Analyst Conference Summary

biotechnology

conference date: November 1, 2018 @ 5:00 AM Pacific Time
for quarter ending: September 30, 2018 (Q3, third quarter 2018)

Forward-looking statements

Overview: Received first revenue for Tibsovo for AML patients with an IDH1 mutation. Revenue down sequentially because received milestone payment in Q2. Increased expenses.

Basic data (GAAP):

Revenue was $15.2 million, down 62% sequentially from $40.4 million, and up 33% from $11.4 million year-earlier.

Net income was negative $94.7 million, down sequentially from negative $68.7 million, and down from negative $79.0 million year-earlier.

EPS (diluted GAAP) was negative $1.63, down sequentially from negative $1.19, and down from negative $1.59 year-earlier.

Guidance:

Has cash runway to the end of 2020.

Conference Highlights:

David Schenkein, M.D., CEO of Agios said "On the heels of the third quarter U.S. approval of Tibsovo, our first wholly owned precision medicine, we remain focused on executing on our remaining 2018 milestones and continuing to create value from our portfolio. Based on regulatory discussions, we are accelerating our frontline strategy in IDH1m AML with the planned submission of an sNDA expanding Tibsovo's label to newly diagnosed AML patients not eligible for standard treatment and a shorter enrollment timeline for the Phase 3 AGILE trial. We believe these programs, coupled with our robust preclinical pipeline, support our next phase of growth toward becoming a fully integrated, sustainable biopharmaceutical company." New positive data is being presented at ASH, with an abstract released today.

Effective February 1, 2019, CEO David Schenkein, M.D., will transition to the role of executive chairman of the board of directors and Jacqualyn Fouse, Ph.D., will succeed Dr. Schenkein as CEO.

Tibsovo (AG-120 or ivosidenib) in R/R AML patients with an IDH1 mutation received FDA approval in July 2018. An EMA submission should be made before the end of 2018. Executing on launch plan. 60% of payments were from Medicare. Agreed with the FDA to submit a supplemental new drug application (sNDA) for single agent Tibsovo in newly diagnosed AML patients with an IDH1 mutation who are not eligible for standard treatment

In Q2 Agios entered into an exclusive license agreement with CStone Pharmaceuticals for ivosidenib in Greater China, resulting in a $12 million upfront payment with the potential for $412 million in development and commercial milestones.

Phase 3 AGILE trial expects full enrollment in 2020 now that event free survival is primary endpoint, in combination with azacitidine for newly diagnosed AML patients with IDH1 mutation ineligible for intensive chemotherapy.

Tibsovo net sales were $4.5 million. $2.0 million of revenue in the quarter was from royalties for Idhifa from Celgene, up sequentially from $1.6 million. $8.7 million was from collaborations.

With Celgene, Agios plans to start a Phase 3 trial for frontline AML combining ivosidenib or enasidenib with 7+3 chemotherapy in Q4 2018. Updated Phase 1/2 data from the trial combining Tibsovo or Idhifa with Vidaza has been submitted for ASCO.

A randomized Phase 3 study (ClarlDHy) of AG-120 (ivosidenib) in IDH1 mutant positive cholangiocarcinoma in continued enrollment, which is expected to complete in first half of 2019. If approved would be the first targeted therapy for this disease, which has about 3,000 IDH1+ patients annually.

Updated MDS data for single agent ivodienib will be presented in a poster at ASH. Further combination trials with a variety of agents and target variants are planned for ivosidenib.

Phase 1 dose-escalation and expansion study of AG-881 in IDH mutant positive hematologic malignancies completed the dose-escalation phase. Phase 1 study for IDHm positive glioma should report data at ASCO. AG-881 rights received back from Celgene. It is a brain-penetrant pan IDH inhibitor. Data will be presented at Society for Neuro-Oncology in November.

Phase 1 study of AG-519 for PK deficiency in healthy volunteers enrollment continues.

AG-348, now mitapivat, for Pyruvate Kinase Deficiency (PKD) Activate, pivotal trial started for patients who do not receive regular blood transfusions.. A Phase 2 proof of concept trial for thalassemia will begin in Q4 2018. The Activate-t trial for PK patients receiving regular blood transfusions is ongoing.

A Phase 1 study is underway for AG-270 for MTAP (methylthioadenosine phosphorylase) deleted cancers .... 15% of all cancers have MTAP deletions. But some, like mesothelioma and glioblastoma, have rates over 50%. Celgene is collaborating on AG-270.

Mitapivat for thalassemia Phase 2 trial should start before year-end.

Will initiate preclinical development activities for the first molecule in the next wave of novel investigational cancer metabolism medicines.

An IND for AG-636, an DHODH (dihydroorotate dehydrogenase) inhibitor, for hematologic malignancies was submitted to the FDA.

Cash (including equivalents & securities) ended at $878 million, down sequentially from $937 million. No debt.

Cost of Sales $0.7 million. GAAP operating expenses were $114.4 million, consisting of: $82.6 million for R&D and $31.1 million for G&A. Loss from operations was $99.2 million. Interest income was $4.5 million.

Q&A:

What to expect for Ivosidenib newly diagnosed AML not eligible for standard of care data to be presented at ASH? Will be on 34 patients in cohort 2. Better sense of safety and efficacy, plus molecular data. We are still putting the presentation together.

Physician awareness, genetic testing? IDH2 testing rate has climbed to around 80%. So the starting point is higher than we had with Idhifa at the same relative time point.

Durations in commercial market for Tibsovo or Idhifa? For Idhifa has been consistent, not yet up to the duration seen in the clinical trials. It is just too early for Tibsovo duration. Also early patients tend to be sicker; duration tends to increase with later patients.

Monotherapy after combination therapy? The maintenance phase of HO150 can be monotherapy, if patients are intollerant of azacitidine. The other aspect is how the drug might be used in the community.

Sales expense? We are well-sized for our sales, so no plans to scale up further.

Treatment landscape for AML is changing rapidly. So it may take a few years to see how doctors decide to sequence revenues, or the exact Tibsovo revenue ramp. But for now Idhifa ramp would be a good analog.

AG270 PK affect across types of tumors? Pleased with enrollment, but no data release until a medical meeting.

R and D can be expected to increase over time as we enroll more Phase 3 trials.

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