Source: https://investor.agios.com/node/13131/xbrl-viewer
Timestamp: 2020-05-30 12:58:58
Document Index: 553187137

Matched Legal Cases: ['arty 10', 'arty 50', 'arty 923', 'arty 2', 'arty 32', 'arty 59', 'arty 60']

Cover Page Consolidated Balance Sheets Consolidated Balance Sheets (Parenthetical) Consolidated Statements of Operations Consolidated Statements of Operations (Parenthetical) Consolidated Statements of Comprehensive Loss Consolidated Statements of Stockholders' Equity Consolidated Statements of Cash Flows Nature of Business Summary of Significant Accounting Policies Fair Value Measurements Marketable Securities Property and Equipment, net Inventory Leases Accrued Expenses Commitments and Contingent Liabilities Product Revenue Collaboration and License Agreements Common Stock Share-Based Payments Income Taxes Defined Contribution Benefit Plan Net Loss per Share Selected Quarterly Financial Data (Unaudited) Summary of Significant Accounting Policies (Policies) Summary of Significant Accounting Policies (Tables) Fair Value Measurements (Tables) Marketable Securities (Tables) Property and Equipment, net (Tables) Inventory (Tables) Leases (Tables) Accrued Expenses (Tables) Product Revenue (Tables) Collaboration and License Agreements (Tables) Share-Based Payments (Tables) Income Taxes (Tables) Net Loss per Share (Tables) Selected Quarterly Financial Data (Unaudited) (Tables) Nature of Business - Additional Information (Details) Summary of Significant Accounting Policies - Additional Information (Details) Summary of Significant Accounting Policies - Estimated Useful Lives of Property and Equipment (Details) Summary of Significant Accounting Policies - Impact of Accounting Changes Upon Adoption of ASC 606 (Details) Fair Value Measurements - Cash Equivalents and Marketable Securities Measured at Fair Value on a Recurring Basis (Details) Fair Value Measurements - Additional Information (Details) Marketable Securities - Summary of Marketable Securities (Details) Marketable Securities - Additional Information (Details) Property and Equipment, net - Summary of Property and Equipment (Details) Property and Equipment, net - Additional Information (Details) Inventory - Schedule of Inventory (Details) Inventory - Additional Information (Details) Leases - Additional Information (Details) Leases - Schedule of Undiscounted Minimum Rental Commitments Under Topic 842 (Details) Leases - Schedule of Minimum Rental Commitments Under Topic 840 (Details) Accrued Expenses - Summary of Accrued Expenses and Other Current Liabilities (Details) Commitments and Contingent Liabilities - Additional Information (Details) Product Revenue - Schedule of Product Revenues (Details) Product Revenue - Schedule of Product Revenue Allowance and Reserves (Details) Product Revenue - Schedule of Revenue-Related Reserves (Details) Product Revenue - Schedule of Changes in Contract Assets and Liabilities (Details) Collaboration and License Agreements - Additional Information (Details) Collaboration and License Agreements - Summary of Milestone-Based Receivable Payments (Details) Collaboration and License Agreements - Schedule of Satisfied and Unsatisfied Performance Obligations (Details) Collaboration and License Agreements - Collaboration Revenue (Details) Collaboration and License Agreements - Schedule of Changes in Contract Assets and Liabilities (Details) Collaboration and License Agreements - Schedule of Revenues as a Result of Changes in Contract Asset and Contract Liabilities (Details) Collaboration and License Agreements - Royalty Revenue (Details) Common Stock - Additional Information (Details) Share-Based Payments - Additional Information (Details) Share-Based Payments - Summary of Company's Stock Option Activity of all Stock Incentive Plans (Details) Share-Based Payments - Summary of Unvested RSUs, Performance-Based Stock and Market-Based Stock Unit Activity (Details) Share-Based Payments - Schedule of Stock-Based Compensation by Award Type Included Within the Consolidated Statements of Operations (Details) Share-Based Payments - Stock-Based Compensation Expense for Equity-Based Awards (Details) Share-Based Payments - Schedule of Grant Date Fair Value Option Award Weighted Average Assumptions Used (Details) Income Taxes - Schedule of Domestic and Foreign Components of Loss Before Income Taxes (Details) Income Taxes - Reconciliation of Expected Income Tax Benefit (Expense) Computed Using Federal Statutory Income Tax Rate (Details) Income Taxes - Company's Deferred Tax Assets and Liabilities (Details) Income Taxes - Additional Information (Details) Income Taxes - Unrecognized Tax Benefits Rollforward (Details) Defined Contribution Benefit Plan - Additional Information (Details) Net Loss per Share - Common Stock Excluded from Calculation of Diluted Net Loss Per Share (Detail) Selected Quarterly Financial Data (Unaudited) - Summary of Quarterly Financial Data (Details) Uncategorized Items - agio-20191231.htm
Entity File Number 001-36014
Entity Registrant Name AGIOS PHARMACEUTICALS, INC.
Entity Tax Identification Number 26-0662915
Entity Address, Address Line One 88 Sidney Street
Local Phone Number 649-8600
Trading Symbol AGIO
Entity Public Float $ 2,563,418,196
Entity Common Stock, Shares Outstanding 68,513,573
Documents Incorporated by Reference Portions of the registrant’s definitive proxy statement for its 2020 Annual Meeting of Stockholders to be filed pursuant to Regulation 14A within 120 days of the end of the registrant’s fiscal year ended December 31, 2019 are incorporated by reference into Part III of this Annual Report on Form 10-K to the extent stated herein.
Entity Central Index Key 0001439222
Cash and cash equivalents $ 80,931 $ 70,502
Marketable securities 483,946 514,800
Collaboration receivable – other 1,928 670
Prepaid expenses and other current assets 24,177 17,167
Total current assets 611,704 613,780
Marketable securities 152,929 220,119
Operating lease assets 93,643
Property and equipment, net 31,472 24,320
Financing lease assets 993
Other non-current assets 0 238
Accounts payable 21,896 17,880
Accrued expenses 53,142 42,147
Deferred revenue – related party 10,933 32,710
Operating lease liabilities 6,642
Deferred rent 0 766
Financing lease liabilities 273
Total current liabilities 92,886 93,503
Deferred revenue, net of current portion – related party 50,580 59,809
Operating lease liabilities, net of current portion 106,074
Deferred rent, net of current portion 0 17,608
Financing lease liabilities, net of current portion 673
Total liabilities 250,213 170,920
Preferred stock, $0.001 par value; 25,000,000 shares authorized, no shares issued and outstanding at December 31, 2019 and 2018 0 0
Common stock, $0.001 par value; 125,000,000 shares authorized and 68,401,105 and 58,218,653 shares issued and outstanding at December 31, 2019 and 2018, respectively 68 58
Additional paid-in capital 2,156,363 1,794,283
Accumulated other comprehensive income (loss) 202 (2,171)
Accumulated deficit (1,516,105) (1,104,633)
Total stockholders’ equity 640,528 687,537
Total liabilities and stockholders’ equity $ 890,741 $ 858,457
Collaboration Receivable, Due from Related Parties, Current
Name: agio_CollaborationReceivableDuefromRelatedPartiesCurrent
Namespace Prefix: agio_
Name: agio_CollaborationReceivableOtherCurrent
Royalty Receivable, Due from Related Parties, Current
Name: agio_RoyaltyReceivableDuefromRelatedPartiesCurrent
Common stock, shares issued (in shares) 68,401,105 58,218,653
Common stock, shares outstanding (in shares) 68,401,105 58,218,653
Revenues $ 117,912 $ 94,387 $ 43,011
Cost of sales 1,317 1,397 0
Research and development [1] 410,894 341,324 292,681
Selling, general and administrative 132,034 114,145 71,124
Total cost and expenses 544,245 456,866 363,805
Loss from operations (426,333) (362,479) (320,794)
Interest income, net 14,861 16,451 6,124
Net loss $ (411,472) $ (346,028) $ (314,670)
Net loss per share - basic and diluted (in usd per share) $ (6.86) $ (6.03) $ (6.75)
Weighted-average number of common shares used in computing net loss per share - basic and diluted (in shares) 59,994,539 57,418,300 46,587,631
Revenues $ 59,851 $ 13,841 $ 0
Revenues 39,257 60,661 41,074
Revenues 8,262 12,670 0
Revenues $ 10,542 $ 7,215 $ 1,937
[1] (1) Total research and development expenses are net of cost reimbursements from related party of $0, $0, and $7,811 for the years ended December 31, 2019, 2018 and 2017, respectively.
Name: srt_ProductOrServiceAxis=agio_CollaborationRevenueRelatedPartyMember
Name: srt_ProductOrServiceAxis=agio_CollaborationRevenueOtherMember
Reduction of research and development costs $ 0 $ 0 $ 7,811,000
Unrealized gain (loss) on available-for-sale securities 2,373 (782) (1,076)
Comprehensive loss $ (409,099) $ (346,810) $ (315,746)
Beginning balance (in shares) at Dec. 31, 2016 42,220,444
Beginning balance at Dec. 31, 2016 $ 358,591 $ 42 $ 842,013 $ (313) $ (483,151)
Unrealized gain on available-for-sale securities (1,076) (1,076)
Net loss (314,670) (314,670)
Stock-based compensation expense 47,809 47,809
Issuance of common stock under stock incentive and employee stock purchase plan (in shares) 797,629
Issuance of common stock under stock incentive and employee stock purchase plans 14,190 $ 1 14,189
Issuance of common stock for follow-on offering (in shares) 5,808,080
Issuance of common stock for follow-on offering 270,250 $ 6 270,244
Other 409 649 (240)
Ending balance (in shares) at Dec. 31, 2017 48,826,153
Ending balance at Dec. 31, 2017 375,503 $ 49 1,174,904 (1,389) (798,061)
Unrealized gain on available-for-sale securities (782) (782)
Net loss (346,028) (346,028)
Stock-based compensation expense 73,357 73,357
Issuance of common stock under stock incentive and employee stock purchase plan (in shares) 1,239,514
Issuance of common stock under stock incentive and employee stock purchase plans 30,216 $ 1 30,215
Issuance of common stock for follow-on offering (in shares) 8,152,986
Issuance of common stock for follow-on offering 516,206 $ 8 516,198
Other (391) (391)
Ending balance (in shares) at Dec. 31, 2018 58,218,653
Ending balance at Dec. 31, 2018 687,537 $ 58 1,794,283 (2,171) (1,104,633)
Unrealized gain on available-for-sale securities 2,373 2,373
Net loss (411,472) (411,472)
Stock-based compensation expense $ 72,373 72,373
Issuance of common stock under stock incentive and employee stock purchase plan (in shares) 283,200 694,952
Issuance of common stock under stock incentive and employee stock purchase plans $ 12,516 $ 1 12,515
Issuance of common stock for follow-on offering (in shares) 9,487,500
Issuance of common stock for follow-on offering 277,201 $ 9 277,192
Ending balance (in shares) at Dec. 31, 2019 68,401,105
Ending balance at Dec. 31, 2019 $ 640,528 $ 68 $ 2,156,363 $ 202 $ (1,516,105)
Depreciation and amortization 8,087 7,172 6,432
Stock-based compensation expense 72,373 73,357 47,809
Net accretion of discount on marketable securities (3,195) (3,837) (11)
Loss on disposal of property and equipment 1,052 20 40
Non-cash operating lease expense 8,532
Accounts receivable, net (3,876) (5,076) 0
Collaboration receivable – related party 923 (14) 2,438
Collaboration receivable – other (1,258) (670) 0
Royalty receivable – related party (666) (1,012) (1,222)
Inventory (6,462) (869) 0
Prepaid expenses and other current and non-current assets (7,742) 1,148 (3,600)
Accounts payable 3,716 (5,488) 5,329
Accrued expenses 7,233 8,623 1,522
Deferred revenue – related party (31,006) (31,665) (26,570)
Operating lease liabilities (6,861)
Deferred rent 0 (82) (2,729)
Net cash used in operating activities (370,622) (304,421) (285,232)
Purchases of marketable securities (488,566) (933,320) (688,702)
Proceeds from maturities and sales of marketable securities 592,177 666,481 635,421
Purchases of property and equipment (12,171) (6,986) (4,627)
Net cash provided by (used in) investing activities 91,440 (273,825) (57,908)
Payments on financing lease obligations (113)
Proceeds from public offering of common stock, net of reimbursements 277,201 516,206 270,250
Reimbursement (payment) of public offering costs 0 (391)
Reimbursement (payment) of public offering costs 638
Net proceeds from stock option exercises and employee stock purchase plan 12,523 30,209 14,222
Net cash provided by financing activities 289,611 546,024 285,110
Net change in cash and cash equivalents 10,429 (32,222) (58,030)
Cash and cash equivalents at beginning of the period 70,502 102,724 160,754
Cash and cash equivalents at end of the period 80,931 70,502 102,724
Additions to property and equipment in accounts payable and accrued expenses 5,168 1,106 1,011
Proceeds from stock option exercises in other current assets 0 $ 7 $ 0
Operating lease liabilities arising from obtaining operating lease assets 42,322
Financing lease liabilities arising from obtaining financing lease assets $ 1,052
Name: agio_IncreaseDecreaseInCollaborationReceivableOtherCurrent
Name: agio_IncreaseDecreaseInContractWithCustomerLiabilityRelatedParty
Name: agio_IncreaseDecreaseInOperatingLeaseLiability
Increase (Decrease) in Collaboration Receivable, Due from Related Parties, Current
Name: agio_IncreaseDecreaseinCollaborationReceivableDuefromRelatedPartiesCurrent
Increase (Decrease) in Royalty Receivable, Due from Related Parties, Current
Name: agio_IncreaseDecreaseinRoyaltyReceivableDuefromRelatedPartiesCurrent
Name: agio_OperatingLeaseRightOfUseAssetAmortization
Proceeds receivable from stock options exercised in other current assets.
Name: agio_ProceedsFromStockOptionsExercisedInOtherCurrentAssets
Name: agio_ReiumbursementOfStockIssuanceCosts
Throughout this Annual Report on Form 10-K, “we,” “us,” and “our,” and similar expressions, except where the context requires otherwise, refer to Agios Pharmaceuticals, Inc. and its consolidated subsidiaries, and “our board of directors” refers to the board of directors of Agios Pharmaceuticals, Inc.
We are a biopharmaceutical company committed to the fundamental transformation of patients’ lives through scientific leadership in the field of cellular metabolism and adjacent areas of biology, with the goal of creating differentiated, small molecule medicines for patients in the areas of hematologic malignancies, solid tumors and rare genetic diseases, or RGDs. To address these focus areas, we take a systems biology approach to deeply understand disease states, drive the discovery and validation of novel therapeutic targets, and define patient selection strategies, thereby increasing the probability that our experimental medicines will have the desired therapeutic effect. We are located in Cambridge, Massachusetts.
Our wholly-owned product, TIBSOVO® (ivosidenib) is an oral targeted inhibitor of the mutated isocitrate dehydrogenase 1, or IDH1 enzyme. TIBSOVO® is the first and only U.S. Food and Drug Administration, or FDA-approved therapy for the treatment of adult patients with (i) relapsed or refractory acute myeloid leukemia, or R/R AML, with a susceptible IDH1 mutation as detected by an FDA-approved test (approved by the FDA in July 2018) and (ii) newly diagnosed AML with a susceptible IDH1 mutation as detected by an FDA-approved test who are at least 75 years old or who have comorbidities that preclude use of intensive induction chemotherapy (approved by the FDA in May 2019). In December 2018, we submitted an Marketing Authorization Application, or MAA, to the European Medicines Agency, or EMA, for TIBSOVO® for the treatment of adult patients with R/R AML with an IDH1 mutation.
Our other marketed product is IDHIFA® (enasidenib), an oral targeted inhibitor of the mutated isocitrate dehydrogenase 2, or IDH2 enzyme and the first and only FDA-approved therapy for patients with R/R AML and an IDH2 mutation. In August 2017, the FDA granted our collaboration partner Celgene approval of IDHIFA® for the treatment of adult patients with R/R AML and an IDH2, mutation as detected by an FDA-approved test. We are eligible to receive royalties at tiered low-double digit to mid-teen percentage rates on any net sales of IDHIFA® and have exercised our rights to provide up to one-third of the field-based commercialization efforts in the United States. In June 2018, Celgene submitted an MAA to the EMA for IDHIFA® for IDH2 mutant-positive AML which it subsequently withdrew in December 2019.
Vorasidenib is an orally available, selective brain-penetrant pan-IDH mutant inhibitor. We are developing vorasidenib for the treatment of IDH mutant-positive low grade glioma and are currently evaluating vorasidenib in clinical trials.
AG-270 is an orally available selective potent inhibitor of methionine adenosyltransferase 2a, or MAT2A. We are currently evaluating AG-270 in a phase 1 dose-escalation and expansion trial in multiple tumor types carrying a methylthioadenosine phosphorylase, or MTAP, deletion.
AG-636 is an inhibitor of the metabolic enzyme dihydroorotate dehydrogenase, or DHODH. We are currently evaluating AG-636 in the phase 1 dose-escalation trial in lymphoma.
The lead product candidate in our RGD portfolio, mitapivat, is an activator of both wild-type and mutant pyruvate kinase-R for the potential treatment of hemolytic anemias. We are currently evaluating mitapivat for the treatment of pyruvate kinase, or PK, deficiency, thalassemia and sickle cell disease, or SCD, in clinical trials.
In addition to the aforementioned development programs, we are seeking to advance a number of early-stage discovery programs in our focus areas of malignant hematology, solid tumors and RGDs based on our scientific leadership in the field of cellular metabolism and adjacent areas of biology.
In November 2019, we completed a public offering of 8,250,000 shares of common at an offering price of $31.00 per share. We received net proceeds from this offering of $241.0 million, after deducting underwriting discounts and commissions paid by us. In addition, we granted the underwriters the right to purchase up to an additional 1,237,500 shares of common stock, which was exercised in November 2019, resulting in additional net proceeds to us of $36.2 million, after underwriting discounts and commissions. After giving effect to the full exercise of the over-allotment option, the number of shares sold by us in the public offering totaled 9,487,500 shares, and net proceeds to us totaled $277.2 million, after underwriting discounts and commissions.
As of December 31, 2019, we had cash, cash equivalents and marketable securities of $717.8 million. Although we have incurred recurring losses and expect to continue to incur losses for the foreseeable future, we expect our cash, cash equivalents and marketable securities to be sufficient to fund current operations for at least the next twelve months from the issuance of the financial statements. If the Company is unable to raise additional funds through equity or debt financings, the Company may be required to delay, limit, reduce or terminate product development or future commercialization efforts or grant rights to develop and market products or product candidates that the Company would otherwise prefer to develop and market itself.
The consolidated financial statements include our accounts and the accounts of our wholly owned subsidiaries, Agios Securities Corporation, Agios International Sarl, Agios Germany GmbH, Agios Netherlands B.V., and Agios Limited. All intercompany transactions have been eliminated in consolidation. The consolidated financial statements have been prepared in conformity with U.S. generally accepted accounting principles, or U.S. GAAP.
The preparation of financial statements in conformity with U.S. GAAP requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. We base our estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances. Actual results could differ from those estimates.
We consider highly liquid investments with a maturity of three months or less when purchased to be cash equivalents. Cash equivalents are stated at fair value.
Marketable securities at December 31, 2019 and 2018 consisted of investments in certificates of deposit, U.S. Treasuries, government securities and corporate debt securities. We determine the appropriate classification of the securities at the time they are acquired and evaluate the appropriateness of such classifications at each balance sheet date. We classify our marketable securities as available-for-sale pursuant to Accounting Standards Codification, or ASC, 320, Investments – Debt and Equity Securities. Marketable securities are recorded at fair value, with unrealized gains and losses included as a component of accumulated other comprehensive loss in stockholders’ equity and a component of total comprehensive loss in the consolidated statements of comprehensive loss, until realized. Realized gains and losses are included in investment income on a specific-identification basis.
At December 31, 2019 and 2018, we held both current and non-current investments. Investments classified as current have maturities of less than one year. Investments classified as non-current are those that: (i) have a maturity of one to two years, and (ii) we do not intend to liquidate within the next twelve months, although these funds are available for use and therefore classified as available-for-sale.
We review marketable securities for other-than-temporary impairment whenever the fair value of a marketable security is less than the amortized cost and evidence indicates that a marketable security’s carrying amount is not recoverable within a reasonable period of time. Other-than-temporary impairments of investments are recognized in the consolidated statements of operations if we experience a credit loss, have the intent to sell the marketable security, or if it is more likely than not that we will be required to sell the marketable security before recovery of the amortized cost basis. Evidence considered in this assessment includes reasons for the impairment, compliance with our investment policy, the severity and the duration of the impairment, and changes in value subsequent to the end of the period.
Our financial assets, which include cash equivalents and marketable securities, have been initially valued at the transaction price, and subsequently revalued at the end of each reporting period, utilizing third-party pricing services or other observable market data. The pricing services utilize industry standard valuation models, including both income and market based approaches, and observable market inputs to determine value. After completing our validation procedures, we did not adjust or override any fair value measurements provided by the pricing services as of December 31, 2019 or 2018. Fair value information for these assets, including their classification in the fair value hierarchy is included in Note 3. Fair Value Measurements.
There have been no changes to the valuation methods during the years ended December 31, 2019 and 2018. We evaluate transfers between levels at the end of each reporting period.
The carrying amounts of collaboration receivable – related party, collaboration receivable – other, royalty receivable – related party, accounts receivable, prepaid expenses and other current assets, accounts payable, and accrued expenses approximate their fair values due to their short-term maturities.
Our trade accounts receivable arise from product sales and represent amounts due from specialty distributors and specialty pharmacy providers in the U.S. We monitor the financial performance and creditworthiness of our customers so that we can properly assess and respond to changes in their credit profile. We reserve against these receivables for estimated losses that may arise from a customer’s inability to pay. Amounts determined to be uncollectible are charged or written-off against the reserve.
Financial instruments which potentially subject us to credit risk consist primarily of cash, cash equivalents, and marketable securities. We hold these investments in highly rated financial institutions, and, by policy, limit the amounts of credit exposure to any one financial institution. These amounts at times may exceed federally insured limits. We have not experienced any credit losses in such accounts and do not believe we are exposed to any significant credit risk on these funds. We have no off-balance sheet concentrations of credit risk, such as foreign currency exchange contracts, option contracts, or other hedging arrangements.
We are also subject to credit risk on our receivables, including trade receivables from our customers and collaboration and royalty receivables from Celgene and CStone Pharmaceuticals, or CStone. Concentrations of credit risk with respect to receivables, which are typically unsecured, are somewhat mitigated due to the number of customers using our products. Our trade receivables arise from product sales in the U.S. and have standard payment terms that generally require payment within 30 to 60 days. We have evaluated the creditworthiness of our customers, including Celgene, and determined them to be creditworthy. To date we have not experienced any losses with respect to our receivables.
Inventory is stated at the lower of cost or estimated net realizable value on a first-in, first-out basis. Prior to the regulatory approval of our product candidates, we incur expenses for the manufacture of drug product that could potentially be available to support the commercial launch of those products. Until the date at which regulatory approval has been received or is otherwise considered probable, we record all such costs as research and development expenses. Upon approval of our wholly owned product, TIBSOVO®, by the FDA on July 20, 2018 for the treatment of adult patients with R/R AML with susceptible IDH1 mutation as detected by an FDA-approved test, we began to capitalize inventories of TIBSOVO®.
We perform an assessment of the recoverability of capitalized inventory during each reporting period and write down any excess and obsolete inventory to its estimated net realizable value in the period in which the impairment is first identified. Such impairment charges, should they occur, are recorded as a component of cost of sales in the consolidated statements of operations. The determination of whether inventory costs will be realizable requires the use of estimates by management. If
actual market conditions are less favorable than projected by management, additional write-downs of inventory may be required.
Property and equipment consist of laboratory equipment, computer equipment and software, leasehold improvements, furniture and fixtures, and office equipment. Costs of major additions and betterment are capitalized; maintenance and repairs, which do not improve or extend the life of the respective assets, are charged to expense as incurred. Upon retirement or sale, the cost of the disposed asset and the related accumulated depreciation are removed from the accounts and the resulting gain or loss is recognized.
Property and equipment is stated at cost, and depreciated using the straight-line method over the estimated useful lives of the respective assets:
We periodically evaluate our long-lived assets for potential impairment in accordance with ASC 360, Property, Plant and Equipment. Potential impairment is assessed when there is evidence that events or changes in circumstances indicate that the carrying amount of an asset may not be recovered. Recoverability of these assets is assessed based on the undiscounted expected future cash flows from the assets, considering a number of factors, including past operating results, budgets and economic projections, market trends and product development cycles. If impairments are identified, assets are written down to their estimated fair value. We did not recognize any impairment charges through December 31, 2019.
We determine if an arrangement is a lease at inception. An arrangement is determined to contain a lease if the contract conveys the right to control the use of an identified property or equipment for a period of time in exchange for consideration. If we can benefit from the various underlying assets of a lease on their own or together with other resources that are readily available, or if the various underlying assets are neither highly dependent on nor highly interrelated with other underlying assets in the arrangement, they are considered to be a separate lease component. In the event multiple underlying assets are identified, the lease consideration is allocated to the various components based on each of the component’s relative fair value.
Operating lease assets represent our right to use an underlying asset for the lease term and operating lease liabilities represent our obligation to make lease payments arising from the leasing arrangement. Operating lease assets and operating lease liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As most of our leases do not provide an implicit rate, in determining the operating lease liabilities, we use an estimate of our incremental borrowing rate. The incremental borrowing rate is determined using two alternative credit scoring models to estimate our credit rating, adjusted for collateralization. The calculation of the operating lease assets includes any lease payments made and excludes any lease incentives. Our lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option.
For operating leases, we record operating lease assets and lease liabilities in our consolidated balance sheets. Lease expense for lease payments is recognized on a straight-line basis over the lease term. Short-term leases, or leases that have a lease term of 12 months or less at commencement date, are excluded from this treatment and are recognized on a straight-line basis over the term of the lease.
We have not entered into any material short-term leases or financing leases as of December 31, 2019.
On January 1, 2018 we adopted ASC 606, Revenue from Contracts with Customers, under the modified retrospective method. Prior to January 1, 2018 we accounted for the consideration received under the Collaboration Agreements under ASC 605-25, Multiple Element Arrangements.
In adopting ASC 606, we applied the practical expedient that permits aggregating the effect of all contract modifications that occurred prior to January 1, 2018. No other practical expedients were used. Similar to the accounting under ASC 605-25, the 2016 Agreement was determined to be a modification of the 2010 Agreement and the AG-881 Agreements with Celgene.
Revenue is recognized when the customer obtains control of promised goods or services, in an amount that reflects the consideration that we expect to receive in exchange for those goods or services. To determine revenue recognition for arrangements that we determined to be within the scope of ASC 606, we perform the following five steps: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) we satisfy a performance obligation. We only apply the five-step model to contracts when it is probable that we will collect the consideration we are entitled to in exchange for the goods or services we transfer to the customer. At contract inception, once the contract is determined to be within the scope of ASC 606, we assess the goods or services promised within each contract and determine those that are performance obligations, and assess whether each promised good or service is distinct. We will then recognize as revenue the amount of the transaction price that is allocated to the respective performance obligation when (or as) the performance obligation is satisfied.
We generate product revenue from sales of TIBSOVO® to a limited number of specialty distributors and specialty pharmacy providers in the U.S., or collectively, the Customers. The Customers subsequently resell TIBSOVO® to pharmacies or dispense directly to patients. In addition to distribution agreements with Customers, we enter into arrangements with healthcare providers and payors that provide for government-mandated and/or privately-negotiated rebates, chargebacks and discounts with respect to the purchase of TIBSOVO®.
Contractual adjustments. We 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.
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 rebates. Government rebates consist of 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 in the prescription drug coverage gap for whom we will owe an additional liability under the Medicare Part D program.
Returns. We estimate the amount of product sales that may be returned by Customers and record this estimate as a reduction of revenue in the period the related product revenue is recognized. We currently estimate product return liabilities using the expected value method, based on available industry data, including our visibility into the inventory remaining in the distribution channel.
We apply the provisions of ASC 808, Collaborative Arrangements, when accounting for our collaboration agreements. We evaluate the presentation of amounts due from our collaborative partners associated with activities in the collaborative arrangement based on the nature of each activity. For transactions with customers, we have reported revenues and costs in accordance with ASC 606, Revenue from Contracts with Customers, ASC 606-10-55-36 through 55-40, Principal versus Agent Considerations. We recognize revenue when the customer obtains control of promised goods or services, in an amount that reflects the consideration that we expect to receive in exchange for those goods or services. To determine revenue recognition for arrangements that have been determined to be within the scope of ASC 606, we perform the following five steps: (i) identify
the contract(s) with a customer; (ii) identify the performance obligations in the contract based on the relative standalone selling prices of the goods or services provided; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) we satisfy a performance obligation. We only apply the five-step model to contracts when it is probable that we will collect the consideration we are entitled to in exchange for the goods or services we transfer to the customer.
Once the contract is determined to be within the scope of ASC 606, we assess the goods or services promised within each contract and determine those that are performance obligations, and assess whether each promised good or service is distinct. We will then recognize as revenue the amount of the transaction price that is allocated to the respective performance obligation when (or as) the performance obligation is satisfied.
The transaction price for each collaboration agreement is determined based on the amount of consideration we expect to be entitled to for satisfying all performance obligations within the agreement. Significant judgment may be required in determining the amount of variable consideration to be included in the transaction price. We use the expected value methods to determine variable consideration and will re-evaluate the transaction price in each reporting period and as uncertain events are resolved or other changes in circumstances occur.
As part of the initial accounting for these arrangements, we must develop assumptions that require judgment to determine the standalone selling price, or SSP, for each performance obligation identified in the contract. We use these key assumptions to determine the SSP, which include forecast of revenues, development timelines, reimbursement rates for personnel costs, discount rates and probabilities of technical and regulatory success.
We recognize the transaction price allocated to upfront license payments as revenue upon delivery of the license to the customer and resulting ability of the customer to use and benefit from the license, if the license is determined to be distinct from the other performance obligations identified in the contract. If the license is considered to not be distinct from other performance obligations, we exercise judgment to assess the nature of the combined performance obligation to determine whether the combined performance obligation is satisfied (i) at a point in time, but only for licenses determined to be distinct from other performance obligations in the contract, or (ii) over time; and, if over time, the appropriate method of measuring progress for purposes of recognizing revenue from license payments. We evaluate the measure of progress each reporting period and, if necessary, adjust the measure of performance and related revenue recognition.
A significant portion of revenue generated from our collaboration agreements with Celgene relates to the provision of research and development services whereby revenue is recognized under an input method using the ratio of effort incurred to date compared to the total estimated effort required to complete the performance obligation. The calculation of the total estimated effort includes the total amount of forecasted costs associated with the completion of discovery, pre-clinical or clinical trials, as well as the assumed timing of these activities and estimated patient populations. Such cost estimates include forecasted direct labor and material costs, subcontractor costs, and external contract research organization, or CRO, costs.
Many of our collaboration agreements also entitle us to additional payments upon the achievement of performance-based milestones. These milestones are generally categorized into three types: development milestones, which are generally based on the initiation of clinical trials; regulatory milestones, which are generally based on the submission, filing or approval of regulatory applications such as a new drug application, or NDA, in the U.S.; and sales-based milestones, which are generally based on meeting specific thresholds of sales in certain geographic areas during a specified period. Upfront and ongoing development milestones per our collaboration agreements are not subject to refund if the development activities are not successful.
For each collaboration that includes development milestone payments, we evaluate whether it is probable that the consideration associated with each milestone will not be subject to a significant reversal in the cumulative amount of revenue recognized. Amounts that meet this threshold are included in the transaction price using the most likely amount method, whereas amounts that do not meet this threshold are considered constrained and excluded from the transaction price until they meet this threshold. Milestones tied to regulatory approval, and therefore not within our control, are considered constrained until such approval is received. At the end of each subsequent reporting period, we re-evaluate the probability of a significant reversal of the cumulative revenue recognized for our milestones, and, if necessary, adjust our estimate of the overall transaction price. Any such adjustments are recorded on a cumulative catch-up basis, which would affect revenues from collaborators and loss in the period of adjustment. For arrangements that include sales-based milestone or royalty payments based on the level of sales, and in which the license is deemed to be the predominant item to which the sales-based milestone or royalties relate to, we recognize revenue in the period in which the sales-based milestone is achieved and in the period in which the sales associated with the royalty occur.
We adopted ASC 606 using the modified retrospective method. Under this method, we recognized the cumulative effect of the change in the opening balance of accumulated deficit in the December 31, 2018 consolidated balance sheet.
In adopting ASC 606, we applied the practical expedient that permits aggregating the effect of all contract modifications that occurred prior to January 1, 2018. No other practical expedients were used.
The impact of the cumulative effect of the accounting changes upon the adoption of the standard is as follows:
Effect January 1,
Deferred revenue – related party, current and net of current portions $ 163,640 $ (39,456) $ 124,184
Accumulated deficit (798,061) 39,456 (758,605)
The following tables summarize the effects of adopting ASC 606 on our consolidated financial statements:
Consolidated Balance Sheets December 31, 2018
606 Under Topic
605 Effect of
Accounts receivable, net $ 5,076 $ 5,076 $ —
Collaboration receivable – related party 2,462 2,462 —
Collaboration receivable – other 670 230 440
Total current assets 613,780 613,340 440
Total assets 858,457 858,017 440
Deferred revenue – related party 32,710 29,133 3,577
Total current liabilities 93,503 89,926 3,577
Deferred revenue, net of current portion – related party 59,809 101,180 (41,371)
Total liabilities 170,920 208,714 (37,794)
Accumulated deficit (1,104,633) (1,142,867) 38,234
Total stockholders’ equity 687,537 649,303 38,234
Total liabilities and stockholders’ equity 858,457 858,017 440
Product revenue, net $ 13,841 $ 13,841 $ —
Collaboration revenue – related party 60,661 58,994 1,667
Collaboration revenue – other 12,670 12,230 440
Total revenue 94,387 92,280 2,107
Research and development expense 341,324 337,995 3,329
Total cost and expenses 456,866 453,537 3,329
Loss from operations (362,479) (361,257) (1,222)
Net loss (346,028) (344,806) (1,222)
Net loss per share – basic and diluted (6.03) (6.01) (0.02)
Consolidated Statements of Comprehensive Loss Year ended December 31, 2018
Net loss $ (346,028) $ (344,806) $ (1,222)
Comprehensive loss (346,810) (345,588) (1,222)
Consolidated Statements of Cash Flows Year ended December 31, 2018
(In thousands) Under Topic
Accounts receivable, net (5,076) (5,076) —
Collaboration receivable – related party (14) (14) —
Collaboration receivable – other (670) (230) (440)
Deferred revenue – related party (31,665) (33,327) 1,662
Cost of sales consists primarily of manufacturing costs of TIBSOVO®. Based on our policy to expense costs associated with the manufacturing of our products prior to regulatory approval, certain of the manufacturing costs associated with product shipments of TIBSOVO® recorded during the years ended December 31, 2019 and December 31, 2018 were expensed prior to July 20, 2018 and, therefore, are not included in costs of sales during the years ended December 31, 2019 or 2018.
Research and development costs, including those accrued as of each balance sheet date, are expensed as incurred. These costs include salaries and personnel-related costs, consulting fees, fees paid for contract research services, fees paid to contract CROs, and other third parties in connection with clinical trials and preclinical development activities, fees paid to investigative sites in connection with clinical studies, the costs associated with the product manufacturing, development, and distribution of clinical supplies, the costs of laboratory equipment and facilities, and other external costs.
Nonrefundable advance payments for goods or services to be received in the future for use in research and development activities are deferred and capitalized. Additionally, there may be instances in which payments made to our vendors will exceed the level of services provided, and result in a prepayment of the research and development expense. The capitalized amounts are expensed as the related goods are delivered or the services are performed. We estimate the time period over which services will be performed and the level of effort to be expended in each period. If the actual timing of the performance of services or the level of effort varies from our estimate, we adjust the accrual or prepaid accordingly.
We account for stock-based compensation awards in accordance with ASC 718, Compensation –Stock Compensation, or ASC 718. For stock-based awards granted to employees and to members of the board of directors for their services and for participation in our employee stock purchase plan, we primarily estimate the grant date fair value of each option award using the Black-Scholes option-pricing model. The use of the Black-Scholes option-pricing model requires us to make assumptions with respect to the expected term of the option, the expected volatility of the common stock consistent with the expected life of the option, risk-free interest rates and expected dividend yields of the common stock. For awards subject to service-based vesting conditions, we recognize stock-based compensation expense equal to the grant date fair value of stock options on a straight-line basis over the requisite service period. For awards subject to both performance and service-based vesting conditions, we recognize stock-based compensation expense over the remaining service period if the performance condition is considered probable of achievement using management’s best estimates.
In 2017, we adopted ASU 2016-09, Compensation—Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting, which simplifies several aspects of the accounting for employee share-based payment transactions, including income tax consequences, classification of awards as either equity or liabilities, and classification in the statement of
cash flows. Upon adoption of this standard, we recorded a cumulative-effect adjustment of approximately $32.7 million through retained earnings and deferred tax assets.
Income taxes are recorded in accordance with ASC 740, Accounting for Income Taxes, or ASC 740, which provides for deferred taxes using an asset and liability approach. We recognize deferred tax assets and liabilities for the expected future tax consequences of events that have been included in our financial statements or tax returns. We determine our deferred tax assets and liabilities based on differences between the financial reporting and tax bases of assets and liabilities, which are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. Valuation allowances are provided, if based upon the weight of available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized.
We also account for uncertain tax positions in accordance with the provisions of ASC 740. When uncertain tax positions exist, we recognize the tax benefit of tax positions to the extent that the benefit will more likely than not be realized. The determination as to whether the tax benefit will more likely than not be realized is based upon the technical merits of the tax position as well as consideration of the available facts and circumstances.
Comprehensive income (loss) is defined as the change in equity of a business enterprise during a period from transactions, and other events and circumstances, and currently consists of net loss and unrealized gains and losses on available-for-sale securities. Accumulated other comprehensive loss consists entirely of unrealized gains and losses from available-for-sale securities as of December 31, 2019 and 2018.
Basic net loss per share is calculated by dividing net loss by the weighted-average shares outstanding during the period, without consideration for common stock equivalents. Diluted net loss per share is calculated by adjusting weighted-average shares outstanding for the dilutive effect of common stock equivalents outstanding for the period, determined using the treasury-stock method. For purposes of the dilutive net loss per share calculation, stock options, restricted stock units, performance-based stock units and market-based stock units for which the performance vesting conditions have been met, and employee stock purchase plan shares are considered to be common stock equivalents but are excluded from the calculation of diluted net loss per share as their effect would be anti-dilutive.
Operating segments are identified as components of an enterprise about which separate discrete financial information is available for evaluation by the chief operating decision maker, or decision-making group, in making decisions on how to allocate resources and assess performance. Our chief operating decision maker is the chief executive officer. Our chief operating decision maker and we view our operations and manage our business as one operating segment.
In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), which was codified as ASC 842, Leases, and amended through subsequent ASUs. We adopted ASC 842 effective January 1, 2019 using the optional transition method provided for under ASU 2018-11, Leases (Topic 842): Targeted Improvements, whereby we applied the new lease requirements through a cumulative-effect adjustment, which after completing our implementation analysis, resulted in no material adjustment to our January 1, 2019 beginning accumulated deficit balance. We also elected the package of practical expedients provided for under ASU 2018-11, which allows us not to reassess whether contracts are or contain leases, lease classification, and whether initial direct costs qualify for capitalization. Additionally, as an accounting policy, for our building leases, we chose not to separate the non-lease components from the lease components and, instead, accounted for each non-lease component and lease component as a single component.
We completed our assessment over the impact of the standard and determined that the only material leases that we hold are our building leases. Upon adoption of the standard on January 1, 2019, we recorded operating right of use assets of $59.9 million and operating lease liabilities of $77.3 million on our consolidated balance sheets. Prior periods are presented in accordance with ASC 840, Leases.
In June 2018, the FASB issued Accounting Standards Update No. 2018-07 – Compensation-Stock Compensation (Topic 718)-Improvements to Nonemployee Share-Based Payment Accounting. ASU 2018-07 simplifies the accounting for share-based
payments to nonemployees by aligning it with the accounting for share-based payments to employees, with certain exceptions. ASU 2018-07 is effective for fiscal years beginning after December 15, 2018. The Company adopted the new standard as of January 1, 2019. There was no material impact to the Company’s consolidated financial position, results of operation, or cash flows.
In December 2019, the FASB issued Accounting Standards Update No. 2019-12 – Income Taxes (Topic 740) Simplifying the Accounting for Income Taxes, as part of its initiative to reduce complexity in the accounting standards. The amendments in ASU 2019-12 eliminate certain exceptions related to the approach for intraperiod tax allocation, the methodology for calculating income taxes in an interim period and the recognition of deferred tax liabilities for outside basis differences. ASU 2019-12 also clarifies and simplifies other aspects of the accounting for income taxes. The amendments in ASU 2019-12 are effective for the fiscal years beginning after December 15, 2020. Early adoption is permitted, including adoption in any interim period. The Company has early adopted this amendment as of January 1, 2019. There was no material impact to the Company’s consolidated financial position, results of operation, or cash flows.
We considered events or transactions occurring after the balance sheet date, but prior to the issuance of the consolidated financial statements, for potential recognition or disclosure in our consolidated financial statements. All significant subsequent events have been properly disclosed in the consolidated financial statements.
The following table summarizes our cash equivalents and marketable securities measured at fair value and by level (as described in Note 2. Summary of Significant Accounting Policies) on a recurring basis as of December 31, 2019:
Cash equivalents $ 12,568 $ 36,299 $ — $ 48,867
Total cash equivalents 12,568 36,299 — 48,867
Certificates of deposit — — — —
U.S. Treasuries — 214,027 — 214,027
Government securities — 97,820 — 97,820
Corporate debt securities — 325,028 — 325,028
Total marketable securities — 636,875 — 636,875
Total cash equivalents and marketable securities $ 12,568 $ 673,174 $ — $ 685,742
There were no transfers between Level 1 and Level 2 and we had no financial assets or liabilities that were classified as Level 3 at any point during the year ended December 31, 2019.
Marketable securities at December 31, 2019 consisted of the following:
Certificates of deposit $ — $ — $ — $ —
U.S. Treasuries 178,721 58 (38) 178,741
Government securities 80,228 17 (16) 80,229
Corporate debt securities 224,928 139 (91) 224,976
Total Current 483,877 214 (145) 483,946
U.S. Treasuries 35,296 3 (13) 35,286
Government securities 17,587 14 (10) 17,591
Corporate debt securities 99,913 239 (100) 100,052
Total Non-current 152,796 256 (123) 152,929
Total marketable securities $ 636,673 $ 470 $ (268) $ 636,875
Marketable securities at December 31, 2018 consisted of the following:
Total Current 515,629 7 (836) 514,800
Total Non-current 221,461 26 (1,368) 220,119
There were no material realized gains or losses on marketable securities for the years ended December 31, 2019 and 2018.
At December 31, 2019 and 2018, we held 113 and 242 debt securities that were in an unrealized loss position for less than one year, respectively. The aggregate fair value of debt securities in an unrealized loss position at December 31, 2019 and 2018 was $345.7 million and $639.3 million, respectively. There were no individual securities that were in a significant unrealized loss position as of December 31, 2019 and 2018. Given our intent and ability to hold such securities until recovery, and the lack of material change in the credit risk of these investments, we do not consider these marketable securities to be other-than-temporarily impaired as of December 31, 2019 and 2018.
Property and equipment, net consisted of the following at December 31:
Laboratory equipment $ 23,418 $ 20,165
Computer equipment and software 6,415 5,449
Leasehold improvements 23,879 22,084
Furniture and fixtures 2,101 1,065
Office equipment 589 407
Construction in progress 7,182 1,302
Total property and equipment 63,584 50,472
Less: accumulated depreciation (32,112) (26,152)
Total property and equipment, net $ 31,472 $ 24,320
Depreciation expense for the years ended December 31, 2019, 2018 and 2017 was $8.0 million, $7.2 million and $6.4 million, respectively.
Work-in-process 6,808 788
Finished goods 343 81
Total Inventory $ 7,331 $ 869
Inventory is related to our approved product, TIBSOVO®. There were no write downs for excess and obsolete inventory during the years ended December 31, 2019, 2018 or 2017.
Our building leases are comprised of office and laboratory space under non-cancelable operating leases. These lease agreements have remaining lease terms of eight years and contain various clauses for renewal at our option. The renewal options were not included in the calculation of the operating lease assets and the operating lease liabilities as the renewal option is not reasonably certain of being exercised. The lease agreements do not contain residual value guarantees. Operating lease costs for the year ended December 31, 2019 were $15.1 million, and cash paid for amounts included in the measurement of operating lease liabilities for the year ended December 31, 2019 was $12.8 million.
In arriving at the operating lease liabilities as of December 31, 2019, we applied the weighted-average incremental borrowing rate of 5.7% over a weighted-average remaining lease term of 8.2 years.
As of December 31, 2019, undiscounted minimum rental commitments under non-cancelable leases, for each of the next five years and total thereafter, were as follows:
2020 $ 13,242
Undiscounted minimum rental commitments 145,072
Interest (32,356)
Total operating lease liabilities $ 112,716
As of December 31, 2018, minimum rental commitments under non-cancelable leases, for each of the next five years and total thereafter, were as follows:
Total minimum rental commitments $ 91,287
Rental expense under these leases, net of tenant improvement reimbursements, amounted to $11.4 million, and $6.0 million for the years ended December 31, 2018 and 2017, respectively. In addition to rent, the leases may require us to pay additional amounts for taxes, insurance, maintenance and other operating expenses.
We provided our landlord a standby letter of credit of $2.9 million as security for our leases. We are not required to maintain any cash collateral for the standby letter of credit.
Accrued compensation $ 18,982 $ 20,843
Accrued research and development costs 21,777 14,777
Accrued professional fees 8,335 5,441
Accrued other 4,048 1,086
Total accrued expenses $ 53,142 $ 42,147
We are party to various agreements with contract manufacturing organizations that we are not contractually able to terminate for convenience and avoid any and all future obligations to the vendors. Under such agreements, we are obligated to make certain minimum payments, with the exact amounts in the event of termination to be based on the timing of the termination and the exact terms of the agreement.
From time to time, we may be involved in disputes and legal proceedings in the ordinary course of business. These proceedings may include allegations of infringement of intellectual property, employment or other matters. We do not have any ongoing legal proceedings that, based on our estimates, could have a material effect on our consolidated financial statements.
Product Revenue Product Revenue
Our wholly owned product, TIBSOVO®, received approval from the FDA on July 20, 2018 for the treatment of adult patients with R/R AML with a susceptible IDH1 mutation. Upon FDA approval of TIBSOVO® in the U.S., we began generating product revenue from U.S. sales of TIBSOVO®.
Product revenue, net $ 59,851 $ 13,841 $ —
The following table summarizes balances and activity in each of the product revenue allowance and reserve categories for the year ended December 31, 2019:
Adjustments Government
Balance at December 31, 2018 592 325 334 1,251
Current provisions relating to sales in the current year 7,899 2,387 1,464 11,750
Adjustments relating to prior years 8 (41) — (33)
Payments/returns relating to sales in the current year (7,027) (1,286) — (8,313)
Balance at December 31, 2019 874 1,124 1,798 3,796
The following table summarizes balances and activity in each of the product revenue allowance and reserve categories for the year ended December 31, 2018:
Balance at December 31, 2017 — — — —
Current provisions relating to sales in the current year 1,777 422 334 2,533
Adjustments relating to prior years — — — —
Payments/returns relating to sales in the current year (1,185) (97) — (1,282)
Payments/returns relating to sales in the prior years — — — —
Total revenue-related reserves for the years ended December 31, 2019 and 2018 above, included in our consolidated balance sheets, are summarized as follows:
Reduction of accounts receivable $ 540 $ 326
Component of accrued expenses 3,256 925
Total revenue-related reserves $ 3,796 $ 1,251
The following table presents changes in our contract assets and liabilities during the year ended December 31, 2019:
2018 Additions Deductions December 31,
$ 5,076 $ 71,542 $ (67,666) $ 8,952
(1) Additions to accounts receivable, net relate to amounts billed to Customers for product sales and deductions primarily relate to collection of receivables during the reporting period.
The following table presents changes in our contract assets and liabilities during the year ended December 31, 2018:
2017 Additions Deductions December 31,
$ — $ 16,374 $ (11,298) $ 5,076
Collaboration and License Agreements Collaboration and License Agreements
To date, our revenue has primarily been generated from our collaboration agreements with Celgene, or collectively, the Collaboration Agreements. Celgene is a related party through ownership of our common stock. In April 2010, we entered into a discovery and development collaboration and license agreement focused on cancer metabolism, or the 2010 Agreement. The 2010 Agreement was amended in October 2011 and July 2014. In April 2015, we entered into a joint worldwide development and profit share collaboration and license agreement with Celgene, and our wholly owned subsidiary, Agios International Sarl, entered into a collaboration and license agreement with Celgene International II Sarl, or collectively, the AG-881 Agreements, to establish a worldwide collaboration focused on the development and commercialization of vorasidenib products. The AG-881 Agreements were terminated effective September 4, 2018. In May 2016, we entered into a master research and collaboration agreement with Celgene, or the 2016 Agreement.
In May 2016, we entered into the 2016 Agreement focused on metabolic immuno-oncology, a developing field which aims to modulate the activity of relevant immune cells by targeting critical metabolic nodes, thereby enhancing the immune mediated anti-tumor response. In addition to new programs identified under the 2016 Agreement, both parties also agreed that all future development and commercialization of two remaining cancer metabolism programs discovered under the 2010 Agreement, including AG-270, will now be governed by the 2016 Agreement.
During the research term of the 2016 Agreeme