Good morning and welcome to Agios Second Quarter 2022 Conference Call. At this time, all participants are in a listen-only mode. There will be a question-and-answer session at the end of the call. Please be advised that this call is being recorded at Agios' request. I would now like to turn the conference over to Holly Manning, Senior Director of Investor Relations. Please go ahead.

Thank you, operator. Good morning, everyone, and welcome to Agios' second quarter 2022 conference call. You can access slides for today's call by going to the Investors Section of our website, agios.com. With me on the call today with prepared remarks are Dr. Jackie Fouse, our Chief Executive Officer; Dr. Sarah Gheuens, our Chief Medical Officer and Head of Research and Development; Richard Poddar, our Chief Commercial Officer; and Jonathan Biller, our Chief Financial Officer and Head of Corporate Affairs. Before we get started, I would like to remind everyone that some of the statements we make on this call will include forward-looking statements. Actual events and results could differ materially from those expressed or implied by any forward-looking statements as a result of various risks, uncertainties and other factors, including those set forth in our most recent filings with the SEC and any other future filings that we may make with the SEC. With that, I will turn the call over to Jackie.

Thanks Holly. Good morning, everyone and thanks for joining our second quarter 2022 results call. The first half of 2022 has been remarkably productive across all facets of our business. I've continued to be impressed by the focused execution of the Agios team and their connection to each other and our vision of making an impact on the lives of patients. In February, our world-class commercial organization launched our first genetically defined disease medicine, PYRUKYND, which is the first FDA approved therapy to treat pyruvate kinase deficiency and the first ever approved PK activator. Today, we report impressive commercial performance for our first full quarter of launch, which Richard will cover in more detail. Our exceptional clinical team initiated two pediatric PK deficiency pivotal studies, as well as an sickle cell disease cohort of the AG-946 Phase 1 trial, all while operationalizing the AG-946 MDS study and continuing to advance site activation and patient enrollment across three pivotal studies of PYRUKYND in thalassemia and sickle cell disease. In May, we made the tough decision to evolve our research organization, which has led to the ongoing integration of our R&D teams and enhanced our research focus and business development activities. And in June, we had a robust presence at the European Hematological Association Meeting in Vienna with broad preclinical, translational and clinical updates across the programs. Sarah will review our preclinical and clinical programs momentarily. A highlight for me occurred a few weeks ago when Agios employees came together for our first company offsite since the start of the pandemic two and a half years ago. It was an incredible reminder of the expansive talent we have at Agios and the interconnected culture that continues to thrive through the dynamic evolution of our business. Turning to slide five. A few weeks…

Thanks Jackie. Back in May, we announced the evolution of our research organization to focus our people and resources on existing validated preclinical programs and shift that pipeline group strategy to in-licensing and/or acquiring well-characterized high potential assets. This approach enabled us to retain a strong internal research team focused on moving our most promising internal programs forward, while also pursuing opportunities that complements our scientific expertise in cellular metabolism and growing clinical and commercial capabilities. With this evolution, I'm excited to step into my new role as Head of Research and Development. It is my focus and priority to seamlessly integrate our research and development functions in a way that increases the coordination and efficiency of the organization and deepens the impact of patient insights on R&D decision-making. As shown on slide eight, we have a fully built research and development organization encompassing all functions needed to drive our preclinical and clinical programs forward and we have an incredible amount of talent across each of these functions. It has been truly gratifying to see the way this new structure has already had a positive impact on communication and collaboration within the R&D organization. Turning to slide nine. While our research leaders are focused on helping us thoughtfully evaluate the underlying science and fit of potential business development opportunities, they are also hard at work advancing our internally discovered preclinical programs. As shown on slide 10, our earliest program is a branched chain amino acids aminotransferase 2 inhibitor known as BCAA2 for the treatment of propionic acidemia called PA and methylmalonic acidemia also known as MMA. These acidemias are a group of inherited inborn errors of metabolism in which the body cannot break down branched-chain amino acids, leading to a toxic accumulation. BCAT2 inhibition may reduce the formation of these…

Thank you, Sarah. In the second quarter, which represented the first full quarter of the PYRUKYND launch, we generated net U.S. sales of $3.1 million. As we've said before, our commercial launch strategy outlined on slide 22 aims to connect with the provider and facilitate access to appropriate disease and product information for the patient. Our focus is on ensuring, first, that the approximately 1,500 to 4,000 PK deficiency patients in the U.S. are accurately diagnosed through efforts like Anemia ID; second, physicians understand the urgency to prescribe an eligible patients advocate for treatment; and finally, patients connect to myAgios support services to optimize disease understanding, ensure access and drive long-term medication adherence. With our first full quarter under our belt, we are encouraged by the early launch metrics as well as the meaningful feedback we have received from patients and the physicians. I'll start with what we view as the key metrics we have observed so far as outlined on slide 23. As of June 30, our team of hemolytic anemia specialists have continued to engage with customers and have been successful in driving scripts as they are now a total of 52 unique patients with completed PYRUKYND prescription enrollment forms. This has converted to 37 total patients on PYRUKYND, which includes those with new prescriptions and those continuing treatment. Importantly, at this early stage of launch, these patients are coming from a unique prescriber base of 50 physicians diversified across the country, validating our view that the majority of patients are treated in the community versus academic medical centers or centers of excellence. The breadth of prescribing across states and practices with indication of early launch health. As we saw in the first quarter, patients coming on therapy represent a range of demographics and disease characteristics very representative…

Thanks Richa. Our second quarter 2022 financial results can be found in the press release we issued this morning, which I will summarize. More detail will be included in our 10-Q filing later today. Turning to slide 28. As Richa shared, PYRUKYND revenue for the second quarter was $3.1 million. In addition, we recognized revenue of $2.5 million in the quarter with respect to an upfront payment associated with the licensing of intellectual property for our Friedreich’s Ataxia preclinical program, which we had discontinued in 2020. Cost of sales for the quarter was $435,000. Turning to operating expense. Research and development for the second quarter was $74.5 million, an increase of $12.5 million compared to the second quarter of 2021. The year-over-year increase in R&D was driven primarily by increased headcount and workforce related expenses, planned increased activity associated with the PAH preclinical program, start-up costs for the AG-946 Phase 2a MDS study, increased spend for the AG-946 Phase 1 trial and start-up costs for the PYRUKYND pivotal studies in sickle cell disease and pediatric PK deficiency. Selling, general and administrative expenses were $28.3 million for the second quarter, representing a $1 million decrease over second quarter 2021. The decrease in SG&A expense was primarily due to the completion of the reimbursable transition-related services provided to Servier related to sale of the oncology business, which concluded in the first quarter of 2022. TIBSOVO royalty revenue, which is recorded under royalty income and gain on sale of oncology business on our income statement, was $2.7 million. We ended the quarter with cash, cash equivalents and marketable securities of approximately $1.1 billion. With this cash balance, we expect to be able to execute our current operating plan through major catalysts and to cash flow positivity without the need to raise additional equity. With that, operator, please open the line for questions.

Thank you. [Operator Instructions] Our first question comes from Marc Frahm with Cowen. Your line is open.

Yes. Thanks for taking the question and congrats on the quarter. Maybe this is for Richa. Can you speak to the kind of full time that you're seeing on those 52 start forms that have come in versus the 37 patients on drug? And how do you expect that trajectory to kind of change through the rest of the year?

Yeah. Marc, thanks for the question. So, we are encouraged, as we said, with the trends that we are seeing in regards to both getting patients on the drug, but also getting the drug -- getting access to the drug as well. So, we expect those to convert over time. It's taking about four to eight at this point for patients to get on therapy, given that we are still transitioning through the medical exception process, payer policies have been developed. As we've said in the past, slow and steady is the way that we anticipate this launch including the second half. I think two things to keep in mind here. The patients are still titrating through their therapy. So, according to our label, we have the six months assessment where the assessment of response will be made for the patient. And depending on that, at least from our clinical sense, we know it's about 40% to 45% of patients expected to respond. We had some patients drop-off. And then, as the payer policies and the authorization developed, we know more as well in terms of what that second half looks like. So those are the two things just to take into consideration as we go into the to the second half, but we are very encouraged with this early launch trend in terms of both diversity of patients who are getting prescribed drugs as well as the breadth of prescribing across the country.

Okay. That's helpful. And then, I know the authorization new regiment criteria process is pretty early, but the early feedback that you're getting on the reauthorization process, how strictly are you seeing those plans adhere to the response criteria in the trial versus being open to maybe a broader interpretation of what a response looks like?

So, I think it's really this is a rare disease, right? That is -- so I think here's the conversation between the division and the plans, as well as our continued engagement with the payers, which we have continued to do and will continue to do as those reauthorization and utilization management criteria develop is going to be very important. So, those interactions thus far have been positive. Still too early comment, like I said, but it continues to trend in the direction we hope it would.

Okay. Great. Thank you.

Our next question comes from Gregory Renza with RBC. Your line is open.

This is [indiscernible] on for Greg. Thanks for taking our questions and congrats on the quarter. Maybe just a follow-up question on the patients on PYRUKYND. Just wondering among the 37, how many were new patients added this quarter? And what is your expectation around the NRx growth in the second half? And what are some of the headwinds and tailwinds that we should think about? And then secondly, just on the diagnostic kit, Anemia ID. Just wondering, is the positivity rate a function of prevalence? Or there are other factors that can increase the positivity rate? And where do you see that rate evolves to in a long time? Thank you.

Sure. So, I'll answer the Anemia ID question first. So, just we reported the positivity rate because we believe that we are at the point where it's pretty steady and has been pretty steady for a while. As a reminder, Anemia ID is not designed for PK deficiency specifically, right? We designed it with the needs of our physician and healthcare professional base as well as what we knew was needed to have improved diagnosis for hemolytic anemia period. So, designed to test for hemolytic anemia of unknown etiology and to aid healthcare professionals to understand what the underlying cost is for the hemolytic anemia as opposed to being specific to PK efficiencies. So, as of this minute, we don't have any information to suggest we would expect any upward mobility in the positivity rate associated with PKD specifically. So that's on Anemia ID. To your question on NRx versus TRx, again it's really early to comment. I think what is important is that we are seeing slow and steady growth as we anticipated. We are seeing patients across a wide variety of demographics. We are not seeing patients off very specific kind being prescribed, we're seeing across hemoglobin levels, across disease characteristic base representative of the adult PKD population, which is encouraging and across the country, which is also encouraging, which is how you would expect. This is a rare disease, chronic in nature that is not concentrated in any centers of excellence, so you would expect that correct with the disease, in general. Again, as a reminder, as I said earlier as well, in the second half, a lot of what we -- this is our first full quarter. So, still really, very early. We have to see what happens with the six-month assessment where the real world efficacy looks like, which is going to take a long time for us to figure out. But in a clinical trial, it was 40% to 45%. And then we also have to see how the payer policies in terms of reauthorization and utilization management criteria that get shaped up, which will influence that as well. So, we have more sense of trends more like what we have fully as opposed to just a couple of quarters, but it's heading to the right direction, which is encouraging.

Great. Thank you.

We have a question from Andrew Berens with SVB Leerink. Your line is open.

Hi. Congrats on the launch progress and thanks for giving color on the addressable market. I was wondering if you could also give us some color on the genotypes of the PKD patients that are on commercial PYRUKYND? And then, one on the thalassemia opportunity. Any thoughts on the transfusion independent opportunity now that Bristol has stopped their program in that cohort?

Yeah. So, in terms of the genotype, so as a reminder, right, a PK deficiency diagnosis can be obtained through enzyme testing or genetic testing. So we don't always have genotype information for the -- for all of our PYRUKYND patients, but we are not seeing physicians at this moment. And as you remember from our label, our label pretty broad, thanks to the work that the clinical and regulatory teams have done. So, it is prescribed for adult PKD patients. As long as over the age of 18, you're currently eligible for PYRUKYND, and that's what we are seeing in terms of our prescription trend. So that's good news. We're not seeing physicians say, oh, I'm only going to give it to a certain kind of genotype or not give it to a certain genotypes. We're not seeing that at least in the data that we have. And then to your question around thalassemia, as you already mentioned, so a couple of things right on and then ask Sara to comment on it from a clinical standpoint as well. But very encouraging that we see -- we are starting to generate these positive experiences with PKD, because it's the same physician and healthcare professional base that will also be looking at thalassemia and prescribing drugs for thalassemia. So, the more experience they get, the better experience they we have with the drug, the better setup we will be when we have an approval in the thalassemia space. Our program itself is designed to address both alpha as well as non-transfusion-dependent and transfusion-dependent thalassemia. And we know that only a small proportion of the thalassemia patient population, the transfusion-dependent beta is currently served by luspatercept, and there's still a lot of people that don't respond. And you really need something that is an oral therapy that's convenient. We've heard from physicians that they feel a tremendous value with that as whether we've designed a clinical program itself, which is looking at the totality of the data, including benefits across a wide spectrum of function as well. And we see a consistency of benefit from our proof-of-concept data across all three hemolytic anemias, which we believe that was in very good stead overall. So, we are very encouraged with what we are seeing, but Sarah can comment more on the thalassemia clinical development plan.

Yeah. Great. Thanks Richa. So, yes, from the clinical development perspective, we remain encouraged and on track with our program for thalassemia. We do not see this recent decision as having an impact on our program or on our probability of success. And for a couple of reasons, we've always planned to deliver on the totality of data package for the transfusion -- non-regularly transfused population, as Richa described earlier. And then on top of that, our mechanism of action is very different. I mean, both drugs do increase hemoglobin, but because of the mechanism of action difference and the data that we've been generating across our different clinical programs, including also seeing -- starting to see signs of an impact on iron overload. We continue to believe in our programs and continue to move forward with the same probability of success.

Great. Thanks. Thanks for that. Maybe a question for Jackie on VOC. You guys aren't considering acquiring GBT? Are you? Or just that's a joke? Thanks for taking the question. Appreciate it.

How about if I laugh in response to that.

Okay. Okay.

Our next question comes from Mark Breidenbach with Oppenheimer. Your line is open.

This is Jaclyn in for Mark from Oppenheimer. Congrats on the quarter and thanks for taking our question. The first one is how many new scripts? What was the monthly retention rate in 2Q? And have you seen any prescription abatement due to payer related issues?

Yeah. I didn't hear the first part of your question, but maybe I'll answer the second part and then come back to your first question. So, I think you had asked about abatement maybe. So, again, what is really -- we haven't seen patients that have been prescribed drug necessarily not want to take therapy. We've been -- we enroll our patients once they've been prescribed therapy into our high-touch patient support program myAgios which is really helpful in terms of getting patients started on therapy and then also staying on therapy. What we have seen with a few patients anecdotally is that some patients are delaying start of therapy, while they have a life event like a wedding or a holiday. So, they are waiting on stopping their therapy, but we are not seeing a at this early stage. I don't know what your first question was, I'm sorry. So if you could repeat that. I didn't quite get.

Yeah. So, how many new scripts? And what was the monthly retention rate for the second quarter?

So, we haven't provided specifics on like this new scripts. What we have said is, we have 52 prescriptions, and 37 of those have been filled, which includes both those patients that have initiated in this quarter as well as those that are continuing on from the previous quarter.

Okay. Thanks. And my other question is on the RISE UP trial. With the enrollment in the Phase 2 portion of RISE UP study to complete by year-end. Can we expect a dose selection decision in the first half of 2023? And what initial data from the trial solely focused on the safety and hemoglobin response, or could we see some of the secondary endpoint data as well?

Hi, this is Sarah. So, you will not see data in the first quarter of 2023, because the trial -- the Phase 2 has a follow-up period of 12 weeks. So, all patients need to complete that, go through their safety follow-up, then we need to do the database lock and review the data. So, it's just not possible for that to happen in Q1. And then in regards to the data that you will be seeing, so -- we do have more than just the hemoglobin response and the safety that we're collecting in that Phase 2 obviously, because it's -- we're going to collect all of the data, and I've outlined the secondary endpoints in our presentation. And so, we will be analyzing all of the data to inform our go, no-go decisions to Phase 3 and then there are pre-specified criteria for the dose selection as well. We will be very much focused on moving from Phase 2 to Phase 3, but we will be presenting the data that we have at an upcoming medical conference when ready, which we'll hope be more towards the end of the year.

Great. That’s helpful. Thank you so much and congrats again on the quarter.

Thank you.

We have a question from Salveen Richter with Goldman Sachs. Your line is open.

This is [indiscernible] on for Salveen and thanks for taking our question. Could you expand on the launch trajectory of PYRUKYND in PKD? Are you planning to continue the same efforts to identify patients? Or are you utilizing new efforts to expand patient identification? And how many patients that are positive with the Anemia ID test actually move to PYRUKYND treatment? And lastly, on the PKD and sickle cell, how are you thinking about the market opportunity, specifically which group of patients do you think are most suitable for PYRUKYND? Thank you.

Yeah. So, I'll start with maybe Anemia ID and then work backwards. So first of all, I think it's just really important to remember that from a compliance standpoint, there is no way for us to know which patient that has been identified as a PKD patient, which physician that patient belongs to. So, it's just really important that we continue to drive disease awareness as well as get improved diagnosis over time. Anemia ID, again, is not specific to pyruvate kinase deficiency, but has been designed with the needs of the community, which is to help do a differential diagnosis on the hemolytic anemia of unknown in theology, and that's where the value for the test comes in and it's being utilized. We're seeing continued growth in the test, because there is that seen from the community and the utilization of the doing that differential diagnosis, so they can tailor their treatment to their patient depending on the kind of hemolytic anemia the patient has. And now for at least one of those hemolytic anemias, pyruvate kinase deficiency, we have a treatment. So, I think that's the underlying sort of thing to think about with regards to an Anemia ID itself. When it comes to diagnosis, again, this is -- I think it's just important pyruvate kinase deficiency, it's a rare chronic condition, and it is not concentrated in specific centers of excellence. It is diffused throughout the country. It is largely managed from the community. And so, our efforts, which have taken the disease understanding into consideration, are around raising awareness of the disease, continue to educate on the burden of disease, working very closely with our medical colleagues to continue to ensure that we are sharing our knowledge if we learn about the disease with the broader community and ensuring that we continue to drive diagnosis is going to going to be a launch thing, but it's going to be a foreboding in this disease space, and it's true for rare diseases. And so what we are seeing is slow and steady progress in ensuring that we get patients diagnosed and for those that are eligible to get them on treatment and that's going to continue to be our focus throughout. And then with regards to sickle cell, I have Sarah comment actually specifically on the Phase 3 trial design because that will be a nice segue to how we think about differentiating our product in that space as well. Sarah, do you want to talk about RISE UP?

Sure. So, the Phase 3 -- well, RISE UP is an operationally seamless trial design from the Phase 2 component that we just discussed and then moving into Phase 3. The operationally seamless component of it is actually giving us a lot of flexibility because it allows us to bring sites on early and get them ready for enrollment as quickly as possible, but it also still allows us to interpret the Phase 2 data and make any adjustments as needed without having an impact on the statistical or regulatory components of the trial. And then for the Phase 3, it's set up with two primary endpoints, the hemoglobin response and analyzed sickle cell pain crisis endpoint, which if one, both that allowed us to move on to secondary endpoint testing, which gives us the totality of the data that we would need to make a meaningful story for patients and physicians and regulators. It's very similar in that sense to our other trials, right? The beauty of the trial RISE UP is that it does allow us to basically hit on anemia and on VOC, both very important in the context of sickle cell disease, and we're hopeful that, that data allows us bring forward to treatment for sickle cell disease as a disease mix entirety.

And the one thing I would add to everything that Sarah just said, right, we've designed the clinical studies and are thinking about how we differentiate based on input from what the community has told us, the broader sickle cell community physicians and patients to understand what the needs are and then design the study accordingly. As far as the commercialization is concerned, it depends on the totality the data before we make any determination around that, but we're designing the study to ensure that we are set up for success.

Thank you.

[Operator Instructions] We have a question from Danielle Brill with Raymond James. Your line is open.

Hi. Good morning. Thanks for so much for the question. I guess a follow-up to a couple of prior, maybe I'll just ask another way. Given your expectations on potential discontinuations at the six-month mark, I'm just wondering if there was a bolus of patients added in 1Q that might impact growth in 3Q? I guess if you could provide some more color on how we should be thinking about sequential revenue growth, that would be great? Thank you.

So, as we've noted, right, we have 52 patients that have been prescribed PYRUKYND. It's taking four to eight weeks for the prescription to be filled. We have 37 on therapy right now, which include those that have initiated therapy as well as those that have refills. So, they're titrating through the drug. So that's -- we're not going into any more specifics on that at this point. Again, this is our first full quarter of launch and a lot more is to be learned. We are learning a lot already from what messages are working, what messages are not working, they're seeing how physicians, patients are responding to our strategy, and we are continuing to hold and continue to learn. So that will be an ongoing process. So, very early to comment anymore.

And I think we can also just remind everybody, there was no bolus of patients in Q1. Majority of patients actually joined in Q2. And so, I think what we're starting to see is we've always talked about this being a slow and steady launch and building this market and the terrific work of our commercial team is starting to pay off as we're gaining that traction with disease awareness and diagnosis and getting patients on. And I think it's going to continue to be a steady progression, but no bolus back in Q1.

Understood. Thank you.

We have a question from Greg Harrison with Bank of America. Your line is open.

This is Mary on for Greg. Thanks for taking our question. You mentioned that the awareness and the diagnostics or of PKD could increase with the awareness of the treatment such as PYRUKYND. Maybe have you been seeing this increase? How are you planning to quantify this? And maybe how long would you expect this increase to take? Thank you.

So, this is -- so when you think about advantage, right, again, I think it's a rare disease, ultra-rare disease, chronic that's not focused in the centers of excellence. So, it's going to take a lot of effort and time before we see we are able to provide any specific trends around where the disease awareness is going. I think what we have is a leading indicator that we've talked to you guys about today -- at today's call. One is, we are seeing a broad swath of PKD patients -- adult PKD patients get on therapy. We are seeing that this is spread out throughout the country. So that means that our awareness efforts are working, and we are able to get physicians across the country, has get professionals across the country as well as patients get on therapy and raise awareness with them. In addition, we are also seeing slower start growth on our Anemia ID kits, which is our -- one of our key ways to help with diagnosis of hemolytic anemia of unknown etiology, which, again, is designed with the hopes to help improve diagnosis over time. So both of those things will help in the long-term. As a reminder, 30% of -- we believe today that 30% of PKD patients are diagnosed, and we expect that number at peak to be about 70% and take about five to seven years to get there. So, given the nature of the disease and the fact that it's not concentrated, it will be a while -- therefore, you see any number that we could reasonably comment on. But the trends are in the right direction.

Great. Thank you.

There's no other questions in the queue. I'd like to turn the call back for management for any closing remarks.

Thank you, operator, and thank you, everyone for the questions this morning. As always, I would like to wrap up thanking my Agios colleagues for their dedication and passion for making a difference for patients. I also want to thank all of the patients, caregivers and physicians who partner with us in so many ways and especially those participating in our clinical trials across indications. Our connections across our stakeholders and our collection efforts fuel our ongoing innovation and impact for people with genetically defined diseases. I also need to take just a second and memorialize this moment as my last quarterly results call for Agios in the CEO role and just express again my gratitude to our terrific team for everything that they're doing. It's amazing to have such a great quarter with our first full quarter of launch for PYRUKYND in PKD in adults in the U.S. And there are just so many things that are amazing about this moment. And I'm very grateful for Brian joining the team as I view this as being an additive thing for Agios as he comes in as the new CEO with a terrific skill set to bring into our team and as I transition into the role Chair of the Board, remain part of the team. So, with that, I look forward to all of your ongoing support. Thank you for your support in the past and looking forward to a terrific future and many good quarters to come for Agios. Thanks very much for joining us today. You may now disconnect.

This concludes today's conference call. Thank you for participating. You may now disconnect.