Agios Pharmaceuticals Inc

NASDAQ:AGIO

Earnings Call Analysis

Agios Pharmaceuticals Path to Transformative Therapies

In the latest earnings call, Agios Pharmaceuticals expressed strong commitment to their ongoing Phase III clinical trials and anticipated milestones set for the current year. They remain confident in the potential $200 to $225 million peak opportunity for PKD in the U.S. and are observing steady progress and persistency with the drug's performance. AG-946 development continues in low-risk MDS without deprioritizing sickle cell disease. The company incorporates extensive feedback from multiple stakeholders, including patient communities and regulators, to craft an effective development strategy. Agios envisions transformative therapies bringing long-term value to both patients and shareholders.

An Introspective Journey of Agios's 2023 Achievements and Forward Endeavors

Agios Pharmaceuticals has embarked on an impressive journey throughout 2023, demonstrating a steadfast commitment to developing transformative medicines for rare diseases. With the successful advancement of its PK activator development program, Agios has proudly shared valuable data readouts—including compelling results from its mitapivat studies in both sickle cell disease and thalassemia. The organization now eagerly awaits the FDA's approval of vorasidenib, with potential milestone payments and significant royalties bolstering its anticipated financial inflow. As Agios paves the way for U.S. launches of mitapivat for thalassemia in 2025, and subsequent launches into 2026, they boast a sturdy financial foundation with a cash reserve of approximately $806 million. Furthermore, the company envisions several value-creating milestones and a confident trajectory well into and beyond 2026.

The Crest of Clinical Success - Mitapivat's Revolutionary Impact

Agios's pioneering efforts with mitapivat, a PK activator, are at the forefront of their clinical success. The positive outcomes from the Phase III Energized study in non-transfusion-dependent thalassemia have not only provided relief for patients but also reinforced the company's aspirations for broad label approval across all thalassemia populations. With over 42% of participants in the treatment group achieving a positive hemoglobin response compared to a mere 1.6% in the placebo group, Agios stands at the brink of revolutionizing the treatment landscape for this rare disease. The significance of these results is magnified by the notable absence of FDA-approved treatments for this patient demographic.

Financial Fortitude and Future Aspirations

With prudent cost management and a disciplined cash allocation strategy, Agios ended the year on a high note, reflected in their decreased SG&A expenses, totaling $120 million for 2023. Along with retaining substantial rights for future financial benefits from oncology business divestitures, the company's planned milestones and probable product revenue showcase a future ripe with opportunity. Enthusiastically, Agios prepares for imminent value creation, while its executives pledge judicious financial stewardship as they continue to realize their vision of a leading rare disease company.

Earnings Call Transcript 2023-Q4

[Operator]

Good morning, and welcome to Agios Fourth Quarter 2023 Conference Call. [Operator Instructions] Please be advised that this call is being recorded at Agios request. I would now like to turn the call over to Chris Taylor, Vice President, Investor Relations and Corporate Communications for Agios. Please go ahead.

[Christopher J. Taylor, executive]

Thank you, operator. Good morning, everyone, and welcome to Agios conference call and webcast to discuss fourth quarter and full year 2023 financial results and recent business highlights. You can access slides for today's call by going to the Investors section of our website, agios.com.

On today's call, I'm joined by our Chief Executive Officer, Brian Goff; Dr. Sarah Gheuens, Chief Medical Officer and Head of Research and Development; Tsveta Milanova, our Chief Commercial Officer; and Cecilia Jones, 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'll turn the call over to Brian. .

[Brian Goff, executive]

Thanks, Chris, and good morning, everyone, and thank you for joining us. Our mission at Agios is to develop and deliver transformative medicines that elevate and extend the lives of patients living with rare diseases. Driven by this goal, we continue to generate consistent and compelling data across our industry-leading PK activator franchise, and with seamless cross-functional collaboration of the Agios team we made remarkable progress advancing this mission in 2023.

Highlighting this progress, we reported 3 key data readouts in the last 12 months. In June, we reported positive top line data from the Phase II portion of the RISE Up study of mitapivat, our lead PK activator in sickle cell disease, followed by the full data set in December at ASH. Despite the field's recent progress in sickle cell disease, there are no novel oral therapies that both improve anemia and reduced sickle cell pain crises, and that is precisely what we aim to deliver with mitapivat.

In November, we reported positive data from the open-label Phase IIa study of our other PK activator, AG-946, in lower-risk MDS with 40% of patients achieving the transfusion independence endpoint. And just last month, we reported positive data from the Phase III energized study of mitapivat in non-transfusion-dependent thalassemia. As a reminder, nontransfusion-dependent or NTD thalassemia accounts for approximately 2/3 of thalassemia in the U.S. and has no FDA-approved treatment option.

Despite not requiring regular transfusions, NTD thalassemia patients experienced significant impact on quality of life a wide range of serious morbidities and an elevated risk of premature death. Together, the consistency of data generated across the mitapivat development program bolsters our conviction in the probability of success of our ongoing studies, including 2 additional Phase III readouts we expect by the end of this year, and this data highlights the potential of our PK activators to transform the course of multiple hematologic diseases.

Sarah will provide more detail on our advancements and upcoming milestones across our pipeline in just a few minutes. Importantly, we believe our PK activation pipeline is well positioned with multiple near-term catalysts to become a multibillion-dollar franchise and deliver significant value. In parallel with advancing the late-stage mitapivat development program across multiple indications, our commercial organization is laser-focused on building the infrastructure established through our current launch in PK deficiency to prepare for potential U.S. launches of mitapivat in thalassemia in 2025, and in sickle cell disease in 2026.

Sarah will provide greater detail on the commercial opportunities for mitapivat in thalassemia as well as an update on our current launch in PK deficiency in just a bit. Finally, as you'll hear from Cecilia we ended 2023 with a strong cash position with approximately $806 million in cash.

In addition, we continue to track Servier's progress toward the potential FDA approval of vorasidenib given our retained economics for both the milestone and royalties. This is truly an exciting time at Agios with 4 additional Phase III readouts and 2 potential launches expected on the horizon we look forward to multiple opportunities to drive significant near-term value creation for patients, caregivers and shareholders.

With that, I'll now turn the call over to Sarah.

[Sarah Gheuens, executive]

Thanks, Brian. .

In 2023, our research and development organization made tremendous progress advancing our PK activator development program. Led by, the industry's most advanced PK activator now with over 8 years of clinical experience, the consistent and compelling data we have generated to date in PK deficiency, thalassemia and sickle cell disease continue to derisk our ongoing development programs and highlights the potential for this molecule to transform patient function and quality of life. .

We are also enthusiastic about the potential for the rest of our growing pipeline, and we are pleased to note that we remain on track to deliver on our milestones, including enrolling the first patients in the Phase IIb trial for AG-946 in lower-risk MDS and for the Phase I trial for AG-181, the compound name for our PAH stabilizer for, reading out top line data for the Phase III ACTIVATE ITC study in regularly transfused pediatric patients with PK deficiency and completing enrollment of the Phase III ACTIVATE KIT study in pediatric patients with PK.

Turning to sickle cell disease, we were pleased to present detailed positive results from the Phase II portion of the Phase II/III RISEUP study of Metapiva at ASH in December. The study achieved its primary endpoint of hemoglobin response and in addition, an improvement in annualized rate of sickle cell pain crisis was observed. And we have been delighted by the investigators. We continue to advance enrollment in the Phase III portion of this study and remain on track to complete enrollment by the end of this year. While the treatment landscape in sickle cell disease continues to evolve, there remains an urgent and unmet need for convenient novel oral treatment options that address both anemia and sickle cell gene crisis, and we believe firmly in the potential to deliver a best-in-class option for patients suffering from this devastating disease.

And finally, on thalassemia, I'll take a moment to highlight a few key elements of our program, and the positive top line Phase III data we reported last month in nontransfusion-dependent thalassemia.

As a reminder, the Phase III program thalassemia encompassing 2 Phase III randomized placebo-controlled trial was designed to deliver data across all populations of thalassemia, such as alpha and beta thalassemia and populations with different transfusion needs.

Both trials enrolled patients with alpha or beta thalassemia, but enrolled different populations as it relates to transfusion needs. We want to highlight that ENERGIZE is the first clinical program that included patients who were not regularly transfused and alpha thalassemia patients.

As Brian mentioned, there are no FDA-approved treatments for non-transfusion dependent thalassemia, which represents approximately 2/3 of total thalassemia patients in the U.S. These patients suffer from a poor quality of life, a high rate of serious morbidities, including thrombosis and premature death.

We were, therefore, very pleased to be able to announce positive results from the ENERGIZE study. As a reminder, the ENERGIZE study enrolled a total of 194 patients with either alpha or beta nontransfusion-dependent thalassemia randomized 2:1 to 100 milligrams mitapivat or placebo twice daily.

The speed of enrollment and the actual number of patients enrolled in this study as well as the high completion and rollover rate supports the idea that people who are not regularly transfused were motivated to take action and speaks to the unmet need for this population.

The primary endpoint of this study was hemoglobin response rate defined as an increase of at least 1 gram per deciliter in average hemoglobin concentration from week 12 to week 24 compared to baseline.

The key secondary endpoints of this study were changed from baseline in average traffic to score and change from baseline in average hemoglobin concentration, also both assessed from week 12 to 24. On the primary endpoint, treatment with mitapivat demonstrated a highly statistically significant result with 42.3% of patients in the treatment arm achieving a hemoglobin response versus 1.6% of patients in the placebo arm.

In line with mitapivat's novel mechanism of action, which focuses on overall red blood cell health and the data generated with mitapivat across additional disease areas the beneficial effects of mitapivat in this study extended beyond hemoglobin alone.

Specifically, treatment with 100 milligrams resulted in statistically significant improvements in both key secondary endpoints, including a change from baseline in average facet fatigue score, an important patient-reported measure of how patients feel and function.

Importantly, across the primary and secondary endpoints, all prespecified subgroup analyses favored compared to placebo, suggesting that no single subgroup was responsible for driving the results, which supports our plan to file for a broad label covering all thalassemia subtypes.

This is, therefore, the first drug that not only improves hemoglobin, but actually makes people with thalassemia feel better, consistent with what we observed in patients with PKD and what we hope to be able to deliver for patients with sickle cell disease as well.

Complementing the near-term benefits of thalassemia patients reporting they had less fatigue and felt better in the near term, clinicians in the trial and other KOLs appreciate the potential longer-term benefits of reducing markers of hemolysis and the longer-term potential to reduce serious morbidities.

We are very much looking forward to presenting the full data set at a medical meeting. Beyond the excitement we have for the energized data itself, the readout of the energized trial also gives us further confidence towards the readout of energized C.

Thalassemia is a hemolytic anemia irrespective of whether a patient is in need of transfusions or not. In addition, the mechanism of action of mitapivat is not dependent on the need for transfusions. We have already demonstrated an improvement in hemolytic anemia in the energized trial with a positive change in hemoglobin, we are now waiting to see if the improvement in hemolytic anemia can also be documented via a reduction in transfusions in energize P.

As a reminder, the primary endpoint of energized is transfusion reduction response defined as a 50% or greater reduction in transfused red blood cell units with a reduction of equal or more than 2 units of transfused blood cells in any consecutive 12-week period through week 48 compared to baseline.

Like the energized study in non-transfusion-dependent thalassemia, the design of the energized trial enables us to demonstrate clinical meaningfulness in a variety of ways a reduction in transfusion burden which also includes transfusion metrics in line with that other studies have used.

We designed this study incorporating learnings from prior studies and agency feedback and believe a dynamic assessment period is important as patients are static in disease. We look forward to the readout of this study by midyear and plan a single regulatory filings to the FDA encompassing data from both energized and energized by the end of this year, seeking a label that will enable people living with thalassemia access to a convenient and differentiated oral treatment option.

Overall, I'm very proud of the tremendous progress made by our R&D organization in 2023 and look forward to continuing this momentum in 2024. With that, I will now turn the call over to Cecilia.

[Tsveta Milanova, executive]

Thanks Sarah. Thalassemia remains an area of higher unmet need with few treatment options. The burden of disease on the patients is significant regardless of their transfusion needs. Thalassemia patients experience increased mortality compared to the general population and can be significantly worse in nonregularly transfused than those who are regularly transfused. Patients endure higher rates of mobilities and increased complications as they age. Adult patients with non-transfusion dependent thalassemia may actually have similar or worse quality of life compared to transfusion-dependent patients. Of course, this burden of disease correlates to increased health care costs.

To address this unmet need, and galvanized by the positive data from the Phase III energize study of mitapivat. Our commercial organization is actively preparing for a potential launch in thalassemia next year. beginning with the U.S. In the U.S., there are approximately 6,000 diagnosed adult patients with thalassemia. Approximately 4,000 of these patients are nontransfusion dependent and has no available treatment options today.

The remaining 2,000 patients are transfusion dependent and have no oral treatment option. Our goal with mitapivat is to address the unmet need of all adults living with thalassemia and become the first therapy approved for all the types of the disease. In addition to the data we are generating through the Mitapivat clinical development program, there are 3 key factors we believe, have the potential to support adoption of mitapiva and monthelautemia patients in the U.S.

First, there is strong alignment between where in the U.S., these patients reside and where they receive treatment. The map on Slide 20, the fixed patient prevalence overlaid with the Agios clinical trial sites and centers of excellence represented by the Gold Stars. Second, the diagnosis rate is high, driven by availability of newborn screening and well-established ICD-10 costs. Many patients are diagnosed before adult hood.

And finally, as shown on Slide 21, there is concentration of patients and providers at selected centers. Approximately 50% of all diagnosed patients are treated at fewer than 150 affiliated hematology oncology practices in the U.S. providing a clear focus for our initial launch.

Given this market dynamics, target product profile, we believe we are well positioned to provide a potential foundational treatment option for patients with thalassemia regardless of subtype. Therefore, our team is focused on 4 core areas of U.S. launch preparations.

First, building on the foundational work we have already done we continue to deepen the sophistication of our market understanding. We are conducting extensive market research and claims data analysis to inform ACP targeting field for sizing and deployment for launch.

Second, we will be rolling out a disease education campaign for both patients and clinicians, highlighting the long-term complication and burden of disease across all thalassemia subtypes. Our disease education engagement will also work to correct the historic perception that non-transfusion-dependent patients are less likely to experience the debilitating long-term effect of thalassemia.

To support these initiatives, we are establishing capabilities to enable execution of our educational efforts across personal and nonpersonal channels. Third, we will continue to strengthen our commercial capabilities by expanding our sales team in anticipation of the thalassemia launch, rightsizing the team for a broad and rare disease. And lastly, with those efforts, we are preparing our market access team to engage with payers on disease safety education in advance of the potential launch in thalassemia next year.

Our team has obtained success in market access for PK deficiency, and we look forward to watching them pave the way in thalassemia 2. In addition to the well-established U.S. thalassemia market, there are approximately 13,000 patients in the EU5 and approximately 70,000 thalassemia patients in the Gulf region. We aim to maximize the potential of these additional markets through coordinated regulatory filings, which we intend to pursue with partners.

Taken together, we believe the potential launch of mitapivat in thalassemia represents a significant opportunity for Agio, and a step forward as we prepare for potential back-to-back launches with sickle cell disease in 2023. Now let me provide an update on the current launch of BioTime in PK deficiency. In the fourth quarter of 2023, we generated $7.1 million in revenue compared to $7.4 million in the prior quarter, a total of 178 patients have completed a prescription enrollment form, including 18 in the fourth quarter of 2023, an 11% increase versus the third quarter.

This translated into net 109 patients on therapy, a 9% increase versus the third quarter, patients on therapy continue to spend from a growing and diverse prescriber base of 154 physicians and represent a broad demographic and disease manifestation range that is consistent with the adult PK deficiency population.

We continue to be encouraged by the persistency of patients on treatment and remain focused on efficiently identifying providers likely to treat patients with PK deficiency. The capabilities we continue to build and expand through the current launch, including efficient targeting analytics, patient awareness and education and patient access from which we can maximize the potential U.S. launches in 2025 and in '26. As we advance through this catalyst-rich period of Phase III data readout for mitapivat, we look forward to dramatically expanding the number of patients we serve. With that, I will turn the call over to Cecilia.

[Cecilia Jones, executive]

Thanks, Sarah. Our fourth quarter 2020 financial results can be found in the press release we issued this morning and more detail will be included in our 10-K, which will be filed later today. Let me now take a moment to provide some context and highlight a few key points.

Full year 2023 revenue was $26.8 million, compared with $11.7 million revenue for 2022. Q4 2020 net revenue was $7.1 million, a 4% reduction compared to the third quarter. The reduction was driven by lower number of weeks on hand of inventory compared to where we ended Q3, partially offset by favorability in gross to net adjustments.

As a reminder, we anticipate low levels of inventory at any given time, given our limited distribution network, which consists of 1 specialty pharmacy and 1 specialty distributor. Consistent with other rare disease launches, gross to net is expected to be in the 10% to 20% range on an annual basis.

Based on our learnings to date, given the ultra-rare nature of the disease and the long lead times associated with initiating patients on therapy, we continue to expect slow and steady growth on quarter-to-quarter variability in 2024 similar to what we saw in 2023.

Cost of sales for the fourth quarter was $0.6 million. R&D expenses were $77 million for the fourth quarter and $296 million for the full year 2023, an increase of $16 million compared to the full year 2022. These changes reflect an increase in development costs for mitapivat and the upfront payments associated with the license agreement with Alnylam, offset by a reduction in expenses associated with the evolution of our research organization and the sale of our Oncology business to Servier.

SG&A expenses were $35 million for the fourth quarter and $120 million for the full year 2023, a decrease of $2 million compared to the full year 2022. As a reminder, as part of the divestiture of our oncology business to Servier, we retain rights to a potential $200 million milestone upon FDA approval of vorasidenib and 15% royalties on potential U.S. net sales. Servier publicly communicated plans to file for approval before the end of 2023, so we are eager to track their progress.

We ended the year with cash, cash equivalents and marketable securities of approximately $806 million. We expect that this balance, together with anticipated product revenue, interest income and the potential for acitinib milestone would enable the company to fund our operating expenses and capital expenditures through several value-creating milestones and at least into 2026.

This guidance does not include cash inflows that could extend our runway beyond 2026, including the potential royalties or royalty monetization from vorasidenib, commercializing mitapivat outside of the U.S. through 1 or more partnerships or other potential strategic business or financial agreements.

We remain focused on creating shareholder value, including by proactively managing our cost base and deploying a disciplined cash allocation approach as we prepare to support potential future launches, as we move toward additional potential value-creating milestones in the near term, I am confident that our strong balance sheet will enable us to execute from a position of strength as we continue to pursue ways to create shareholder value.

I will now turn the call back over to Brian for his closing remarks.

[Brian Goff, executive]

Thanks, Cecilia. As we turn the page on a highly productive 2023 we're focused on executing across the additional 4 Phase III readouts for mitapivat that we expect over the next 2 years, beginning with the Phase III energize T study in transfusion-dependent thalassemia in the middle of this year.

As we continue to stack successive positive data readouts for mitapivat we are only growing more confident in the probability of success ahead. We're well positioned with a differentiated mechanism of action that improves red blood cell health beyond hemoglobin increase and allows us to pursue large commercial opportunities with substantial value and the potential for 2 additional first-in-class and best-in-class indications as we build a multibillion-dollar franchise in PK activation.

As we continue to take steps toward realizing our vision of becoming a leading rare disease company, we will continue to strive to be responsible stewards of our balance sheet and evaluate meaningful opportunities for value creation. Finally, I'd like to thank all of our employees for their hard work and dedication to our mission of developing and delivering transformative medicines that elevate and extend the lives of patients living with rare diseases and all of our partners, including the patients physicians, caregivers and participants in our clinical development programs.

With that, we will now open the call for questions.

[Operator]

[Operator Instructions]

Our first question comes from the line of Eric Smith with Cantor Fitzgerald.

[Eric Schmidt, analyst]

congrats on all the recent development successes. I guess maybe 1 for Sarah, given the next milestone at least might be the energized T study for mitipevant in transfusion-dependent patients. Can you give us a little bit of a preview here or set up with regard to the primary endpoint? I know you're looking at transfusion reductions in a slightly different way than what we've been accustomed to seeing with the luspatercept data. So how might that primary endpoint definition change the way we view the data and what might the hurdle be?

[Brian Goff, executive]

Great. Eric, thanks a lot for the question. And I just -- before Sarah goes, I just want to welcome you back to Agio's earnings call. So Sarah you want to get started? .

[Sarah Gheuens, executive]

Sure. Thanks for the question. So in the endpoint, our primary endpoint has a different definition than the primary endpoint that was patters in the sense that we are looking at a 50% reduction in any 12-week period -- rolling period basically over the 48 weeks that patients are assessed, which we believe is a more appropriate measure to assess a patient in the context of a dynamic disease over a longer stretch of time and which reflects better the real-world experience that patients may have. .

We do have a similar end points like the Luspateimary endpoint in our secondary endpoints. In regarding to the hurdles, it is a different endpoint indeed. The hurdle is not necessarily different in the sense that you have multiple assessment periods versus a fixed period in time. The bar of 50%, of course, is higher than 33%. But like I said, because it's every -- any 12-week period, you have more shots on goal as to speak. This was an endpoint that luspatercept also had in their assessment and in their review. But as it was not a prespecified like primary or secondary analysis that did not make it into the label.

[Operator]

Our next question comes from the line of Chris Raymond with Piper Sandler.

[Christopher Raymond, analyst]

Maybe just a question on the energized data that we got last month. We've gotten a few questions around from investors around the sort of the transition from the Phase II data to the Phase III data, there was a degradation in the hemoglobin response. But you measured these effects over different time points. I know you guys had said that there was no waning of efficacy over time, but maybe just square this difference that you saw? And then I've got a follow-up.

[Sarah Gheuens, executive]

Sure. Thanks for the question. So the primary endpoint that we used in a Phase II was indeed different than the endpoint that we used in the Phase III, meaning that for the Phase II, we just looked at patients meeting a hemoglobin response at a single time point. And for the Phase III, we incorporated the duration in that end point over a longer stretch of time and measured at a later time point because it's a chronic disease. So then from a Phase II perspective, you're truly looking for maintenance over a longer duration of time. So we averaged hemoglobin over 12 weeks versus that just single time point, which is much easier to reach as a bar. .

In regards to the waning, we don't see waning of our hemoglobin response. So mitapivat in this trial behaves very similarly to how it behaved in PKD. So once patients show a response. They tend to maintain that response over time. There's always a little bit of fluctuation on hemoglobin over time. But overall, it stayed positive in the line kind of horizontal in comparison to their baseline. So we feel very confident with the results that we have observed in energized.

In addition, it's more than hemoglobin alone that we observed. We really saw an improvement on the fatigue there as well, which we believe is extremely meaningful because now we are adding to the hemoglobin story here. The thing that we've observed in PKD now also have been observed in the nontransfusion-dependent thalassemia population, and that continues to add to this consistent and compelling data story that we are continuing to generate.

[Christopher Raymond, analyst]

Okay. And then maybe just a follow-up to Eric's question on the success bogey of Energized. I know it's -- you're talking about different measures, it's not an apples-to-apples comparison to luspatercept. But just as you're thinking about the obvious difference mid to that is oral versus luspatercept, which is not. Just maybe talk in generalities how you see these 2 compounds sort of coexisting commercially.

[Sarah Gheuens, executive]

Sure. So if we think about the nontransfusion-dependent thalassemia patient population, they currently have no therapy available. So that is if we get it through the next stages of development, would be the therapy that it would be available for nontransfusion-dependent patient population and is oral indeed, which is a huge benefit, specifically for that population because patients aren't are going to clinic as frequently. And if you have a drug that requires frequent clinic visits to the burden of disease typically. .

For the transfusion-dependent patient population, there is indeed a subcutaneous available for transfusion-dependent beta thalassemia patients. Our program has studied all genotypes of thalassemia. So that's 1 difference. The oral route of administration here is very relevant because it's allowed for almost a seamless incorporation into a transfusion schedule adaptations they have versus requiring more visits on top of the transfusion scheduling. In that sense, it's also important to understand there's a very different mechanism of action between those 2 products, which improve red blood cell health overall. And so we do think from that perspective, they're vastly different.

[Brian Goff, executive]

Yes. And Chris, I mean, that last point is the 1 that I would just emphasize is that I know folks are trying to make comparisons, but in so many ways, they're incomparable because of the profound difference in the mechanisms and you'll hear a lot from us because we continue to be emboldened by this by the data that we see very consistently that the benefits of pyruvate kinase activation really do go beyond hemoglobin. So we'll await the data Fortunately, we don't have to wait that long. Energized is coming midyear. But I think above oral and the other dimensions, hemoglobin and the like, that's really the big headline for this mechanism is it's ultimately about red blood cell health. .

[Operator]

Our next question comes from the line of Danielle Brill with Raymond James.

[Danielle Brill, analyst]

A have a question on powering assumptions for Energised Like Chris said, we know it's not apples-to-apples. But when you look at luspatercept their mean hemoglobin increase is about 1.5 grams, and they achieved, I think, around a 40% response rate on your primary endpoint. With this context, what are your internal expectations for how mitapivat will perform, and then I also have a follow-up.

[Sarah Gheuens, executive]

Thanks for the question. So in regards assumptions. We haven't spoken about these, but we have, of course, studied all of the programs in front of us, which includes our own internal programs in which we took a very similar development approach, for thalassemia as we have for PKD.

In regards to the hemoglobin increase that you mentioned, so we don't -- from a transfusion-dependent perspective, we don't believe you necessarily need to increase hemoglobin on top of making people reduce their transfusions. This is truly a different approach because people, when they get transfused, their hemoglobin goes down over time. So what we are trying to do here is basically avoiding that people their hemoglobin decreases back to a transfusion trigger, which then would trigger a transfusion. And it comes down again to that different mechanism of stimulating out red blood cells ultimately, you're going to increase hemoglobin versus what we're trying to do about keeping the red blood cells happier and healthier thereby reducing hemolysis is a completely different way of actually trying to avoid transfusions.

[Danielle Brill, analyst]

That's helpful. And that actually is a perfect segue for my follow-up. Do you have data on the potential of mitapivat for extending the half-life of healthy red blood cells? .

[Sarah Gheuens, executive]

So in the context of you mean healthy volunteers red blood cells.

[Danielle Brill, analyst]

Like extending the lifespan of transfused blood .

[Sarah Gheuens, executive]

So yes. So this is something that is extremely difficult to measure in the context of a transfusion setting as everything is kind of mixed. So it would require a very unique experience to be able to the part to types of red blood cells that are available. So we're not planning on doing that right now for our transfusion-dependent patients. .

[Danielle Brill, analyst]

Got it. Thanks again for the question. .

[Operator]

Our next question comes from the line of Gregory Renza with RBC Capital Markets. .

[Gregory Renza, analyst]

Congrats on all the progress. Brian, you certainly speak to the multibillion-dollar opportunity available with PK activation and your portfolio. Just curious if you could maybe just elaborate a little bit on that, maybe provide some of the inputs or assumptions that you're using to get to that characteristic, whether it's with respect to and the ramp of indications or the broader portfolio? And maybe I'll just layer in my second question, which with respect to the landscape in PK activation, perhaps you and Sarah can just rip a little bit about maybe the differences with versus others, especially . Certainly, you mentioned the lead. You have the body of data. But when you think about some of the nuances on pan-PKactivation or even selectivity, maybe just help us understand the differences between in a pivot in the landscape?

[Brian Goff, executive]

Yes. Thanks, Greg. So I'll get started on your first question about the multibillion dollar opportunity or opportunities that I referenced in my prepared comments, that really comes from the fact that we're rapidly progressing in our pipeline moving from clear ultrarare with PD into successively larger prevalent diseases.

Some of those diseases, I think, are well characterized in terms of opportunity. sickle cell for sure, where there's been a lot of interest in a lot of therapeutic development focus. And here, we're talking about moving from 3,000 to 8,000 patients across the U.S. and EU 5 in the case of jumping to just in the U.S. alone, 100,000 patients with sickle cell disease.

But it's more than that. I mean as we've already discussed this morning, we had this really exciting opportunity relatively near term with a potential launch next year in thalassemia, which is a prevalent step-up in the case of the U.S. from, sickle cell I just mentioned. And then even after that, with our other PK activator, AG-946 moving into low-risk MDS. The great news about all this is we're moving in the right direction in terms of prevalence, and that is allowing us to enter into very compelling commercial opportunities. And it also allows us to navigate through the appropriate pricing dynamics as we go forward. But we are very excited most importantly, with the fact that as we advance our pipeline and as we've already noted, we have 2 back-to-back launch potentials with thalassemia next year, followed by sickle cell disease in 2026, and then, you want to pick up with the next question?

[Sarah Gheuens, executive]

Sure. So in regards to PK activation and the differences between mitapivat and some other PK activators. So we indeed -- while we stimulate PK -- different PK isoenzymes among switch to PKR, which is important for the red blood cell, but then also PKM2 is important, and we understand more and more the relevance of this specific is enzyme in the context of the diseases that we are studying. As you know, thalassemia, sickle cell disease, MDF, there is different components to these diseases in which stimulation of PKM2 may be relevant.

As it is expressed in immature red blood cells, it is expressed in product tissues that are also touched by these diseases. We are planning to further study this clinically as well, specifically in sickle cell disease in the kidney as we know kidney is such an important organ in the context of sickle cell disease and that many patients suffer from kidney disease, and we believe that PKM2 may have an added advantage there.

In regards to how that compares to other activated specifically, this is the drug that used to be for a drug. They always spoke about being a PKR selective agent in regards to how they translate into other isoenzymes they have not spoken about that, they have just highlighted there is selectivity message .

[Operator]

Next question comes from the line of Salveen Richter with Goldman Sachs.

[Andrea Tan, analyst]

on for Salveen. Just 1 on sickle cell. Could you just discuss where you see Parkin fitting into the current commercial landscape just broadly? And then can you also speak to the -- or the enrollment progression and any physician feedback you've gotten so far? .

[Brian Goff, executive]

Sure. And maybe I will just start and then quickly turn it over to Sarah can pick up on the enrollment aspects. I mean, the fundamental premise of what we're driving towards with sickle cell disease is we believe that mitapivat pyrokine has the potential to be what we refer to as foundational therapy. This is a very different mechanism of action, as we've talked about, very unique from currently available options. We're increasingly convinced that the benefits on making the red blood cells healthier, really position it as such. And then the fact that this is an oral treatment only adds to that potential. But I'll let speak a little bit more about not just how we're thinking about sickle cell disease, but the bridge as we go from PKD to thalassemia and then to sickle cell.

[Sarah Gheuens, executive]

Thanks, Brian. I'll start with but as you said, we have a very important milestone with the Thalassemia launch ahead of that, which we believe will be an important point from growing the commercial capabilities, executing on the thalassemia launch and after that capitalizing on sickle cell disease. When we think about sickle cell disease, Brian mentioned that mentioned that already, the prevalence of the disease is 100,000 patients in the U.S., which is a significant step-up from where we are today with PK deficiency, it's a disease where patients are diagnosed and the burden of disease is well characterized.

At the moment, the outpatient population with sickle cell disease has very limited treatment options available, they are either improving hemoglobin levels, which is the case of a brighter or improving DUCs. Based on the Phase II data and the target product profile, we have for launch we believe that we'll be very well positioned with to provide a treatment option, which will bring benefits to physicians, patients and ultimately varies as well by improving hemoglobin reducing buses and ultimately improving the way patients feel and function. And that's going to be a unique value proposition if we were to deliver on that profile.

So we are very excited about that opportunity to come. But before we get to sickle cell disease, we are optically very excited to progress with our launch preparation for thalassemia as well. After we saw the results from the energize data in the year, we have definitely pressed the button and are actively preparing for the launch to come in 2025. A similar to sickle cell disease, I think the thalassemia launch will be meaningfully differentiated in terms of market characteristics compared to and that will position us well for adoption assuming approval in 2025, including, again, these patients are diagnosed, is 6,000 diagnosed patients in the U.S. with thalassemia and well-established ICD, a stronger concentration of the prescriber base and all of these elements give us confidence on our ability to commercialize the product and drive adoption at launch.

And to sickle cell disease, there is a better understanding of the thalassemia unmet needs across both the transfusion dependent, but also the nontransfusion-dependent patients as well. So we are gearing up and getting ready to commercial organization to go launch in thalassemia in 2025, potentially followed by vectored launches in sickle cell disease in 2026.

[Brian Goff, executive]

I was just going to say that's great set, and I think everybody can sense our excitement about what we have in front of us. And I was just going to ask Sarah to make a comment about the progress with Rise Up Phase III for sickle cell. .

[Sarah Gheuens, executive]

Exactly because we're equally excited to move towards those launches. So we are heavily focused on our Phase III enrollment, of course, right now, the trial is progressing as we are anticipating. There's a lot of both within our teams and of course, on the by the investigators as well. And so everything is on track to deliver to the milestone that we have set out for this year. .

[Operator]

Our next question comes from the line of Tess Romero with JPMorgan.

[Tessa Romero, analyst]

Great. Good morning, Brian and team, a little bit to commercial PKD. Do you still think that PKD could be a $200 million to $250 million peak opportunity here in the U.S.? And if so, how long do you think it I take you to get there. And then my second question, we know that you're moving AG-946 forward in lower-risk MDS. But we were curious have you formally deprioritized the program in sickle cell disease as we haven't heard anything on this in a while. Can you confirm if that's the case or not?

[Brian Goff, executive]

Actually, the second question, we can handle that very quickly, which is no. And we have not deprioritized anything with AG-946. I think we're inspired by the potential at the right time, we'll provide updates about the progress not just in our pursuits of low-risk MDS. .

[Tsveta Milanova, executive]

But also where we stand with respect to sickle cell disease. [Audio Gap] So do you want to on the first 1 .

[Cecilia Jones, executive]

Yes, sure. That's the question. So we definitely remain excited about the opportunity in PKD and we continue to expect those peak sales. That's a $200 million to $225 million for the U.S. We continue to make progress each quarter, and we're learning and, this is helping also in those capabilities for that launch.

We think it's going to be steady continuing to see the trends we've seen in 2023 for the next few years, but do stay maintain our peak of $200 million to $225 million. .

[Brian Goff, executive]

Yes. I mean with PKD and we've talked about this previously, but in the deep commercial experience that both Pete and I have across multiple rare disease launches. This 1 is tough. It's a challenge. It is ultrarare. it's diagnostically intensive, there's long lead times for patients. So slow and steady is the right phrase. What we're continue to be inspired by each quarter is that persistency, which is something we saw relatively early with the launch of Parkin and PKD. That is a really important feature as we think about chronic rare disease launches to come that are in our sights. And so we'll take the slow and steady path and we're going to continue to expect that going forward. But the way Pirakind is performing is what we believe really puts us in a position of strength as we approach, energize sorry, I keep seeing energized as we approach thalassemia as well as sickle cell beyond that. .

[Operator]

Our next question comes from the line of Greg Harrison with Bank of America..

[Greg Harrison, analyst]

Also, I just wanted to follow up on AG-946. How are you thinking just generally in development about development and potentially overlapping indications could be improvement for example, in sickle cell like you've discussed or even thalassemia? And what would you need to see from 946 in order to make that decision?

[Brian Goff, executive]

Yes, I'll start and then Sarah can jump in. First of all, Greg, I hope we're in that position, where we have multiple indications just as we have right now. One of the key advantages of at Agios is having really a leading PK activation franchise as we have not 1, but 2 products that we're developing, and that allows us to have different economics, different pricing dynamics across the indications in between the products. I think there's a wide enough space for us right now, given where we are in the development program with AG-946 that we can tailor the appropriate target product profiles, whether it's for sickle cell disease or for low-risk MDS.

In the case of low-risk MDS, as I think folks know, we just reported out last year, very encouraging proof of concept from our Phase IIa study, and we're in the process right now of making enhancements in the design, so we can pursue Phase IIb. I feel very good about the work the team has done. And that will be the next step. And as I mentioned before, at the right time, we'll also report out progress on sickle cell disease. Anything you want to add, Sarah?

[Sarah Gheuens, executive]

Just high level, I think what you can expect from development is that we always try to design our trials to meet multiple stakeholders their needs, meaning we take our target product profile very seriously. So that is something that for 946 is the same. We take that very seriously, and we incorporate -- we will be incorporating patient voice and the regulatory feedback obviously as well.

[Brian Goff, executive]

Yes. And a great example of that is in the case of sickle cell disease, a point that we're very proud of that Agios is we have deeply involved the community. And in fact, Sarah and I attended the conference last year where we won an award from the community about how carefully and thoughtfully we involved sickle cell disease warriors and caregivers in how we think about designing the trials, recruiting for the trials and ultimately what the commercial profile should look like. And we'll do the same thing with AG-946. .

[Operator]

And our last question will come from the line of Divya Rao with TD Cowen..

[Divya Rao, analyst]

This is Divya on for Marc. I have 2 kind of follow-up questions. One on Eric's question earlier, was the difference in the primary endpoint between mitapivat and luspatercept for the transfusion-dependent patients, something that was recommended to you by regulatory authorities? Or was it more of an internal choice, and then my second question is turning to the design of the Phase IIb and MDS. Do you plan to test multiple dose levels of 946? And any color on the enrollment criteria versus what Repsol had in the COMMANDS trial would be great.

[Sarah Gheuens, executive]

Awesome. Thank you Thanks, Divya. So in regards to the first question, primary endpoint, yes, indeed, we -- do -- as I just mentioned on the previous question as well, we do our development in collaboration with regulators. So we take feedback from the regulators very seriously and try to really incorporate the feedback as best as we can. And so that's how we ended up settling for the 50% endpoints in a rolling 12-week period interval, which we indeed truly believe is a more dynamic endpoint and really reflects the real-world experience of patients.

So this is where it's always very good, and we're always very grateful to be able to have those conversations because I do think incorporating feedback from multiple stakeholders always leads to better design choices. So that's that on the primary endpoint. And then in regards to your question for MDS Phase IIb, yes, the Phase IIb is indeed multiple doses that we are testing.

We are going to test higher doses than we originally anticipated just because we have learned from our Phase IIa that MDS patients overall have lower exposure to same amount of drug than other patient populations and healthy volunteers. So we are incorporating those learnings into our Phase IIb. And in regards to our inclusion criteria, we have not, as we haven't presented a trial in progress post or anything like that yet, but you can expect the population to be relatively similar to how our population was in the Phase IIa, however, we will be focusing on patients with transfusion burden.

It will also be a broad MDS population, just like we allowed into 2. We are not excluding per se population like specific mutations or things like that.

[Operator]

Thank you. I would now like to hand the conference back over to Mr. Brian Goff for closing remarks.

[Brian Goff, executive]

All right. Thanks a lot, Norma. And thank you very much, everyone, for participating in today's call. Very good questions, which we very much appreciate. As you heard today, our team has great conviction in our potential to deliver transformative new therapies to patients and significant long-term value to shareholders, and we really look forward to speaking with all of you again soon. So thanks a lot. .

[Operator]

This concludes today's conference call. Thank you for your participation. You may now disconnect. Everyone, have a wonderful day.