adoption
permitted. We plan to adopt the standard in the first quarter of 2026 and are currently assessing its effect on our consolidated financial statements.
Subsequent events
We considered events or transactions occurring after the balance sheet date, but prior to the issuance of the consolidated financial statements, for potential
recognition or disclosure in our consolidated financial statements. All significant subsequent events have been properly disclosed in the consolidated
financial statements.
Note 3. Fair Value Measurements
The following table summarizes our cash equivalents and marketable securities measured at fair value and by level (as described in Note 2, Summary of
Significant Accounting Policies) on a recurring basis as of December 31, 2025:
(In thousands)
Level 1
Level 2
Level 3
Total
Cash equivalents
$
47,496 
$
3,347 
$
— 
$
50,843 
Total cash equivalents
47,496 
3,347 
— 
50,843 
Marketable securities:
Certificates of deposit
— 
751 
— 
751 
U.S. Treasuries
— 
296,213 
— 
296,213 
Government securities
— 
164,816 
— 
164,816 
Corporate debt securities
— 
613,528 
— 
613,528 
Total marketable securities
— 
1,075,308 
— 
1,075,308 
Total cash equivalents and marketable securities
$
47,496 
$
1,078,655 
$
— 
$
1,126,151 
We had no financial assets or liabilities that were classified as Level 3 at any point during the year ended December 31, 2025.
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Note 4. Marketable Securities
Marketable securities at December 31, 2025 consisted of the following:
(In thousands)
Amortized
Cost
Unrealized
Gains
Unrealized
Losses
Fair
Value
Current:
Certificates of deposit
$
750 
$
1 
$
— 
$
751 
U.S. Treasuries
165,365 
463 
— 
165,828 
Government securities
110,182 
92 
(6)
110,268 
Corporate debt securities
487,786 
673 
(11)
488,448 
Total Current
764,083 
1,229 
(17)
765,295 
Non-current:
U.S. Treasuries
129,738 
648 
(1)
130,385 
Government securities
54,527 
31 
(10)
54,548 
Corporate debt securities
124,767 
346 
(33)
125,080 
Total Non-current
309,032 
1,025 
(44)
310,013 
Total marketable securities
$
1,073,115 
$
2,254 
$
(61)
$
1,075,308 
Marketable securities at December 31, 2024 consisted of the following:
(In thousands)
Amortized
Cost
Unrealized
Gains
Unrealized
Losses
Fair
Value
Current:
Certificates of deposit
$
10,374 
$
11 
$
— 
$
10,385 
U.S. Treasuries
173,465 
153 
(27)
173,591 
Government securities
167,970 
103 
(75)
167,998 
Corporate debt securities
465,427 
321 
(259)
465,489 
Total Current
817,236 
588 
(361)
817,463 
Non-current:
U.S. Treasuries
107,725 
106 
(303)
107,528 
Government securities
112,175 
3 
(469)
111,709 
Corporate debt securities
420,166 
181 
(1,263)
419,084 
Total Non-current
640,066 
290 
(2,035)
638,321 
Total marketable securities
$
1,457,302 
$
878 
$
(2,396)
$
1,455,784 
There were no material realized gains or losses on marketable securities for the years ended December 31, 2025 and 2024.
At December 31, 2025 and 2024, we held 37 and 213 debt securities, respectively, that were in an unrealized loss position for less than one year. We did not
record an allowance for credit losses as of December 31, 2025 and 2024 related to these securities. The aggregate fair value of debt securities in an
unrealized loss position at December 31, 2025 and 2024 was $136.2 million and $768.1 million, respectively. There were no individual securities that were
in a significant unrealized loss position as of December 31, 2025 and 2024. We regularly review the securities in an unrealized loss position and evaluate
the current expected credit loss by considering factors such as historical experience, market data, issuer-specific factors, and current economic conditions.
We do not consider these marketable securities to be impaired as of December 31, 2025 and 2024.
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Note 5. Inventory
Inventory, which consists of commercial supply of PYRUKYND® and AQVESME™, consisted of the following:
(In thousands)
December 31, 2025
December 31, 2024
Raw materials
$
88  $
89 
Work-in-process
30,253 
24,509 
Finished goods
2,579 
3,018 
Total inventory
$
32,920  $
27,616 
Note 6. Leases
Our building leases are comprised of office and laboratory space under non-cancelable operating leases. These lease agreements have remaining lease
terms of two years and contain various clauses for renewal at our option. The renewal options were not included in the calculation of the operating lease
assets and the operating lease liabilities as the renewal options are not reasonably certain of being exercised. The lease agreements do not contain residual
value guarantees.
We currently lease approximately 146,000 square feet at 88 Sidney Street, 43,000 square feet at 64 Sidney Street, and 13,000 square feet at 38 Sidney
Street, Cambridge, Massachusetts. All leases, as amended, expire on February 29, 2028. At the end of the initial lease period, we have the option to extend
the leases at all facilities for two consecutive five-year periods at the fair market rent at the time of the extension.
The components of lease expense and other information related to leases were as follows:
(In thousands)
2025
2024
2023
Operating lease costs
$
15,227  $
15,227  $
15,227 
Cash paid for amounts included in the measurement of operating lease liabilities
19,583 
18,705 
18,170 
We have not entered into any material short-term leases or financing leases as of December 31, 2025.
In arriving at the operating lease liabilities as of December 31, 2025, we applied the weighted-average incremental borrowing rate of 5.7% from inception
over a weighted-average remaining lease term of 2.2 years. In arriving at the operating lease liabilities as of December 31, 2024, we applied the weighted-
average incremental borrowing rate of 5.7% over a weighted-average remaining lease term of 3.2 years.
As of December 31, 2025, undiscounted minimum rental commitments under non-cancelable leases, for each of the next five years and total thereafter,
were as follows:
(In thousands)
2026
$
18,511 
2027
20,755 
2028
3,479 
Undiscounted minimum rental commitments
42,745 
Interest
(2,538)
Total operating lease liabilities
$
40,207 
We provided our landlord a security deposit of $2.9 million as security for our leases, which is included within other non-current assets on our consolidated
balance sheet.
In August 2021, we entered into a long-term sublease agreement for 13,000 square feet of the office space at 38 Sidney Street, Cambridge, Massachusetts,
which expired on December 31, 2024.
In April 2022, we entered into a long-term sublease agreement for 27,000 square feet of the office space at 64 Sidney Street, Cambridge, Massachusetts,
which expired on April 30, 2025.
In May 2023, we entered into a long-term sublease agreement for 7,407 square feet of office space on the first floor of 64 Sidney Street, Cambridge,
Massachusetts, which expired on July 31, 2025. In July 2025, we entered into a long-term sublease
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agreement with a new tenant for the same space, which began in November 2025 with the term of the lease running through February 2028.
We recorded operating sublease income of $1.9 million and $6.4 million for the years ended December 31, 2025 and December 31, 2024, respectively, in
other income, net in the consolidated statements of operations. We hold security deposits from our sublessee of approximately $0.1  million which is
recorded within other non-current assets on our consolidated balance sheet.
As of December 31, 2025, the future minimum lease payments to be received under the long-term sublease agreement was as follows:
(In thousands)
2026
$
386 
2027
394 
2028
67 
Total
$
847 
Note 7. Accrued Expenses
Accrued expenses consisted of the following at December 31:
(In thousands)
2025
2024
Accrued compensation
$
27,264 
$
29,935 
Accrued research and development costs
12,081 
10,548 
Accrued professional fees
3,613 
4,316 
Accrued other
2,501 
2,062 
Total accrued expenses
$
45,459 
$
46,861 
Note 8. Product Revenue
We generate product revenue from sales of PYRUKYND® in the United States to a limited number of specialty distributors and specialty pharmacy
providers, and to Avanzanite and NewBridge outside of the United States, or collectively, the Customers. These Customers subsequently resell
PYRUKYND® to pharmacies or dispense PYRUKYND® directly to patients. In addition to distribution agreements with Customers, we enter into
arrangements with healthcare providers and payors that provide for government-mandated and/or privately-negotiated rebates, chargebacks and discounts
with respect to the purchase of PYRUKYND®.
The performance obligation related to the sale of PYRUKYND® is satisfied and revenue is recognized when the Customer obtains control of the product,
which occurs at a point in time, typically upon delivery to the Customer.
Product revenue, net, was as follows for the years ended December 31:
(In thousands)
2025
2024
2023
Product revenue, net
United States
$
49,170 
$
36,395 
$
26,823 
Rest of world
4,858 
103 
— 
Total product revenue, net
$
54,028 
$
36,498 
$
26,823 
One Customer accounted for 89%, 95% and 96% of our consolidated revenues for the years ended December 31, 2025, 2024 and 2023, respectively, and
55% and 92% of accounts receivable from product sales for the years ended December 31, 2025 and 2024, respectively.
Reserves for Variable Consideration
Revenues from product sales are recorded at the net sales price, or transaction price, which includes estimates of variable consideration for which reserves
are established and result from contractual adjustments, government rebates, returns and other allowances that are offered within the contracts with our
Customers, healthcare providers, payors and other indirect customers relating to the sale of our products.
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Table of Contents
The following tables summarize balances and activity in each of the product revenue allowance and reserve categories for the years ended December 31,
2025 and December 31, 2024:
(In thousands)
Contractual
Adjustments
Government
Rebates
Returns
Total
Balance at December 31, 2024
$
253 
$
1,354 
$
489 
$
2,096 
Current provisions relating to sales in the current year
1,422 
2,917 
557 
4,896 
Adjustments relating to prior years
(51)
(892)
— 
(943)
Payments/returns relating to sales in the current year
(1,240)
(1,643)
— 
(2,883)
Payments/returns relating to sales in the prior years
(202)
(462)
(6)
(670)
Balance at December 31, 2025
$
182 
$
1,274 
$
1,040 
$
2,496 
(In thousands)
Contractual
Adjustments
Government
Rebates
Returns
Total
Balance at December 31, 2023
$
156 
$
1,084 
$
232 
$
1,472 
Current provisions relating to sales in the current year
1,300 
2,593 
399 
4,292 
Adjustments relating to prior years
(39)
(711)
(45)
(795)
Payments/returns relating to sales in the current year
(1,079)
(1,239)
— 
(2,318)
Payments/returns relating to sales in the prior years
(85)
(373)
(97)
(555)
Balance at December 31, 2024
$
253 
$
1,354 
$
489 
$
2,096 
Total revenue-related reserves above, included in our consolidated balance sheets, are summarized as follows:
(In thousands)
December 31, 2025
December 31, 2024
Reduction of accounts receivable
$
174  $
124 
Component of accrued expenses
2,322 
1,972 
Total revenue-related reserves
$
2,496  $
2,096 
The following table presents changes in our contract assets, which consisted of accounts receivable, net:
(In thousands)
December 31, 2025
December 31, 2024
Beginning balance
$
4,109  $
2,810 
   Additions 
58,011 
39,973 
   Deductions 
(51,543)
(38,674)
Ending balance
$
10,577  $
4,109 
(1) Additions to contract assets relate to amounts billed to Customers for product sales, and deductions to contract assets primarily relate to collection of receivables during the reporting period.
Note 9. Share-Based Payments
2023 Stock Incentive Plan and Inducement Grants
In June 2023, our stockholders approved the 2023 Stock Incentive Plan, or the 2023 Plan. The 2023 Plan provides for the grant of incentive stock options,
nonstatutory stock options, stock appreciation rights, restricted stock awards, RSUs, PSUs, and other stock-based awards to employees, advisors,
consultants and non-employee directors.
Following the adoption of the 2023 Plan, we ceased granting equity awards under the 2013 Stock Incentive Plan, or the 2013 Plan. Any outstanding equity
awards that were previously granted under the 2013 Plan continue to be governed by their terms. Following adoption of the 2013 Plan, we ceased granting
equity awards under the 2007 Stock Incentive Plan, or the 2007 Plan. There are no outstanding equity awards under the 2007 Plan.
(1)
(1)
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In connection with the start of employment of our Chief Executive Officer and Chief Financial Officer in 2022, our Chief Commercial Officer in 2023, and
our Chief Corporate Development and Strategy Officer in March 2025, our Board of Directors granted each of them equity awards in the form of stock
options, RSUs and PSUs, which awards were made outside our equity incentive plans as inducements material to their respective entry into employment
with us in accordance with Nasdaq Listing Rule 5635(c)(4).
As of December 31, 2025, the maximum number of shares reserved under the 2013 Plan, the 2023 Plan and the inducement grants described above was
12,332,999, and we had 3,835,495 shares available for future issuance under the 2023 Plan.
Stock options
The following table summarizes the stock option activity of all stock incentive plans for the year ended December 31, 2025:
Number of
Stock
Options
Weighted-
Average
Exercise
Price
Weighted-
Average
Remaining
Contractual
Term
(in years)
Aggregate
Intrinsic
Value (in
thousands)
Outstanding at December 31, 2024
5,834,256 
$
43.48 
6.21 $
11,911 
Granted
971,460 
33.75 
Exercised
(168,174)
30.99 
Cancelled/Forfeited
(272,912)
46.06 
Expired
(251,567)
105.27 
Outstanding at December 31, 2025
6,113,063 
$
39.62 
6.08 $
2,053 
Exercisable at December 31, 2025
4,300,729 
$
42.66 
5.07 $
1,663 
Vested and expected to vest at December 31, 2025
6,113,063 
$
39.62 
6.08 $
2,053 
The weighted-average grant date fair value of options granted was $18.68, $18.92 and $14.32 during the years ended December 31, 2025, 2024 and 2023,
respectively. The total intrinsic value of options exercised was $1.6 million, $3.3 million and $2.9 million during the years ended December 31, 2025, 2024
and 2023, respectively.
At December 31, 2025, the total unrecognized compensation expense related to unvested stock option awards was $27.3 million, which we expect to
recognize over a weighted-average period of approximately 2.36 years.
Restricted stock units
Upon vesting, each RSU entitles the holder to receive a specified number of shares of our common stock. The following table presents RSU activity for the
year ended December 31, 2025:
Number of

Stock Units
Weighted-Average

Grant Date

Fair Value
Unvested shares at December 31, 2024
1,818,563 
$
30.31 
Granted
1,181,710 
33.41 
Vested
(830,795)
30.41 
Forfeited
(162,015)
31.10 
Unvested shares at December 31, 2025
2,007,463 
$
32.03 
As of December 31, 2025, there was approximately $39.3 million of total unrecognized compensation expense related to RSUs, which we expect to be
recognized over a weighted-average period of 1.79 years.
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Performance-based stock units
At the achievement of the performance-based and service-based vesting criteria, each PSU entitles the holder to receive a specified number of shares of our
common stock. The following table presents PSU activity for the year ended December 31, 2025:
Number of
Stock Units
Weighted-Average
Grant Date

Fair Value
Unvested shares at December 31, 2024
374,583 
$
29.45 
Granted
185,450 
33.25 
Vested
(160,055)
26.40 
Forfeited
(23,000)
30.38 
Unvested shares at December 31, 2025
376,978 
$
32.55 
Stock-based compensation expense associated with these PSUs is recognized if the underlying performance condition is considered probable of
achievement using our management’s best estimates. As of December 31, 2025, there was no unrecognized compensation expense related to PSUs with
performance-based vesting criteria that are considered probable of achievement that we expect to recognize. There was $12.3 million of total unrecognized
compensation expense related to PSUs with performance-based vesting criteria that are considered not probable of achievement.
Amended and Restated 2013 Employee Stock Purchase Plan
In June 2013, our Board of Directors adopted, and in July 2013 our stockholders approved, the 2013 ESPP, which was further amended and restated by our
Board of Directors in December 2024. We issued 133,283 shares and 102,805 shares during the years ended December 31, 2025 and 2024, respectively,
under the 2013 ESPP. The 2013 ESPP provides participating employees with the opportunity to purchase up to an aggregate of 2,363,636 shares of our
common stock. As of December 31, 2025, we had 1,449,951 shares available for future issuance under the 2013 ESPP.
Stock-based compensation expense
During the years ended December  31, 2025, 2024 and 2023, we recorded stock-based compensation expense for employee and non-employee stock
options, RSUs, PSUs, and ESPP shares. Stock-based compensation expense by award type included within the consolidated statements of operations is as
follows:
(In thousands)
2025
2024
2023
Stock options
$
18,128  $
17,519  $
17,163 
Restricted stock units
28,818 
23,553 
19,367 
Performance-based stock units
4,226 
750 
7,368 
Employee Stock Purchase Plan
1,380 
1,025 
868 
Total stock-based compensation expense
$
52,552  $
42,847  $
44,766 
Expenses related to equity-based awards were allocated as follows in the consolidated statements of operations:
(In thousands)
2025
2024
2023
Research and development expense
$
20,568  $
16,910  $
17,064 
Selling, general and administrative expense
31,984 
25,937 
27,702 
Total stock-based compensation expense
$
52,552  $
42,847  $
44,766 
No related tax benefits were recognized for the years ended December 31, 2025, 2024 and 2023.
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Table of Contents
The fair value of each stock option granted to employees and non-employees is estimated on the date of grant using the Black-Scholes option-pricing
model. The following table summarizes the weighted average assumptions used in calculating the grant date fair value of the awards:
2025
2024
2023
Risk-free interest rate
4.03 %
4.15 %
4.05 %
Expected dividend yield
— 
— 
— 
Expected term (in years)
6.00
6.02
5.99
Expected volatility
54.18 %
53.32 %
54.26 %
Expected term
We use the “simplified method” as prescribed by the Securities and Exchange Commission Staff Accounting Bulletin No. 107, Share Based Payments, to
estimate the expected term of stock option grants. Under this approach, the weighted-average expected life is presumed to be the average of the contractual
term of ten years and the weighted-average vesting term of the stock options, taking into consideration multiple vesting tranches. We utilize this method
due to the plain-vanilla nature of our share-based awards.
Volatility
The expected volatility has been determined using our historical volatilities for a period equal to the expected term of the option grant.
Risk-free rate
The risk-free rate is based on the yield curve of U.S. Treasury securities with periods commensurate with the expected term of the options being valued.
Dividends
We have never paid, and do not anticipate paying, any cash dividends in the foreseeable future, and, therefore, use an expected dividend yield of zero in the
option-pricing model.
Forfeitures
We account for forfeitures as they occur and, therefore, do not estimate forfeitures.
Note 10. Net (Loss) Income per Share
Basic net (loss) income per share is calculated by dividing net (loss) income by the weighted-average shares outstanding during the period, without
consideration for common stock equivalents. Diluted net (loss) income per share is calculated by adjusting the weighted-average shares outstanding for the
dilutive effect of common stock equivalents outstanding for the period, determined using the treasury stock method. For purposes of the dilutive net (loss)
income per share calculation, stock options, RSUs and PSUs for which the performance and market vesting conditions, respectively, have been deemed
probable, and 2013 ESPP shares are considered to be common stock equivalents, while PSUs with performance and market vesting conditions,
respectively, that were not deemed probable as of December 31, 2025 are not considered to be common stock equivalents.
We utilize the control number concept in the computation of diluted earnings per share to determine whether potential common stock equivalents are
dilutive. The control number used is net (loss) income from continuing operations. The control number concept requires that the same number of
potentially dilutive securities applied in computing diluted earnings per share from continuing operations be applied to all other categories of income or
loss, regardless of their anti-dilutive effect on such categories. Since we had a net loss for the years ended December 31, 2025 and 2023, no dilutive effect
was recognized in the calculation of loss per share, and basic and diluted net loss per share was the same for those periods.
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Table of Contents
The following is a reconciliation of basic weighted-average number of common shares used in computing net (loss) income per share to diluted weighted-
average number of common shares used in computing net (loss) income per share for the periods indicated:
Years ended December 31,
2025
2024
2023
Basic shares
57,972,004 
56,807,415 
55,651,487 
Effect of dilutive securities
Stock options
— 
336,446 
— 
Restricted stock units
— 
732,925 
— 
Performance-based stock units
— 
8,845 
— 
Employee stock purchase plan shares
— 
3,624 
— 
Diluted shares
57,972,004 
57,889,255 
55,651,487 
The following common stock equivalents were excluded from the calculation of diluted net (loss) income per share applicable to common stockholders for
the periods indicated because including them would have had an anti-dilutive effect:
Years ended December 31,
2025
2024
2023
Stock options
6,113,063 
3,926,330 
5,263,681 
Restricted stock units
2,007,463 
95,679 
1,346,701 
Performance-based stock units
— 
— 
145,023 
Employee Stock Purchase Plan shares
51,318 
3,987 
48,713 
Total
8,171,844 
4,025,996 
6,804,118 
Note 11. Income Taxes
The domestic and foreign components of (loss) income before income taxes are as follows:
(In thousands)
2025
2024
2023
Domestic
$
(413,806) $
717,967  $
(352,085)
Foreign
9 
2 
(3)
Total
$
(413,797) $
717,969  $
(352,088)
As further described in Note 2, Summary of Significant Accounting Policies, we have elected to prospectively adopt the guidance in ASU 2023-09. The
following table is a reconciliation of our effective income tax rate to the statutory federal income tax rate for the year ended December  31, 2025 in
accordance with the guidance in ASU 2023-09:
(In thousands, except percentages)
Year Ended December 31, 2025
Rate
Tax
At U.S. federal statutory rate
21.0 % $
(86,897)
State taxes, net of federal effect
— %
(153)
Tax credits
Research and development costs
1.5 %
(6,225)
Orphan drug credit
2.3 %
(9,654)
Changes in valuation allowances
(23.0)%
95,035 
Nontaxable or nondeductible items
Stock compensation
(1.7)%
7,149 
Other items
(0.1)%
592 
Other adjustments
Other items
0.2 %
(863)
Effective income tax rate
0.2 % $
(1,016)
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The following table is a reconciliation of our effective income tax rate to the statutory federal income tax rate for the years ended December 31, 2024 and
2023 in accordance with the guidance prior to the adoption of ASU 2023-09:
2024
2023
Federal statutory tax rate
21.0 %
21.0 %
State taxes, net of federal benefit
1.6 %
1.9 %
Change in valuation allowance
(14.5)%
(23.8)%
General business credits and other credits
(2.6)%
4.2 %
Permanent differences and other adjustments
0.6 %
(2.8)%
Stock based compensation
0.1 %
(0.5)%
Total
6.2 %
— %
Deferred income taxes reflect the net tax effects of temporary differences between the carrying amount of assets and liabilities for financial reporting
purposes and the amounts used for income tax purposes. Significant components of our deferred tax assets and liabilities for the years ended December 31,
2025 and 2024 are as follows:
(In thousands)
2025
2024
Deferred tax assets:
Net operating loss carryforwards
$
134,116  $
26,492 
Tax credit carryforwards
103,912 
83,994 
Purchased intangible assets
13,301 
12,713 
Stock-based compensation
18,381 
21,090 
Operating lease liability
8,782 
13,023 
Non-deductible accruals and reserves, including inventory
8,633 
8,635 
Section 174 R&D expense
86,409 
121,530 
Total deferred tax assets
373,534 
287,477 
Depreciation and amortization
(418)
(1,193)
Operating lease right of use asset
(7,493)
(10,713)
Less: valuation allowance
(365,623)
(275,571)
Net deferred taxes
$
—  $
— 
On July 4, 2025, the One Big Beautiful Bill Act, or OBBBA, was enacted. The legislation includes several changes to the U.S. federal corporate income tax
law, among other things, reinstating 100% bonus depreciation on qualified fixed assets, immediate expensing of domestic research and development
expenditures, and favorable rules for determining the limitation on business interest expense. These changes were retroactively enacted for tax years
beginning after December 31, 2024 with certain provisions effective after January 19, 2025 and were reflected in the income tax provision for the year
ended December 31, 2025. The provisions of the OBBBA did not have a material impact on the effective income tax rate.
As of December 31, 2025, we had net operating loss carryforwards, or NOLs, available to reduce federal, state and foreign income taxes of approximately
$515.8 million, $394.1 million and $38.0 million, respectively. The federal NOLs will be carried forward indefinitely and could be used to offset up to 80%
of taxable income in all other future years. State NOLs will begin expiring in varying amounts through 2045 unless utilized. At December 31, 2025, we
also had available research and development tax credits for federal and state income tax purposes of approximately $32.1 million and $31.2 million,
respectively. If not utilized, the credits begin to expire in 2040 and 2028 for federal and state income tax purposes, respectively. Additionally, we engaged
in clinical testing activities and incurred expenses that qualify for the federal orphan drug tax credit. At December 31, 2025, we had available orphan drug
tax credits for federal purposes only of approximately $47.1 million. If not utilized, these orphan drug credits begin to expire in 2040.
As provided by Section  382 of the Internal Revenue Code of 1986, or Section  382, and similar state provisions, utilization of NOLs and tax credit
carryforwards may be subject to substantial annual limitations due to ownership change limitations that have previously occurred or that could occur in the
future. Ownership changes may limit the amount of NOLs and tax credit carryforwards that can be utilized annually to offset future taxable income and tax,
respectively. In general, an ownership change, as defined by Section 382, results from transactions that increase the ownership of five percent stockholders
in the
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Table of Contents
stock of a corporation by more than 50 percent in the aggregate over a three year period. We completed a review of our changes in ownership through
December 31, 2025 and determined that transactions have resulted in no ownership changes during the year ended December 31, 2025, as defined by
Section 382. The impact of the historical ownership changes has been reflected in our deferred tax assets in the table above.
As required by ASC 740, we have evaluated the positive and negative evidence bearing upon the realizability of our deferred tax assets. Based on the
weight of available evidence, both positive and negative, we recorded a valuation allowance of $365.6 million and $275.6 million as of December 31, 2025
and December 31, 2024, respectively, because we have determined that it is more likely than not that these assets will not be fully realized. The valuation
allowance increased by $90.1 million for the year ended December 31, 2025 and decreased by $104.1 million for the year ended December 31, 2024. The
increase for the year ended December 31, 2025 is primarily due to Section 174 R&D domestic expense and the decrease for the year ended December 31,
2024 relates primarily to the utilization of tax attributes to offset taxable income.
The following table presents our change in valuation allowance for the years ended December 31, 2025 and, 2024:
(In thousands)
2025
2024
Valuation allowance at the beginning of the year
$
275,571  $
379,660 
Increase (decrease) for the current period
90,052 
(104,089)
Valuation allowance at the end of the year
$
365,623  $
275,571 
As of December 31, 2025, the unremitted earnings of our foreign subsidiaries are not material. We have not provided for U.S. income taxes or foreign
withholding taxes on these earnings as it is our current intention to permanently reinvest these earnings outside the U.S. The tax liability on these earnings
is also not material. Events that could trigger a tax liability include, but are not limited to, distributions, reorganizations or restructurings and/or tax law
changes.
We apply the accounting guidance in ASC 740 related to accounting for uncertainty in income taxes. Our reserves related to taxes are based on a
determination of whether, and how much of, a tax benefit taken by us in our tax filings or positions is more likely than not to be realized following
resolution of any potential contingencies present related to the tax benefit.
The following table presents our unrecognized tax benefits activity for the years ended December 31, 2025 and 2024:
(In thousands)
2025
2024
Unrecognized tax benefits at the beginning of the year
$
31,591  $
28,578 
Gross increases - current period tax positions
2,871 
3,013 
Gross increases - prior period tax positions
1,327 
— 
Unrecognized tax benefits at the end of the year
$
35,789  $
31,591 
We will recognize interest and penalties related to uncertain tax positions above the line as an expense to continuing operations. As of December 31, 2025
and 2024, we had no accrued interest or penalties related to uncertain tax positions and no such amounts have been recognized. If all of our unrecognized
tax benefits as of December  31, 2025 were to become recognizable in the future, we would record $35.8  million of unrecognized tax benefits. The
uncertain tax position does not impact our effective income tax rate due to the full valuation allowance.
We are subject to taxation in the United States, Switzerland, Netherlands, Germany, Italy and France. The statute of limitations for assessment by the IRS
and state tax authorities is open for tax years ending December 31, 2025, 2024, 2023, 2022 and 2021, although carryforward attributes that were generated
for tax years prior to 2021 may still be adjusted upon examination by the IRS or state tax authorities if they either have been, or will be, used in a future
period. The statute of limitations for assessments in Switzerland, the Netherlands and Italy remains open for tax years ending December 31, 2025, 2024,
2023, 2022 and 2021. Our subsidiary in Germany has statute of limitations for assessments open are for the tax years ending December 31, 2025, 2024,
2023, and 2022, and our subsidiary in France has statute of limitations for assessments for the tax years ending December 31, 2025, 2024, and 2023. There
are currently no federal, state or foreign audits in progress.
As of December 31, 2025 we had an income tax receivable of $0.2 million, which is recorded within prepaid expenses and other current assets in our
consolidated balance sheets, and as of December 31, 2024 we had an income tax payable of $0.9 million.
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Table of Contents
Note 12. Property and Equipment, net
Property and equipment, net consisted of the following at December 31:
(In thousands)
2025
2024
Laboratory equipment
$
17,567 
$
17,529 
Computer equipment and software
7,284 
6,454 
Leasehold improvements
37,519 
37,519 
Furniture and fixtures
3,454 
3,454 
Office equipment
2,319 
2,319 
Construction in progress
2,747 
897 
Total property and equipment
70,890 
68,172 
Less: accumulated depreciation
(60,115)
(56,497)
Total property and equipment, net
$
10,775 
$
11,675 
Depreciation expense for the years ended December 31, 2025, 2024 and 2023 was $5.2 million, $5.7 million and $6.6 million, respectively.
Note 13. Common Stock
We are authorized to issue 125,000,000 shares of our common stock. Holders of common stock are entitled to one vote per share. Additionally, holders of
common stock are entitled to receive dividends, if and when declared by our board of directors, and to share ratably in our assets legally available for
distribution to our shareholders in the event of liquidation.
Note 14. Commitments and Contingent Liabilities
Manufacturing Commitments
We are party to various agreements with contract manufacturing organizations that we are not contractually able to terminate for convenience and avoid
any and all future obligations to the vendors. Under such agreements, we are obligated to make certain minimum payments, with the exact amounts in the
event of termination to be based on the timing of the termination and the exact terms of the agreement.
Legal Contingencies
From time to time, we may be involved in disputes and legal proceedings in the ordinary course of business. These proceedings may include allegations of
infringement of intellectual property, employment or other matters. We do not have any ongoing legal proceedings that, based on our estimates, could have
a material effect on our consolidated financial statements.
Note 15. Defined Contribution Benefit Plan
We sponsor a 401(k) retirement plan, in which substantially all our full-time employees are eligible to participate. Participants may contribute a percentage
of their annual compensation to this plan, subject to statutory limitations. We make matching contributions equal to 100% of the employee’s contributions,
subject to a maximum of 4% of eligible compensation.
Note 16. Segment Information
Operating segments are identified as components of an enterprise about which separate discrete financial information is available for evaluation by the
CODM or decision-making group in making decisions on how to allocate resources and assess performance. Our CODM is our CEO. Our CEO views our
operations and manages our business as one operating segment, which derives its revenues from the development and commercialization of therapies for
patients with rare diseases.
Our CEO manages and allocates resources to the operations of our company on a total company basis by assessing the overall level of resources available
and how to best deploy these resources across functions and research and development projects that are in line with our long-term company-wide strategic
goals. In making these decisions, our CEO uses consolidated financial information for purposes of evaluating performance, forecasting future period
financial results, allocating resources and setting incentive targets. The CODM performs this assessment based on our consolidated net (loss) income.
Through this analysis, the CODM assesses performance by comparing actual consolidated net (loss) income versus the budget, and then decides how to
allocate resources to invest in our research and development programs. The measure of segment assets is reported on the consolidated balance sheets as
total assets.
F-27

The following table contains additional information on our consolidated revenue and net (loss) income, including significant segment expenses:
(In thousands) Years Ended December 31:
2025
2024
2023
Product revenue, net - U.S.
$
49,170 
$
36,395 
$
26,823 
Product revenue, net - Rest of world
4,858 
103 
— 
PK activator (PYRUKYND®/AQVESME™) direct expenses - research and development
(108,087)
(112,720)
(101,322)
Compensation and related expenses - research and development
(121,645)
(114,618)
(108,484)
Total selling, general and administrative expenses
(180,280)
(156,784)
(119,903)
Gain on sale of contingent payments
— 
889,136 
— 
Milestone payment from gain on sale of oncology business
— 
200,000 
— 
Other segment items*
(56,797)
(67,787)
(49,202)
Net (loss) income
$
(412,781)
$
673,725 
$
(352,088)
*Other segment items primarily include cost of sales, other research and development expenses, interest income and income taxes.
F-28

Exhibit 4.2
DESCRIPTION OF SECURITIES REGISTERED UNDER SECTION 12 OF THE SECURITIES EXCHANGE ACT OF 1934
The following description of the common stock, $0.001 par value per share (the “Common Stock”), of Agios Pharmaceuticals, Inc. (“us,” “our,”
“we” or the “Company”), which is the only security of the Company registered under Section 12 of the Securities Exchange Act of 1934, as amended (the
“Exchange Act”), summarizes certain information regarding the Common Stock in our certificate of incorporation, our by-laws and applicable provisions
of Delaware corporate law, and is qualified by reference to our certificate of incorporation and by-laws, which are incorporated by reference as Exhibit 3.1
and Exhibit 3.2, respectively, to the Annual Report on Form 10-K.
Our authorized capital stock consists of 125,000,000 shares of common stock, par value $0.001 per share, and 25,000,000 shares of preferred stock,
par value $0.001 per share.
Common Stock
Voting Rights. Holders of our Common Stock are entitled to one vote for each share held on all matters submitted to a vote of stockholders and do not
have cumulative voting rights. An election of directors by our stockholders shall be determined by a plurality of the votes cast by the stockholders entitled
to vote on the election. Any matter other than the election of directors to be voted upon by the stockholders at such meeting shall be decided by the vote of
the holders of shares of stock having a majority in voting power of the votes cast by the holders of all of the shares of stock present or represented at the
meeting and voting affirmatively or negatively on such matter, except when a different vote is required by law, our certificate of incorporation or our
bylaws.

Dividends. Holders of Common Stock are entitled to receive proportionately any dividends as may be declared and paid on the Common Stock from
funds lawfully available therefor as and when determined by our board of directors, subject to any preferential dividend rights of any series of preferred
stock that we may designate and issue in the future.
Liquidation and Dissolution. In the event of our liquidation or dissolution, whether voluntary or involuntary, the holders of Common Stock are
entitled to receive proportionately our net assets available for distribution to stockholders after the payment of all debts and other liabilities and subject to
the prior rights of any preferred stock that we may designate and issue in the future.
Other Rights. Holders of Common Stock have no preemptive, subscription, redemption or conversion rights. The rights, preferences and privileges of
holders of Common Stock are subject to and may be adversely affected by the rights of the holders of shares of any series of preferred stock that we may
designate and issue in the future.
Provisions of Our Certificate of Incorporation and By-laws and Delaware Law That May Have Anti-Takeover Effects
The provisions of Delaware law and our certificate of incorporation and by-laws could discourage or make it more difficult to accomplish a proxy
contest or other change in our management or the acquisition of control by a holder of a substantial amount of our voting stock. It is possible that these
provisions could make it more difficult to accomplish, or could deter, transactions that stockholders may otherwise consider to be in their best interests or
in our best interests. These provisions are intended to enhance the likelihood of continuity and stability in the composition of our board of directors and in
the policies formulated by the board of directors and to discourage certain types of transactions that may involve an actual or threatened change of our
control. These provisions are designed to reduce our vulnerability to an unsolicited acquisition proposal and to discourage certain tactics that may be used
in proxy fights. Such provisions also may have the effect of preventing changes in our management.
Delaware Business Combination Statute. Section 203 of the General Corporation Law of the State of Delaware, which we refer to as the DGCL, is
applicable to us. Section 203 of the DGCL restricts some types of transactions and business combinations between a corporation and a 15% stockholder. A
15% stockholder is generally considered by Section 203 to be a person owning 15% or more of the corporation’s outstanding voting stock. Section 203
refers to a 15% stockholder as an “interested stockholder.” Section 203 restricts these transactions for a period of three years from the date the stockholder
acquires 15% or more of our outstanding voting stock. With some exceptions, unless the transaction is approved by the board of directors and the holders of
at least two-thirds of the outstanding voting stock of the corporation, Section 203 prohibits significant business transactions such as:
•
a merger with, disposition of significant assets to or receipt of disproportionate financial benefits by the interested stockholder, and
•
any other transaction that would increase the interested stockholder’s proportionate ownership of any class or series of our capital stock.

The shares held by the interested stockholder are not counted as outstanding when calculating the two-thirds of the outstanding voting stock needed
for approval.
The prohibition against these transactions does not apply if:
•
prior to the time that any stockholder became an interested stockholder, the board of directors approved either the business combination or
the transaction in which such stockholder acquired 15% or more of our outstanding voting stock, or
•
the interested stockholder owns at least 85% of our outstanding voting stock as a result of a transaction in which such stockholder acquired
15% or more of our outstanding voting stock. Shares held by persons who are both directors and officers or by some types of employee
stock plans are not counted as outstanding when making this calculation.
Board of Directors. Our certificate of incorporation and by-laws provide for a board of directors divided as nearly equally as possible into three
classes. Each class is elected to a term expiring at the annual meeting of stockholders held in the third year following the year of such election. Under our
certificate of incorporation and by-laws, any vacancy on our board of directors, including a vacancy resulting from an enlargement of our board of
directors, may be filled only by vote of a majority of our directors then in office. Furthermore, our certificate of incorporation and by-laws provides that the
authorized number of directors may be changed only by the resolution of our board of directors.
Removal of Directors by Stockholders. Our certificate of incorporation and by-laws provide that a director may be removed only for cause and only
by the affirmative vote of the holders of at least 75% of the votes that all our stockholders would be entitled to cast in an annual election of directors or
class of directors.
Super Majority Stockholder Vote Required for Certain Actions. The DGCL provides generally that the affirmative vote of a majority of the shares
entitled to vote on any matter is required to amend a corporation’s certificate of incorporation or by-laws, unless a corporation’s certificate of incorporation
or by-laws, as the case may be, requires a greater percentage. Our by-laws may be amended or repealed by a majority vote of our board of directors or the
affirmative vote of the holders of at least 75% of the votes that all our stockholders would be entitled to cast in an annual election of directors or class of
directors. In addition, the affirmative vote of the holders of at least 75% of the votes which all our stockholders would be entitled to cast in an annual
election of directors or class of directors is required to amend or repeal or to adopt any provisions inconsistent with any of the provisions of our certificate
of incorporation described in this paragraph.
Issuance of Preferred Stock. Our board of directors is authorized, without further action by our stockholders, to issue up to 25,000,000 shares of
preferred stock in one or more series, and to fix the designations, powers, preferences and the relative, participating, optional or other special rights, and
any qualifications, limitations and restrictions of the shares of each series of preferred stock. The issuance of preferred stock could impede the completion
of a merger, tender offer or other takeover attempt.
Advance Notice Provisions for Stockholder Proposals and Stockholder Nomination of Directors. Our by-laws provide that, for nominations to the
board of directors or for other business to be properly brought by a stockholder before a meeting of stockholders, a stockholder must first have given timely
notice of the proposal in writing to our secretary. Our certificate of incorporation and by-laws also provide that, except as otherwise required by law, special
meetings of our stockholders can only be called by our chair of the board, our chief executive officer or our board of directors. In addition, our by-laws
provide that, for an annual meeting, a stockholder notice generally must be delivered not earlier than the 120 day and not later than the 90  day prior to the
first anniversary of the preceding year’s annual meeting; provided, that if the date of the annual meeting is advanced by more than 30 days or delayed by
more than 60 days from such anniversary date, notice by the stockholder to be timely must be so delivered not earlier than the 120  day prior to the date of
such annual meeting and not later than the close of business on the later of (x) the 90  day prior to the date of such meeting and (y) the 10  day following
the day on which notice of the date of such annual meeting was given or public announcement of the date of such annual meeting is first made by us,
whichever first occurs. For a special meeting, such notice must be delivered not earlier than the 120  day prior to such special meeting and not later than
the close of business on the later of (x) the 90  day prior to such special meeting and (y) the 10  day following the day on which notice of the date of such
special meeting was given or public disclosure of the date of such special meeting was made, whichever first occurs. Detailed requirements as to the form
of the notice and information required in the notice are specified in our by-laws.
No Action By Written Consent. Our certificate of incorporation provides that our stockholders may not act by written consent and may only act at
duly called meetings of stockholders.
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2

Exhibit 10.37
EMPLOYMENT AGREEMENT
This Employment Agreement (the “Agreement”) is made as of January 31, 2025 by and between Agios Pharmaceuticals,
Inc. (the “Company”), and Krishnan Viswanadhan (the “Executive”) (together, the “Parties”).
RECITALS
WHEREAS the Company desires to employ the Executive as its Chief Corporate Development & Strategy Officer; and
WHEREAS, the Executive has agreed to accept such employment on the terms and conditions set forth in this Agreement.
NOW, THEREFORE, in consideration of the foregoing and of the respective covenants and agreements of the Parties
herein contained, the Parties hereto agree as follows:
1.
Employment Period. The Executive’s employment shall commence on March 5, 2025 (the “Effective Date”) and
shall continue until terminated in accordance with this Agreement (such period, the “Employment Period”). During the
Employment Period, the Executive shall be an at-will employee of the Company and the Executive’s employment shall be freely
terminable by either the Executive or the Company, for any reason, at any time, by giving notice as described in Section 10 of
this Agreement and subject to the terms of Section 4(f) of this Agreement.
2.
Position. During the Employment Period, the Executive shall serve as the Company’s Chief Corporate
Development & Strategy Officer. The Executive’s principal place of providing services to the Company will be at the Company’s
Cambridge, Massachusetts offices; provided; however, that the Executive shall be eligible to participate in any flexible work
schedule arrangement then available to the Company’s employees. During the Employment Period, the Executive will also
engage in business travel as required by the Executive’s job duties. Immediately upon the termination of the Executive’s
employment for any reason, the Executive must resign from any office held in the Company. If the Executive does not do so, the
Company is hereby irrevocably authorized to appoint a person in the Executive’s name to sign and deliver any required letter(s)
of resignation to the Company.
3.
Scope of Employment.
(a)
During the Employment Period, the Executive shall be responsible for the performance of those duties
consistent with the Executive’s position as an employee and Chief Corporate Development & Strategy Officer in comparable
publicly-traded biotechnology companies, in addition to such other duties as may from time to time be reasonably assigned to the
Executive. The Executive shall report to the Company’s Chief Executive Officer and shall perform and discharge faithfully,
diligently, and to the best of the Executive’s ability, the Executive’s duties and responsibilities hereunder.

(b)
The Executive agrees to devote the Executive’s full business time, best efforts, skill, knowledge, attention
and energies to the advancement of the business and interests of the Company and to the performance of the Executive’s duties
and responsibilities as an employee of the Company; provided that the Executive may (i) engage in charitable, educational,
religious, civic and similar types of activities, and (ii) continue to serve as a member of the board of directors of the two (2)
organizations for which Executive serves as a director on the Effective Date, in each case only to the extent that such activities
are not competitive with the business of the Company and do not individually or in the aggregate inhibit, interfere with, or
prohibit the timely performance of the Executive’s duties hereunder, and do not create a potential business or fiduciary conflict.
Service by the Executive on any other board of directors not contemplated by subsection (ii) above is subject to the prior
approval of the Company.
(c)
The Executive agrees to abide by the rules, regulations, instructions, personnel practices, and policies of
the Company, as well as any applicable codes of ethics or business conduct, and any changes therein that may be adopted from
time to time by the Company.
4.
Compensation. As full compensation for all services rendered by the Executive to the Company during the
Employment Period, the Company will provide to the Executive the following:
(a)
Base Salary. The Executive shall receive a base salary at the annualized rate of $525,000 (the “Base
Salary”). The Executive’s Base Salary shall be paid in equal installments in accordance with the Company’s regularly established
payroll procedures. The Executive’s Base Salary will be reviewed annually by the Company in accordance with normal business
practice.
(b)
Annual Discretionary Bonus. Following the end of each calendar year during the Employment Period, the
Executive will be eligible to receive a discretionary annual performance and retention bonus in a target amount of 45% of the
Executive’s Base Salary for the applicable calendar year (the “Target Bonus”), based upon the Board’s assessment, in its sole
discretion, of the Company’s achievement of its performance goals for the applicable calendar year and the Board’s and the
Executive’s manager’s assessment of the Executive’s achievement of the Executive’s performance goals for the applicable
calendar year (with such goals to be established by the Executive’s manager after consultation with the Executive). No annual
bonus or minimum amount thereof is guaranteed, and, except as provided below, the Executive must be an employee in good
standing on the date that annual bonuses are paid out in order to be eligible for and to earn any annual bonus, as it also serves as
an incentive to remain employed by the Company. Any annual bonus shall be paid to the Executive no later than March 15 of the
year following the year with respect to which such bonus is earned In the event the Executive’s employment terminates on or
after the last day of the applicable calendar year for any reason other than termination by the Company for Cause or resignation
by the Executive without Good Reason and prior to payment of the annual bonus, the Executive shall be deemed to be an
employee in good standing on the date such annual bonuses are paid.
(c)
Equity Awards.
2

(i)
As a material inducement to the Executive entering into employment with the Company and
agreeing to the non-competition provision set forth in the Restrictive Covenant Agreement (as defined below):
a.
Effective as of the Effective Date or the first business day next following the Effective Date, if the
Effective Date falls on a weekend or holiday (the “Grant Date”), the Executive will be granted a
stock option to purchase shares of the Company’s common stock (the “Option”) with a Black-
Scholes value (as calculated on the Grant Date using the same methodology that the Company then
uses to calculate the value of stock awards for purposes of the Company’s financial statements) of
$1,375,000, based on the closing price of the Company’s common stock on the Nasdaq Global
Select Market on the Grant Date (the “Closing Price”). The Option shall be issued outside the
Company’s 2023 Stock Incentive Plan, as an “inducement grant” within the meaning of Nasdaq
Listing Rule 5635(c)(4), will be a non-qualified stock option for United States tax purposes and
will be subject to all of the terms set forth in a written agreement covering the Option in the form
attached hereto as Exhibit A.
b.
Effective as of the Grant Date, the Executive will be granted a number of restricted stock units (the
"RSUs"), which the number shall be determined by dividing $825,000 by the Closing Price. The
RSUs shall be issued outside the Company’s 2023 Stock Incentive Plan, as an “inducement grant”
within the meaning of Nasdaq Listing Rule 5635(c)(4), and will be subject to all of the terms set
forth in a written agreement covering the RSUs in the form attached hereto as Exhibit B.
c.
Effective as of the Grant Date, the Executive will be granted a number of performance share units
(the “PSUs”) for a number of shares of Common Stock, which number shall be determined by
dividing $550,000 by the Closing Price. Each PSU shall entitle the Executive to receive one share
of the Company’s common stock for each PSU that vests. The PSUs shall be issued outside the
Company’s 2023 Stock Incentive Plan, as an “inducement grant” within the meaning of Nasdaq
Listing Rule 5635(c)(4), and will be subject to all of the terms set forth in a written agreement
covering the PSUs attached hereto as Exhibit C.
(ii)    The Company will file with the Securities and Exchange Commission, no later than the Effective Date, a
Registration Statement on Form S-8 for purposes of registering under the Securities Act of 1933, as amended, all
shares of Company common stock that may be issuable under the Option, the RSUs and the PSUs.
3

(iii)    The Executive will be eligible to receive an annual PSU award in 2025 and annual equity grants beginning
in 2026, in each case consistent with the Company’s normal business practice, with any such equity grants being in the
sole discretion of the Board (or the Compensation & People Committee) and, to the extent such grants are made, being on
such terms and subject to such conditions as the Board (or the Compensation & People Committee) shall determine in its
sole discretion.
(d)
Paid Time Off. The Executive shall be eligible for vacation time in accordance with the Company’s
vacation policy. The Company also provides employees with paid holidays annually in accordance with the Company’s holiday
schedule.
(e)
Benefits. The Executive may participate in any and all benefit programs that the Company establishes and
makes available to its employees from time to time, provided the Executive is eligible under (and subject to all provisions of) the
plan documents governing those programs. The benefit programs made available by the Company, and the rules, terms and
conditions for participation in such benefit programs, may be changed by the Company at any time without advance notice (other
than as required by such programs or under law). The Executive also shall be eligible to receive annual equity awards, at the
discretion of the Executive’s manager and the Board.
(f)
Severance. The Company maintains an Amended and Restated Severance Benefits Plan, effective October
6, 2022 (the “Plan”), pursuant to which the Executive will be a Covered Employee eligible to receive Severance Pay and
severance benefits in the event of a Covered Termination (each as defined in the Plan). The Executive’s participation in the Plan
shall be governed by the provisions of the Plan. For avoidance of doubt, any amendment, modification or termination of the Plan
made after the date hereof shall be treated as amendment of this Agreement and, as such, shall be effective as to Executive only
upon execution of a written instrument by both the Company and Executive pursuant to Section 14 below.
(g)
Withholdings. All compensation payable to the Executive shall be subject to applicable taxes and
withholdings.
(h)    Indemnification. Effective as of the Effective Date, the Executive and the Company shall enter into the
Indemnification Agreement attached hereto as Exhibit D. 
5.
Sign-on Payment. The Executive will receive a one-time payment of $250,000, less applicable taxes and
withholdings. This payment will be made as part of the normal semi-monthly payroll after 30 days of employment. If the
Executive leaves the Company within 18 months after the Effective Date (other than in connection with a Covered Termination),
the Executive will be required to repay the full amount of this payment within thirty (30) days after the Executive’s separation
from emploment with the Company.
6.
Expenses. The Executive will be reimbursed for the Executive’s actual, necessary and reasonable business
expenses pursuant to Company policy, subject to the provisions of Exhibit E attached hereto.
4

7.
Restrictive Covenant Agreement. As a condition of the Executive’s employment with the Company and eligibility
to receive the equity set forth in Section 4(c) above, the Executive will be required to execute the Employee Non-Competition,
Non-Solicitation, Confidentiality and Assignment Agreement previously provided to the Executive, another copy of which is
provided contemporaneously with this Agreement (the “Restrictive Covenant Agreement”). The Executive acknowledges that the
Executive’s eligibility to receive the equity set forth above is contingent upon the Executive’s agreement to the non-competition
provision set forth in the Restrictive Covenant Agreement, and that such consideration was mutually agreed upon by the
Executive and the Company and is fair and reasonable in exchange for the Executive’s compliance with such non-competition
obligation.
8.
Absence of Restrictions. The Executive represents and warrants that the Executive is not bound by any
employment contracts, restrictive covenants or other restrictions that prevent the Executive from entering into employment with,
or carrying out the Executive’s responsibilities for, the Company, or which are in any way inconsistent with any of the terms of
this Agreement. In connection with the Executive’s employment hereunder, the Executive shall not use or disclose any trade
secrets or other proprietary information or intellectual property in which the Executive or any other person or entity has any right,
title or interest, and the Executive’s employment with the Company will not infringe or violate the rights of any other person or
entity. The Executive represents and warrants to the Company that the Executive has returned all property and confidential
information belonging to any prior employer.
9.
Additional Employment Conditions. The Executive’s employment with the Company is contingent upon the
Executive’s successful completion of a background investigation, as well as on the Executive’s providing to the Company, within
three (3) days of the Effective Date, documentation proving the Executive’s identity and eligibility to work in the United States,
as required by the Immigration Reform and Control Act of 1986.
10.
Notice. Any notice delivered under this Agreement shall be deemed duly delivered (a) three (3) business days after
it is sent by registered or certified mail, return receipt requested, postage prepaid, (b) one (1) business day after it is sent for next-
business day delivery via a reputable nationwide overnight courier service, (c) immediately when sent by electronic mail or
confirmed facsimile if sent during normal business hours of the recipient, and if not, then on the next business day, or (d)
immediately upon hand delivery, in each case to the address of the recipient set forth below.
To the Executive:
At the address set forth in the Executive’s personnel file
To Company:
Agios Pharmaceuticals, Inc.
88 Sidney Street
Cambridge, MA 02139
Attn: Chief People Officer
5

Either Party may change the address to which notices are to be delivered by giving notice of such change to the other Party in the
manner set forth in this Section 10.
11.
Applicable Law and Forum. This Agreement shall be governed by and construed in accordance with the laws of
the Commonwealth of Massachusetts (without reference to the conflict of laws provisions thereof). Any action, suit or other legal
proceeding arising under or relating to any provision of this Agreement shall be commenced only in a court of the
Commonwealth of Massachusetts (or, if appropriate, a federal court located within Massachusetts), and the Company and the
Executive each consents to the jurisdiction of such a court. The Company and the Executive each hereby irrevocably waives any
right to a trial by jury in any action, suit or other legal proceeding arising under or relating to any provision of this Agreement.
12.
Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of both Parties and their
respective successors and assigns, including any corporation with which or into which the Company may be merged or which
may succeed to its assets or business; provided, however, that the obligations of the Executive are personal and shall not be
assigned by the Executive.
13.
Acknowledgment. The Executive acknowledges that the Executive has the right to consult with counsel prior to
signing this Agreement and states and represents that the Executive has had an opportunity to fully discuss and review the terms
of this Agreement with counsel and, if the Executive has not done so, has voluntarily declined to seek such counsel. The
Executive further states and represents that the Executive has carefully read this Agreement, understands the contents herein,
freely and voluntarily assents to all of the terms and conditions hereof, and signs the Executive’s name of the Executive’s own
free act.
14.
No Oral Modification, Waiver, Cancellation or Discharge. This Agreement may be amended or modified only by
a written instrument executed by both the Company and the Executive. No delay or omission by the Company in exercising any
right under this Agreement shall operate as a waiver of that or any other right. A waiver or consent given by the Company on any
one occasion shall be effective only in that instance and shall not be construed as a bar to or waiver of any right on any other
occasion.
15.
Captions and Pronouns. The captions of the sections of this Agreement are for convenience of reference only and
in no way define, limit or affect the scope or substance of any section of this Agreement. Whenever the context may require, any
pronouns used in this Agreement shall include the corresponding masculine, feminine or neuter forms, and the singular forms of
nouns and pronouns shall include the plural, and vice versa.
16.
Interpretation. The Parties agree that this Agreement will be construed without regard to any presumption or rule
requiring construction or interpretation against the drafting Party. References in this Agreement to “include” or “including”
should be read as though they said “without limitation” or equivalent forms. References in this Agreement to the “Board” shall
include any authorized committee thereof.
6

17.
Severability. Each provision of this Agreement must be interpreted in such manner as to be effective and valid
under applicable law, but if any provision of this Agreement is held to be prohibited by or invalid under applicable law, such
provision will be ineffective only to the extent of such prohibition or invalidity, without invalidating the remainder of such
provision or the remaining provisions of this Agreement. Moreover, if a court of competent jurisdiction determines any of the
provisions contained in this Agreement to be unenforceable because the provision is excessively broad in scope, whether as to
duration, activity, geographic application, subject or otherwise, it will be construed by limiting or reducing it to the extent legally
permitted, so as to be enforceable to the extent compatible with then applicable law to achieve the intent of the Parties.
18.
Entire Agreement. This Agreement (together with the attachments hereto and the Restrictive Covenant Agreement)
constitutes the entire agreement between the Parties and supersedes all prior agreements and understandings, whether written or
oral, relating to the subject matter of this Agreement.
7

IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of the day and year set forth above.
Agios Pharmaceuticals, Inc.
By: /s/ Brian Goff
Name: Brian Goff                
Title: Chief Executive Officer                
THE EXECUTIVE:
By: /s/ Krishnan Viswanadhan
Name: Krishnan Viswanadhan            
8

EXHIBIT A
Incorporated by reference to Exhibit 99.1 of the Company’s Registration Statement on Form S-8 filed with the Securities and
Exchange Commission on March 5, 2025.
9

EXHIBIT B
Incorporated by reference to Exhibit 99.2 of the Company’s Registration Statement on Form S-8 filed with the Securities and
Exchange Commission on March 5, 2025.
10

EXHIBIT C
Incorporated by reference to Exhibit 99.3 of the Company’s Registration Statement on Form S-8 filed with the Securities and
Exchange Commission on March 5, 2025.
11

Exhibit 21.1
SUBSIDIARIES
Entity
State or other Jurisdiction of Incorporation or Organization
Agios Securities Corporation
Massachusetts
Agios Limited
Bermuda
Agios International Sarl (GmbH)
Switzerland
Agios Netherlands B.V.
The Netherlands
Agios Germany GmbH
Germany
Agios Italy S.R.L.
Italy
Agios France SARL
France

Exhibit 23.1
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We hereby consent to the incorporation by reference in the Registration Statements on Form S-8 (No. 333-288151, 333-285585, 333-272615, 333-269951,
333-262956, 333-266675, 333-267624, 333-269108, 333-253498, 333-236523, 333-229669, 333-223031, 333-216106, 333-209755, 333-201796, 333-
193802, and 333-190101) and Form S-3 (No.333-269949) of Agios Pharmaceuticals, Inc. of our report dated February 12, 2026 relating to the financial
statements and the effectiveness of internal control over financial reporting, which appears in this Form 10-K.
/s/ PricewaterhouseCoopers LLP

Boston, Massachusetts

February 12, 2026
1

Exhibit 31.1
CERTIFICATION
I, Brian Goff, certify that:
1.
I have reviewed this Annual Report on Form 10-K of Agios Pharmaceuticals, Inc.;
2.
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by
this report;
3.
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects
the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and
15d-15(f)) for the registrant and have:
a.
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our
supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by
others within those entities, particularly during the period in which this report is being prepared;
b.
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our
supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for
external purposes in accordance with generally accepted accounting principles;
c.
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the
effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d.
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most
recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably
likely to materially affect, the registrant’s internal control over financial reporting; and
5.
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to
the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
a.
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are
reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b.
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal
control over financial reporting.
Date: February 12, 2026
/s/ Brian Goff
Brian Goff
Chief Executive Officer
(principal executive officer)

Exhibit 31.2
CERTIFICATION
I, Cecilia Jones, certify that:
1.
I have reviewed this Annual Report on Form 10-K of Agios Pharmaceuticals, Inc.;
2.
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by
this report;
3.
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects
the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and
15d-15(f)) for the registrant and have:
a.
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our
supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by
others within those entities, particularly during the period in which this report is being prepared;
b.
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our
supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for
external purposes in accordance with generally accepted accounting principles;
c.
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the
effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d.
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most
recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably
likely to materially affect, the registrant’s internal control over financial reporting; and
5.
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to
the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
a.
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are
reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b.
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal
control over financial reporting.
Date: February 12, 2026
/s/ Cecilia Jones
Cecilia Jones
Chief Financial Officer
(principal financial officer)

Exhibit 32.1
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with this Annual Report on Form 10-K of Agios Pharmaceuticals, Inc. (the “Company”) for the fiscal year ended December 31, 2025, as
filed with the Securities and Exchange Commission on the date hereof (the “Report”), the undersigned, Brian Goff, Chief Executive Officer of the
Company, hereby certifies, pursuant to 18 U.S.C. Section 1350, that, to his knowledge on the date hereof:
 
1.
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
2.
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the
Company.
Date: February 12, 2026
/s/ Brian Goff
Brian Goff
Chief Executive Officer
(principal executive officer)

Exhibit 32.2
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with this Annual Report on Form 10-K of Agios Pharmaceuticals, Inc. (the “Company”) for the fiscal year ended December 31, 2025, as
filed with the Securities and Exchange Commission on the date hereof (the “Report”), the undersigned, Cecilia Jones, Chief Financial Officer of the
Company, hereby certifies, pursuant to 18 U.S.C. Section 1350, that, to her knowledge on the date hereof:
 
1.
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
2.
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the
Company.
Date: February 12, 2026
/s/ Cecilia Jones
Cecilia Jones
Chief Financial Officer
(principal financial officer)