Good morning, and welcome to Agios’ Fourth Quarter 2018 Conference Call. At this time, all participants are in a listen-only mode. There will be a question-and-answer session at the end. Please be advised that this call is being recorded at Agios’ request. I would now like to turn the call over to Kendra Adams, Senior Director, Investor & Public Relations

Thanks, Shannon. Good morning, everyone, and welcome to Agios’ fourth quarter 2018 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 are Dr. Jackie Fouse, our Chief Executive Officer, who will review key business updates and milestones for 2019; Dr. Chris Bowden, our Chief Medical Officer, who will provide an update on our clinical development activities; Steve Hoerter, our Chief Commercial Officer, who will provide an update on the launch of TIBSOVO; and Andrew Hirsch, our Chief Financial Officer, who will summarize our four quarter and full year 2018 financial results. Dr. Scott Biller, our Chief Scientific Officer, will also be available for Q&A. Before we get started, I would like to remind everyone that 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 factors, uncertainties and other factors, including those set forth in the Risk Factors section of our most recent Form 10-Q filed with the SEC and any other filings that we may make with the SEC. In addition, any forward-looking statements made on this call represent our views only as of today and should not be relied upon as representing our views as of any subsequent date. We specifically disclaim any obligation to update or revise any forward-looking statements. And with that, I’ll turn the call over to Jackie.

Thanks, Kendra. And good morning, everyone, and welcome to our fourth quarter earnings call. I'm excited to join the call today in my new role as CEO of Agios. The company's accomplishments in 10 short years, including seven INDs, two product approvals and the successful first wholly-owned commercial launch are impressive and I'm proud to be a member of the incredible Agios team. This success comes from keeping patients in science at the core of what we do. I am highly appreciative of what this team has accomplished and I look forward to continue building on this strong foundation. I would like to take this opportunity to thank David Schenkein for his invaluable contribution to making Agios what it is today and also wish him well in his future endeavors. My initial priority is to listen and learn from my new perspective as CEO. I'll be diving deeper into our discovery, clinical and commercial activities to determine how each can be further leveraged to continue creating value for patients and our shareholders. Execution across the business in 2018 has put us in a strong position to create long-term growth and value, particularly on the heels of the notable achievements in the fourth quarter, which Chris and Steve will describe in more detail. Our 2019 priorities are structured to broaden the opportunities within our oncology and rare genetic disease portfolios. First, we're working to expand the IDH opportunity in the frontline AML and solid tumor settings. The TIBSOVO sNDA for newly diagnosed patients with AML who are not eligible for standard treatment is currently under review and we expect approval this year. We plan to submit an sNDA for TIBSOVO in second line or later cholangiocarcinoma by the end of the year assuming the CLARITY trial data are supportive. And we…

Thanks, Jackie. I will start with our broad AML clinical development strategy for TIBSOVO where our next steps include expanding the relapsed refractory AML opportunity outside of the US and moving to the frontline setting. As Jackie mentioned, we submitted MAA application for TIBSOVO and IDH1 mutant relapsed or refractory AML at the end of 2018. Our application has now been validated by the European Medicines Agency and the review procedure is underway. With this validation we have CLARITY on timelines for the review process and expect the day one 20 listed questions from the agency during the second quarter. In addition to relapsed refractory AML, our goal is to ensure all AML patients with an I IDH1 mutant have access to TIBSOVO. So we are pursuing an ambitious clinical development strategy in the frontline setting that I will outline for you. Today, based on age, comorbidities and other factors, newly diagnosed AML patients are segmented into one of three categories, intensive therapy, non-intensive therapy and non-eligible for any standard treatments. Our goal is to achieve TIBSOVO labeled indications in both the intensive and non-intensive therapy setting and to be the first treatment approved for patients who today do not receive active therapy. Let's begin with intensive therapy, where standard of care is a combination of chemotherapy known as 7+3. At ASH last year we reported encouraging data from our Phase 1 study above TIBSOVO and IDHIFA in combination with 7+3 where we demonstrated a 91% CR, plus CRI CRP rate in the TIBSOVO arm. Additionally in a subset of patients who achieved a CR or CRI, CRP elimination of minimal residual disease was also observed suggesting deep and durable responses with TIBSOVO. This sets the stage for the randomized Phase 3 study run by the Co-operative Group's HOVON and…

Thanks, Chris. I'd like to start with an update on the strong launch of TIBSOVO in the US. In the fourth quarter, we recorded $9.4 million in revenue, bringing total 2018 revenue to $14 million for the first five months of launch. Since the launch in July, our team of senior hematology sales consultants has been raising awareness of TIBSOVO and IDHIFA which we co-commercialize with Celgene. Their focus is on educating physicians on how these novel first-in-class precision medicines can be used to benefit their patients with relapsed or refractory AML with an IDH mutation. As a result of our team's hard work on the launch of TIBSOVO, the number of unique prescribers doubled from the third quarter to more than 200 prescribers as of the end of 2018. As a comparison, there were approximately 600 unique IDHIFA prescribers as of year end, 1.5 years post launch. As the number of unique prescribers has expanded, we are seeing steady growth in the adoption of TIBSOVO in both the academic and community settings. As we previously noted, testing for IDH mutations is high and has not been a barrier to use with approximately 80% of physicians testing their patients for these actionable mutations. While academic centers are screening the vast majority of their patients for mutations such as IDH, we have an opportunity to further drive IDH testing rates in the community setting. We are very pleased with the foundation that both products have established in the relapsed or refractory AML setting and now looking forward to the potential launch and the newly diagnosed population reflected in our TIBSOVO sNDA this year. Beyond that, we believe there is tremendous potential for expansion into the broader frontline AML segments that Chris spoke about, as well as in cholangiocarcinoma. Each of these indications are important opportunities for us to provide TIBSOVO to patients who have the potential to benefit from this targeted therapy. I look forward to updating you on our ongoing progress in future quarters. I'll now turn the call over to Andrew.

Thanks, Steve. Our fourth quarter and full year financial results can be found in the press release we issued this morning, which I'll summarize. More detail will be included in our 10-K filing later today. Total revenue for the fourth quarter was $30 million, which consisted of $9.4 million of net US sales of TIBSOVO, $18.4 million of collaboration revenue and $2.2 million of IDHIFA royalty revenue. Total revenue for the full year 2018 was $94 million, an increase of $51 million compared to 2017. The year-over-year increase in revenue was driven by a $17 million increase in collaboration revenue, primarily related to our CStone collaboration, which we signed in June of 2018. A $15 million milestone payment from Celgene related to the IDHIFA MAA filings with the EMA. $40 million of net US sales of TIBSOVO and a $5 million increase in the IDHIFA royalty. Cost of sales for the fourth quarter was $700,000 and $1.4 million for the full year 2018. Turning to operating expenses, R&D for the fourth quarter was $94 million and $341 million for the full year 2018, an increase of $48 million compared to the full year 2017. The year-over-year increase in R&D was largely driven by clinical trial activity for mitapivat and PK deficiency and start up activities for our thalassemia study. IND enabling activities for AG-636, our DHODH inhibitor and ongoing research efforts across our discovery platform programs. Selling, general and administrative expenses were $32 million for the fourth quarter and $114 million for the full year of 2018. This represents a $43 million increase over full year 2017, driven by increased investment in our infrastructure and commercial capabilities for the launch of TIBSOVO. We ended the quarter with cash, cash equivalents and marketable securities of $805 million. We expect that this cash balance in addition to expected product revenue and royalties, but excluding anticipated program specific milestone payments will fund our current operating plan through at least the end of 2020. With that, operator, please open the lines for questions.

Thank you. [Operator Instructions] Our first question comes from Kennen MacKay with RBC Capital Markets. Your line is open.

Hey. Thank you for taking the question. First off, congrats to Jackie on taking the helm here and for first earnings call. How are you? And maybe one for Steve on the commercialization. I was wondering if you've seen any impact at all from FDA warnings on differentiation syndrome that came out late last year. And maybe a second one for Chris on cholangio. I was just wondering if you could help us understand the sort of powering and assumptions for TIBSOVO in the control arm on PFS in the cholangio trial? Thank you.

Yeah. Thanks, Kennen. It's Steve. So first with respect to the ASH presentation on differentiation syndrome. As you may know, the data that FDA presented is exactly what the data are in our label for TIBSOVO, so there weren't any great surprises or really new information with respect to what was presented. And accordingly, we just haven't seen any impact since ASH with respect to DS. This is an important adverse events associated with TIBSOVO and so our teams, whether it's our sales teams or the MSL teams, since launch we've continued to educate physicians on how best to detect and then manage differentiation syndrome, should it occur.

Okay. Kennen, it's Chris here. So the CLARITY study has 96% power to detect a hazard ratio of 0.5. Our assumption for the control arm, progression-free survival is in the order of - couple of months, two to three months.

That's it. Thanks so much.

Thank you. Our next question comes from Peter Lawson with SunTrust. Your line is open.

Hi. Thanks for taking my questions. Just maybe a macro question for Jackie, just the thoughts around, I guess, buy versus build for additional products with the sales force and thoughts around that decision to go alone in EU5?

Yeah. Hi, Peter. Thanks for the question and thanks for the welcome Kennen as well. So, we are in a terrific position of strength today, the portfolio that we have is a broader and deeper than it's ever been. When you look at the products that we've got in clinical development and the number of indications that they potentially can play and there's a lot of optionality in the pipeline and we've already got two approved products, one of which is wholly owned. So, I might turn it over to Andrew in just a minute for a little more color on the European decision. But when we look at what we have today in the near term opportunity, as well as the opportunity for evolution of the portfolio over time we came to the conclusion that going on our own in the selected number of EU countries is the way to go. In terms of priorities and the build or buy decision. I mean, as I've just said, we've a got a lot going on. The priorities for the team are to continue to support our early research team to bring those candidates through the discovery pipeline. We filed the IND for 636 late last year and now are moving that product into humans, it's been a very productive engine. So we want to continue to resource that. So we have this long-term organic growth. We've got stellar execution across our clinical programs with our clinical teams, we want to keep that up, move those along as fast as we can. And we're driving commercial performance and building those capabilities now. So we have a lot going on, a lot of potential with what we have. Those are the kinds of moments from a physician and strength that you want to take to them. Also see whether there are other things that in the future could be complementary or adjacent, we'll do that over time as appropriate. But we're in a great position today, we’re just where we are. Andrew, I don't know if you want to say something just about the EU decision quickly?

Yeah. So over the course of last year we went through a pretty deliberate process of evaluating multiple options for the commercialization of TIBSOVO, but also as we thought about the rest of our portfolio. We did see - and that process included both partnering, as well as building ourselves. And we did see broad strong interest in our assets in a variety of proposals and deal structures. But at the end of the day, as we sort of step back, we thought that commercializing ourselves really made the most sense to maximize the value, both TIBSOVO, as well as the potential future launches in our platform. And so that's really where we came down as we went through that process.

Thank you. And maybe a question for Steve or Chris, just on duration for IDHIFA, how that's trending? I know it's early days for TIBSOVO, but any comments you can make there around duration of treatment? Thank you.

Yeah. Thanks, Peter. Thanks for the question. So with respect to duration on TIBSOVO, still a little early for us to comment on duration. I mean, we fully expect that it's going to be pretty consistent with what we see on IDHIFA and what we saw on the clinical trial setting. As we spoke about at JPMorgan in January, we now see duration on IDHIFA of approximately four months, just over four months, which is consistent again with what we've seen in the trial setting. I think we'll continue to see that nudge a bit higher. But particularly in the relapse and refractory setting, we're in the range of what we would expect to see based on the clinical trial experience.

Great. Thanks so much. Thanks for taking the questions.

You bet.

Thank you. Our next question comes from Anupam Rama with JPMorgan. Your line is open.

Hey, guys. Thanks so much for taking the question. Can you talk a little bit about the next steps for Europe and timelines for TIBSOVO here? I think you said the 120 day questions are coming soon. And concurrently, what are some of the pre-commercial activities now that are ongoing for TIBSOVO in the region? And then a quick question about the cash position, being sufficient through at least 2020, can you confirm that this now includes sort of EU commercialization activities? Because this guidance appears to be unchanged from the conference just a couple of weeks ago? Thanks so much.

Yes. It's Jackie. I'm just going to jump in and then either Andrew or Steve will take over after me. But as we said in the remarks, we are going to gate the plans in Europe very carefully in terms of when we start to invest and what we start to invest in, in line with the milestones that we see as we make our way through the regulatory process. And we can let Chris comment on that. If we want - the MAA is in, but we don't have a lot probably to say about the process other than that we make our way through that with the regulator. So I don't - we're not going to go into the details of the specifics about that commercial plan just yet, but we will share more details with you as we start to make our way through that in line with what we see, with respect to expectations for the potential timing of the approval of the product.

And Anupam, this is Andrew for your question around runway. Yeah, so the guidance does include the runway - the European build over kind of the runway time period.

Great. Thanks for taking my questions.

Thank you. Our next question comes from Mohit Bansal with Citi. Your line is open.

Great. Thanks for taking my question and congratulations from my end to Jackie as well. Maybe if you could delve little bit on the cholangiocarcinoma opportunity in terms of the size of the opportunity and the commercial infrastructure that may be needed for launch there? And how would you think about that opportunity versus the trend that may be needed there? Thank you.

Yeah. Thanks, Mohit, it's Chris. I think I'll take the first two parts of your question there. So with respect to the size of the opportunity, as we previously disclosed and talked about, we believe there are about 21,000 patients in the US and in Europe that are diagnosed each year with the disease. We estimate that between 2,000 and 3,000 of those patients have the IDH1 mutation. So that's the size of opportunity. We believe that's pretty evenly split between the US and Europe. And now when it comes to kind of commercial infrastructure in the US to support a launch and whether we would need to significantly expand. Now what we've previously guided to is, we would need to have a modest expansion of our sales organization, we think that's in the range of 10 to 12 FTEs. But we'll be doing some more work on that during the course of this year to further refine that assumption and we'll share that with you as we get closer to a potential launch.

Got it. Helpful. Thank you.

You're welcome.

Thank you. Our next question comes from Chris Shibutani with Cowen. Your line is open.

Thank you very much. Perhaps, a question for Chris. In later this month in Munich you let us know that we are going to be seeing some additional data. Could you just clarify for everyone exactly what the incremental data that we will see and what you feel would be the appropriate way to think about comparing this with perhaps other competitive regimens that became a bit of a source of consternation or debate when we came out of ASH? Thanks.

Yeah. So we published the data from this ongoing Phase I/II study for the TIBSOVO plus azacitidine combination at ASCO last year. So you're going to see a dataset with 23 patients who are treated with that combination with longer follow up. So what that will allow one to do is to make further conclusions and dry insights in terms of CR rates, overall response rate, importantly duration, how durable responses are, as well as some molecular data to understand what's happening with regards to the IDH clone. So I think that will be very important and then the last piece of course is safety. So this will be very helpful, I think in terms of placing this in the context of the number of emerging new drug, which makes this a really exciting time for patients with AML, and we think it will underscore and reinforce what we've been saying is that we have a very active and well tolerated combination. And so it looks like it's going to be a very good option for patients who are IC-ineligible, who have an IDH1 mutation.

Great, that's helpful. And Jackie, welcome. Have you had any opportunity to interact with the folks at Celgene and/or Bristol obviously since their announcement? And any thoughts about implications about that upcoming combination as far as your commercial outlook and how you're thinking about your business planning? Thanks.

So, I mean, I have ongoing interactions with people across the industry all the time. And so it's not related to the deal specifically between those guys. So let's let them get their deal closed and see what happens after that. We continue to work with Celgene in the same way that we have in the past as a valued partner, and all of that is going extremely well and as we would have expected it to. So let's say, better not the comment on these sorts of situations. I can't see anything negative for Agios in this situation at all, and so we wish them well and there you go.

Great. Thanks very much.

Thank you. Our next question comes from John Newman with Canaccord. Your line is open.

Hi there, good morning. Thanks for taking my question, and welcome from me as well to Jackie. Question is, after doctors get a look at the Phase I, 7+3 combination data in AML, obviously, you would never promote this way, but do you think that there might be immeasurable off-label use of that combination? Thanks.

Yeah. Hi, John. It's Steve. Thanks for the question. You're right, we only promote what is within the FDA approved label. I think as is the case with any disease where there is significant unmet need, physicians will take an interpret data from Phase I/II trials and may choose or not - or choose not to experiment with that with their own patients. As you know, NCCN tends to be pretty quick to recognize emerging data as it comes out and accommodates that use in their compendium and in their treatment guidelines. I think, I'd just say that, this is a very dynamic space in AML as Chris has said, this is great news for patients and it's an exciting time for the physicians who treat these patients given the number of new options. And we view part of our role is to ensure that we generate the right data with the right combinations to inform future treatment decisions and to evolve the standard of care. And that's exactly what our broad program is focused on doing.

Great. Thank you.

Thank you. Our next question comes from Alex Duncan with Piper Jaffray. Your line is open.

Hi. Thanks for the question. Two questions, first on TIBSOVO and cholangio and then followed by another question in MTAP. With TIBSOVO and cholangio, I'm wondering what are the current rates of genetic testing in cholangio and do you potentially need to do some promotion here? And in regards to the sNDA package later this year is the PFS in CLARITY, which will be reported in H1 and you eventually plan to file the sNDA package later this year. There is a certain benchmark at the end of the year needed to be met in the final analysis to allow this filing instead of just being filed on PFS. And with successful top line results in H1 this year allow you to move to frontline trials or is this final analysis later in the year needed to justify this? And in MTAP, I'm wondering how common is genetic testing across all the tumor types that you're enrolling? And could these testing rates bias patient enrollment? And do you have data on outcomes for MTAP deleted patients on current standard of care in these indications? And are these outcomes similar to the general population or are they worse? And I'm just wondering, that's because, I'm curious if this can be used to guide tumor specific paths forward? Thank you.

Okay. It's Chris here. And with regards to your questions around CLARITY design and the aspect of progression-free survival and the important secondary endpoint of overall survival. So what we're going to do is, announce top line results of the data in the first half of the year and then we plan to submit the data from the trial and to be presented at the meeting in the second half of the year. So it's in the second half of the year when one could expect to see a detailed results from the study. I think that the trial being positive is predicated on a meeting, its primary endpoint of progression free survival. Overall survival as well as other secondary endpoints can be important and supportive. I will remind you that trial has crossover. So, at the time of progression patients are offered a crossover, we thought that was an important component of the study because patients coming into the trial know there IDH status and there are no other therapies available for them. So that doesn't mean that survival isn't something that we need to look at, but we would not consider in the setting of a persuasive positive study that one would need to have overall survival and wanted to garner approval. Of course, that's something that needs to be debated and discussed with the various authorities throughout the world as they look at the totality of the data. With regards to MTAP, you had - I captured three questions. One is around, what's the rate of testing and does - do we have data around outcomes? We don't have any data in terms of understanding with regards to survival progression free survival or response rates for that matter in a selected group of patients within an indication with an MTAP-deletion. Testing rates, I would say that, there's probably very little testing for the MTAP-deletion at this point. However, P-16, CDK2NA [ph] is a part of some of the routine testing panels and MTAP tends to travel with that. Certainly, if this drug continues to move along its development, that will be a very important part of what we do, which is not just education which you alluded to, but also we might end up in a physician like with TIBSOVO where we developed the companion diagnostic.

Great. Thanks so much.

Thank you. [Operator Instructions] Our next question comes from Mark Breidenbach with Oppenheimer. Your line is open.

Hey, good morning and thanks for taking the question. Just a quick one from me on the PKD program with mitapivat. Basically, I'm wondering, given the diversity of mutations that can cause PKD in this population. I'm wondering how the trials stratifying or type of mutation and as you're expecting better efficacy, better hemoglobin response in some mutational backgrounds versus others? Thank you.

So, it's Chris here. Thank you for your question on this fascinating component of developing a drug in this disease. There are over 300 mutations that have been described. And I think, hence the nature of your question, the way - when we think about this based on the data that we've generated from dry PK, which is where we're trying to understand how genotype is predictive of response with mitapivat. We tend to look at genotype categories, missense-missense, non-missense-non-missense, or if - and then there's is missense, non-missense. And 80% of patients have at least one missense mutation. They fall into that category, which makes them potentially eligible to be - to have a response with mitapivat. So we don't need to stratify when you look at it from that perspective. That's a good thing, because if we had to consider a 300 different genes, we would be in a pretty challenging position. So that's how we've designed the trial and based on some of the aspects that we learn from dry PK, patients with a non-missense-non-missense gene category don't come into the trial. So that really takes care of any stratification aspect that we would need to address in ACTIVATE, which is the randomized trial within our portfolio of pivotal studies in this indication.

All right. That's perfect. Thanks for clarifying that for me.

Thank you. And I'm currently showing no further questions. At this time, I'd like to turn the call back over to Jackie Fouse for closing remarks.

Thank you, operator. Thanks everybody for joining us on the call today. 2019 is going to be a terrific year for us. It's an important year for us. We've got broader, deeper portfolio of programs than we've ever had before. We're going to continue to ensure stellar execution across those. We’re going to see a nice flow of data over the course of the year. And we'll have our first full year revenues from TIBSOVO and we'll be starting our plans for commercialization outside the US. So there is a lot going on, more to come. I just want to thank all of the tremendous employees and our team here at Agios for their dedication, passion for the patients that we serve. And I would also like to thank the patients, caregivers and physicians who participate in our clinical trials, because without them we could not do what we do. Thank you and we'll see you soon.

Ladies and gentlemen, this concludes today's conference. Thanks for your participation. Have a wonderful day.