BLUEPRINT MEDICINES CORP Management's Discussion and Analysis of Financial Condition and Results of Operations (form 10-Q)

The following discussion and analysis of our financial condition and results of
operations should be read in conjunction with our unaudited condensed
consolidated financial statements and related notes appearing elsewhere in this
Quarterly Report on Form 10-Q and the audited consolidated financial statements
and related notes thereto and management's discussion and analysis of financial
condition and results of operations included in our Annual Report on Form 10-K
for the year ended December 31, 2021, filed with the Securities and Exchange
Commission (the SEC) on February 17, 2022. Some of the information contained in
this discussion and analysis or set forth elsewhere in this Quarterly Report on
Form 10-Q, including information with respect to our plans and strategy for our
business, includes forward-looking statements that involve risks and
uncertainties. As a result of many factors, including those factors set forth in
the "Risk Factors" section of this Quarterly Report on Form 10-Q, our actual
results or timing of certain events could differ materially from the results or
timing described in, or implied by, these forward-looking statements.

Overview

We are a global precision therapy company that is inventing life-changing
medicines for people with cancer and blood disorders. Applying an approach that
is both precise and agile, we create therapies that selectively target genetic
drivers, with the goal of staying one step ahead across stages of disease. Since
2011, we have leveraged our research platform, including expertise in molecular
targeting and world-class drug design capabilities, to rapidly and reproducibly
translate science into a broad pipeline of precision therapies. Today, we are
delivering our approved medicines, AYVAKIT®/AYVAKYT® (avapritinib) and GAVRETO®
(pralsetinib), to patients in the U.S. and Europe, and we are globally advancing
multiple programs for systemic mastocytosis (SM), lung cancer and other
genomically defined cancers, and cancer immunotherapy.

Our drug discovery approach combines our biological insights with our
proprietary compound library and chemistry expertise to design highly selective
and potent precision therapies, with the goal of delivering significant and
durable clinical benefit to patients based on the genetic driver of their
disease. This uniquely targeted, scalable approach is designed to empower the
rapid design and development of new treatments and increase the likelihood of
success. In addition, our business model integrates our research engine with
robust clinical development and commercial capabilities in oncology and
hematology to create a cycle of innovation.

Systemic Mastocytosis and other Mast Cell Disorders - AYVAKIT® / AYVAKYT® (avapritinib) and BLU-263

Avapritinib

We are developing and commercializing avapritinib for the treatment of advanced
SM and developing avapritinib for the treatment of non-advanced SM. SM is a rare
hematologic disorder that causes an overproduction of mast cells and the
accumulation of mast cells in the bone marrow and other organs, which can lead
to a wide range of debilitating symptoms and, in advanced forms of the disease,
organ dysfunction and failure. Nearly all cases of SM are driven by the KIT
D816V mutation, which aberrantly activates mast cells.

Avapritinib is approved in the U.S. under the brand name AYVAKIT for the
treatment of adult patients with advanced SM, including aggressive SM (ASM), SM
with an associated hematologic neoplasm (SM-AHN), and mast cell leukemia (MCL).
In March 2022, the European Commission expanded the marketing authorization for
AYVAKYT to include the treatment of adult patients with ASM, SM-AHN, or MCL,
after at least one systemic therapy. We launched AYVAKYT in advanced SM in
Germany within one week after receiving the European Commission approval and
plan to make AYVAKYT commercially available in other European countries based on
local reimbursement and access pathways.

At the European Hematology Association (EHA) Annual Meeting in June 2022, we
presented data showing that AYVAKIT improved overall survival (OS) and other
clinical outcomes in patients with advanced SM, when indirectly compared to
real-world data for prior best available therapies.

We are also evaluating avapritinib in an ongoing registration-enabling Phase 2
clinical trial in non-advanced SM, which we refer to as our PIONEER trial. In
January 2022, we announced that the PIONEER trial was fully enrolled.

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In June 2022, we announced that we updated the primary endpoint of the
registration-enabling PIONEER trial of AYVAKIT in patients with non-advanced SM,
based on a written recommendation from the FDA on statistical considerations
ahead of the planned database lock.

In August 2022, we reported positive top-line data for Part 2 of the PIONEER
trial of AYVAKIT plus best available care versus placebo plus best available
care (control arm), demonstrating clinically meaningful and highly significant
improvements across the primary and key secondary endpoints, including
patient-reported symptoms and objective measures of mast cell burden. AYVAKIT
had a favorable safety profile compared to the control arm, supporting the
potential for long-term treatment. Based on these positive results and a strong
safety profile, we plan to submit a supplemental new drug application (sNDA) to
the FDA for avapritinib in non-advanced SM in the fourth quarter of 2022, with a
subsequent submission of a type II variation marketing authorization application
to the European Medicines Agency (EMA) anticipated in the first quarter of
2023.

The FDA has granted breakthrough therapy designation to avapritinib for (i) the
treatment of advanced SM, including the subtypes of ASM, SM-AHN and MCL, and
(ii) the treatment of moderate to severe indolent SM. In addition, the FDA has
granted orphan drug designation to avapritinib for the treatment of
mastocytosis, and the European Commission has granted orphan medicinal product
designation to avapritinib for the treatment of mastocytosis.

BLU-263

We are developing BLU-263, an investigational, orally available, potent and
highly selective KIT inhibitor, for the treatment of non-advanced SM and other
mast cell disorders. BLU-263 is designed to have equivalent potency as
avapritinib, with low off-target activity and lower central nervous system (CNS)
penetration relative to avapritinib based on preclinical data, which we believe
will enable development of BLU-263 in a broad population of patients with
non-advanced SM, including patients with lower disease burden and potentially
patients with other mast cell disorders.

In April 2021, we presented results from a Phase 1 trial of BLU-263 in healthy
volunteers at the virtual American Association for Cancer Research (AACR) Annual
Meeting, which showed that BLU-263 was well-tolerated at all doses tested. Based
on these data, we initiated the Phase 2/3 trial of BLU-263 in patients with
non-advanced SM, which we refer to as our HARBOR trial, in the second quarter of
2021. We anticipate presenting initial data from the HARBOR trial in the fourth
quarter of 2022.

RET-altered Cancers - GAVRETO® (pralsetinib)

We are developing and commercializing pralsetinib for the treatment of RET
fusion-positive non-small cell lung cancer (NSCLC), and for the treatment of
RET-altered thyroid carcinoma, including medullary thyroid cancer (MTC). We are
also developing pralsetinib for the treatment of other RET-altered solid tumors.
We have granted exclusive licenses to F. Hoffmann-La Roche Ltd and Genentech,
Inc., a member of the Roche Group (which we refer to together as Roche) and
CStone Pharmaceuticals (CStone), to develop and commercialize pralsetinib in
their respective territories. See "-Collaborations and Licenses Summary" below.

Pralsetinib received accelerated approval in the U.S. under the brand name GAVRETO for the treatment of (i) adult patients with metastatic RET fusion-positive NSCLC as detected by an FDA approved test, (ii) adult and pediatric patients 12 years of age and older with advanced or metastatic RET-mutant MTC who require systemic therapy, and (iii) adult and pediatric patients 12 years of age and older with advanced or metastatic RET fusion-positive thyroid cancer who require systemic therapy and who are radioactive iodine-refractory (if radioactive iodine is appropriate).

Through our collaboration with Roche, the European Commission granted
conditional marketing authorization for GAVRETO as a monotherapy for the
treatment of adults with RET fusion-positive advanced NSCLC not previously
treated with a RET inhibitor. Roche submitted a Type II variation MAA to the EMA
for pralsetinib for RET-altered thyroid cancers in December 2021, as well as
marketing applications for pralsetinib for RET-altered NSCLC and thyroid cancers
across multiple global geographies in 2021. Marketing applications are planned
for pralsetinib for RET-altered NSCLC and thyroid cancers across additional

global geographies in 2022.

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Through our collaboration with CStone, China's NMPA approved GAVRETO for the
treatment of RET fusion-positive NSCLC patients previously treated with
platinum-based chemotherapy. In March 2022, China's National Medicinal Products
Administration (NMPA) approved GAVRETO for the treatment of RET-mutant MTC and
RET fusion-positive thyroid cancer. In February 2022, the Taiwan Food and Drug
Administration (TFDA) accepted CStone's NDA for the treatment of patients with
RET fusion-positive locally advanced or metastatic NSCLC, RET-mutant MTC, and
RET fusion-positive TC. GAVRETO was approved in Hong Kong in July 2022 for the
treatment of RET fusion-positive NSCLC.

We evaluated pralsetinib in an ongoing registration-enabling Phase 1/2 clinical
trial in patients with RET-altered NSCLC, MTC and other advanced solid tumors,
which we referred to as the ARROW trial. In addition, Roche is conducting
multiple ongoing studies, including a registration-enabling Phase 3 clinical
trial in treatment-naïve patients with RET fusion-positive NSCLC, which is
referred to as the ACCELERET-Lung trial; and a registration-enabling Phase 3
clinical trial in patients with locally advanced or metastatic RET-mutated MTC
who have not previously received a standard of care multi-kinase inhibitor
therapy, which is referred to as the ACCELERET-MTC trial. The ARROW trial was
fully enrolled in December 2021 and was subsequently transferred to Roche in May
2022. Pursuant to our collaboration with Roche, we are co-developing pralsetinib
globally in RET-altered solid tumors, including NSCLC, MTC and other thyroid
cancers, as well as other solid tumors.

The FDA has granted breakthrough therapy designation to pralsetinib for (i) the
treatment of patients with RET fusion-positive NSCLC that has progressed
following platinum-based chemotherapy, and (ii) the treatment of patients with
RET mutation-positive MTC that requires systemic treatment and for which there
are no acceptable alternative treatments. In addition, the FDA has granted
orphan drug designation to pralsetinib for the treatment of RET-rearranged
NSCLC, JAK1/2-positive NSCLC or TRKC-positive NSCLC.

PDGFRA-Driven Gastrointestinal Stromal Tumors - AYVAKIT® / AYVAKYT® (avapritinib)

We are commercializing avapritinib for the treatment of patients with PDGFRA
exon 18 gastrointestinal stromal tumors (GIST), a rare disease that is a
sarcoma, or tumor of bone or connective tissue, of the gastrointestinal tract.
Avapritinib is approved in the U.S. under the brand name AYVAKIT for the
treatment of adults with unresectable or metastatic GIST harboring a PDGFRA exon
18 mutation, including PDGFRA D842V mutations, and is approved in Europe with
conditional marketing authorization under the brand name AYVAKYT as a
monotherapy for the treatment of adult patients with unresectable or metastatic
GIST harboring a PDGFRA D842V mutation.

Through our collaboration with CStone, AYVAKIT was approved by China's NMPA for
the treatment of adults with unresectable or metastatic GIST harboring a PDGFRA
exon 18 mutation, including PDGFRA D842V mutations and also received accelerated
approval from the TFDA and approval in Hong Kong, both for adults with
unresectable or metastatic GIST harboring PDGFRA D842V mutations.

The FDA has granted breakthrough therapy designation for avapritinib for the
treatment of unresectable or metastatic GIST harboring the PDGFRA D842V
mutation. In addition, the FDA has granted orphan drug designation to
avapritinib for the treatment of GIST, and the European Commission has granted
orphan medicinal product designation to avapritinib for the treatment of GIST.

EGFR-Mutated NSCLC - BLU-945, BLU-701, BLU-525, and BLU-451

We are developing a portfolio of investigational epidermal growth factor
receptor (EGFR) inhibitors with the potential to address a spectrum of common
and uncommon EGFR activating mutations, including exon 19 deletions, the L858R
mutation and exon 20 insertions. Patients with EGFR-driven NSCLC have high
medical needs despite current standards of care. First, osimertinib has
demonstrated shorter overall survival and progression-free survival in patients
whose tumors have activating L858R mutations, and there are limited treatment
options for exon 20 insertion-driven NSCLC. Second, the majority of patients
will ultimately progress due to tumor resistance, and preventing mutations from
emerging is an important treatment goal. Third, the brain is a common site of
disease progression that has proven difficult to treat. We are working to
address the challenges and prolong patient benefit by advancing development of
rational combinations with our investigational EGFR therapies. Ultimately, we
are seeking to address the significant

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medical needs in EGFR-mutant NSCLC that affect approximately 60,000 patients in major markets, including the U.S., European Union (EU), the UK, and Japan.

EGFR-Positive NSCLC - BLU-945



BLU-945 is a selective and potent investigational inhibitor of the activating
EGFR L858R mutation and on-target T790M and C797S resistance mutations. Early
data from the ongoing dose escalation part of the Phase 1/2 trial of BLU-945,
which we refer to as our SYMPHONY trial, were presented at the AACR Annual
Meeting in April 2022. BLU-945 demonstrated dose-dependent decreases in EGFR
variant allele fractions via circulating tumor DNA (ctDNA) analysis and
radiographic tumor reductions. BLU-945 was well-tolerated, with no significant
AEs associated with wild-type EGFR inhibition. In the second quarter of 2022, we
initiated a BLU-945 and osimertinib combination cohort in the ongoing Phase 1/2
SYMPHONY trial. In October 2022, preclinical data presented at the
EORTC-NCI-AACR Molecular Targets and Cancer Therapeutics Symposium showed that
BLU-945 in combination with osimertinib prolonged tumor regression and survival
in EGFR L858R-driven, treatment-naïve, patient-derived xenograft models.



In November 2022, at our Investor Day, we reported updated monotherapy dose
escalation data showing BLU-945 was well-tolerated and led to target ctDNA
responses and tumor shrinkage. In the late-line setting, significant off-target
resistance was identified at baseline and end-of-treatment by ctDNA analysis,
leading us to prioritize clinical development of BLU-945 in combination with
osimertinib in the first line, where we do not expect multiple overlapping
driver mutations. In addition, at our Investor Day we reported early SYMPHONY
trial dose escalation data showing BLU-945 in combination with osimertinib has
been well-tolerated to-date. We plan to define a recommended phase 2 dose for
the combination of BLU-945 and osimertinib and initiate a dose expansion cohort
in the first quarter of 2023.

EGFR-Positive NSCLC - BLU-701 and BLU-525

BLU-701 is a selective and potent investigational inhibitor of activating EGFR
L858R or exon 19 deletion mutations and the on-target C797S resistance mutation.
Based on emerging clinical and preclinical data, Blueprint Medicines plans to
prioritize development of BLU-525, a next-generation EGFR inhibitor, and
deprioritize further development of BLU-701. Compared to BLU-701, BLU-525 has a
distinct chemical structure with improved kinome selectivity and differentiated
metabolism, and equivalent EGFR mutation coverage, wild-type EGFR selectivity
and CNS penetration. Data supporting the preclinical profile of BLU-525 were
reported at the EORTC-NCI-AACR Molecular Targets and Cancer Therapeutics
Symposium in October 2022. We plan to submit an investigational new drug
application to the FDA for BLU-525 in the first quarter of 2023.

EGFR Exon 20 Insertion-Positive NSCLC - BLU-451

BLU-451 is a selective and potent investigational inhibitor under development
for the treatment of EGFR exon 20 insertion-positive NSCLC. In December 2021, we
completed our acquisition of Lengo Therapeutics, Inc., along with its lead
compound LNG-451, which we refer to as BLU-451. In April 2022, we presented the
first preclinical data for BLU-451 at the AACR Annual Meeting demonstrating that
BLU-451 is a wild-type EGFR-sparing, CNS penetrant molecule which potently
inhibited a broad range of exon 20 insertions and uncommon oncogenic point
mutations. In addition, BLU-451 led to measurable tumor regression in a
preclinical intracranial tumor model. Based on these foundational preclinical
data, in March 2022 we initiated the Phase 1/2 trial of BLU-451 in patients with
EGFR-driven NSCLC harboring exon 20 insertion mutations, which we refer to as
our CONCERTO trial. In November 2022, at our Investor Day, we presented a case
report of a patient with EGFR exon 20 insertion-positive NSCLC, in which BLU-451
led to a confirmed partial response following prior treatment with chemotherapy
and immunotherapy, CLN-081 and BDTX-189. We plan to present initial data from
the CONCERTO trial of BLU-451 in the first half of 2023.

CDK2-Vulnerable Cancers - BLU-222

We are developing an investigational inhibitor, BLU-222, targeting CDK2 for the
treatment of patients with CDK2-vulnerable cancers. CDK2 is cell cycle regulator
and an important cancer target, with relevance across multiple malignancies,
including hormone-receptor-positive breast cancer and other CCNE1 amplified

tumors, such as subsets of

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ovarian and endometrial cancer. In subsets of patients across multiple cancer
types, aberrant CCNE1 hyperactivates CDK2, resulting in cell cycle dysregulation
and tumor proliferation. Aberrant CCNE1 has been observed as a primary driver of
disease, as well as a mechanism of resistance to CDK4/6 inhibitors and other
therapies.

At the AACR Annual Meeting in April 2022, we presented preclinical data showing
BLU-222 demonstrated significant antitumor activity in a CCNE1-amplified ovarian
cancer model. BLU-222 in combination with standard of care agents, including
chemotherapy and the PARP inhibitor olaparib, led to sustained tumor regression
even after treatment cessation. In the first quarter of 2022, we initiated the
Phase 1/2 trial of BLU-222 in CDK2-vulnerable cancers, which we refer to as our
VELA trial. BLU-222 is being developed as monotherapy and in combination with
other agents, including CDK4/6 inhibitors and ER antagonists, in
hormone-receptor-positive, HER2-negative breast cancer (HR+/HER- BC), and as a
single agent and in combination in CCNE1-amplified tumor types. We plan to
present initial clinical data for BLU-222 in the first half of 2023.

Advanced Cancers - BLU-852

BLU-852 is a selective and potent investigational inhibitor of MAP4K1, a
well-characterized immunokinase involved in the regulation of immune cells.
Preclinical data presented at the virtual AACR Annual Meeting in April 2021 show
that MAP4K1 inhibition enhanced intratumoral immune cell activation, overcame
Treg mediated T cell suppression, and reduced tumor burden both as a monotherapy
and in combination with checkpoint inhibition. These preclinical data support
the continued development of BLU-852. Under our ongoing cancer immunotherapy
collaboration, we expect Roche to initiate a Phase 1 trial of BLU-852, as a
single agent and in combination with atezolizumab, in advanced cancers in 2023.

Discovery Platform

We plan to continue to leverage our discovery platform to systematically and
reproducibly identify kinases that are drivers of diseases in genomically
defined patient populations, and craft drug candidates that potently and
selectively target these kinases. In addition, we plan to expand our discovery
platform by building capabilities, supported by external collaborations, for
targeted protein degradation of both kinase and non-kinase targets in precision
oncology, with the goal of advancing transformative therapies to patients and
further broadening the significant productivity of our research engine. Beyond
the discovery programs described above, we have multiple pre-development
candidate programs for undisclosed kinase targets. In 2022, we nominated two
development candidates from our discovery programs: a KIT exon 13 inhibitor,
IDRX-73 (formerly known as BLU-654), and BLU-525. We will also be sharing our
vision for our expanded discovery platform at our Investor Day on November 1,
2022, in New York City.

Under our targeted protein degradation collaboration with Proteovant, we plan to
research and advance up to two novel protein degrader programs into development,
with the option to expand to two additional programs. Under our immunotherapy
collaboration with Roche, we are conducting activities for up to two discovery
programs, including BLU-852. See "-Collaborations and Licenses" Summary below.

Mast Cell Disorders - wild-type KIT inhibition

We are pursuing a research program targeting wild-type KIT, which aims to build
on our KIT target leadership to design a best-in-class oral precision therapy
for prevalent mast cell diseases, including chronic urticaria. Wild-type KIT
plays a central role in mast cell survival, proliferation and activation. In
addition, mast cells are the primary effector cells in several
allergic-inflammatory diseases, including both inducible and spontaneous chronic
urticaria. Chronic urticaria is a debilitating inflammatory skin disorder
characterized by wheals (hives), and sleep disruption, stress and anxiety due to
severe itching are major contributors to disease burden. We have identified
multiple examples of compounds meeting our target product profile, which
includes potent and selective inhibition of wild-type KIT, low potential for
drug/drug interactions, and activity that is peripherally restricted.

Development and Commercialization Rights

We currently have worldwide development and commercialization rights to avapritinib, other than the rights

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licensed to CStone for these drug candidates in Mainland China, Hong Kong, Macau
and Taiwan (the CStone territory). We have entered into distribution agreements
for certain European countries in which we do not have our own infrastructure,
and we plan to pursue additional regulatory approvals and commercialization of
avapritinib in additional countries, including through additional distribution
agreements.

We have granted Roche an exclusive license to develop and commercialize pralsetinib worldwide, excluding the CStone territory and the U.S., and a co-exclusive license in the U.S. to develop and commercialize pralsetinib. We have granted CStone an exclusive license to develop and commercialize pralsetinib in the CStone territory.

We currently have worldwide development and commercialization rights to BLU-945
and BLU-701, other than the rights licensed to Zai Lab for these drug candidates
in Mainland China, Hong Kong, Macau, and Taiwan (collectively, the Zai
territory).

Other than the discovery-stage cancer immunotherapy programs (including BLU-852) under our collaboration with Roche, we have worldwide development and commercialization rights to all of our development and discovery programs, including BLU-451, BLU-222 and BLU-263.

We have granted an exclusive worldwide license to Clementia, a wholly-owned subsidiary of Ipsen S.A., to develop and commercialize BLU-782.

We have granted an exclusive worldwide license to IDRx for a development candidate-stage KIT exon 13 inhibitor, IDRX-73 (formerly known as BLU-654).

Collaborations and Licenses

Roche-Immunotherapy Collaboration. In March 2016, we entered into a
collaboration with Roche to discover, develop and commercialize small molecule
therapeutics targeting kinases believed to be important in cancer immunotherapy
(including the kinase target MAP4K1, which is believed to play a role in T cell
regulation), as single products or possibly in combination with other
therapeutics.

Roche-Pralsetinib Collaboration. In July 2020, we entered into a collaboration
with Roche to develop and commercialize pralsetinib for the treatment of
RET-altered cancers. Under the collaboration, we and Genentech are
co-commercializing GAVRETO in the U.S., and Roche has exclusive
commercialization rights for pralsetinib outside of the U.S., excluding the
CStone territory. We and Roche are also co-developing pralsetinib globally in
RET-altered solid tumors, including NSCLC, MTC and other thyroid cancers, and
expanding development of pralsetinib in multiple treatment settings.

CStone. In June 2018, we entered into a collaboration with CStone to develop and
commercialize avapritinib, pralsetinib and fisogatinib, as well as back-up forms
and certain other forms, in the CStone territory either as a monotherapy or as
part of a combination therapy.

Clementia. In October 2019, we entered into a license agreement with Clementia,
a wholly-owned subsidiary of Ipsen S.A., and granted Clementia an exclusive,
worldwide, royalty-bearing license to develop and commercialize BLU-782, as well
as specified other compounds related to the BLU-782 program. BLU-782 is an
investigational, orally available, potent and highly selective inhibitor that
targets mutant ALK2 in development for the treatment of FOP. The FDA has granted
a rare pediatric disease designation, orphan drug designation and fast track
designation to BLU-782, each for the treatment of FOP. Clementia initiated
patient dosing in a Phase 2 clinical trial of BLU-782, now referred to as
IPN60130, in the first quarter of 2022.

Zai Lab. In November 2021, we entered into a collaboration with Zai Lab to
develop and commercialize BLU-701, BLU-945, including their respective back-up
forms and certain other forms thereof, for the treatment of EGFR-driven NSCLC in
Greater China, including Mainland China, Hong Kong, Macau and Taiwan. The
collaboration aims to accelerate and expand global development of BLU-701 and
BLU-945, and potential future candidates.

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Proteovant. In February 2022, we entered into a collaboration with Proteovant to
research and advance novel targeted protein degrader therapies to address
medical needs in oncology and hematology. The collaboration will leverage
Proteovant's artificial intelligence-enhanced targeted protein degradation
platform and our small molecule precision medicine capabilities to discover and
advance up to two novel protein degrader target programs into development, with
the option to extend to two additional programs.

IDRx. In August 2022, we entered into the IDRx License Agreement and a Stock
Purchase Agreement with IDRx, a recently launched clinical-stage
biopharmaceutical company. Pursuant to these agreements, we licensed a
development candidate-stage KIT exon 13 inhibitor, IDRX-73 (formerly known as
BLU-654), to IDRx in exchange for 4,509,105 shares of IDRx's Series A preferred
stock received as noncash consideration and the eligibility to receive up to
$217.5 million in contingent cash payments, including specified development,
regulatory and sales-based milestone payments and tiered royalty payments.

Mergers & Acquisitions Summary

Lengo Therapeutics. In December 2021, we completed our acquisition of Lengo
Therapeutics, Inc., along with its lead compound LNG-451, now known as BLU-451,
which is in development for the treatment of NSCLC in patients with EGFR exon 20
insertion mutations. The acquisition also brought additional undisclosed
preclinical precision oncology programs and research tools, including a catalog
of covalent, highly brain penetrant kinase inhibitors that we plan to add to our
proprietary compound library to further enable future drug discovery efforts.

We will continue to evaluate additional collaborations, acquisitions,
partnerships and licenses that could maximize the value of our programs and
allow us to leverage the expertise of strategic collaborators, partners and
licensors, including in additional geographies where we may not have current
operations or expertise. We are also focused on engaging in collaborations,
acquisitions, partnerships and license agreements to capitalize on or expand our
discovery platform.

Financing Arrangement Summary

Royalty Purchase. In June 2022, we entered into a Royalty Purchase Agreement
with Royalty Pharma. Pursuant to this Royalty Purchase Agreement, we received an
upfront cash payment of $175.0 million and the right to receive up to $165.0
million in certain milestone payments, subject to the achievement of specified
net sales milestones by Roche, in exchange for all of our existing rights to
receive royalty payments on the net sales of GAVRETO worldwide excluding the
CStone territory and U.S. territory under the terms of the Roche pralsetinib
collaboration agreement.

Synthetic Royalty Facility. In June 2022, we entered a Future Revenue Purchase
Agreement with Sixth Street Partners. In July 2022, upon the closing of the
transaction pursuant to the Future Revenue Purchase Agreement, we received gross
proceeds of $250.0 million in exchange for future royalty payments at a rate of
9.75% on up to $900 million each year of (i) aggregate worldwide annual net
product sales of AYVAKIT/ AYVAKYT (avapritinib) and (ii) if it is approved,
aggregate worldwide annual net product sales of BLU-263, but excluding sales in
Greater China, subject to a cumulative cap of 1.45 times the upfront invested
capital or a total of $362.5 million. In the event that certain revenue targets
are not achieved by specified dates, the royalty rate and cumulative cap shall
be increased to 15% and 1.85 times the invested capital (or $462.5 million),
respectively.

Debt Facility. In June 2022, we entered into a Financing Agreement for up to
$660.0 million with Sixth Street Partners. The Financing Agreement provides for
(i) a senior secured term loan facility of up to $150.0 million and (ii) a
senior secured delayed draw term loan facility of up to $250.0 million to be
funded in two tranches at the Company's choice. The loans will mature on June
30, 2028 and bear interest at a variable rate equal to either the SOFR plus six
and one half percent (6.50%) or the base rate plus five and one half percent
(5.50%), subject to a floor of one percent (1%) and two percent (2%) with
respect to the SOFR and base rate, respectively. The initial gross proceeds of
$150.0 million was funded in July 2022. In addition, we may at any time request
an incremental term loan in an amount not to exceed $260.0 million on terms to
be agreed and subject to the consent of the lenders providing such incremental
term loan.

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Note on the Ongoing COVID-19 Pandemic

Due to the continued evolution and global impact of the ongoing COVID-19
pandemic, we cannot precisely determine or quantify the impact this pandemic
will have on our business, operations and financial performance. For our ongoing
and planned clinical trials, while we anticipate and have experienced some
delays or disruptions due to the COVID-19 pandemic, we have successfully worked
with impacted clinical trial sites to ensure study continuity. We actively
monitor for COVID-19-related impacts to our supply chain, and we currently have
sufficient supply or plans for supply to meet our anticipated global commercial
and clinical development needs for our approved drugs and clinical-stage drug
candidates. COVID-19 may also impact and has impacted our commercial activities
for AYVAKIT/AYVAKYT and GAVRETO, including patient access to testing and
identification, but we have observed an increase in in-person engagements and
will continue to conduct commercial and medical affairs field activities across
our portfolio in virtual formats where in-person interactions are not feasible.
We will continue to assess the duration, scope and severity of the COVID-19
pandemic as it evolves and the existing and potential impacts on our business,
operations and financial performance, and we will continue to work closely with
our third-party vendors, collaborators and other parties in order to seek to
advance our pipeline of targeted therapies as quickly as possible, while keeping
the health and safety of our employees and their families, healthcare providers,
patients and communities a top priority. Please refer to our Risk Factors in
Part II, Item IA of this Quarterly Report on Form 10-Q for further discussion of
risks related to the COVID-19 pandemic.

Financial Operations Overview

To date, we have financed our operations primarily through public offerings of
our common stock, private placements of our convertible preferred and common
stock, collaborations, a license agreement, future royalty and revenue
monetization, and a term loan. Through September 30, 2022, we have received an
aggregate of $3.6 billion from such transactions, including $1.9 billion in
aggregate gross proceeds from the sale of common stock in our initial public
offering (IPO), follow-on public offerings, through our "at the market" stock
offering program and the equity investment by Roche, $115.1 million in gross
proceeds from the issuance of convertible preferred stock, $175.0 million in
gross proceeds from our Royalty Purchase Agreement with Royalty Pharma, $250.0
million in gross proceeds from our Future Revenue Purchase Agreement with Sixth
Street Partners, $1.0 billion in upfront payments and milestone payments under
our collaborations with Roche, CStone and Zai Lab, our license agreement with
Clementia and our former collaboration with Alexion Pharma Holding (Alexion),
and $150.0 million in gross proceeds from a term loan from Sixth Street
Partners. Since January 2020, we have also generated revenue through the sales
of our approved drug products.

Since inception, we have incurred significant operating losses, with the
exception of the year ended December 31, 2020. Our net loss was $398.9 million
for the nine months ended September 30, 2022. For the year ended December 31,
2021, our net loss was $644.1 million, which included $260.0 million of expenses
related to the acquisition of Lengo, and our net income was $313.9 million for
the year ended December 31, 2020, primarily due to the collaboration revenue
recorded under our collaboration with Roche for pralsetinib. Our net loss was
$347.7 million for the year ended December 31, 2019. As of September 30, 2022,
we had an accumulated deficit of $1,674.3 million. We expect to continue to
incur significant expenses and operating losses over the next few years. We
anticipate that our expenses will continue to increase in connection with our
ongoing activities, particularly as we:

maintain and expand our sales, marketing and distribution infrastructure to

? continue to commercialize our drug and any current or future drug candidates

for which we may obtain marketing approval;

? seek marketing approval for our drug candidates, including avapritinib and

pralsetinib in additional indications or avapritinib in additional geographies;

continue to advance clinical development activities for avapritinib and

? pralsetinib and initiate or advance clinical development activities for other

current or future drug candidates as monotherapies or in combination with other

agents;

continue to discover, validate and develop additional drug candidates or

 ? development candidates, including BLU-945, BLU-701, BLU-525, BLU-451, BLU-263
   and BLU-222;


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continue to manufacture increasing quantities of drug substance and drug

product material for use in preclinical studies, clinical trials and

? commercialization and to purchase quantities of other agents for use in our

clinical trial as we develop our drugs and drug candidates as potential

combination therapies or for use as comparator agents;

? conduct development and commercialization activities for companion diagnostic

tests for our drugs and drug candidates;

? conduct research and development activities under our collaborations with

Roche, CStone, Zai Lab and Proteovant;

? maintain, expand and protect our intellectual property portfolio;

acquire or in-license additional businesses, technologies, drugs or drug

? candidates, form strategic alliances or create joint ventures with third

parties; and

? hire additional research, clinical, quality, manufacturing, regulatory,

commercial and general and administrative personnel.

Revenue

In January 2020, the FDA granted approval of avapritinib under the brand name
AYVAKIT for the treatment of adults with unresectable or metastatic GIST
harboring a PDGFRA exon 18 mutation, including PDGFRA D842V mutations. In
September 2020, the European Commission granted conditional marketing
authorization to AYVAKYT as a monotherapy for the treatment of adult patients
with unresectable or metastatic GIST harboring the PDGFRA D842V mutation. In
June 2021, the FDA granted a subsequent approval for AYVAKIT, expanding the
labeled indications to include adult patients with advanced SM, including
aggressive SM, SM with an associated hematological neoplasm and mast cell
leukemia. In March 2022, the European Commission expanded the marketing
authorization for AYVAKYT to include the treatment of adult patients with ASM,
SM-AHN, or MCL, after at least one systemic therapy.

In September 2020, the FDA granted accelerated approval to pralsetinib under the
brand name GAVRETO for the treatment of adult patients with metastatic RET
fusion-positive NSCLC as detected by an FDA approved test. In December 2020, the
FDA granted a subsequent accelerated approval for GAVRETO, expanding the labeled
indications to include adult and pediatric patients 12 years of age and older
with advanced or metastatic RET-mutant MTC who require systemic therapy, or with
advanced or metastatic RET fusion-positive thyroid cancer who require systemic
therapy and who are radioactive iodine-refractory (if radioactive iodine is
appropriate).

For the three and nine months ended September 30, 2022, our revenue primarily
consisted of product sales of AYVAKIT/ AYVAKYT as well as collaboration and
license revenue under our collaborations with CStone and Roche and license
agreements with Clementia and IDRx. We transferred certain responsibilities
associated with product sales to customers, pricing and distribution matters
related to U.S. product sales of GAVRETO to Roche on July 1, 2021, and have not
recorded any net product revenue from product sales of GAVRETO after this date.
For additional information, see Note 10, Collaboration and License Agreements,
to our unaudited condensed consolidated financial statements. Collaboration and
license revenue for the three and nine months ended September 30, 2022 primarily
includes amounts that were recognized related to upfront consideration,
milestone payments, amounts due to us for supply of inventory (under our
collaboration agreements) and research and development services, and royalties
on drug sales.

In the future, we expect to generate revenue from a combination of sources,
including sales of our current drug product and any current or future drug
candidates for which we receive marketing approval, royalties on drug sales,
upfront, milestone, profit sharing and other payments, if any, under any current
or future collaborations and licenses, including revenues related to the supply
of our drug candidates or approved drugs to our various collaboration partners.
We expect that any revenue we generate will fluctuate from quarter to quarter as
a result of the timing and amount of product sales, license fees, research and
development services, payments for manufacturing services, and option fees,
milestone payments or other payments under our collaboration or license
agreements, if any.

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Cost of Sales

Our cost of sales includes the cost of producing and distributing inventories
that are related to product revenue as well as the sale of drug substance and
drug product to our collaboration partners during the respective period,
including salary related expenses and stock-based compensation expense for
employees involved with production and distribution, freight, and indirect
overhead costs. In addition, shipping and handling costs for product shipments
are recorded in cost of sales as incurred.

Prior to receiving the initial FDA approval for AYVAKIT and GAVRETO in January
2020 and September 2020, respectively, and subsequent approval for AYVAKIT in
June 2021, we manufactured inventory to be sold upon commercialization and
recorded approximately $37.7 million related to this inventory as research and
development expense. As a result, certain manufacturing costs related to the
inventory build-up incurred before FDA approval were expensed in prior periods
and are therefore excluded from the cost of goods sold for the three and nine
months ended September 30, 2022. We estimate our cost of goods sold related to
product revenue as a percentage of net product revenue will continue to be
positively impacted as we sell through certain inventory that was previously
expensed prior to FDA approval. We expect to utilize low-cost inventory for an
extended period of time. Once the low-cost inventory balances are sold through,
we estimate our costs of goods sold related to product sales to remain in the
mid-single digit percentage range. Cost of goods sold related to sales of drug
products to our collaboration partners are at lower margins and will partially
offset the positive impact of the previously expensed inventory.

Expenses

Collaboration Loss Sharing

On July 1, 2021, Roche took over certain responsibilities associated with
product sales to customers, pricing and distribution matters related to GAVRETO
in the U.S. and became the principal for recording product sales to customers in
the U.S. Collaboration loss sharing consists of our share of the losses incurred
from sales of GAVRETO to customers in the U.S. under our collaboration for
pralsetinib with Roche. For additional information, see Note 10, Collaboration
and License Agreements, to our unaudited condensed consolidated financial
statements. We expect collaboration loss sharing will fluctuate from quarter to
quarter as a result of the timing and amount of GAVRETO sales.

Research and Development Expenses

Research and development expenses consist primarily of costs incurred for our
research and development activities, including our drug discovery efforts, and
the development of our drug candidates, which include:

? expenses incurred to acquire in-process research and development asset with no

alternative future use;

? employee-related expenses including salaries, benefits, and stock-based

compensation expense;

expenses incurred under agreements with third parties that conduct research and

? development, preclinical activities, clinical activities and manufacturing on

our behalf;

? expenses incurred under agreements with third parties for the development and

commercialization of companion diagnostic tests;

expenses incurred in connection with research and development activities under

? our immunotherapy collaboration with Roche, development activities under our

collaboration for pralsetinib with Roche, and research and development

activities under our collaboration with Proteovant;

? the cost of consultants in connection with our research and development

activities;

 ? the cost associated with regulatory quality assurance and quality control
   operations;


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the cost of lab supplies and acquiring, developing and manufacturing

? preclinical study materials, clinical trial materials and commercial supply

materials; and

facilities, depreciation, and other expenses, which include direct and

? allocated expenses for rent and maintenance of facilities, insurance, and other

operating costs in support of research and development activities.

Research and development costs are expensed as incurred. Costs for certain
activities are recognized based on an evaluation of the progress to completion
of specific tasks. Nonrefundable advance payments for goods or services to be
received in the future for use in research and development activities are
capitalized. The capitalized amounts are expensed as the related goods are
delivered or the services are performed.

The successful development of our drug candidates is highly uncertain. As such,
at this time, we cannot reasonably estimate or know the nature, timing and
estimated costs of the efforts that will be necessary to complete the remainder
of the development of these drug candidates. We are also unable to predict when,
if ever, material net cash inflows will commence from the sale of our current or
future drug candidates for which we received marketing approval. This is due to
the numerous risks and uncertainties associated with developing drugs, including
the uncertainty of:

? establishing an appropriate safety profile with IND-enabling toxicology

studies;

? successful initiation, enrollment in, and completion of clinical trials;

? receipt of marketing approvals from applicable regulatory authorities;

? establishing manufacturing capabilities or making arrangements with third-party

manufacturers to ensure adequate clinical and commercial supply;

? obtaining and maintaining patent and trade secret protection and regulatory

exclusivity for AYVAKIT/AYVAKYT, GAVRETO and our drug candidates;

? commercializing AYVAKIT/AYVAKYT, GAVRETO and our drug candidates, if and when

approved, whether alone or in collaboration with others;

? market acceptance of AYVAKIT/AYVAKYT, GAVRETO and any future drug we may

commercialize; and

? continued acceptable safety profile of the drugs following approval.

A change in the outcome of any of these variables with respect to the development of any of our drug candidates would significantly change the costs and timing associated with the development of that drug candidate.

Research and development activities are central to our business model. Drug
candidates in later stages of clinical development generally have higher
development costs than those in earlier stages of clinical development,
primarily due to the increased size and duration of later-stage clinical trials.
We expect research and development costs to increase significantly for the
foreseeable future as our drug candidate development programs progress and as we
conduct and continue our clinical trials to evaluate our approved drugs for
additional indications. However, we do not believe that it is possible at this
time to accurately project total program-specific expenses through
commercialization. There are numerous factors associated with the successful
commercialization of any of our approved drugs or drug candidates for which we
may receive marketing approval, including future trial design and various
regulatory requirements, many of which cannot be determined with accuracy at
this time based on our stage of development. In addition, future commercial and
regulatory factors beyond our control will impact our clinical development

programs and plans.

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A significant portion of our research and development expenses have been
external expenses, which we track on a program-by-program basis following
nomination as a development candidate. Our internal research and development
expenses are primarily personnel-related expenses, including stock-based
compensation expense. Except for internal research and development expenses
related to collaboration agreements, we do not track our internal research and
development expenses on a program-by-program basis as they are deployed across
multiple projects under development.

The following table summarizes our external research and development expenses by
program for the three and nine months ended September 30, 2022 and 2021. Other
development and pre-development candidate expenses, unallocated expenses and
internal research and development expenses have been classified separately.

                                           Three Months Ended September 30,           Nine Months Ended September 30,
                                               2022                  2021                2022                  2021

                                                     (in thousands)                            (in thousands)

Avapritinib external expenses            $          17,240      $        13,664    $         41,174      $         46,169
Pralsetinib external expenses                        3,028                7,744              22,658                18,529
BLU-263 external expenses                           10,574                6,084              28,595                15,233
EFGR franchise (BLU-525/701/945)
expenses                                            15,901               10,930              52,838                33,229
BLU-222 external expenses                           11,454                4,042              32,173                 9,290
BLU-451 external expenses                            6,963                    -              13,466                     -
Other development and pre-development
candidate expenses and unallocated
expenses                                            28,931               14,591              69,342                46,789
Internal research and development
expenses                                            33,890               27,364              99,333                74,918
Total research and development
expenses                                 $         127,981      $        

84,419 $ 359,579 $ 244,157

Pralsetinib external expenses includes reduction for reimbursable expenses from

Roche or increases in reimbursements to Roche under our collaboration for

* pralsetinib with Roche, and other development and pre-development candidate

expenses includes reduction for reimbursable expenses under our other

collaboration agreement.

We expect that our research and development expenses will increase in future
periods as we expand our operations and incur additional costs in connection
with our clinical trials and preparing regulatory filings. These increases will
likely include the costs related to the implementation and expansion of clinical
trial sites and related patient enrollment, monitoring, program management and
manufacturing expenses for active pharmaceutical ingredient (API), drug product
and drug substance for current and future clinical trials and commercial
inventory. In addition, we expect that our research and development expenses
will increase in future periods as we incur additional costs in connection with
research and development activities under our immunotherapy collaboration with
Roche, development activities under our collaboration for pralsetinib with
Roche, research and development activities under our collaboration with
Proteovant and development activities for companion diagnostic tests for any
current and future drug candidates.

Selling, General and Administrative Expenses

Selling, general and administrative expenses consist primarily of compensation
and benefits, including stock-based compensation expense, for commercial
operations and for personnel in executive, finance, accounting, commercial,
business development, information technology, legal and human resources
functions. Other significant costs include facility costs not otherwise included
in research and development expenses, commercial development activities, legal
fees related to intellectual property and corporate matters and fees for
accounting and consulting services.

We expect that our selling, general and administrative expenses will continue to
increase in the future to support additional research and development activities
and commercialization activities, including expanding our sales, marketing and
distribution infrastructure to commercialize any drugs for which we may obtain
marketing approval for additional indications or in additional geographies and
expanding our operations globally. These increases will likely include increased
costs related to the hiring of additional personnel, legal, auditing and filing
fees and general compliance and consulting expenses, among other expenses. We
have incurred and will continue to incur additional expenses associated with
operating as a public company and expanding the scope of our operations.

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Interest Income (Expense), Net

Interest income (expense), net consists primarily of interest expense related to
our financing arrangements with Royalty Pharma and Sixth Street Partners.
Interest expense on liabilities related to the sale of future royalties and
revenues consists of the periodic interest calculated using the effective
interest rate method over the future estimated royalty payments due to Royalty
Pharma and Sixth Street Partners over the life of the agreements. Interest
expense on the term loan with Sixth Street Partners results from the
amortization of the debt liability using the effective interest method over the
maturity of the term loan. For additional information, see Note 3, Financing
Arrangements, to our unaudited condensed consolidated financial statements.

Interest income (expense), net also includes income earned on cash equivalents and marketable securities.

Other Income (Expense), Net

Other income (expense), net consists primarily of foreign currency transaction gains or losses.

Income Tax Expense

Income tax expense consists of federal, state and foreign income taxes incurred.

Critical Accounting Policies and Estimates

For a description of our critical accounting policies and estimates, please see
"Management's Discussion and Analysis of Financial Condition and Results of
Operations-Financial Operations Overview-Critical Accounting Policies and
Estimates" in our Annual Report on Form 10-K for the year ended December 31,
2021. There have been no significant changes to our critical accounting policies
and estimates since December 31, 2021 with the exception of the below new
policies.

Equity Investment

Investments in non-marketable equity securities of privately-held companies that
do not have readily determinable fair values are carried at cost, less any
impairments, plus or minus changes resulting from observable price changes in
orderly transactions for the identical or a similar investment of the same
issuer. Each period we assess relevant transactions to identify observable price
changes, and regularly monitor these investments to evaluate whether there is an
indication of impairment. We evaluate whether an investment's fair value is less
than its carrying value using an estimate of fair value, if such an estimate is
available. For periods in which there is no estimate of fair value, we evaluate
whether an event or change in circumstances has occurred that may have a
significant adverse effect on the value of the investment.

Liabilities related to the sale of future royalties and revenues

We account for net proceeds from sales of our rights to receive future royalty
payments and from sales of future revenues as liabilities related to the sale of
future royalties and revenues if we have significant continuing involvement in
the generation of the related future cash flows. Interest on the liabilities
related to the sale of future royalties and revenues will be recognized using
the effective interest rate method over the life of the related royalty or
revenue stream. The liabilities related to the sale of future royalties and
revenues and the related interest expenses are based on our current estimates of
future royalties and revenues as well as commercial milestones expected to be
achieved and received over the life of the arrangement, which we determine by
using forecasts of the underlying drug products of the underlying regions. We
periodically assess the expected payments and to the extent the amount or timing
of the future estimated payments is materially different than previous
estimates, we account for any such change by adjusting carrying value of the
liabilities related to the sale of future royalties and revenues, and
prospectively recognizing the related interest expenses.

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Results of Operations

Comparison of Three Months Ended September 30, 2022 and 2021

The following table summarizes our results of operations for the three months
ended September 30, 2022 and 2021, together with the changes in those items

in
dollars and as a percentage:

                                                  Three Months Ended
                                                    September 30,
                                                 2022           2021         Dollar Change     % Change

                                                             (in thousands)
Revenues:
Product revenue, net                          $    28,634    $    17,270    $        11,364          66 %

Collaboration and license revenue                   9,843          6,918              2,925          42
License revenue - related party                    27,500              -   

         27,500         100
Total revenues                                     65,977         24,188             41,789         173
Cost and operating expenses:
Cost of sales                                       3,000          3,790              (790)        (21)
Collaboration loss sharing                          1,665          3,269            (1,604)        (49)
Research and development                          127,981         84,419             43,562          52

Selling, general and administrative                57,608         49,806              7,802          16
Total cost and operating expenses                 190,254        141,284             48,970          35
Other income (expense):
Interest income (expense), net                    (8,396)            552            (8,948)     (1,621)
Other income (expense), net                           396          (522)                918         176
Total other income (expense), net                 (8,000)             30            (8,030)    (26,767)
Loss before income taxes                        (132,277)      (117,066)   

       (15,211)        (13)
Income tax expense                                  (886)          (175)              (711)       (406)
Net loss                                      $ (133,163)    $ (117,241)    $      (15,922)        (14) %


Product Revenue, Net

Net product revenue increased by $11.4 million from $17.3 million for three months ended September 30, 2021 to $28.6 million for three months ended September 30, 2022.

We started generating revenue from sales of AYVAKIT in the first quarter of 2020
following FDA approval of AYVAKIT for the treatment of adults with unresectable
or metastatic GIST harboring a PDGFRA exon 18 mutation, including PDGFRA D842V
mutations. In September 2020, the European Commission granted conditional
marketing authorization to avapritinib under the brand name AYVAKYT as a
monotherapy for the treatment of adult patients with unresectable or metastatic
GIST harboring the PDGFRA D842V mutation. In June 2021, the FDA granted a
subsequent approval for AYVAKIT, expanding the labeled indications to include
adult patients with advanced SM, including aggressive SM, SM with an associated
hematological neoplasm and mast cell leukemia. In March 2022, the European
Commission expanded the marketing authorization for AYVAKYT to include the
treatment of adult patients with ASM, SM-AHN, or MCL, after at least one
systemic therapy.

The following table summarizes revenue recognized from sales of AYVAKIT/AYVAKYT during the three months ended September 30, 2022 and 2021 (in thousands):

                                 Three Months Ended September 30,
                               2022                             2021
                   United    Rest of                United    Rest of
                   States     World      Total      States     World      Total

AYVAKIT/AYVAKYT $ 25,054 $ 3,580 $ 28,634 $ 14,656 $ 2,614 $ 17,270

The increase in net product revenue of AYVAKIT/AYVAKYT was primarily driven by
the FDA and European Commission approvals to expand the labeled indications to
include adult patients with advanced SM.

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Collaboration and License Revenue

Collaboration and license revenue increased by $2.9 million from $6.9 million
for the three months ended September 30, 2021 to $9.8 million for the three
months ended September 30, 2022. The following table summarizes the revenue
recognized from our collaboration and license agreements during the three months
ended September 30, 2022 and 2021 (in thousands):

                                             Three Months Ended
                                               September 30,
                                              2022         2021

Collaboration with Roche for pralsetinib $ 4,282 $ 856 CStone collaboration

                            2,915    $  4,654
Cancer immunotherapy with Roche                 2,475       1,408
Other                                             171           -

Total collaboration and license revenue $ 9,843 $ 6,918

Revenue recognized under our collaboration with Roche for pralsetinib for the
three months ended September 30, 2022 was primarily associated with
manufacturing services related to ex-US territory-specific activities and
royalties on drug sales. Revenue recognized under our CStone collaboration for
the three months ended September 30, 2022 was primarily generated by royalties
on drug sales and the manufacturing services associated with CStone
territory-specific activities during the quarter. Revenue recognized under our
cancer immunotherapy collaboration with Roche for the three months ended
September 30, 2022 consisted of amortization of the total transaction price of
the arrangement achieved as of such period.

Revenue recognized under our collaboration with Roche for pralsetinib for the
three months ended September 30, 2021 was primarily associated with
manufacturing and other services related to Roche territory-specific activities.
Revenue recognized under our CStone collaboration for the three months ended
September 30, 2021 was primarily generated by royalties on drug sales and the
manufacturing services associated with CStone territory-specific activities
during the quarter, including supply of drug substance and drug product to
CStone for sale in their territory. Revenue recognized under our cancer
immunotherapy collaboration with Roche for three months ended September 30, 2021
consisted of amortization of the total $64.5 million of upfront and milestone
payments achieved as of such period.

License revenue - Related Party

License revenue - related party was $27.5 million for the three months ended
September 30, 2022, which represents the license revenue recorded under the IDRx
License Agreement. For additional information, see Note 10, Collaboration and
License Agreements, to our unaudited condensed consolidated financial
statements.

Cost of Product Sales

Cost of product sales decreased by $0.8 million from $3.8 million during the
three months ended September 30, 2021 to $3.0 million for the three months ended
September 30, 2022, and was related to manufacturing costs associated with our
products sales as well as costs associated with the sale of drug products to our
collaboration partners. The following table summarizes the cost of sales by type
during the three months ended September 30, 2022 and 2021 (in thousands):

                                Three Months Ended
                                  September 30,
                                 2022         2021
Cost of product sales         $      710     $ 1,408
Cost of collaboration sales        2,290       2,382
Total cost of sales           $    3,000     $ 3,790


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The decrease in costs of product sales was primarily driven by costs incurred in
the prior year that weren't present in the current year, including a write-down
of $0.4 million for the three months ended September 30, 2021. In addition,
costs associated with our net product revenue remain at higher margins as
certain costs associated with the manufacture of our drugs prior to FDA approval
were recorded as research and development expenses and, therefore, were not
included in cost of sales during such period.

Collaboration Loss Sharing

Our loss sharing under the collaboration with Roche for pralsetinib decreased by
$1.6 million from $3.3 million for the three months ended September 30, 2021 to
$1.7 million for the three months ended September 30, 2022.

Research and Development Expense

Research and development expense increased by $43.6 million from $84.4 million
for the three months ended September 30, 2021 to $128.0 million for the three
months ended September 30, 2022. The increase in research and development
expense was primarily due to an increase of $26.2 million in increased clinical
supply manufacturing and clinical development activities due to the progression
and expansion of our clinical trials, an increase of $8.5 million in costs
related to early discovery and expanding the platform, and an increase of $8.9
million in personnel expenses.

Selling, General and Administrative Expense

Selling, general and administrative expense increased by $7.8 million from
$49.8 million for the three months ended September 30, 2021 to $57.6 million for
the three months ended September 30, 2022. The increase in selling, general and
administrative expense was primarily related to an increase of $3.4 million in
personnel expenses associated with the expansion of our commercial
infrastructure for commercialization of AYVAKIT/AYVAKIT, including a $0.4
million increase in stock-based compensation expense, an increase of $3.0
million in other general expenses to operate the business, and an increase of
$1.4 million in commercial expenses primarily related to the expansion of our
commercial infrastructure for commercialization of AYVAKIT/AYVAKYT.

Interest Income (Expense), Net

Interest expense, net, increased by $8.9 million from $0.6 million interest
income for the three months ended September 30, 2021 to $8.4 million interest
expense for the three months ended September 30, 2022. This increase was due to
the interest charges on the liabilities related to the sale of future royalties
and revenues with Royalty Pharma and Sixth Street Partners as well as the term
loan with Sixth Street Partners.

Other Income (Expense), Net

Other income, net, increased by $0.9 million from $0.5 million expense for the three months ended September 30, 2021 to $0.4 million income for the three months ended September 30, 2022.

Income Tax Expense

Income tax expense increased by $0.7 million from $0.2 million for the three
months ended September 30, 2021 to $0.9 million for three months ended
September 30, 2022. In June 2022, we entered into a Royalty Purchase Agreement
with Royalty Pharma and a Future Revenue Purchase Agreement with Sixth Street
Partners. Pursuant to the agreements, we received gross proceeds of $175.0
million from Royalty Pharma in June 2022 and $250.0 million from Sixth Street
Partners in July 2022. Both cash considerations in their entirety are considered
as taxable income for the calendar year ending December 31, 2022 which resulted
in the Company being in an estimated taxable income position for the calendar
year ending December 31, 2022 and the increase in income tax expense for three
months ended September 30, 2022. For additional information, see Note 13, Income
Taxes, to our unaudited condensed consolidated financial statements.

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Table of Contents

Comparison of Nine Months Ended September 30, 2022 and 2021

The following table summarizes our results of operations for the nine months
ended September 30, 2022 and 2021, together with the changes in those items in
dollars and as a percentage:

                                                   Nine Months Ended
                                                     September 30,
                                                  2022           2021         Dollar Change     % Change

                                                              (in thousands)
Revenues:

Product revenue, net                           $    80,929    $    37,658    $        43,271         115 %
Collaboration and license revenue                   56,826         35,401             21,425          61
License revenue - related party                     27,500              -  

          27,500         100
Total revenues                                     165,255         73,059             92,196         126
Cost and operating expenses:
Cost of sales                                       12,965         10,385              2,580          25
Collaboration loss sharing                           7,076          3,269              3,807         116
Research and development                           359,579        244,157            115,422          47

Selling, general and administrative                173,354        141,093             32,261          23
Total cost and operating expenses                  552,974        398,904            154,070          39
Other income (expense):
Interest income (expense), net                     (7,527)          1,923            (9,450)       (491)
Other income (expense), net                            575        (1,109)              1,684         152
Total other income (expense), net                  (6,952)            814            (7,766)       (954)
Loss before income taxes                         (394,671)      (325,031)           (69,640)        (21)
Income tax expense                                 (4,200)          (368)            (3,832)     (1,041)
Net loss                                       $ (398,871)    $ (325,399)    $      (73,472)        (23) %


Product Revenue, Net

Net product revenue increased by $43.3 million from $37.7 million for the nine months ended September 30, 2021 to $80.9 million for the nine months ended September 30, 2022.

We started generating revenue from sales of AYVAKIT in the first quarter of 2020
following FDA approval of AYVAKIT for the treatment of adults with unresectable
or metastatic GIST harboring a PDGFRA exon 18 mutation, including PDGFRA D842V
mutations. In September 2020, the European Commission granted conditional
marketing authorization to avapritinib under the brand name AYVAKYT as a
monotherapy for the treatment of adult patients with unresectable or metastatic
GIST harboring the PDGFRA D842V mutation. In June 2021, the FDA granted a
subsequent approval for AYVAKIT, expanding the labeled indications to include
adult patients with advanced SM, including aggressive SM, SM with an associated
hematological neoplasm and mast cell leukemia. In March 2022, the European
Commission expanded the marketing authorization for AYVAKYT to include the
treatment of adult patients with ASM, SM-AHN, or MCL, after at least one
systemic therapy.

We started generating revenue from sales of GAVRETO in the third quarter of 2020
following the initial FDA approval of GAVRETO. GAVRETO was originally approved
for the treatment of adult patients with metastatic RET fusion-positive NSCLC
and subsequently approved for adult and pediatric patients 12 years of age and
older with advanced or metastatic thyroid cancer who require systemic therapy
and who are radioactive iodine-refractory (if radioactive iodine is
appropriate). We transferred certain responsibilities associated with product
sales to customers, pricing and distribution matters related to U.S. product
sales of GAVRETO to our collaboration partner on July 1, 2021, and have not
recorded any net product revenue from product sales of GAVRETO after this date.
For additional information, see Note 10, Collaboration and License Agreements,
to our unaudited condensed consolidated financial statements.

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The following table summarizes revenue recognized from sales of AYVAKIT/AYVAKYT
and GAVRETO during the nine months ended September 30, 2022 and 2021 (in
thousands):

                                            Nine Months Ended September 30,
                                          2022                             2021
                              United    Rest of                United    Rest of
                              States     World      Total      States     World      Total
AYVAKIT/AYVAKYT              $ 70,888   $ 10,041   $ 80,929   $ 26,949   $  6,003   $ 32,952
GAVRETO                             -          -          -      4,706     

- 4,706 Total product revenue, net $ 70,888 $ 10,041 $ 80,929 $ 31,655 $ 6,003 $ 37,658

The increase in net product revenue of AYVAKIT/AYVAKYT was primarily driven by
the FDA and European Commission approvals to expand the labeled indications to
include adult patients with advanced SM.

Collaboration and License Revenue

Collaboration and license revenue increased by $21.4 million from $35.4 million
for the nine months ended September 30, 2021 to $56.8 million for the nine
months ended September 30, 2022. The following table summarizes the revenue
recognized from our collaboration and license agreements during the nine months
ended September 30, 2022 and 2021 (in thousands):

                                             Nine Months Ended
                                              September 30,
                                              2022        2021
Clementia license agreement                $   30,000   $     40
CStone collaboration                           18,209     26,228

Collaboration with Roche for pralsetinib 5,573 4,539 Cancer immunotherapy with Roche

                 1,710      4,293
Other                                           1,334        301

Total collaboration and license revenue $ 56,826 $ 35,401

Revenue recognized under our license agreement with Clementia for the nine
months ended September 30, 2022 consisted of a specified development milestone
payment. Revenue recognized under our CStone collaboration for the nine months
ended September 30, 2022 consisted of $4.0 million in a specified regulatory
milestone payment and $14.2 million associated with the manufacturing services
related to CStone territory-specific activities and royalties on drug sales.
Revenue recognized under our collaboration with Roche for pralsetinib for the
nine months ended September 30, 2022 was associated with manufacturing services
related to ex-US territory-specific activities and royalties on drug sales.
Revenue recognized under our cancer immunotherapy collaboration with Roche for
the nine months ended September 30, 2022 consisted of amortization of the total
transaction price of the arrangement achieved as of such period.

Revenue recognized under our CStone collaboration for the nine months ended
September 30, 2021 primarily consisted of $9.0 million in milestone revenue
related to regulatory and development milestones that were achieved during the
period and $17.2 million related to manufacturing services associated with
CStone territory-specific activities during the period, including supply of drug
substance and drug product to CStone for sale in their territory, and royalties
on the drug sales. Revenue recognized under our collaboration with Roche for
pralsetinib for the nine months ended September 30, 2021 was associated with
manufacturing and other services related to Roche territory-specific activities.
Revenue recognized under our cancer immunotherapy collaboration with Roche for
the nine months ended September 30, 2021 was primarily related to amortization
of the $64.5 million of upfront and milestone payments received as of such

period.

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License Revenue - Related Party

License revenue - related party was $27.5 million for the nine months ended
September 30, 2022, which represents license revenue recorded under the IDRx
License Agreement. For additional information, see Note 10, Collaboration and
License Agreements, to our unaudited condensed consolidated financial
statements.

Cost of Product Sales

Cost of product sales increased by $2.6 million from $10.4 million during the
nine months ended September 30, 2021 to $13.0 million for the nine months ended
September 30, 2022, and was related to manufacturing costs associated with our
products sales as well as costs associated with the sale of drug product to our
collaboration partners. The following table summarizes the cost of sales by type
during the nine months ended September 30, 2022 and 2021 (in thousands):

                                Nine Months Ended
                                 September 30,
                                2022         2021

Cost of product sales $ 2,139 $ 2,872 Cost of collaboration sales 10,826 7,513 Total cost of sales

$  12,965    $ 10,385


The increase in total costs of sales was primarily driven by the increase in
sales to our collaboration partners. The decrease in cost of product sales was
driven by costs incurred in the prior year that weren't present in the current
year, including a write-down of $0.8 million for the nine months ended September
30, 2021. Costs associated with our net product revenue remain at higher margins
as certain costs associated with the manufacture of our drugs prior to FDA
approval were recorded as research and development expenses and, therefore, were
not included in cost of sales during such period.

Collaboration Loss Sharing

Our loss sharing under the collaboration with Roche for pralsetinib increased by
$3.8 million from $3.3 million for the nine months ended September 30, 2021 to
$7.1 million for the nine months ended September 30, 2022.

Research and Development Expense

Research and development expense increased by $115.4 million from $244.2 million
for the nine months ended September 30, 2021 to $359.6 million for the nine
months ended September 30, 2022. The increase in research and development
expense was primarily due to an increase of $67.7 million in increased clinical
supply manufacturing and clinical development activities due to the progression
and expansion of our clinical trials, an increase of $22.2 million in costs
related to early discovery and expanding the platform, and an increase of $25.5
million in personnel expenses, including an increase of $0.9 million in
stock-based compensation expense.

Selling, General and Administrative Expense

Selling, general and administrative expense increased by $32.3 million from
$141.1 million for the nine months ended September 30, 2021 to $173.4 million
for the nine months ended September 30, 2022. The increase in selling, general
and administrative expense was primarily related to an increase of $19.3 million
in personnel expenses, including a $3.0 million increase in stock-based
compensation expense, an increase of $9.6 million in other general expenses to
operate the business, and an increase of $3.3 million in commercial expenses
primarily related to the expansion of our commercial infrastructure for
commercialization of AYVAKIT/AYVAKYT.

Interest Income (Expense), Net

Interest expense, net, increased by $9.5 million from $1.9 million interest income for the nine months ended September 30, 2021 to $7.5 million interest expense for the nine months ended September 30, 2022. This increase was

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due to the interest charges on the liabilities related to the sale of future
royalties and revenues with Royalty Pharma and Sixth Street Partners as well as
the term loan with Sixth Street Partners.

Other Income (Expense), Net

Other income (expense), net, increased by $1.7 million from $1.1 million expense
for the nine months ended September 30, 2021 to $0.6 million income for the nine
months ended September 30, 2022.

Income Tax Expense

Income tax expense increased by $3.8 million from $0.4 million for the nine
months ended September 30, 2021 to $4.2 million for the nine months ended
September 30, 2022. In June, 2022, we entered into a Royalty Purchase Agreement
with Royalty Pharma and a Future Revenue Purchase Agreement with Sixth Street
Partners. Pursuant to the agreements, we received gross proceeds of $175.0
million from Royalty Pharma in June 2022 and $250.0 million from Sixth Street
Partners in July 2022. Both cash considerations in their entirety are considered
as taxable income for the calendar year ending December 31, 2022 which resulted
in the Company being in a taxable income position for the calendar year ending
December 31, 2022 and the increase in income tax expense for the nine months
ended September 30, 2022. For additional information, see Note 13, Income Taxes,
to our unaudited condensed consolidated financial statements.

Liquidity and Capital Resources

Sources of Liquidity

To date, we have financed our operations primarily through public offerings of
our common stock, private placements of our convertible preferred and common
stock, collaborations, a license agreement, future royalty and revenue
monetization, and a term loan. Through September 30, 2022, we have received an
aggregate of $3.6 billion from such transactions, including $1.9 billion in
aggregate gross proceeds from the sale of common stock in our IPO, follow-on
public offerings, through our "at the market" stock offering program and the
equity investment by Roche, $115.1 million in gross proceeds from the issuance
of convertible preferred stock, $175.0 million in gross proceeds from our
Royalty Purchase Agreement with Royalty Pharma, $250.0 million in gross proceeds
from our Future Revenue Purchase Agreement with Sixth Street Partners, $1.0
billion in upfront payments and milestone payments under our collaborations with
Roche, CStone and Zai Lab, our license agreement with Clementia and our former
collaboration with Alexion, and $150.0 million in gross proceeds from a term
loan from Sixth Street Partners. Since January 2020, we have also generated
revenue through the sales of our approved drug products.

As of September 30, 2022, we had cash, cash equivalents and marketable securities of $1,192.6 million.

Cash Flows

The following table provides information regarding our cash flows for the nine months ended September 30, 2022 and 2021:

                                                                     Nine Months Ended
                                                                       September 30,
(in thousands)                                                     2022           2021

Net cash used in operating activities                           $ (380,872)    $ (284,539)
Net cash provided by (used in) investing activities                (96,258)

121,094

Net cash provided by financing activities                           559,319

32,787

Net increase (decrease) in cash, cash equivalents, and
restricted cash                                                 $    82,189

$ (130,658)

Net Cash Used in Operating Activities. For the nine months ended September 30, 2022, compared to the same period in 2021, the $96.3 million increase in net cash used in operating activities was primarily due to an increase of $73.5 million in the net loss.

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Net Cash Provided by (Used in) Investing Activities. For the nine months ended
September 30, 2022, compared to the same period in 2021, the $217.4 million
increase in net cash used in investing activities was primarily due to an
increase of $211.5 million in net proceeds used to purchase available-for-sale
marketable securities.

Net Cash Provided by Financing Activities. For the nine months ended
September 30, 2022, compared to the same period in 2021, the $526.5 million
increase in net cash provided by financing activities was due to an increase of
$553.6 million in net proceeds received under the Royalty Purchase Agreement
with Royalty Pharma, the Future Revenue Purchase Agreement with Sixth Street
Partners, and the term loan with Sixth Street Partners, which was partially
offset by a decrease in net proceeds received from stock options exercises and
employee stock purchase plan.

Debt Financing

In June 2022, we entered into a Royalty Purchase Agreement with Royalty Pharma.
Pursuant to the Royalty Purchase Agreement, we received an upfront payment of
$175.0 million in consideration for our rights to receive royalty payments on
the net sales of GAVRETO worldwide excluding the CStone territory and U.S.
territory under the terms of the Roche pralsetinib collaboration agreement. Net
proceeds from the transaction were recorded as liabilities related to sale of
future royalties and revenues on the consolidated balance sheet and as of
September 30, 2022, the carrying value of the liability related to this
arrangement was $173.6 million.

Pursuant to the Royalty Purchase Agreement, we are eligible to receive certain
milestone payments totaling up to $165.0 million, subject to the achievement of
specified net sales milestones by Roche. The potential milestone payments will
be added to the carrying value of the liability related to this arrangement when
the milestones are achieved and received. For additional information, see Note
3, Financing Arrangements to our unaudited condensed consolidated financial
statements.

In July 2022, we closed a Future Revenue Purchase Agreement with Sixth Street
Partners and received gross proceeds of $250.0 million in exchange for future
royalty payments at a rate of 9.75% on up to $900 million each year of (i)
aggregate worldwide annual net product sales of AYVAKIT/ AYVAKYT (avapritinib)
and (ii) if it is approved, aggregate worldwide annual net product sales of
BLU-263, but excluding sales in Greater China, subject to a cumulative cap of
1.45 times the upfront invested capital or a total of $362.5 million. In the
event that certain revenue targets are not achieved by specified dates, the
royalty rate and cumulative cap shall be increased to 15% and 1.85 times the
invested capital (or $462.5 million), respectively. Net proceeds from the
transaction were recorded as liabilities related to sale of future royalties and
revenues on the consolidated balance sheet and as of September 30, 2022, the
carrying value of the liability related to this arrangement was $250.1 million.

In July 2022, we closed a Financing Agreement for up to $660.0 million with
Sixth Street Partners. The Financing Agreement entered into by the parties in
connection with the transaction provides for (i) a senior secured term loan
facility of up to $150.0 million and (ii) a senior secured delayed draw term
loan facility of up to $250.0 million to be funded in two tranches at our
choice. The loans will mature on June 30, 2028 and bear interest at a variable
rate equal to either the Secured Overnight Financing Rate (SOFR) plus six and
one half percent (6.50%) or the base rate plus five and one half percent
(5.50%), subject to a floor of one percent (1%) and two percent (2%) with
respect to the SOFR and base rate, respectively. The initial gross proceeds of
$150.0 million was funded in July 2022. In addition, we may at any time request
an incremental term loan in an amount not to exceed $260.0 million on terms to
be agreed and subject to the consent of the lenders providing such incremental
term loan. As of September 30, 2022, the carrying value of the term loan was
$138.4 million.

Our obligations under the financing agreement will be secured, subject to
certain exceptions, by security interests in the substantially all of our assets
and our certain subsidiaries. The financing agreement contains negative
covenants that, among other things and subject to certain exceptions, could
restrict the our ability to incur additional liens, incur additional
indebtedness, make investments, including acquisitions, engage in fundamental
changes, sell or dispose of assets that constitute collateral, including certain
intellectual property, pay dividends or make any distribution or payment on or
redeem, retire or purchase any equity interests, amend, modify or waive certain
material agreements or organizational documents and make payments of certain
subordinated indebtedness. The financing agreement also requires us to have
consolidated liquidity of at least (i) $50.0 million during the period
commencing from the date on which the term loans are funded to the date which is
the day before the next term loans are funded and (ii) $80.0 million for each
day thereafter. For additional information, see Note 3, Financing Arrangements,
to our unaudited condensed

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consolidated financial statements.

Funding Requirements

We expect our expenses to increase in connection with our ongoing activities,
particularly as we continue the research and development of, initiate or
continue clinical trials of, and seek marketing approval for our drug
candidates, including marketing approval for avapritinib and pralsetinib for
additional indications or avapritinib in additional geographies, to the extent
these expenses are not the responsibility of our collaborators. In addition, we
expect to incur additional significant commercialization expenses for
AYVAKIT/AYVAKYT, GAVRETO and other drug candidates, if approved, related to drug
sales, marketing, manufacturing and distribution to the extent that such sales,
marketing, manufacturing and distribution are not the responsibility of
potential collaborators or licensors. We will also incur additional significant
costs if we choose to pursue additional indications or geographies for any of
our approved drugs or drug candidates or otherwise expand more rapidly than we
presently anticipate. Accordingly, we may seek to obtain additional funding from
time to time in connection with our continuing operations. If we are unable to
raise capital when needed or on attractive terms, we may be forced to delay,
reduce or eliminate certain of our research and development programs or future
commercialization efforts.

As of September 30, 2022, we had cash, cash equivalents and marketable securities of $1,192.6 million. Based on our current operating plans, we anticipate our existing cash, cash equivalents and marketable securities, together with anticipated future product revenues, will provide sufficient capital to enable us to achieve a self-sustainable financial profile.

Our future capital requirements will depend on many factors, including:

the success of our commercialization efforts and market acceptance for

? AYVAKIT/AYVAKYT, GAVRETO or any of our current or future drug candidates for

which we receive marketing approval;

the costs of maintaining, expanding or contracting for sales, marketing and

? distribution capabilities in connection with commercialization of

AYVAKIT/AYVAKYT and any of our current or future drug candidates for which we

receive marketing approval;

the costs of securing manufacturing, packaging and labeling arrangements to

ensure adequate supply for development activities and commercial production,

? including API, drug substance and drug product material for use in preclinical

   studies, clinical trials, our compassionate use program and for use as
   commercial supply, as applicable;

the cost of purchasing quantities of agents for use in our clinical trials in

? connection with our efforts to develop our drugs and drug candidates, including

for development as combination therapies;

the scope, progress, results and costs of drug discovery, preclinical

? development, laboratory testing and clinical trials for our approved drugs and

drug candidates;

the costs, timing and outcome of regulatory review of marketing applications

? for our drug candidates, including seeking marketing approval for avapritinib

   and pralsetinib for additional indications or avapritinib in additional
   geographies;

the success of our collaborations with Roche, CStone, Zai Lab and Proteovant

? and our license agreements with Clementia and IDRx, as well as our ability to

establish and maintain additional collaborations, partnerships or licenses on

favorable terms, if at all;

the achievement of milestones or occurrence of other developments that trigger

? payments under our existing collaboration or license agreements, or any

   collaboration, partnership or license agreements that we may enter into in the
   future;


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the extent to which we are obligated to reimburse, or entitled to reimbursement

? of, research and development, clinical or other costs under future

collaboration agreements, if any;

? the extent to which we acquire or in-license other approved drugs, drug

candidates or technologies and the terms of any such arrangements;

? the success of our current or future collaborations for the development and

commercialization of companion diagnostic tests;

the costs of preparing, filing and prosecuting patent applications, maintaining

? and enforcing our intellectual property rights and defending intellectual

property-related claims; and

? the costs of continuing to expand our operations.

Identifying potential drug candidates, conducting preclinical development and
testing and clinical trials and, for any drug candidates that receive marketing
approval, establishing and maintaining commercial infrastructure is a
time-consuming, expensive and uncertain process that takes years to complete,
and we may never generate the necessary data or results required to obtain
additional marketing approvals, including for avapritinib and pralsetinib in
additional indications or avapritinib in additional geographies, and achieve
substantial revenues for any of our drugs that receive marketing approval,
including for AYVAKIT/AYVAKYT and GAVRETO. In addition, our drugs and any
current or future drug candidates that receive marketing approvals, including
avapritinib and pralsetinib for additional indications or avapritinib in
additional geographies, may not achieve commercial success. Accordingly, we may
need to rely on additional financing to achieve our business objectives.
Adequate additional financing may not be available to us on acceptable terms, or
at all.

Until such time, if ever, as we can generate substantial drug revenues, we
expect to finance our cash needs primarily through a combination of public and
private equity offerings, debt financings, collaborations, strategic alliances
and licensing arrangements. We do not have any committed external source of
funds, other than our collaborations with Roche, CStone and Zai Lab, the license
agreements with Clementia and IDRx, the Royalty Purchase Agreement with Royalty
Pharma, and the Financing Agreement with Sixth Street Partners, which are
limited in scope and duration and subject to the achievement of milestones or
royalties on sales of licensed products, if any. To the extent that we raise
additional capital through the sale of common stock or securities convertible or
exchangeable into common stock, the ownership interest of our stockholders will
be diluted, and the terms of these securities may include liquidation or other
preferences that materially adversely affect the rights of our common
stockholders. Additional debt financing, if available, would increase our fixed
payment obligations and may involve agreements that include additional covenants
limiting or restricting our ability to take specific actions, such as incurring
additional debt, making capital expenditures or declaring dividends.

If we raise funds through additional collaborations, strategic alliances or
licensing arrangements with third parties, we may have to relinquish valuable
rights to our intellectual property, future revenue streams, research programs,
drugs or drug candidates or to grant licenses on terms that may not be favorable
to us. If we are unable to raise additional funds through equity or debt
financings when needed, we may be required to delay, limit, reduce or terminate
our drug development or future commercialization efforts or grant rights to
develop and market drug and drug candidates that we would otherwise prefer

to
develop and market ourselves.

Contractual Obligations

Our contractual obligations primarily consist of our obligations under non-cancellable operating leases and unconditional purchase obligations related to certain commercial manufacturing agreements.

During the nine months ended September 30, 2022, there was a $4.0 million decrease in the Company's contractual obligations described under "Management's Discussion and Analysis of Financial Condition and Results of Operations" included in the Annual Report on Form 10-K for the year ended December 31, 2021.

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