Company: AGIO
Filing Date: 2025-10-30
Form Type: 10-Q
Source: 0001439222-25-000116
Chunk: 180

Company: AGIOS PHARMACEUTICALS, INC.
Filing Date: 2025-10-30
Form: 10-Q
Item: Part I, Item 8
Chunk 180
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 the sale of our products.Contractual AdjustmentsWe generally provide Customers with discounts, including prompt pay discounts, and allowances that are explicitly stated in the contracts and are recorded as a reduction of revenue in the period the related product revenue is recognized. In addition, we receive sales order management, data and distribution services from certain Customers.Chargebacks and discounts represent the estimated obligations resulting from contractual commitments to sell products to qualified healthcare providers at prices lower than the list prices charged to Customers who directly purchase the product from us. Customers charge us for the difference between what they pay for the product and the ultimate selling price to the qualified healthcare providers. These reserves are estimated using the expected value method, based upon a range of possible outcomes that are probability-weighted for the estimated channel mix and are established in the same period that the related revenue is recognized, resulting in a reduction of product revenue.Government RebatesGovernment rebates include Medicare, TriCare, and Medicaid rebates, which we estimate using the expected value method, based upon a range of possible outcomes that are probability-weighted for the estimated payor mix. These reserves are recorded in the same period the related revenue is recognized, resulting in a reduction of product revenue. For Medicare, we also estimate the number of patients for whom we will owe an additional liability under the Medicare Part D Manufacturer Discount Program.Returns / ReplacementWe estimate the amount of product sales that may be returned by Customers or replaced by Agios and record this estimate as a reduction of revenue in the period the related product revenue is recognized. We currently estimate product return and replacement liabilities using the expected value method, based on available industry data, including our visibility into the inventory remaining in the distribution channel.

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The following table summarizes balances and activity in each of the product revenue allowance and reserve categories for the nine months ended September 30, 2025:(In thousands)Contractual AdjustmentsGovernment RebatesReturns/ ReplacementTotalBalance at December 31, 2024$253 $1,354 $489 $2,096 Current provisions relating to sales in the current year1,046 2,054 391 3,491 Adjustments relating to prior years(51)(84)— (135)Payments/returns relating to sales in the current year(935)(964)— (1,899)Payments/returns relating to sales in the prior years(202)(462)— (664)Balance at September 30, 2025$111 $1,898 $880 $2