Good day and thank you for standing by and welcome to Q3 2022 Agios Pharmaceuticals, Inc. Earnings Conference Call. [Operator Instructions] Please be advised that today’s conference is being recorded. I would now like to hand the conference over to your speaker today, Holly Manning. Please go ahead.

Thank you, operator. Good morning, everyone, and welcome to Agios’ third 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 Brian Goff, our Chief Executive Officer; Dr. Sarah Gheuens, our Chief Medical Officer and Head of Research and Development; Richa Poddar, our Chief Commercial Officer; and Cecilia Jones, our Chief Financial Officer. Before we get started, I would like to remind everyone that some of the statements we make on this call will include forward-looking statements. Actual events and results could differ materially from 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 Brian.

Thanks, Holly and good morning, everyone. It’s a privilege to join you today on my first Agios financial results call as Chief Executive Officer nearly 3 months after assuming the role in August. Agios has a longstanding legacy of scientific excellence and clinical execution and is on the cusp of broadening its ability to change the treatment landscape of rare and genetically defined diseases. With the recent launch of PYRUKYND and its extensive clinical and preclinical pipeline, the opportunity that lies ahead for Agios and the patients it serves is exciting [Technical Difficulty] the company from the very beginning. Since joining in August as I have dug into the business and met so many of our talented team, my optimism and excitement for the future of Agios has grown for several reasons, first, the strength of the culture and patient orientation is even better than I perceived during my diligence process. The emphasis on our shared mission of improving lives is palpable across all functions within the organization and part of the fabric of the decisions we make, the people we hire and the reason we come to work every day. Second, for a company of our size, the depth and breadth of activity across all areas of the business is remarkable. 2022 has been a year of execution with 5 pivotal studies and 2 early-stage trials underway, an ongoing commercial launch in the U.S. and active filing in the EU and Great Britain and advancing preclinical pipeline and broad business development efforts to continue to build out our pipeline. And finally, while the PYRUKYND launch was always attracted based on my experience and passion for rare diseases I will come to further appreciate the unique combination of a first-in-class, first-in-disease launch with a pipeline of significant near-term indication expansion…

Thanks, Brian. 2022 has been a year of significant execution for the research and development organization. We have continued to pioneer the field of PK activation and broaden the potential applicability of this mechanism to a range of diseases with significant unmet needs while also advancing our earlier pipeline. As highlighted on Slide 9, our clinical focus for PK activation is to transform the course of hemolytic and acquired anemia by increasing red blood cell energy health and longevity. By improving the overall health of the red blood cell, our aim is to impact the downstream consequences of hemolysis and ultimately improve how patients feel and function. To date, we have demonstrated remarkable consistency in the largest clinical data set for a PK activator across our three most advanced therapeutic areas, sickle cell disease, thalassemia and PK deficiency and become the first company to do so. Moving to Slide 10. At the ASH Annual Meeting taking place in December in New Orleans, more than 20 abstracts from Agios and our collaborators were accepted for presentation, which further underscore the clinical consistency across diseases as well as the commonalities of the underlying pathophysiology of these diseases. Specifically, we look forward to sharing new data demonstrating the long-term impact of treatment with PYRUKYND in PK deficiency and thalassemia as well as the SAD and MAD data for our novel PK activator, AG-946, more to come on our ASH abstract when they go online today at 9:00 a.m. Eastern Time. Turning to our most advanced PK activator, mitapivat, known commercially as PYRUKYND became the first FDA-approved therapy for PK deficiency in February, and we continue our efforts to expand the utility of this medicine to all patients with PK deficiency. This summer, we initiated two randomized, placebo-controlled trials of PYRUKYND in pediatric patients…

Thanks, Sarah. As Brian highlighted, this quarter has been one of continued learning, deep strategic assessment and refinement of our priorities and tactics in order to drive success in these early days of launch. Success, as we define it, is creating an important commercial foundation for our PK activator franchise. We believe this foundation is key to our long-term success as shown on Slide 21. As the first real-world proof point for PYRUKYND, we are establishing a strong base of real-world evidence and uncovering the opportunities for the first PK activator in the market in addition to being the first ever therapy available for patients with PK deficiency. While this initial launch will be a modest revenue generator, it establishes our commercial capabilities platform in rare and genetically defined diseases and serves as an important introduction for us to the broader hematology community, but there is significant overlap with future potential indications. These learnings, capabilities and relationships will be invaluable as we prepare for multiple potential launches in the next 4 to 5 years. In the third quarter, which represented the second full quarter of the PYRUKYND launch, we generated net U.S. sales of $3.5 million, which is indicative of increased patient demand, offset by modest inventory build in the prior quarters of launch. In assessing the results from this quarter, I will start with the key metrics we have observed so far, which are shown on Slide 22. As of September 30, we now have a total of 84 unique patients with completed PYRUKYND prescription enrollment forms, a 64% increase over total PES at the end of Q2. Of these PES, there were a net of 56 patients on PYRUKYND therapy, which includes those patients with new prescriptions and those continuing treatment, a 51% increase since quarter two. It…

Thanks, Richa. Our third 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 27, as Richa shared, PYRUKYND net revenue for the second quarter was $3.5 million. PYRUKYND inventory levels on a weeks-on-hand basis remained slightly lower throughout the quarter from where we ended Q2. As a reminder, we anticipate low levels of inventory given our limited distribution network which consists of one specialty pharmacy and one specialty distributor. Gross to net continues to be in the 10% to 20% range as expected with another rare disease launches. Cost of sales for the quarter was $517,000. Turning to operating expense, research and development for the third quarter was $65 million, an increase of $1 million compared to the third quarter of 2021. Selling, general and administrative expenses were $29.1 million for the third quarter representing a $1.9 million increase over third quarter 2021. The increase in SG&A expense was primarily due to an increase in workforce-related expenses. TIBSOVO royalty revenue, which is recorded under royalty income from gain on sale of oncology business on our income statement was $4.4 million. TIBSOVO royalty income will cease in 2022 due to the sale of these royalty rights to Sagard Healthcare Partners. We ended the quarter with cash, cash equivalents and marketable securities of approximately $1 billion, which excludes the $131.8 million of cash received from Sagard for the sale of our royalty rights to TIBSOVO. 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. In the current environment, we agree for a strong balance sheet but also mindful to maintain this advantage and ensure the capital necessary to execute on a promising clinical program and retain flexibility for BD. We continue to be laser focused on capital allocation to only our highest priorities, proactively managing our expense base and evaluating opportunities to add to our pipeline. I’ll now turn the call back to Brian to close this out.

Thanks, Cecilia. To summarize, we’re pleased with the continued progress across the organization and our priorities for Q4 are clear. We’re focused on driving demand for our launch in PK deficiency while applying learnings along the way to strengthen our commercial capabilities platform for future expansion. Our R&D organization is dedicated to enrolling our pivotal trials in thalassemia and sickle cell disease while continuing to advance our pediatric PK efficacy and MDS studies. And we aim to be responsible stewards of our balance sheet and continue to evaluate meaningful opportunities for value creation. As always, thank you for your continued support of Agios. With that, operator, please open the line for questions.

Thank you. [Operator Instructions] And our first question comes from Gregory Renza from RBC Capital Markets. Your line is now open.

Hi, this is Jason on for Greg. Congrats on the quarter. Thank you for taking our question. Maybe first on PYRUKYND, just wondering if you could help us think about how the prescription enrollment forms convert to patients on PYRUKYND and what are the push and pulls to think about in this process? And then maybe another one for Cecilia, as we’ve had two full quarters since the PYRUKYND launched, how are you thinking about forecasting and potentially providing revenue guidance? Thank you.

Great. Thanks for the question. Maybe we will have Richa start with the first one.

So thanks again for the question. As far as PES conversions to pills is concerned, so PYRUKYND enrollment form, the prescription enrollment form serves an enrollment into our patient support services. So that’s how the flow goes. They get enrolled into myAgios, get connected to patient support manager who help them navigate through the benefits investigation process as well as get them access to therapy. And then we navigate through the prior authorization criteria that have been established by the payers to help them figure out what is needed in order to get them into the pill. So when we reported the 84 and the 56, the 56 are the patients that have received at least one pill, it takes about 4 to 6 weeks to get from PES to pill and it’s really driven by the PA criteria that have been established by the payers. And I’ll turn it over to Cecilia to answer the second bit.

Yes. Thank you, Richa. I think it’s a little early yet in our launch, and we’re learning a lot, but we do – we are considering when to provide guidance, and we will provide it when appropriate.

Great. Thank you.

Thank you.

Thank you. [Operator Instructions] And our next question comes from Marc Frahm from Cowen. Your line is now open.

Hi, thanks for taking my questions. Richa, I realize it’s kind of early in this process, but can you characterize the typical reauthorization criteria you’re expecting to be applied? And I guess how much broader do you think that could be on average versus the primary end point in the trial?

Yes, Marc, thanks for the question. So the way to think about it is, again, as you said presented it, it is a little bit early to comment on the specifics because we’re still working through that. And as you know, most of the patients will get to that 6-month response evaluation time point in Q4. So we know more about what the reauthorization criteria going to be. Our goal is to really help payers appreciate and understand how our label is set up. So that’s what our goal is with them, which is to say don’t just look at hemoglobin or transfusion burden, but also look at chronic hemolytic parameters which influence how patients feel and function. So that is part of the dialogue that’s happening right now, so still too early to comment on specifics around that.

And Marc, I’ll just add that so far, we’ve not had real hurdles of any kind from the payer perspective. It still is early in the launch, but we don’t expect this to be a managed category because it’s on the ultra-rare side. And the team, I must say, is making really good progress with the payers as well.

Okay. That’s helpful. And then maybe just on the patients that are getting added kind of in the last quarter or more recently. Can you characterize these more recent adds in terms of is it – when success is on kind of what you spoke to in the prepared remarks, Richa, getting these patients who maybe have been under active care but have been diagnosed previously into therapy? Or is it more being driven by things like Anemia ID and stuff actually making the new differential diagnosis?

So I – the specifics around that Marc would be a little bit hard to characterize that as we noted before, Anemia ID is designed to test for hemolytic anemia of unknown etiology. So it’s not specific to PKD. And therefore, we can’t directly tie that back to which patients have been identified through Anemia ID. Our goal and our focus has been on driving education from the physician standpoint to help them appreciate the need and urgency to diagnose PKD and raise that in the sort of diagnostic triage process, which currently slower in the diagnostic triage process, right? So that disease education from a physician standpoint needs to continue and continues to remain a focus for us. And [indiscernible] on the other end, we also want to make sure that patients are educated about their disease and know how to have those conversations with their physicians so that they can be empowered to take a more active role in the diagnosis and treatment. So that push/pull component of our strategy is what’s driving demand and we will continue to remain a focus for now and forever what’s in this disease space?

Okay, thank you.

Thank you. [Operator Instructions] And our next question comes from Mark Breidenbach from Oppenheimer. Your line is now open.

Hey, good morning. Just a couple of quick ones from me. First of all, I’m wondering how we should be thinking about pricing of PYRUKYND in Europe? What are you guys seeing as maybe the most appropriate comps for this drug in Europe in terms of pricing? And also, in light of the recent top line Phase 3 data from luspatercept in low and intermediate risk MDS. Is that impacting or influencing your plans for developing AG-946 in MDS in any way? And maybe you can just take an opportunity to highlight the main differentiators between 946 and luspatercept? Thank you.

Sure. Good morning, Mark. It’s Brian. I’m going to start with the first one, and then Sarah can certainly comment on MDS and our thoughts there. For ex U.S., and I won’t get into specifics about pricing at this stage. What I would like to emphasize is that while we are waiting and expecting the final approval of PYRUKYND in Europe and Great Britain, as we noted on the call that will be an important win for PKD patients. Near-term, what we’ve decided to do is focus on ensuring access for the PKD patients that we know would very much like to have access to PYRUKYND. And so as Sarah mentioned on the call, we’re very proud of the fact that we have a global managed access program in place. That’s not commercial, obviously, just to make sure that adult PKD patients can have access. So stepping back, though, which I think is behind your question about the revenue opportunity, the majority of that we see as occurring in the U.S. where when we think about ex U.S., Europe, specifically, we are continuing to assess the commercial access plans, but we are doing that in concert with a bigger picture, and that is the pathway that we could see towards potential larger follow-on launches, mainly thalassemia and sickle cell disease. I will just add that we are not at this stage when we think about commercialization, we are not looking to build out on our own sales force or commercial team ex-U.S., we are looking at partnering opportunities. But we are going to be very selective in how we do that. And all of that is what will guide us on how to commercialize and to your question what the appropriate pricing would be.

And then for the second question around the luspatercept data, so we don’t believe the recent outcome of the luspatercept trial would have any impact on our clinical development plans. We are continuing as we feel very excited about them. I think the biggest differences are of course, there is a very different route of administration. We have an oral convenience that is very important, especially also in an elderly population. But then most importantly, there is a very different mechanism of action, and we believe that PK activation in the context of enhancing red blood cell functionality and survival is very important in the context of this disease. And our clinical development program is really set up to encompass ESA naïve patients and ESA refractory patients, so basically all comers with lower-risk MDS, which we believe is an advantage of how we have designed our program to-date.

Okay. Thanks so much for taking the questions and congrats on the quarter.

And thank you.

And one moment for our next question. And our next question comes from Greg Harrison from Bank of America. Your line is now open.

Good morning. This is Jason on for Greg. Thanks so much for taking our questions and congrats on the progress. I was hoping you could provide a little bit more color on the initial launch dynamics of PYRUKYND. Is the initial demand matching your expectation? Is there growing awareness starting to track into new patient starts? Just trying to think about an inflection in the more medium term? And then in terms of the initial inventory build, any concern that this could impact treatment starts this quarter? Thank you.

Sure. So, I will kick us off here, Jason, and then have Cecilia comment on the inventory component. So, from an initial demand standpoint, the way to think about it is we are going to continue to remain laser focused on demand generation because that is going to be really important in this disease phase. A couple of points to highlight about the disease itself, I think we are encouraged with what we saw this quarter in the growth we saw in the new prescription enrollment forms because that’s really the leading predictor about how the launch is going. And it’s a story of breadth, breadth in terms of the kind of physicians prescribing the drug as well as breadth as the kind of patients that have been prescribed drug. So, in the second full quarter of launch, we are continuing to see that dynamic playing out. That being said, the two things that we have to get right and will take time is one is diagnostic efficiency. There is a sort of triage process that happens from a diagnostic standpoint where PKD gets lost in that funnel. And our goal is with the availability of treatment to raise that urgency from a physician standpoint so that they are testing for and diagnosing PKD more early in the diagnostic funnel than they are today. So, that’s one. And the second component is, given the rarity of the disease and the fact that this is a chronic condition that does not have the centers of excellence and is a diffuse patient population, having the patient play a very active role in their diagnosis and treatment. So, empowering them with the tools and educating them to ensure that they know how to have those conversations with the healthcare providers, becomes very, very important, and that’s part of a tactical pivot that we made as well. So, the focus on demand generation will continue. As we also indicated in the past, this is going to be a slow and steady launch. This is not going to be some match ball like hockey stick inflection point that we anticipate. So, it’s going to be slow and steady, but it’s really the foundation for our commercial capability building, as Brian alluded to, in his opening remarks for what’s to come in the future with thalassemia and sickle cell.

Yes. And in terms of inventory, we did see some inventory where that you would expect in the first couple of quarters, but we anticipate low levels of inventory going forward. As a reminder, we have a limited network distribution, which is one specialty pharma – sorry one specialty pharmacy and one specialty distributor.

Great. And so that inventory is sufficient, you think, to handle that new patient builds as we go forward in the next quarter or so?

Yes.

Perfect. Thanks so much for taking our questions.

[Operator Instructions] And our next question comes from Andy Berens from SVB. Your line is now open.

Hi. Thanks. I am sorry if I missed this because I was bouncing between a couple of calls. I am wondering if you can give us any color on the genotypes of the patients that are using the drug and maybe those that are not actually using the drug. And it’s early, but any comment on the persistence rate would be appreciated. And then just one on the MDS opportunity, a fair number of patients do get EPO off label. So, just wondering how we should think about a PKR drug entering that treatment paradigm?

So, hi Andy. Thanks for the question. So, in terms of the patient characteristics, we have had used across the board in terms of the kinds of patients that are being prescribed drug. So, we have seen patients irrespective of age, splenectomy status and symptomology, regularly transfused, not regularly transfused, get drug. To your specific question around genotypes, we haven’t provided specifics, but the way to think about it is from EPO or pyruvate criteria. If the payer policy does not include the double non-missense mutated patients, then those patients would not be able to get therapy unless they met financial eligibility criteria and could get on our free drug program. So, that’s the one caveat, I would say, dependent on the payer policy. But in general, we are not seeing physicians limiting use of the drug based on a specific disease or patient characteristic.

And then maybe I will just add, Andy, that for persistency, we are in the period right now, we are starting to get initial data. I would say, we are on track with what we expected, but it’s too early to make too many projections from that, from the standpoint where we are at this stage in launch. You may recall from the clinical trial, there were – the response rate was about 40% to 45% with PYRUKYND and moving forward in the real world, what we will be looking at is how the payers respond at the six-month mark of treatment to the criteria that they put in place as well as is the synchronization of patient visits with their doctor to do the appropriate monitoring is it exactly at six months. And we will just have to monitor that over time, but we feel good with how we are progressing on that front so far. And Sarah can cover MDS.

Yes. Sure. So, the question around EPO and off-label use for EPO, so the way we have designed our program right now is to really study the patients who may be naïve to any erythro-stimulated agent or who have been refractory. We currently are not planning in this proof-of-concept study to enroll patients who are on EPO actively because we are truly looking for efficacy at this point, specifically to our drug.

Okay. Thank you.

[Operator Instructions] And one moment of our next question. And our next question comes from Salveen Richter from Goldman Sachs. Your line is now open.

Good morning. This is Andrea on for Salveen. Thanks for taking our questions. For the first one, recognizing that it’s early, but maybe another question on pricing for PYRUKYND. How are you thinking about this for indications such as thalassemia and sickle cell? Do you expect that to be in line with how you have priced it for PKD?

Yes. Andrea, thanks for the question. I will take that one. Again, I think that with pricing, we are not going to go into specifics at this stage, but I will just say that directionally, what will await, of course, is the data, which is so critically important. And we are very excited about the progress we are making on enrollments with the thalassemia, ENERGIZE, the ENERGIZE-T trials as well as the Phase 2 portion of sickle cell disease with RISE UP. And we have been very clear about our ambitions to get to that data point following the successful enrollment. Once we have that, then we will take a thoughtful look at pricing. In general, thalassemia is a step-up in terms of patient prevalence from where we are with PKD. And then sickle cell, as you know, is another step-up from even thalassemia. We are talking about – in thalassemia, 18,000 to 23,000 patients in the U.S. and EU five [ph]. In sickle cell disease, in the U.S. alone, we are in the neighborhood of 100,000 patients. So, that plus the data will guide us on the appropriate pricing decision. I know that’s a non-specific answer, but as far as I think you should take it for now.

No problem. Thanks so much. And then maybe just a broader question, just wondering if you could provide some updated thoughts here on how you are thinking about potential business development activities for the future and how this would interface with your existing pipeline? Thanks so much.

You bet. And I am going to combine that as well with at least acknowledgment of what we had in our comments earlier that we are really pleased to have completed the TIBSOVO royalty monetization deal with Sagard. And what that does is obviously further strengthen our balance sheet, which is already, as we described it in an enviable position, particularly in this market. So, that will add to our optionality as to what we do with our capital deployment. For BD, we have an ambition to further strengthen our pipeline as well as diversifying, particularly diversification from PKR activation. And internally, because we believe BD is so important for us over the long-term, we have also enhanced the size of our BD team internally, and that should give us more quality, more quantity, capacity from search and evaluation and diligence standpoint. The way I think about it is our sweet spot for business development would be potentially synergy with rare, non-malignant hematology disease areas where we are currently focused. That could be one part and/or leverage of the building rare disease capabilities that we are working on, on the foundation of our PKD launch as Richa has talked about. And then lastly, of course, for us in rare diseases, whatever we do, we will have to have line of sight to transformational benefit for patients. That’s mission critical from our perspective. So, we are not time-bounding when we will do a deal or how many deals we do, but we do feel really good about our capital position and our focus will be on value creation in a very disciplined approach.

Okay. Thank you so much for the color.

[Operator Instructions] And our next question comes from Danielle Brill from Raymond James. Your line is now open.

Hi guys. Good morning. Thanks for taking the question. I am curious what percent of patients that have been diagnosed with your Anemia ID kits are actually opting to go on treatment. Thank you.

Hi, Danielle. This is Richa. So, thanks again for the question. As noted before that the Anemia ID is designed for hemolytic anemia of unknown etiology. So, it’s not specific for the diagnosis of PKD. So, there is really no way for us to know compliantly what patients diagnosed through Anemia ID have been put on therapy. The way we think about this is our focus continues to remain on-demand generation and that involves both the top-down approach, ensuring that the healthcare providers are appropriately elevating PKD in the diagnostic triage process, while also empowering and activating patients so that they know to have those conversations with their healthcare providers to ensure that they can get diagnosed and treated. So, that continues to be our focus but specifics around translation of Anemia ID into patients is not possible.

I see. I guess are the docs that are ordering the ID kits the same as the docs prescribing the drug?

They certainly can be, yes. That’s – and as we have noted, we believe Anemia ID is one of the few select tools that are really important for our continued progress in launch. We believe that we have that with Anemia ID. It’s – but I would not categorize it as its exclusive for those who prescribe.

Understood. Thank you for the question.

Sure.

Thank you. And I am showing no further questions. I would now like to turn the call back over to Brian Goff, CEO, for closing remarks. End of Q&A:

Alright. Thanks a lot Justin and thanks everyone for your questions and your continued interest in our progress. As always, I want to thank my Agios colleagues for their dedication, for their passion to make a difference for patients. I also want to thank all of the patients, caregivers and physicians who partner us – partner with us rather in so many ways and especially those who participate in our clinical trials across indications. Our connections across stakeholders and our collective efforts fuel our ongoing innovation impact for people with genetically defined diseases. So, thanks a lot for joining us today, and you may now disconnect.

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