IMMUNOMEDICS INC (Form: 10-Q, Received: 08/07/2019 16:07:29)

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2019

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d)

OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _____ to _____

Commission File Number: 0-12104

Immunomedics, Inc.

(Exact name of Registrant as specified in its charter)



Delaware	61-1009366
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

300 The American Road, Morris Plains, New Jersey 07950

(Address of principal executive offices) (Zip Code)

(973) 605-8200

(Registrant’s Telephone Number, Including Area Code)

Former Name, Former Address and Former Fiscal Year,

If Changed Since Last Report: Not Applicable

Securities registered pursuant to Section 12(b) of the Act:



Title of each class	Trading Symbol	Name of each exchange on which registered
Common Stock, $0.01 par value	IMMU	Nasdaq Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☑ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period the registrant was required to submit such files). Yes ☑ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definitions of “large accelerated filer”, “accelerated filer”, “smaller reporting company” and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large Accelerated Filer ☑ Accelerated Filer ☐

Non-Accelerated Filer ☐ Smaller Reporting Company ☐ Emerging Growth Company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☑

The number of shares of the registrant’s common stock outstanding as of August 2, 2019 was 191,978,434.

IMMUNOMEDICS, INC.

TABLE OF CONTENTS



PART I:	FINANCIAL INFORMATION

ITEM 1.	FINANCIAL STATEMENTS (UNAUDITED):

	Unaudited Condensed Consolidated Balance Sheets as of June 30, 2019 and December 31, 2018	3

	Unaudited Condensed Consolidated Statements of Comprehensive Loss for the Three and Six Months Ended June 30, 2019 and 2018	4

	Unaudited Condensed Consolidated Statements of Changes in Stockholders' Equity (Deficit) for the Three and Six Months Ended June 30, 2019 and 2018	5

	Unaudited Condensed Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2019 and 2018	7

	Notes to Unaudited Condensed Consolidated Financial Statements	8

ITEM 2.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	20

ITEM 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	30

ITEM 4.	CONTROLS AND PROCEDURES	30

PART II:	OTHER INFORMATION

ITEM 1.	LEGAL PROCEEDINGS	31

ITEM 1A.	RISK FACTORS	31

ITEM 6.	EXHIBITS	51

EXHIBIT INDEX		53

SIGNATURES		52

PART I. FINANCIAL INFORMATION


ITEM 1.	FINANCIAL STATEMENTS (Unaudited)

IMMUNOMEDICS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(Dollars in thousands, except per share amounts)

(Unaudited)



	June 30, 2019			December 31, 2018
ASSETS
Current Assets:
Cash and cash equivalents	$	427,909		$	492,860
Marketable securities	4,741			4,941
Prepaid expenses	8,296			5,354
Other current assets	1,313			1,348
Total current assets	442,259			504,503
Property and equipment, net of accumulated depreciation and amortization of $6,260 and $4,316 at June 30, 2019 and December 31, 2018, respectively	35,177			23,469
Other long-term assets	249			68
Total Assets	$	477,685		$	528,040

LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable and accrued expenses	$	38,967		$	31,722
Liability related to sale of future royalties - current	5,314			—
Lease liability - current	271			—
Total current liabilities	44,552			31,722
Convertible senior notes, net	7,081			7,055
Liability related to sale of future royalties - non-current	236,354			221,295
Deferred revenues	65,000			—
Other long-term liabilities	10,138			2,119
Total Liabilities	363,125			262,191
Commitments and Contingencies (Note 11)
Stockholders' Equity:
Convertible preferred stock, $0.01 par value; authorized 10,000,000 shares; no shares issued and outstanding at June 30, 2019 and December 31, 2018	—			—
Common stock, $0.01 par value; authorized 250,000,000 shares; issued 191,972,321 shares and outstanding 191,852,700 shares at June 30, 2019; issued 190,445,795 shares and outstanding 190,411,070 shares at December 31, 2018	1,920			1,905
Capital contributed in excess of par	1,232,575			1,219,237
Treasury stock, at cost: 119,621 shares at June 30, 2019 and 34,725 shares at December 31, 2018	(2,095		)	(824		)
Accumulated deficit	(1,116,506		)	(953,216		)
Accumulated other comprehensive loss	(365		)	(351		)
Total Immunomedics, Inc. stockholders' equity	115,529			266,751
Noncontrolling interest in subsidiary	(969		)	(902		)
Total stockholders' equity	114,560			265,849
Total Liabilities and Stockholders' Equity	$	477,685		$	528,040

See accompanying notes to unaudited condensed consolidated financial statements

IMMUNOMEDICS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF

COMPREHENSIVE LOSS

(Dollars in thousands, except per share amounts)

(Unaudited)



	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2019			2018			2019			2018
Revenues:
Product sales	$	—		$	—		$	—		$	450
License fee and other revenues	—			250			—			265
Research and development	—			136			—			153
Total revenues	—			386			—			868

Costs and Expenses:
Costs of goods sold	—			—			—			47
Research and development	52,923			27,603			111,095			56,446
Sales and marketing	6,346			3,039			14,227			5,405
General and administrative	7,899			22,139			21,494			28,993
Total costs and expenses	67,168			52,781			146,816			90,891
Operating loss	(67,168		)	(52,395		)	(146,816		)	(90,023		)
Changes in fair market value of warrant liabilities	—			(58,861		)	—			(49,026		)
Interest expense	(10,625		)	(9,434		)	(20,584		)	(20,334		)
Interest and other income	1,840			3,565			4,043			4,695
Insurance reimbursement	—			342			—			2,272
Foreign currency transaction loss, net	—			(101		)	—			(26		)
Loss before income tax	(75,953		)	(116,884		)	(163,357		)	(152,442		)
Income tax expense	—			(156		)	—			(156		)
Net loss	$	(75,953	)	$	(117,040	)	$	(163,357	)	$	(152,598	)
Net loss attributable to noncontrolling interest	—			(11		)	(67		)	(23		)
Net loss attributable to Immunomedics, Inc. stockholders	$	(75,953	)	$	(117,029	)	$	(163,290	)	$	(152,575	)
Loss per common share attributable to Immunomedics, Inc. stockholders (basic and diluted):	(0.40		)	(0.68		)	(0.85		)	(0.91		)
Weighted average shares used to calculated loss per common share (basic and diluted):	191,745			171,124			191,401			168,583
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustments	195			50			186			(16		)
Unrealized gain (loss) on securities available for sale	—			54			(200		)	64
Other comprehensive loss, net of tax:	195			104			(14		)	48
Comprehensive loss	(75,758		)	(116,936		)	(163,371		)	(152,550		)
Comprehensive loss attributable to noncontrolling interest	—			(11		)	(67		)	(23		)
Comprehensive loss attributable to Immunomedics, Inc. stockholders	$	(75,758	)	$	(116,925	)	$	(163,304	)	$	(152,527	)

See accompanying notes to unaudited condensed consolidated financial statements

IMMUNOMEDICS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (DEFICIT)

(in thousands)

(Unaudited)



	Immunomedics, Inc. Stockholders' Equity (Deficit)
	Convertible Preferred Stock						Capital Contributed in Excess of Par								Accumulated Other Comprehensive Income (Loss)
	Convertible Preferred Stock			Common Stock					Treasury Stock			Accumulated Deficit						Noncontrolling Interest
	Shares	Amount		Shares	Amount				Treasury Stock			Accumulated Deficit						Noncontrolling Interest			Total
Three Months Ended June 30, 2019:
Balance at March 31, 2019	—	$	—	191,509	$	1,915	$	1,224,066	$	(2,095	)	$	(1,040,553	)	$	(560	)	$	(969	)	$	181,804
Exercise of stock options, net	—	—		77	1		280		—			—			—			—			281
Stock-based compensation	—	—		15	—		2,404		—			—			—			—			2,404
Issuance of common stock in at-the-market offering, net	—	—		371	4		5,825		—			—			—			—			5,829
Other comprehensive loss	—	—		—	—		—		—			—			195			—			195
Net loss	—	—		—	—		—		—			(75,953		)	—			—			(75,953		)
Balance at June 30, 2019	—	$	—	191,972	$	1,920	$	1,232,575	$	(2,095	)	$	(1,116,506	)	$	(365	)	$	(969	)	$	114,560

Three Months Ended June 30, 2018:
Balance at March 31, 2018	—	$	—	167,256	$	1,672	$	750,392	$	(458	)	$	(678,519	)	$	(457	)	$	(810	)	$	71,820
Reclassification of warrant liability to equity, net	—	—		—	—		120,219		—			—			—			—			120,219
Exercise of stock options, net	—	—		320	4		1,258		—			—			—			—			1,262
Exercise of common stock warrants	—	—		6,000	60		22,440		—			—			—			—			22,500
Issuance of common stock in public offering, net	—	—		13,225	132		299,335		—			—			—			—			299,467
Stock-based compensation	—	—		—	—		1,354		—			—			—			—			1,354
Other comprehensive gain	—	—		—	—		—		—			—			104			—			104
Net loss	—	—		—	—		—		—			(117,029		)	—			(11		)	(117,040		)
Balance at June 30, 2018	—	$	—	186,801	$	1,868	$	1,194,998	$	(458	)	$	(795,548	)	$	(353	)	$	(821	)	$	399,686

See accompanying notes to unaudited condensed consolidated financial statements

IMMUNOMEDICS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (DEFICIT)

(in thousands)

(Unaudited)



	Immunomedics, Inc. Stockholders' Equity (Deficit)
	Convertible Preferred Stock								Capital Contributed in Excess of Par									Accumulated Other Comprehensive Income (Loss)
	Convertible Preferred Stock			Common Stock								Treasury Stock			Accumulated Deficit						Noncontrolling Interest
	Shares	Amount		Shares		Amount						Treasury Stock			Accumulated Deficit						Noncontrolling Interest			Total
Six Months Ended June 30, 2019:
Balance at December 31, 2018	—	$	—	190,446		$	1,905		$	1,219,237		$	(824	)	$	(953,216	)	$	(351	)	$	(902	)	$	265,849
Exercise of stock options, net	—	—		1,140		11			3,366			(1,271		)	—			—			—			2,106
Stock-based compensation	—	—		15		—			4,147			—			—			—			—			4,147
Issuance of common stock in at-the-market offering, net	—	—		371		4			5,825			—			—			—			—			5,829
Other comprehensive loss	—	—		—		—			—			—			—			(14		)	—			(14		)
Net loss	—	—		—		—			—			—			(163,290		)	—			(67		)	(163,357		)
Balance at June 30, 2019	—	$	—	191,972		$	1,920		$	1,232,575		$	(2,095	)	$	(1,116,506	)	$	(365	)	$	(969	)	$	114,560

Six Months Ended June 30, 2018:
Balance at December 31, 2017	—	$	—	161,303		$	1,613		$	659,467		$	(458	)	$	(642,973	)	$	(401	)	$	(798	)	$	16,450
Reclassification of warrant liability to equity, net	—	—		—		—			137,976			—			—			—			—			137,976
Exercise of stock options, net	—	—		403		4			1,592			—			—			—			—			1,596
Exercise of common stock warrants	—	—		7,400		74			27,676			—			—			—			—			27,750
Issuance of common stock to RPI Finance Trust	—	—		4,373		44			67,740			—			—			—			—			67,784
Issuance of common stock in public offering, net	—	—		13,225		132			299,335			—			—			—			—			299,467
Stock-based compensation	—	—		284		3			2,682			—			—			—			—			2,685
Conversion of RSU's for tax withholding payments	—	—		(187	)	(2		)	(1,470		)	—			—			—			—			(1,472		)
Other comprehensive gain	—	—		—		—			—			—			—			48			—			48
Net loss	—	—		—		—			—			—			(152,575		)	—			(23		)	(152,598		)
Balance at June 30, 2018	—	$	—	186,801		$	1,868		$	1,194,998		$	(458	)	$	(795,548	)	$	(353	)	$	(821	)	$	399,686

See accompanying notes to unaudited condensed consolidated financial statements

IMMUNOMEDICS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Dollars in thousands)

(Unaudited)



	Six Months Ended June 30,
	2019			2018
Cash flows from operating activities:
Net loss	$	(163,357	)	$	(152,598	)
Adjustments to reconcile net loss to net cash used in operating activities:
Changes in fair value of warrant liabilities	—			49,026
Depreciation and amortization	1,839			670
Interest on non-recourse debt	20,373			19,790
Amortization of deferred revenue	—			13
Amortization of bond premiums	—			36
Amortization of debt issuance costs	25			73
Amortization of deferred rent	—			218
Right-of-use asset amortization	130			—
Decrease in allowance for doubtful accounts	—			(13		)
Non-cash expense related to stock-based compensation	4,147			2,682
Changes in deferred revenue	65,000			—
Changes in other operating assets and liabilities	4,670			10,456
Net cash used in operating activities	(67,173		)	(69,647		)
Cash flows from investing activities
Purchases of marketable securities	—			(135		)
Proceeds from sales/maturities of marketable securities	—			52,150
Purchases of property and equipment	(5,699		)	(7,985		)
Net cash (used in) provided by investing activities	(5,699		)	44,030
Cash flows from financing activities:
Exercise of stock options, net	2,106			1,596
Exercise of warrants	—			27,750
Proceeds from private offering of common stock	—			67,784
Proceeds from the issuance of common stock in at-the-market offering	5,829			—
Proceeds of public offering of common stock	—			299,467
Proceeds from the issuance of non-recourse debt	—			182,216
Debt conversion fees	—			(3		)
Tax withholding payments for stock-based compensation	—			(1,472		)
Net cash provided by financing activities	7,935			577,338
Effect of changes in exchange rates on cash, cash equivalents and restricted cash	(14		)	(99		)
Net (decrease) increase in cash, cash equivalents and restricted cash	(64,951		)	551,622
Cash, cash equivalents and restricted cash beginning of period	494,173			60,960
Cash, cash equivalents and restricted cash end of period	$	429,222		$	612,582
Supplemental disclosure of cash flow information:
Interest paid	$	169		$	475
Schedule for non-cash investing and financing activities:
Non-cash component of warrant exercise	$	—		$	137,979
Accrued capital expenditures	$	404		$	2,173
Shares received in cashless exercise	$	1,272		$	—

The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within our condensed consolidated balance sheets that sum to the total of the same amounts shown in the condensed consolidated statements of cash flows (dollars in thousands):



	June 30, 2019		June 30, 2018
Cash and cash equivalents	$	427,909	$	612,057
Restricted cash in other current assets	1,313		525
Total cash, cash equivalents and restricted cash	$	429,222	$	612,582

See accompanying notes to unaudited condensed consolidated financial statements.

IMMUNOMEDICS, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED

FINANCIAL STATEMENTS

Reference is made to the Transition Report on Form 10-K, of Immunomedics, Inc., a Delaware corporation (“Immunomedics,” the “Company,” “we,” “our” or “us”), for the six months ended December 31, 2018, which contains our audited consolidated financial statements and the notes thereto.

1. Business Overview, Basis of Presentation and Recent Accounting Pronouncements

Business Overview

Immunomedics, Inc., a Delaware corporation, together with its subsidiaries (collectively "we," "our," "us," "Immunomedics", or the "Company"), is a clinical-stage biopharmaceutical company that develops monoclonal antibody-based products for the targeted treatment of cancer. Immunomedics manages its operations as one line of business of researching, developing, manufacturing and marketing biopharmaceutical products, particularly antibody-based products for patients with difficult to treat solid tumor and blood cancers. The Company currently reports as a single industry segment with substantially all business conducted in the United States. Immunomedics conducts its research activities in the United States and runs its development studies in the United States and selected European countries. Our corporate objective is to become a fully-integrated biopharmaceutical company and a leader in the field of antibody-drug conjugates (“ADCs”). To that end, our immediate priority is to commercialize our most advanced ADC product candidate, sacituzumab govitecan ("IMMU-132"), beginning in the United States, with metastatic triple-negative breast cancer (“mTNBC”) as the first indication. On May 21, 2018, we submitted a Biologics License Application (“BLA”) to the United States Food and Drug Administration ("FDA") for sacituzumab govitecan for the treatment of patients with mTNBC who have received at least two prior therapies for metastatic disease. On July 18, 2018, we received notification from the FDA that the BLA was accepted for filing and the original application was granted Priority Review with a Prescription Drug User Fee Act ("PDUFA") target action date of January 18, 2019. On January 17, 2019, we received a Complete Response Letter ("CRL") from the FDA for the BLA. On February 4, 2019, we received a written communication from the FDA enclosing the Establishment Inspection Report (“EIR”) from the chemistry, manufacturing and controls ("CMC") BLA pre-approval inspection conducted by the FDA at the Company’s Morris Plains, New Jersey antibody manufacturing facility for our ADC product candidate sacituzumab govitecan, which took place from August 6, 2018 through August 14, 2018. The FDA also notified the Company that the FDA will be conducting a re-inspection of the Company’s Morris Plains, New Jersey antibody manufacturing facility as part of the BLA resubmission process. The Company is finalizing its plans with respect to the matters raised in the CRL received from FDA on January 17, 2019 and the EIR. The Company met with the FDA on May 2, 2019 to review the FDA's findings and discussed the Company's BLA resubmission.

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements of Immunomedics, which incorporates our foreign subsidiary, Immunomedics GmbH in Rödermark, Germany, have been prepared in accordance with United States generally accepted accounting principles (“GAAP”), for interim financial information and the instructions to the Quarterly Report on Form 10‑Q and Regulation S‑X. Accordingly, the statements do not include all of the information and footnotes required by GAAP for complete annual financial statements. With respect to the financial information for the interim periods included in this Quarterly Report on Form 10-Q, which is unaudited, management believes that all adjustments (consisting of normal recurring accruals), considered necessary for a fair presentation of the results for such interim periods have been included. Operating results for the three and six-month periods ended June 30, 2019, are not necessarily indicative of the results that may be expected for the full calendar year ending December 31, 2019, or any other period. The preparation of the condensed consolidated financial statements requires management to make estimates and assumptions that affect reported amounts and disclosures. Actual results could differ from those estimates.

Our significant accounting policies are described in Note 2 of Notes to Consolidated Financial Statements included in our 2018 Transition Report on Form 10-K. Such significant accounting policies are applicable for periods prior to the adoption of the following new accounting standards.

Recent Accounting Pronouncements

Accounting Pronouncements adopted during the year:

The Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2019-01, “Leases Topic 842,” requiring entities to recognize assets and liabilities on the balance sheet for all leases, with certain exceptions. Topic 842 allows for a modified retrospective application and is effective as of the first quarter of 2019. Entities are allowed to apply the new guidance using a modified retrospective approach at the beginning of the year in which new lease standard is adopted, rather than to the earliest comparative period presented in their financial statements. The modified retrospective approach includes a number of optional practical expedients that entities may elect to apply. We elected the modified retrospective approach under the new guidance and elected the available practical expedients on adoption. Upon adoption, we recognized additional operating lease liabilities of $8.4 million with a corresponding right-of-use assets of $8.4 million based on the present value of the remaining lease payments under existing operating leases. As of December 31, 2018, we had $2.1 million in deferred charges related to our real estate leases that were recorded against the lease liability asset as part of the transition, resulting in $10.5 million included in other long-term liabilities on our condensed consolidated balance sheet. In addition, the new guidance resulted in additional lease-related disclosures in the footnotes to our condensed consolidated financial statements. Our leasing portfolio is comprised entirely of operating leases, and we do not recognize right-of-use assets or related lease liabilities with a lease term of twelve months or less on our condensed consolidated balance sheet. Adoption of Topic 842 has required changes to our business processes and controls to comply with the provisions of the standard. Refer to Note 11 "Commitments and Contingencies" for additional information.

In June 2018, the FASB issued ASU 2018-07, "Compensation-Stock Compensation," to improve the usefulness of information provided to users of financial statements while reducing cost and complexity in financial reporting and provide guidance aligning the measurement and classification for share-based payments to nonemployees with the guidance for share-based payments to employees. Under the guidance, the measurement of equity-classified nonemployee awards will be fixed at the grant date. This standard is effective for fiscal years beginning after December 15, 2018, and interim periods within those annual periods. Early adoption is permitted, but no earlier than an entity's adoption date of ASU 2014-09, “Revenue from Contracts with Customers (Topic 606).” We adopted ASU 2018-07 during the first quarter of 2019 and the adoption did not have a material impact to our condensed consolidated financial statements.

Accounting Pronouncements yet to be adopted:

In November 2018, the FASB issued ASU 2018-18, "Collaborative Arrangements (Topic 808): Clarifying the Interaction between Topic 808 and Topic 606," to clarify when ASC 606 should be used for collaborative arrangements when the counterparty is a customer. The guidance precludes an entity from presenting consideration from a transaction in a collaborative arrangement as revenue from contracts with customers if the counterparty is not a customer for that transaction. The guidance is effective for public business entities in fiscal years beginning after December 15, 2019, and interim periods therein. Early adoption is permitted to entities that have adopted ASC 606. We are currently assessing the impact of ASU 2018-18.

In August 2018, the FASB issued ASU 2018-13, "Fair Value measurement (Topic 820): Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement," to no longer require public companies to disclose transfers between Level 1 and Level 2 of the fair value hierarchy, and to require disclosure about the range and weighted average used to develop significant unobservable inputs for Level 3 fair value measurements. The guidance is effective for fiscal years beginning after December 15, 2019, and for interim periods within those fiscal years. Entities are permitted to early adopt either the entire standard or only the provisions that eliminate or modify the requirements. We are currently assessing the impact of ASU 2018-13.

2. Revenue Recognition

Pursuant to Topic 606, we recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. To achieve this core principle, Topic 606 includes provisions within a five step model that includes i) identifying the contract with a customer, ii) identifying the performance obligations in the contract, iii) determining the transaction price, iv) allocating the transaction price to the performance obligations, and v) recognizing revenue when, or as, an entity satisfies a performance obligation.

At contract inception, we assess the goods or services promised within each contract and assess whether each promised good or service is distinct and determine those that are performance obligations. We then recognize as revenue the amount of the transaction price that is allocated to the respective performance obligation when the performance obligation is satisfied.

Everest Medicines II Limited:

On April 29, 2019, the Company entered into a license agreement (the “License Agreement”) with Everest Medicines II Limited, a China limited company (“Everest”). Pursuant to the License Agreement, the Company granted Everest an exclusive license to develop and commercialize sacituzumab govitecan in the People’s Republic of China, Taiwan, Hong Kong, Macao, Indonesia, Philippines, Vietnam, Thailand, South Korea, Malaysia, Singapore and Mongolia (the "Territory"). In consideration for entering into the License Agreement, Everest made a one-time, non-refundable upfront payment to the Company in the aggregate amount of $65.0 million which is recorded as deferred revenue. The License Agreement contains a development milestone payment of $60.0 million based upon the Company’s achievement of FDA approval for sacituzumab govitecan in mTNBC. The License Agreement also contains additional development milestone payments in a total amount of up to $180.0 million based upon the achievement of certain other development milestones. In addition, the License Agreement contains sales milestone payments in a total amount of up to $530.0 million based upon the achievement of certain sales milestones. Everest will make royalty payments to the Company based upon percentages of net sales of sacituzumab govitecan, ranging from 14% to 20%.

The Company assessed the arrangement in accordance with ASC 606 and concluded that the contract counterparty, Everest, is a customer based on the arrangement structure. The Company identified two material promises to deliver under the contract: (1) grant of license and the (2) clinical and commercial supply of the product. However, given the nature of the manufacturing of the product the license is not considered to be distinct from the clinical and commercial supply promise. The Company therefore concluded that there is one combined performance obligation.

The Company initially deferred and will recognize the $65.0 million over the performance obligation period of the combined performance obligation. As it relates to the upfront consideration, the $65.0 million is recorded as deferred revenue and will be recognized over the term of the of the contract performance obligation period, which the Company has concluded to be 15 years after initial sale of the product in the territory. As concluded above, the Company has a combined performance obligation, which includes delivering the license and clinical and commercial supply to Everest. As such, because the clinical and commercial supply obligation occur throughout the period of the License Agreement, the $65.0 million fixed consideration is recognized over the period in which commercial and clinical supply of product is delivered (over-time).

The future potential milestone payments are excluded from the transaction price, as the achievement of the milestone events require considerable judgment in determining whether it is probable of being achieved, and that a significant revenue reversal would not occur. As such, all milestone payments are fully constrained. The Company will reevaluate the transaction price at the end of each reporting period and as uncertain events are resolved or other changes in circumstances occur, and, if necessary, adjust its estimate of the transaction price.

Janssen Biotech Inc.:

On April 5, 2019, the Company entered into a promotion agreement (the “Promotion Agreement”) with Janssen Biotech Inc., ("Janssen") pursuant to which the Company will provide non-exclusive product detailing services to Janssen for erdafitinib (the “Product”). Pursuant to the Promotion Agreement, the Company will provide a dedicated sales team to market the Product, upon approval by the FDA, to oncologists and other targeted health care providers in the United States. Under the terms of the Promotion Agreement, Janssen maintains ownership of the New Drug Application for the Product as well as legal, regulatory, distribution, commercialization and manufacturing responsibilities for the Product, while the Company will provide product detailing services to Janssen. Following the achievement of certain sales targets in 2019 and 2020, Janssen will pay the Company (a) a service fee equal to a percentage in the low double digits of the portion of Cumulative Net Sales (as defined in the Promotion Agreement) in excess of a baseline amount during each of 2019 and 2020, and (b) potential milestone payments of up to $15.0 million when Cumulative Net Sales exceed certain thresholds during each of 2019 and 2020. On April 12, 2019, the Company

was informed that the FDA granted accelerated approval to Janssen's Balversa (erdafitinib) for the treatment of adult patients with locally advanced or metastatic urothelial carcinoma that has a type of susceptible genetic alteration known as FGFR3 or FGFR2, and that has progressed during or following prior platinum-containing chemotherapy. During the three and six months ended June 30, 2019, no revenues were recorded relating to the Promotion Agreement.

3. Marketable Securities

Immunomedics considers all of its current investments to be available-for-sale. Marketable securities at June 30, 2019, consisted of the following (in thousands):



	Amortized Cost		Gross Unrealized Gain		Gross Unrealized (Loss)			Fair Value
U.S. Government Sponsored Agencies	$	4,941	$	—	$	(200	)	$	4,741

Maturities of debt securities classified as available-for-sale were as follows at June 30, 2019 (in thousands):



	Fair Value		Net Carrying Amount
Due after one year through five years	$	4,741	$	4,754

Marketable securities at December 31, 2018 consisted of the following (in thousands):



	Amortized Cost		Gross Unrealized Gain		Gross Unrealized (Loss)		Fair Value
U.S. Government Sponsored Agencies	$	4,941	$	—	$	—	$	4,941

Maturities of debt securities classified as available-for-sale were as follows at December 31, 2018 (in thousands):



	Fair Value		Net Carrying Amount
Due after one year through five years	$	4,941	$	4,954

4. Debt

Liability related to sale of future royalties:

On January 7, 2018, the Company entered into a funding agreement with RPI Finance Trust, a Delaware statutory trust ("RPI"), under which we sold a portion of our right to receive royalties on potential net sales of the ADC sacituzumab govitecan, in exchange for $175.0 million in cash. Concurrently, we entered into a common stock purchase agreement with RPI through which RPI purchased 4.4 million shares of the Company's common stock for $75.0 million (the "Financing").

The Company concluded that there were two units of accounting in the transaction: (1) the liability related to the sale of future royalties (the "Liability") and (2) the "Financing". We allocated the consideration of $250.0 million on a relative fair value basis to the Liability for $182.2 million and the common stock for $67.8 million. We continue to accrete the Liability related to the sale of future royalties using the effective interest method with an annual interest rate of approximately 18% over a period of 20 years. As of June 30, 2019 and December 31, 2018, we determined the fair value at $241.7 million and $221.3 million, respectively. During the three months ended June 30, 2019 and 2018, the Company recognized approximately $10.4 million and $9.2 million in interest expense, respectively. During the six months ended June 30, 2019 and 2018, the Company recognized approximately $20.4 million and $19.8 million in interest expense, respectively.

The following table shows the activity within the liability related to sale of future royalties during the six months ended June 30, 2019 (in thousands):



Carrying value of liability related to sale of future royalties at December 31, 2018	$	221,295
Interest expense recognized	20,373
Carrying value of liability related to sale of future royalties at June 30, 2019	$	241,668

Convertible Senior Notes:

In February 2015, the Company issued $100.0 million of Convertible Senior Notes (the "Convertible Senior Notes") (net proceeds of approximately $96.3 million after deducting the initial purchasers’ fees and offering expenses) in a private offering exempt from registration under the Securities Act of 1933, as amended (the “Securities Act”), in reliance upon Rule 144A under the Securities Act. The Convertible Senior Notes will mature on February 15, 2020, unless earlier purchased or converted. The debt issuance costs of approximately $3.7 million, primarily consisting of underwriting, legal and other professional fees, are amortized over the term of the Convertible Senior Notes. The Convertible Senior Notes are senior unsecured obligations of the Company. Interest at 4.75% is payable semiannually on February 15 and August 15 of each year. The effective interest rate on the Convertible Senior Notes was 5.48% for the period from the date of issuance through June 30, 2019. The balance of the outstanding Convertible Senior Notes was $7.1 million convertible into 1.4 million shares of common stock at June 30, 2019, and December 31, 2018.

If the Company undergoes a fundamental change (as defined in the indenture governing the Convertible Senior Notes), holders may require Immunomedics to purchase for cash all or part of the Convertible Senior Notes at a purchase price equal to 100% of the principal amount of the Convertible Senior Notes to be purchased, plus accrued and unpaid interest, if any, to, but excluding, the fundamental change purchase date, subject to certain exceptions. In addition, if certain make-whole fundamental changes (as defined in the indenture governing the Convertible Senior Notes) occur, Immunomedics will, in certain circumstances, increase the conversion rate for any Convertible Note converted in connection with such make-whole fundamental change.

Total interest expense for the Convertible Senior Notes for the three months ended June 30, 2019 and 2018 was $0.1 million and $0.2 million, respectively. For the six months ended June 30, 2019 and 2018, interest expense was $0.2 million and $0.5 million, respectively. Included in interest expense was an immaterial amount of amortization of debt issuance costs for the three and six months ended June 30, 2019 and 2018.

5. Stock-based Compensation

Stock Incentive Plan

The Company has a stock incentive plan, the Immunomedics, Inc. 2014 Long-Term Incentive Plan (the “Plan”) that provides for the granting of stock options, restricted stock units (RSUs), performance stock options (PSOs), and other stock-based awards to eligible individuals on the terms and subject to the conditions set forth in the Plan. There were no significant modifications to the Plan during the three and six months ended June 30, 2019 or 2018.

Stock-based compensation expense included in the condensed consolidated statements of comprehensive loss was $2.4 million, and $1.4 million for the three months ended June 30, 2019 and 2018, respectively, and $4.1 million and $2.7 million for the six months ended June 30, 2019 and 2018.

The following table summarizes the activity for stock options, RSUs and PSOs for the six months ended June 30, 2019 (in thousands):



	Stock Options		RSUs		PSOs
Equity awards outstanding, beginning of year	4,757		15		538
Changes during the year:
Granted	1,675		58		650
Exercised	(1,140	)	(15	)	—
Expired or forfeited	(949	)	—		(442	)
Equity awards outstanding, end of period	4,343		58		746

On March 14, 2019, performance stock options were granted to certain individuals that vest upon the Company’s receipt of approval from the FDA for the Company’s BLA for sacituzumab govitecan for the treatment of patients with metastatic triple-negative breast cancer who have received at least two prior therapies for metastatic disease under the Prescription Drug User Fee Act. There were additional stock options that were granted to certain eligible individuals that vest on the second anniversary of the date of grant. In addition, on April 17, 2019 performance stock options were granted to certain individuals that vest upon achievement of defined sales performance milestones.

As of June 30, 2019, total compensation cost related to unvested awards not yet recognized and the weighted-average periods over which the awards are expected to be recognized were as follows ($ in thousands):



	Stock Options		RSUs		PSOs
Unrecognized compensation cost	$	33,988	$	701	$	5,556
Expected weighted-average period in years of compensation cost to be recognized	3.1		0.9		1.3

6. Estimated Fair Value of Financial Instruments

Cash equivalents and marketable securities as of:



	($ in thousands)
June 30, 2019	Level 1 ^(a)		Level 2 ^(b)		Level 3 ^(c)		Total
Money Market Funds Note ^(d)	$	330,422	$	—	$	—	$	330,422
Marketable Securities:
U.S. Government Sponsored Agencies	4,741		—		—		4,741
Total	$	335,163	$	—	$	—	$	335,163



	($ in thousands)
December 31, 2018	Level 1 ^(a)		Level 2 ^(b)		Level 3 ^(c)		Total
Money Market Funds Note ^(d)	$	326,239	$	—	$	—	$	326,239
Marketable Securities:
U.S. Government Sponsored Agencies	4,941		—		—		4,941
Total	$	331,180	$	—	$	—	$	331,180

^(a) Level 1 - Financial instruments whose values are based on unadjusted quoted prices for identical assets or liabilities in an active market which the company has the ability to access at the measurement date.

^(b) Level 2 - Financial instruments whose values are based on quoted market prices in markets where trading occurs infrequently or whose values are based on quoted prices of instruments with similar attributes in active markets.

^(c) Level 3 - Financial instruments whose values are based on prices or valuation techniques that require inputs that are both unobservable and significant to the overall fair value measurement. These inputs reflect management's own assumptions about the assumptions a market participant would use in pricing the asset.

^(d) The money market funds noted above are included in cash and cash equivalents.

Convertible Senior Notes

The carrying amounts and estimated fair values (Level 2) of debt instruments are as follows (in thousands):



	As of June 30, 2019				As of December 31, 2018
	Carrying Amount		Estimated Fair Value		Carrying Amount		Estimated Fair Value
	Carrying Amount		Estimated Fair Value		Carrying Amount		Estimated Fair Value
Convertible Senior Notes	$	7,081	$	19,600	$	7,055	$	20,100

The fair value of the Convertible Senior Notes, which differs from their carrying values, is influenced by interest rates, the Company’s stock price and stock price volatility, and is determined by prices for the Convertible Senior Notes observed in market trading which are Level 2 inputs.

Liability related to the sale of future royalties

The Company has determined the fair value of the liability related to the sale of future royalties is based on the Company's current estimates of future royalties expected to be paid to RPI, over the life of the arrangement, which are considered Level 3 (See Note 4 - "Debt").

There were no transfers between Level 1, Level 2, and Level 3 during the periods presented.

7. Stockholders’ Equity

Common Stock

On October 11, 2016, the Company completed an underwritten public offering of 10,000,000 shares of its common stock and accompanying warrants to purchase 10,000,000 shares of common stock at a purchase price of $3.00 per unit, comprising of one share of common stock and one warrant. The change in fair value of the warrant liabilities for the three and six months ended June 30, 2018, resulted in a loss of approximately $58.9 million and $49.0 million, respectively, which has been recognized in the accompanying condensed consolidated statements of comprehensive loss. During 2018, all of the warrants were exercised. As of June 30, 2019 and December 31, 2018, there were no warrants outstanding.

At-the-market Offering

On March 29, 2019, the Company entered into a sales agreement (the "ATM Agreement") with Cowen and Company, LLC ("Cowen") to issue and sell shares of the Company’s common stock, par value $0.01 per share, having an aggregate offering price of up to $150,000,000, from time to time during the term of the ATM Agreement, through an “at-the-market” equity offering program at the Company's sole discretion, under which Cowen will act as the Company’s agent and/or principal. The Company will pay Cowen a commission up to 3.0% of the gross sales proceeds of any common stock sold through Cowen under the ATM Agreement. During the three and six months ended June 30, 2019, the Company sold 370,920 shares of common stock with net proceeds of $5.8 million at a weighted average price of $15.95 (excluding commissions) under the ATM Agreement.

Treasury Stock

During the six months ended June 30, 2019, there were 84,896 shares received in connection with a non-cash equity transaction related to the Company's Plan.

8. Accumulated Other Comprehensive Loss

The components of accumulated other comprehensive loss were as follows (in thousands):



	Currency Translation Adjustments			Net Unrealized Gains (Losses) on Available- for-Sale Securities			Accumulated Other Comprehensive Loss
Balance, December 31, 2017	$	(323	)	$	(78	)	$	(401	)
Other comprehensive (loss) income before reclassifications	(16		)	64			48
Net current-period other comprehensive (loss) income	(16		)	64			48
Balance, June 30, 2018	$	(339	)	$	(14	)	$	(353	)
Balance, December 31, 2018	$	(347	)	$	(4	)	$	(351	)
Other comprehensive (loss) income before reclassifications	(9		)	(200		)	(209		)
Reclassified gains from accumulated other comprehensive loss	195			—			195
Net current-period other comprehensive income (loss)	186			(200		)	(14		)
Balance, June 30, 2019	$	(161	)	$	(204	)	$	(365	)

There was $0.2 million reclassified from accumulated other comprehensive (loss) income during the three and six months ended June 30, 2019. All components of accumulated other comprehensive loss are net of tax, except currency translation adjustments, which exclude income taxes related to indefinite investments in foreign subsidiaries.

9. Related Party Transactions

On January 8, 2018, Morris Rosenberg joined the Company as Chief Technology Officer and became a full-time employee. Between May 5, 2017 and January 7, 2018, Mr. Rosenberg was engaged by the Company as an independent consultant pursuant to a consulting agreement between the Company and Mr. Rosenberg’s consulting company, M Rosenberg BioPharma Consulting LLC. The Company paid M Rosenberg BioPharma Consulting LLC $0.6 million during this time and Morris Rosenberg was also granted stock options to purchase 45,000 shares of the Company's common stock pursuant to the Immunomedics, Inc. 2014 Long-Term Incentive Plan. From January 8, 2018 through June 30, 2018, the Company paid M Rosenberg BioPharma $0.8 million for services agreed upon prior to Mr. Rosenberg becoming a full-time employee. As part of his employment contract, 50% of the 45,000 shares granted to Mr. Rosenberg as a consultant were forfeited, and the remaining 50% continue to vest. Mr. Rosenberg received 104,389 stock options and was permitted to continue to provide certain limited outside consulting services through M Rosenberg BioPharma Consulting LLC based on certain restrictions outlined in the contract. Additionally, during his employment period, except with the prior written consent of the Company's Board of Directors (the "Board"), Mr. Rosenberg is not permitted to enter into any contract, agreement or other transaction arrangement to provide goods and/or services to the Company through M Rosenberg BioPharma Consulting LLC.

The Company appointed Scott Canute, a member of the Company’s Board, as the Company’s Executive Director. Upon recommendation of the Compensation Committee, the Board approved that Mr. Canute will be paid $16,667 per month for his service as Executive Director and was granted a nonqualified stock option to purchase 79,818 shares of the Company’s common stock (the “Initial Canute Compensation”). The Compensation Committee determined that in order to reflect the scope of his role and the significant time that Mr. Canute will be devoting to his role as Executive Director, Mr. Canute’s cash compensation shall be increased to $21,372 per month, and Mr. Canute was granted an additional nonqualified stock option to purchase 22,854 shares of the Company’s common stock (the “Revised Canute Compensation”). The options have a seven-year term and an exercise price equal to the fair market value of the Company’s common stock based on the closing price of the Company’s common stock on each date of grant and will be subject to the terms of a nonqualified stock option agreement (the “Canute NQSO Agreement”). Such options will vest in full upon the Company’s receipt of approval from the FDA for the Company’s BLA resubmission for sacituzumab govitecan for the treatment of patients with TNBC who have received at least two prior therapies for metastatic disease under the PDUFA. The Company and Mr. Canute entered into a letter agreement (the “Canute Letter Agreement”) to memorialize his appointment as the Company’s Executive Director, and the Initial Canute Compensation. The Canute Letter Agreement may be terminated by either party at any time upon written notice to the other party. During the six months ended June 30, 2019, the Company paid Mr. Canute $0.1 million for such services.

10. Collaboration Agreement

AstraZeneca/MedImmune

In June 2018, the Company entered into a clinical collaboration with AstraZeneca and its global biologics research and development arm, MedImmune, to evaluate in Phase 1/2 studies the safety and efficacy of combining AstraZeneca’s Imfinzi^® (durvalumab), a human monoclonal antibody directed against PD-L1, with sacituzumab govitecan as a treatment of patients with triple-negative breast cancer (“TNBC”) and urothelial cancer ("UC"), which was broadened in October 2018 to include second-line metastatic non-small cell lung cancer ("NSCLC").

Part one of the two-part Phase 1/2 studies will be co-funded by the two companies. Immunomedics will supply the study drug and AstraZeneca will utilize its existing clinical trial infrastructure to accelerate the enrollment of the sacituzumab govitecan and durvalumab combination. The trial design allows for rapid transition into randomized Phase 2 studies should the first part of these studies show promising data and the companies agree to proceed based on efficacy and safety results obtained. The Company did not incur costs associated with the clinical collaboration during the Transition Period.

The collaboration terminates thirty days following the expiration of the study periods end-date. Either party may terminate the collaboration earlier by providing thirty days' written notice.

11. Commitments and Contingencies

Commitments and Contingencies

a. Legal Matters

Stockholder Complaints:

Class Action Stockholder Federal Securities Cases

Two purported class action cases were filed in the United States District Court for the District of New Jersey; namely, Fergus v. Immunomedics, Inc., et al., filed June 9, 2016; and Becker v. Immunomedics, Inc., et al., filed June 10, 2016. These cases arise from the same alleged facts and circumstances, and seek class certification on behalf of purchasers of our common stock between April 20, 2016 and June 2, 2016 (with respect to the Fergus matter) and between April 20, 2016 and June 3, 2016 (with respect to the Becker matter). These cases concern the Company’s statements in press releases, investor conference calls, and filings with the U.S. Securities and Exchange Commission (the "SEC") beginning in April 2016 that the Company would present updated information regarding its IMMU-132 breast cancer drug at the 2016 American Society of Clinical Oncology (“ASCO”) conference in Chicago, Illinois. The complaints allege that these statements were false and misleading in light of June 2, 2016 reports that ASCO had canceled the presentation because it contained previously reported information. The complaints further allege that these statements resulted in artificially inflated prices for our common stock, and that the Company and certain of its officers are thus liable under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). An order of voluntary dismissal without prejudice was entered on November 10, 2016 in the Becker matter. An order granting motion to consolidate cases, appoint lead plaintiff, and approve lead and liaison counsel was entered on February 7, 2017 in the Fergus matter. A consolidated complaint was filed on October 4, 2017. The Company filed a motion to dismiss the consolidated complaint on January 26, 2018. On March 31, 2019, the court granted the Company's motion to dismiss, without prejudice, and left plaintiffs with the ability to file an amended complaint within thirty (30) days. Counsel for the Company has consented to an extension of time for plaintiffs to file the proposed amended complaint for an additional thirty (30) days. On May 30, 2019, plaintiffs filed an amended complaint alleging many of the same allegations that were set forth in the previously filed complaints, and the Company has filed a motion to dismiss.

A third purported class action case was filed in the United States District Court for the District of New Jersey; namely, Odeh v. Immunomedics, Inc., et al., filed December 27, 2018. The complaint in this action alleges that the Company failed to disclose the results of observations made by the FDA during an inspection of the Company’s manufacturing facility in Morris Plains, New Jersey in August 2018. The complaint alleges that Immunomedics misled investors by failing to disclose the Form 483 inspection report issued by the FDA which set forth the observations of the FDA inspector during the inspection. Such observations purportedly included, inter alia, manipulated bioburden samples, misrepresentation of an integrity test procedure in the batch record, and backdating of batch records. The complaint further alleges that the Company’s failure to disclose the Form 483 resulted in an artificially inflated price for our common stock, and that the Company and certain of its officers are thus liable under Sections 10(b) and 20(a) of the Exchange Act.

On February 8, 2019, a purported class action case was filed in the United States District Court for the District of New Jersey; namely, Choi v. Immunomedics, Inc., et al. The complaint asserts violations of the federal securities laws based on claims that the Company violated the federal securities laws by making alleged misstatements in various press releases and securities filings from February 8, 2018 to November 7, 2018 and by failing to disclose the substance of its interactions with the FDA in connection with the Company's submission of its BLA for sacituzumab govitecan.

Motions for the appointment of a lead plaintiff and lead counsel and to consolidate the Odeh and Choi complaints have been filed.

On April 8, 2019, a putative stockholder of the Company filed a derivative action purportedly on behalf of the Company and against the Company’s board of directors and certain Company current and former officers, in the Superior Court of New Jersey, Law Division (Morris County); namely, Crow v. Aghazadeh, et al. The Crow complaint alleges that the individual defendants breached their fiduciary duties and committed other violations of law based on the same core allegations in the Odeh and Choi actions. The Crow complaint was served on the Company and other defendants on July 18, 2019.

Stockholder Claim in the Court of Chancery of the State of Delaware

On February 13, 2017, venBio commenced an action captioned venBio Select Advisor LLC v. Goldenberg, et al., C.A. (Del. Ch.) (the “venBio Action”), alleging that Company’s Board breached their fiduciary duties when the Board (i) amended the Company’s Amended and Restated By-laws (the “By-Laws”) to call for a plurality voting regime for the election of directors instead of majority voting, and providing for mandatory advancement of attorneys’ fees and costs for the Company’s directors and officers, (ii) rescheduled the Company’s 2016 Annual Meeting of Stockholders (the “2016 Annual Meeting”) from December 14, 2016 to February 16, 2017, and then again to March 3, 2017, and (iii) agreed to the proposed Licensing Transaction with Seattle Genetics. venBio also named Seattle Genetics as a defendant and sought an injunction preventing the Company from closing the licensing transaction with Seattle Genetics. On March 6, 2017, venBio amended its complaint, adding further allegations. The Court of Chancery entered a temporary restraining order on March 9, 2017, enjoining the closing of the Licensing Transaction. venBio amended its complaint a second time on April 19, 2017, this time adding Greenhill & Co. Inc. and Greenhill & Co. LLC (together “Greenhill”), the Company’s financial advisor on the Licensing Transaction, as an additional defendant. On May 3, 2017, venBio and the Company and individual defendants Dr. Goldenberg, Ms. Sullivan and Mr. Brian A. Markison, a director of the Company (collectively, the “Individual Defendants”) entered into the Initial Term Sheet. On June 8, 2017, venBio the Company and Greenhill entered into the Greenhill Term Sheet. On February 9, 2018, the Court of Chancery approved the Settlement, and entered an order and partial judgment releasing all claims that were asserted by venBio against the Individual Defendants and Greenhill in the venBio Action and awarding venBio fees and expenses. On May 24, 2018 the remaining parties to the venBio Action participated in a mediation of the claims against Geoff Cox, Robert Forrester, Bob Oliver, and Jason Aryeh (the "Remaining Defendants"). The mediation was unsuccessful. The Remaining Defendants filed submitted motions to dismiss the claims against them in the venBio Action. On March 18, 2019, venBio amended its complaint, adding further allegations. The Remaining Defendants filed a motion to dismiss the claims against them on May 1, 2019. The Court of Chancery has scheduled oral arguments for the motion to dismiss on November 13, 2019.

Insurance Coverage Arbitration:

The Company has initiated an arbitration with three of its management liability insurers: Starr Indemnity & Liability Company (“Starr”), Liberty Insurance Underwriters Inc. (“Liberty”), and Berkley Professional Liability (“Berkley”) (collectively, “Insurers”). The arbitration arises from the Insurers’ refusal to cover $3,402,980 in attorneys’ fees and expenses paid to venBio pursuant to a December 1, 2017, settlement agreement between venBio, the Company, Dr. Goldenberg, Ms. Sullivan, Mr. Markison, and Greenhill to partially settle the venBio Action and fully settle the Federal Action and the Delaware Section 225 Action (the “venBio Fee Award”).

The Insurers argue that the venBio Fee Award does not satisfy their policies’ definitions of covered “loss” because the policies only cover defense costs incurred by the Company. The Company counters that the venBio Fee Award is a covered settlement, not a claim for defense costs. Insurers also argue that they have no obligation to pay any defense costs or settlement incurred in the Federal Action or 225 Action because Immunomedics initiated those lawsuits. The Company’s position is that the Federal Action and 225 Action were defensive in nature and therefore covered because they were initiated to further the defense of the venBio Action. Additionally, Insurers argue the venBio Fee Award is not covered because the Company was required to obtain Insurers’ consent to enter into a binding term sheet in the venBio Action and to agree to pay the venBio Fee Award and that the Company failed to do so. The Company takes the position that Insurers at all times were aware of the developments in the venBio Action, that they sought consent to enter into the settlement, and that Insurers cannot show they were prejudiced by an any alleged failure to obtain Insurers’ consent.

Liberty also contends that the Company’s insurance claim is not covered by Liberty’s 2015-16 insurance policy and should be covered by another company’s policy in a later policy period. The Company, Starr, and Berkley take the position that the policies treat the venBio Action as a related claim to the Fergus v. Immunomedics class action stockholder federal securities case, which was filed in 2016. Because of the similar allegation in the venBio Action and Fergus, the policies deem the venBio Action claim to be made at the same time as Fergus and covered by the 2015-16 policies.

Starr is presently advancing the costs to defend the remaining claims in the venBio Action, i.e., those against the Company as Nominal Defendant and individual defendants Aryeh, Cox, Forrester, and Oliver. However, all Insurers have reserved their rights to contest coverage for any potential settlement of those claims.

Breach of Contract:

On November 16, 2018, Kapil Dhingra filed a complaint against Immunomedics, Inc., in the Superior Court of New Jersey, Law Division, Morris County, alleging breach of contract and breach of the implied covenant of good faith and fair dealing. In the complaint, Dhingra alleges that Immunomedics breached agreements with Dhingra entered into in 2012 and 2013 that purportedly give him the right to purchase 50,000 shares of Common Stock of Immunomedics for a strike price stated in the agreements. On January 11, 2019, Immunomedics filed a motion for summary judgment and to stay discovery while the motion for summary judgment was pending. On February 5, 2019, Dhingra filed an opposition brief and an amended complaint adding as a plaintiff Kapital Consulting, LLC (together with Dhingra, "Plaintiffs"), and Plaintiffs filed a partial cross-motion for summary judgment. On April 4, 2019, the Court denied all motions without prejudice pending the completion of discovery. Immunomedics continues to dispute the allegations and will seek expedited disposition following discovery.

b. Other matters:

Immunomedics is also a party to various claims and litigation arising in the normal course of business.

c. Our Licenses

We have obtained licenses from various parties for rights to use, develop and commercialize proprietary technologies and compounds. Currently, we have the following licenses:

Medical Research Council (“MRC”) - We entered into a license agreement with MRC in May 1994, whereby we have obtained a license for certain patent rights with respect to the genetic engineering on monoclonal antibodies. Our agreement does not require any milestone payments, nor have we made any payments to MRC to date. Our agreement with MRC, which expires at the expiration of the last of the licensed patents in 2020, provides for future royalty payments in the low single digits based on a percentage of product sales.

On April 4, 2018, we entered into a license agreement with The Scripps Research Institute ("TSRI"). Pursuant to the license agreement, TSRI granted to us an exclusive, worldwide, sub-licensable, royalty-bearing license to use certain patent rights relating to sacituzumab govitecan. The license agreement expires on a country-by-country basis on the expiration date of the last to expire licensed patent rights in such country covering a licensed product. The license agreement may be terminated by the mutual written consent of us and TSRI, and TSRI may terminate the license agreement upon the occurrence of certain events, including, but not limited to if we do not make a payment due pursuant to the license agreement and fail to cure such non-payment within 30 days after the date of TSRI's written notice of such non-payment. As consideration for the license granted, we made a cash payment of $250,000 to TSRI. Additionally, we will pay TRSI (i) product development milestone payments that range from the mid six-digit dollar figure to the low seven-digit dollar figure and (ii) royalties on net sales of licensed products in the low-single digit percentage figure range capped at an annual amount. We have agreed to use reasonable efforts to develop and market the licensed products.

d. Michael Pehl Separation

On March 13, 2019, the Company entered into a separation agreement (the “Separation Agreement”) with Michael Pehl, the Company’s former Chief Executive Officer, President and member of the Company’s Board. Mr. Pehl resigned as Chief Executive Officer, President and member of the Company’s Board effective February 23, 2019. Pursuant to the Separation Agreement, Mr. Pehl will receive cash payments of approximately $1.0 million over an eighteen-month period. During the six months ended June 30, 2019, the Company paid approximately $0.1 million to Mr. Pehl, and $0.9 million was accrued for as of June 30, 2019. Mr. Pehl also released the Company from any and all claims with respect to all matters arising out of or related to Mr. Pehl’s employment by the Company and his resignation.

e. Leases

Our operating lease assets primarily represent manufacturing and research and development facilities, warehouses, and offices. Our finance leases primarily represent computer equipment and are not significant. Total operating lease expense was $352,000 for the three months ended June 30, 2019, and $705,000 for the six months ended June 30, 2019. For the three and six months ended June 30, 2019, cash payments against operating lease liabilities totaled $327,000 and $654,000, respectively. The discount rate used to determine the net present value of the leases at inception was 11.0%. This is the incremental borrowing rate that represents the rate of interest that the Company would expect to pay to borrow an amount equal to the lease payments under similar terms. Our leases both share a remaining lease term of 12.3 years, some of which may include options to extend the leases further. The Company considers these options in determining the lease term used to establish the right-of-use assets and lease liabilities.

Supplemental Unaudited Condensed Consolidated Balance Sheet information related to leases was as follows (in thousands):



Operating leases:		June 30, 2019
	Operating lease right-of-use assets	$	8,239

	Current portion of lease liabilities	$	271
	Non-current portion of lease liabilities	$	10,138
	Total operating lease liabilities	$	10,409

	Weighted average remaining lease term (years)	12.3
	Weighted average discount rate	11.0		%

Supplemental cash flow information related to leases was as follows (in thousands):



	Six Months Ended June 30, 2019
Non-cash lease expense	$	130
Change in operating lease liabilities	$	79

Maturities of lease liabilities as of June 30, 2019 were as follows (in thousands):



Year 1		$	1,405
Year 2		1,453
Year 3		1,499
Year 4		1,523
Year 5		1,552
Thereafter		12,117
Total lease payments		19,549
	Less imputed interest	(9,140		)
Total		$	10,409

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Cautionary Note Regarding Forward-Looking Statements

The Securities and Exchange Commission (the “SEC”) encourages companies to disclose forward-looking information so that investors can better understand a company’s future prospects and make informed investment decisions. This Quarterly Report on Form 10-Q contains such “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These statements may be made directly in this Quarterly Report, and they may also be made a part of this Quarterly Report by reference to other documents filed with the SEC, which is known as “incorporation by reference.”

Words such as “may,” “anticipate,” “estimate,” “expects,” “projects,” “intends,” “plans,” “believes” and words and terms of similar substance used in connection with any discussion of future operating or financial performance are intended to identify forward-looking statements. All forward-looking statements are management’s present expectations of future events and are subject to a number of risks and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. This Quarterly Report on Form 10-Q, in addition to historical information, may contain forward-looking statements made pursuant to the Private Securities Litigation Reform Act of 1995. Such statements, including statements regarding expectations for the outcome of our planned resubmission of our Biologics License Application ("BLA") for sacituzumab govitecan for the treatment of patients with metastatic triple-negative breast cancer ("mTNBC") who have received at least two prior therapies for metastatic disease, and expectations for the related resubmission, the United States Food and Drug Administration ("FDA") re-inspection of the Company’s manufacturing facility where we manufacture the monoclonal antibody for further manufacture into our antibody-drug-conjugate candidate sacituzumab govitecan, potential approval and commercial launch of sacituzumab govitecan for that indication and the Company’s development of sacituzumab govitecan for additional indications, clinical trials (including the funding therefor, anticipated patient enrollment, trial outcomes, timing or associated costs), regulatory applications and related timelines, including the filing and approval timelines for BLAs, BLA resubmissions, and BLA supplements, out-licensing arrangements, forecasts of future operating results, potential collaborations, capital raising activities, and the timing for bringing any product candidate to market, involve significant risks and uncertainties and actual results could differ materially from those expressed or implied herein. Factors that could cause such differences include, but are not limited to, the Company’s reliance on third-party relationships and outsourcing arrangements (for example, in connection with manufacturing, logistics and distribution, and sales and marketing) over which it may not always have full control, including the failure of third parties on which the Company is dependent to meet the Company’s business and operational needs for investigational or commercial products and to comply with the Company’s agreements or laws and regulations that impact the Company’s business; the Company’s ability to meet pre-or post-approval compliance obligations; the imposition of significant post-approval regulatory requirements on our product candidates, including a requirement for a post-approval confirmatory clinical study, or the failure to maintain or obtain full regulatory approval for the Company’s product candidates, if received, due to a failure to satisfy post-approval regulatory requirements, such as the submission of sufficient data from a confirmatory clinical study; the uncertainties inherent in research and development; safety and efficacy concerns related to the Company’s products and product candidates; uncertainties in the rate and degree of market acceptance of products and product candidates, if approved; the inability to create an effective direct sales and marketing infrastructure or to partner with third parties that offer such an infrastructure for distribution of the Company’s product candidates, if approved; inaccuracies in the Company’s estimates of the size of the potential markets for the Company’s product candidates or limitations by regulators on the proposed treatment population for the Company’s products and product candidates; decisions by regulatory authorities regarding labeling and other matters that could affect the availability or commercial potential of the Company’s products and product candidates; the Company’s dependence on business collaborations or availability of required financing from capital markets, or other sources on acceptable terms, if at all, in order to further develop our products and finance our operations; new product development (including clinical trials outcome and regulatory requirements/actions); the risk that we or any of our collaborators may be unable to secure regulatory approval of and market our drug candidates; risks associated with litigation to which the Company is or may become a party, including the cost and potential reputational damage resulting from such litigation; loss of key personnel; competitive risks to marketed products; and the Company’s ability to repay its outstanding indebtedness, if and when required, as well as the risks discussed in the Company’s filings with the SEC. The Company is not under any obligation, and the Company expressly disclaims any obligation, to update or alter any forward-looking statements, whether as a result of new information, future events or otherwise. Refer to Item 1A “Risk Factors” in this Quarterly Report on Form 10-Q for more information.

In light of these assumptions, risks and uncertainties, the results and events discussed in the forward-looking statements contained in this Quarterly Report on Form 10-Q or in any document incorporated by reference might not occur. Stockholders are cautioned not to place undue reliance on the forward-looking statements, which speak only as of the date of this Quarterly Report on Form 10-Q or the date of the document incorporated by reference in this Quarterly Report on Form 10-Q, as applicable. We are not under any obligation, and we expressly disclaim any obligation, to update or alter any forward-looking statements, whether

as a result of new information, future events or otherwise except as may be required by applicable law. All subsequent forward-looking statements attributable to the Company or to any person acting on our behalf are expressly qualified in their entirety by the cautionary statements contained or referred to in this section.

Overview

Immunomedics, Inc., a Delaware corporation, together with its subsidiaries (collectively "we," "our," "us," "Immunomedics," or the "Company"), is a clinical-stage biopharmaceutical company that develops monoclonal antibody-based products for the targeted treatment of cancer. Our advanced proprietary technologies allow us to create humanized antibodies that can be used either alone in unlabeled or “naked” form, or conjugated with chemotherapeutics, cytokines or toxins.

We believe that our antibodies have therapeutic potential, in some cases as a naked antibody or when conjugated with chemotherapeutics, cytokines or other toxins to create unique and potentially more effective treatment options. The attachment of effective anti-tumor compounds to antibodies is intended to allow the delivery of these therapeutic agents to tumor sites with better specificity than conventional chemotherapy. This treatment method is designed to optimize the therapeutic window through reducing the systemic exposure of the patient to the therapeutic agents, which ideally minimizes debilitating side effects while maximizing the concentration of the therapeutic agent at the tumor, potentially leading to better efficacy.

Our portfolio of investigational products includes antibody-drug conjugates ("ADCs") that are designed to deliver a specific payload of a chemotherapeutic directly to the tumor while reducing overall toxicities that are usually associated with conventional administration of these chemotherapeutic agents. Our lead ADC product candidate is sacituzumab govitecan (“IMMU-132”). It has received Breakthrough Therapy Designation from the FDA for the treatment of patients with mTNBC who have received at least two prior therapies for metastatic disease.

Our corporate strategy is to commercialize sacituzumab govitecan on our own in the United States for the benefit of patients with mTNBC and the creation of value for our stockholders. On May 21, 2018, we submitted a BLA to the FDA for sacituzumab govitecan for the treatment of patients with mTNBC who have received at least two prior therapies for metastatic disease. On July 18, 2018, we received notification from the FDA that the BLA was accepted for filing and the original application was granted Priority Review with a PDUFA target action date of January 18, 2019. On January 17, 2019, we received a Complete Response Letter ("CRL") from the FDA for the BLA. On February 4, 2019, we received a written communication from the FDA enclosing the Establishment Inspection Report (“EIR”) from the chemistry, manufacturing and controls ("CMC") BLA pre-approval inspection conducted by the FDA at the Company’s Morris Plains, New Jersey antibody manufacturing facility for our ADC product candidate sacituzumab govitecan, which took place from August 6, 2018 through August 14, 2018. The FDA also notified us that the FDA will be conducting a re-inspection of our Morris Plains, New Jersey antibody manufacturing facility as part of the BLA resubmission process. We are finalizing its plans with respect to the matters raised in the CRL received from FDA on January 17, 2019 and the EIR. We met with the FDA on May 2, 2019 to review the FDA's findings and discussed our BLA resubmission.

On April 5, 2019, we entered into a promotion agreement (the “Promotion Agreement”) with Janssen Biotech Inc., ("Janssen") pursuant to which we will provide non-exclusive product detailing services to Janssen for erdafitinib (the “Product”). Pursuant to the Promotion Agreement, we will provide a dedicated sales team to market the Product, upon approval by the FDA, to oncologists and other targeted health care providers in the United States. Under the terms of the Promotion Agreement, Janssen maintains ownership of the New Drug Application for the Product as well as legal, regulatory, distribution, commercialization and manufacturing responsibilities for the Product, while we will provide product detailing services to Janssen. Following the achievement of certain sales targets in 2019 and 2020, Janssen will pay us (a) a service fee equal to a percentage in the low double digits of the portion of Cumulative Net Sales (as defined in the Promotion Agreement) in excess of a baseline amount during each of 2019 and 2020, and (b) potential milestone payments of up to $15 million when Cumulative Net Sales exceed certain thresholds during each of 2019 and 2020. On April 12, 2019, we were informed that the FDA granted accelerated approval to Janssen's Balversa (erdafitinib) for the treatment of adult patients with locally advanced or metastatic urothelial carcinoma that has a type of susceptible genetic alteration known as FGFR3 or FGFR2, and that has progressed during or following prior platinum-containing chemotherapy. Refer to "Note 2 - Revenue Recognition" for additional information.

On April 29, 2019, we entered into a license agreement (the “License Agreement”) with Everest Medicines II Limited, a China limited company (“Everest”). Pursuant to the License Agreement, we granted Everest an exclusive license to develop and commercialize sacituzumab govitecan in the People’s Republic of China, Taiwan, Hong Kong, Macao, Indonesia, Philippines, Vietnam, Thailand, South Korea, Malaysia, Singapore and Mongolia (the "Territory"). In consideration for entering into the License Agreement, Everest made a one-time, non-refundable upfront payment to us in the aggregate amount of $65.0 million which is recorded as deferred revenue. The License Agreement contains a development milestone payment of $60.0 million based upon our achievement of FDA approval for sacituzumab govitecan. The License Agreement also contains additional development milestone payments in a total amount of up to $180.0 million based upon the achievement of certain other development milestones. In addition, the License Agreement contains sales milestone payments in a total amount of up to $530.0 million based upon the achievement of certain sales milestones. Everest will make royalty payments to us based upon percentages of net sales of sacituzumab govitecan, ranging from 14% to 20%. Refer to "Note 2 - Revenue Recognition" for additional information.

As of June 30, 2019, we had $432.7 million in cash, cash equivalents and marketable securities. We believe our projected financial resources are adequate to (i) support our clinical development plan for developing sacituzumab govitecan in mTNBC, advanced urothelial cancer ("UC"), hormone receptor-positive ("HR+")/human epidermal growth factor receptor 2-negative ("HER2-") metastatic breast cancer ("mBC"), non-small cell lung cancer ("NSCLC"), (ii) further build our clinical and manufacturing infrastructure, and (iii) fund operations through 2020. However, in case of regulatory delays or other unforeseen events, we may require additional funding. Potential sources of funding in such a case could include (i) the entrance into potential development and commercial partnerships to advance and maximize our full pipeline for mTNBC and beyond in the United States and globally, and (ii) potential private and capital markets financing including the use of our ATM Agreement. Refer to "Note 7 - Stockholders' Equity" for additional information.

To accelerate the clinical and preclinical development of sacituzumab govitecan, we have entered into clinical collaborations with AstraZeneca to investigate the ADC in earlier lines of therapy for mTNBC, advanced UC and metastatic NSCLC in combination with its checkpoint inhibitor, and with Clovis to combine with its PARP inhibitor in mTNBC, advanced UC and ovarian cancer. We are also working with the University of Wisconsin on a clinical study in prostate cancer.

We also have a number of other product candidates that target solid tumors and hematologic malignancies in various stages of clinical and preclinical development. They include other ADCs such as labetuzumab govitecan, which binds the CEACAM5 antigen expressed on CRC and other solid cancers, and IMMU-140 which targets HLA-DR for the potential treatment of hematologic malignancies. We believe that our portfolio of intellectual property provides commercially reasonable protection for our product candidates and technologies.

The development and commercialization of successful therapeutic products is subject to numerous risks and uncertainties including, without limitation, the following:


•	we may be unable to obtain additional capital through strategic collaborations, licensing, issuance of convertible debt securities or equity financing in order to continue our research and secure regulatory approval of and market our drug;


•	the type of therapeutic compound under investigation and nature of the disease in connection with which the compound is being studied;


•	our ability, as well as the ability of our partners, to conduct and complete clinical trials on a timely basis;


•	the time required for us to comply with all applicable federal, state and foreign legal requirements, including, without limitation, our receipt of the necessary approvals of the FDA, if at all;


•	the financial resources available to us during any particular period; and


•	many other factors associated with the commercial development of therapeutic products outside of our control.

See Risk Factors in Item 1A of this Quarterly Report.

Critical Accounting Policies and Accounting Estimates

A critical accounting policy is one that is both important to the portrayal of our financial condition and results of operation and requires management's most difficult, subjective or complex judgments, often as a result of the need to make estimates about the effect of matters that are inherently uncertain.

For a description of our significant accounting policies, refer to "Part II, Item 8. Financial Statements and Supplementary Data, Note 2 - Summary of Significant Accounting Policies" in our 2018 Transition Report on Form 10-K. Of these policies, the following are considered critical to an understanding of our Unaudited Condensed Consolidated Financial Statements as they require the application of the most difficult, subjective and complex judgments: stock-based compensation expenses, and interest expense on liability related to sale of future royalties.

Our critical accounting estimates and assumptions impacting the unaudited condensed consolidated financial statements relate to stock-based compensation expense, and interest expense on liability related to sale of future royalties. Refer to "Note 4 - Debt" and "Note 5 - Stock-based Compensation", respectively, for more information.

Recent Accounting Pronouncements

Refer to "Note 1 - Business Overview, Basis of Presentation and Recent Accounting Pronouncements” in the Notes to Unaudited Condensed Consolidated Financial Statements for a discussion of recently adopted accounting pronouncements and accounting pronouncements not yet adopted, and their expected impact on our financial position and results of operations.

Results of Operations

Our results for any interim period, such as those described in the following analysis, are not necessarily indicative of the results for the entire year or any other future period.

Three-Month Period Ended June 30, 2019 Compared to Three-Month Period Ended June 30, 2018

Revenues



					($ in thousands)
					(Decrease)
Three Months Ended June 30,	2019		2018		2019 vs 2018
Product sales	$	—	$	—	$	—		nm
License fee and other revenues	—		250		(250		)	nm
Research and development	—		136		(136		)	nm
Total revenues	$	—	$	386	$	(386	)	nm
nm - not meaningful

Total revenue for the three months ended June 30, 2019 decreased compared to the three months ended June 30, 2018, primarily due to the discontinued sale of LeukoScan^®during February 2018 to focus on our ADC business.

Costs and Expenses



					($ in thousands)
					Increase/(Decrease)
Three Months Ended June 30,	2019		2018		2019 vs 2018
Research and development	$	52,923	$	27,603	$	25,320		91.7%
Sales and marketing	6,346		3,039		3,307			nm
General and administrative	7,899		22,139		(14,240		)	(64.3)%
Total costs and expenses	$	67,168	$	52,781	$	14,387		27.3%
nm - not meaningful

Total costs and expenses for the three months ended June 30, 2019 increased $14.4 million compared to the three months ended June 30, 2018, primarily due to an increase in research and development expenses of $25.3 million, and an increase in sales and marketing expenses of $3.3 million, partially offset by a decrease in general and administrative expenses of $14.2 million. The overall increase is attributed primarily to preparations to launch sacituzumab govitecan for commercial sales in the United States for patients with at least two prior lines of treatment for metastatic TNBC, and to expand clinical development of sacituzumab govitecan into earlier lines of therapy and other indications.

Research and Development

We do not track expenses on the basis of each individual compound under investigation. We evaluate projects under development from an operational perspective, including such factors as results of individual compounds from laboratory/animal testing, patient results and enrollment statistics in clinical trials. It is important to note that multiple product candidates are often tested simultaneously. It is not possible to calculate each antibody’s supply costs. There are many different development processes and test methods that examine multiple product candidates at the same time. We track our costs in the categories discussed below, specifically “research costs” and “product development costs” and by the types of costs outlined below.

Our research costs consist of outside costs associated with animal studies and costs associated with research and testing of our product candidates prior to reaching the clinical stage. Such research costs primarily include personnel costs, facilities, including depreciation, lab supplies, funding of outside contracted research and license fees. Our product development costs consist of costs from preclinical development (including manufacturing), conducting and administering clinical trials and patent expenses.

The following table summarizes our research and development costs for the three months ended June 30, 2019, compared to the three months ended June 30, 2018:



					($ in thousands)
					Increase
Three Months Ended June 30,	2019		2018		2019 vs 2018
Labor	$	12,317	$	6,250	$	6,067	97.1	%
Manufacturing and quality costs	27,136		15,517		11,619		74.9	%
Clinical development and operations	11,294		3,867		7,427		nm
Other	2,176		1,969		207		10.5	%
Total research and development costs	$	52,923	$	27,603	$	25,320	91.7	%
nm - not meaningful

Research and development costs increased for the three months ended June 30, 2019 by approximately $25.3 million to $52.9 million compared to the three months ended June 30, 2018. The increase in research and development costs for the three months ended June 30, 2019, compared to the three months ended June 30, 2018, relate primarily to preparations for the approval and launch of sacituzumab govitecan in the United States for patients with mTNBC, including outside manufacturers' organizations services costs and outside consulting services to improve our manufacturing and regulatory functions.

Completion of clinical trials may take several years or more. The length of time varies according to the type, complexity and the disease indication of the product candidate. We estimate that clinical trials of the type we generally conduct are typically completed over the following periods:



		Estimated Completion Period
Clinical Phase		(Years)
I		0-1
II		1-2
III		1-4

The duration and cost of clinical trials through each of the clinical phases may vary significantly over the life of a particular project as a result of, among other things, the following factors:


•	the length of time required to recruit qualified patients for clinical trials;


•	the duration of patient follow-up in light of trial results;


•	the number of clinical sites required for trials; and


•	the number of patients that ultimately participate.

Sales and Marketing

Sales and marketing expenses increased $3.3 million during the three months ended June 30, 2019, compared to the three months ended June 30, 2018, primarily due to increased headcount and labor expenses related to our sales force.

General and Administrative Expenses

The following table summarizes our general and administrative expenses for the three months ended June 30, 2019, compared to the three months ended June 30, 2018:



					($ in thousands)
					(Decrease)
Three Months Ended June 30,	2019		2018		2019 vs 2018
Labor costs	$	2,393	$	8,036	$	(5,643	)	(70.2	)%
Legal and advisory fees	2,856		5,287		(2,431		)	(46.0	)%
Consulting services	1,066		1,355		(289		)	(21.3	)%
Other	1,584		7,461		(5,877		)	(78.8	)%
Total general and administrative	$	7,899	$	22,139	$	(14,240	)	(64.3	)%
nm- not meaningful

General and administrative expenses for the three months ended June 30, 2019 decreased compared to the three months ended June 30, 2018, primarily due to decreased labor costs and legal and advisory fees.

Changes in fair market value of warrant liabilities

We had no non-cash income or expense for the three months ending June 30, 2019, compared to a $58.9 million of non-cash expense for the three months ended June 30, 2018, due to an increase in the fair value of outstanding warrants. There were no outstanding warrants as of June 30, 2019.

Interest expense

Interest expense for the three months ended June 30, 2019 was $10.6 million, compared to $9.4 million for the three months ended June 30, 2018. The $1.2 million increase was due primarily to changes in the fair value of our debt balances as a result of the RPI agreement. Refer to "Note 4 - Debt" for more information.

Income tax expense

There was no income tax expense for the three months ended June 30, 2019 and $0.2 million of income tax expense for the three months ended June 30, 2018.

Six-Month Period Ended June 30, 2019 Compared to Six-Month Period Ended June 30, 2018

Revenues



					($ in thousands)
					(Decrease)
Six Months Ended June 30,	2019		2018		2019 vs 2018
Product sales	$	—	$	450	$	(450	)	nm
License fee and other revenues	—		265		(265		)	nm
Research and development	—		153		(153		)	nm
Total revenues	$	—	$	868	$	(868	)	nm
nm - not meaningful

Total revenue for the six months ended June 30, 2019 decreased compared to the six months ended June 30, 2018, primarily due to the discontinued sale of LeukoScan^®during February 2018 to focus on our ADC business.

Costs and Expenses



					($ in thousands)
					(Decrease)/Increase
Six Months Ended June 30,	2019		2018		2019 vs 2018
Costs of goods sold	$	—	$	47	$	(47	)	nm
Research and development	111,095		56,446		54,649			96.8%
Sales and marketing	14,227		5,405		8,822			nm
General and administrative	21,494		28,993		(7,499		)	(25.9)%
Total costs and expenses	$	146,816	$	90,891	$	55,925		61.5%
nm - not meaningful

Total costs and expenses for the six months ended June 30, 2019 increased $55.9 million compared to the six months ended June 30, 2018, primarily due to an increase in research and development expenses of $54.6 million, and an increase in sales and marketing expenses of $8.8 million, partially offset by a decrease in general and administrative expenses of $7.5 million. The overall increase is attributed primarily to preparations to launch sacituzumab govitecan for commercial sales in the United States for patients with at least two prior lines of treatment for metastatic TNBC, and to expand clinical development of sacituzumab govitecan into earlier lines of therapy and other indications.

Research and Development

The following table summarizes our research and development costs for the six months ended June 30, 2019, compared to the six months ended June 30, 2018:



					($ in thousands)
					Increase/(Decrease)
Six Months Ended June 30,	2019		2018		2019 vs 2018
Labor	$	23,871	$	11,036	$	12,835		nm
Manufacturing and quality costs	66,794		30,976		35,818			nm
Clinical development and operations	15,949		7,194		8,755			nm
Other	4,481		7,240		(2,759		)	(38.1	)%
Total research and development costs	$	111,095	$	56,446	$	54,649		96.8	%
nm - not meaningful

Research and development costs increased for the six months ended June 30, 2019 by approximately $54.6 million to $111.1 million compared to the six months ended June 30, 2018. The increase in research and development costs for the six months ended June 30, 2019, compared to the six months ended June 30, 2018, relate primarily to preparations for the approval and launch of sacituzumab govitecan in the United States for patients with mTNBC, including outside manufacturers' organizations services and outside consulting services to improve our manufacturing and regulatory functions.



		Estimated Completion Period
Clinical Phase		(Years)
I		0-1
II		1-2
III		1-4

The duration and cost of clinical trials through each of the clinical phases may vary significantly over the life of a particular project as a result of, among other things, the following factors:


•	the length of time required to recruit qualified patients for clinical trials;


•	the duration of patient follow-up in light of trial results;


•	the number of clinical sites required for trials; and


•	the number of patients that ultimately participate.

Sales and Marketing

Sales and marketing expenses increased $8.8 million during the six months ended June 30, 2019, compared to the six months ended June 30, 2018, primarily due to increased headcount and labor expenses related to our sales force.

General and Administrative Expenses

The following table summarizes our general and administrative expenses for the six months ended June 30, 2019, compared to the six months ended June 30, 2018:



					($ in thousands)
					(Decrease)/Increase
Six Months Ended June 30,	2019		2018		2019 vs 2018
Labor costs	$	9,206	$	10,651	$	(1,445	)	(13.6	)%
Legal and advisory fees	3,910		8,414		(4,504		)	(53.5	)%
Consulting services	3,212		2,189		1,023			46.7	%
Other	5,166		7,739		(2,573		)	(33.2	)%
Total general and administrative	$	21,494	$	28,993	$	(7,499	)	(25.9	)%
nm- not meaningful

General and administrative expenses for the six months ended June 30, 2019 decreased compared to the six months ended June 30, 2018, primarily due to decreased labor costs and legal and advisory fees.

Changes in fair market value of warrant liabilities

We had no non-cash income or expense for the six months ending June 30, 2019, compared to a $49.0 million non-cash expense for the six months ended June 30, 2018, due to an increase in the fair value of then outstanding warrants. There were no outstanding warrants as of June 30, 2019.

Interest expense

Interest expense for the six months ended June 30, 2019 was $20.6 million, compared to $20.3 million for the six months ended June 30, 2018. The $0.3 million increase was due primarily to changes in the fair value of our debt balances as a result of the RPI agreement. Refer to "Note 4 - Debt" for more information.

Income tax expense

There was no income tax expense for the six months ended June 30, 2019, and $0.2 million of income tax expense for the six months ended June 30, 2018.

Liquidity and Capital Resources

Since its inception in 1982, Immunomedics’ principal sources of funds have been the private and public sale of equity and debt securities, and revenues from licensing agreements, including up-front and milestone payments, funding of development programs, and other forms of funding from collaborations.

Actual results could differ materially from our expectations as a result of a number of risks and uncertainties, including the risks described in Item 1A Risk Factors, “Factors That May Affect Our Business and Results of Operations,” and elsewhere in this Quarterly Report on Form 10-Q. Our working capital and working capital requirements are affected by numerous factors and such factors may have a negative impact on our liquidity. Principal among these factors are the success of product commercialization and marketing products, the technological advantages and pricing of our products, the impact of the regulatory requirements applicable to us, and access to capital markets that can provide us with the resources, when necessary, to fund our strategic priorities.

Discussion of Cash Flows

The following table summarizes our cash flows for the six months ended June 30, 2019 and 2018:



	($ in thousands)
	Six Months Ended June 30,
	2019			2018
Net cash used in operating activities	$	(67,173	)	$	(69,647	)
Net cash (used in) provided by investing activities	(5,699		)	44,030
Net cash provided by financing activities	7,935			577,338

Net cash used in operating activities. Net cash used in operating activities during the six months ended June 30, 2019 was approximately $67.2 million, compared to $69.6 million during the six months ended June 30, 2018, a decrease in cash used in operating activities of $2.5 million. The decrease in cash used in operating activities for the period was primarily due to an increase in the net loss partially offset by an increase of $65.0 million of deferred revenue related to the Everest Agreement, as well as changes in the fair value of warrant liabilities.

Net cash (used in) provided by investing activities. Net cash used in investing activities during the six months ended June 30, 2019 was $5.7 million, compared to cash provided by investing activities of $44.0 million during the six months ended June 30, 2018, an increase of approximately $49.7 million, due primarily to a decrease of $52.2 million in proceeds from sales or maturities of marketable securities.

Net cash provided by financing activities. Net cash provided by financing activities during the six months ended June 30, 2019 was $7.9 million, compared to $577.3 million of cash provided by financing activities during the six months ended June 30, 2018. The decrease of $569.4 million was due primarily to cash proceeds received from our agreement with RPI in January 2018, as well as the sale of common stock and warrants, net of related expenses in the prior year.

Working Capital and Cash Requirements

Working capital was $397.7 million as of June 30, 2019, compared to $472.8 million as of December 31, 2018. The $75.1 million decrease in working capital was primarily due to increased research and development expenses in clinical trial costs as well as increases in labor related costs in connection with preparations for the approval and launch of sacituzumab govitecan in the United States for patients with mTNBC.

We expect to continue to fund our operations with our current financial resources. However, in case of regulatory delays or other unforeseen events, we may require additional funding. Potential sources of funding include (i) the entrance into various potential strategic partnerships targeted at advancing and maximizing our full pipeline for mTNBC and beyond, (ii) the sales and marketing of sacituzumab govitecan as a third-line therapy for mTNBC in the United States (pending FDA approval), and (iii) potential equity and debt financing transactions including the use of our ATM Agreement. Refer to "Note 7 - Stockholders' Equity" for additional information.

Until we can generate significant cash through (i) the entrance into various potential strategic partnerships towards advancing and maximizing our full pipeline for mTNBC and beyond, or (ii) the sales and marketing of sacituzumab govitecan as a third-line therapy for mTNBC in the United States (pending FDA approval), we expect to continue to fund our operations with our current financial resources. In the future, if we cannot obtain sufficient funding through the above methods, we could be required to finance future cash needs through the sale of additional equity and/or issuance of debt. However, there can be no assurance that we will be able to raise the additional capital needed to complete our pipeline of research and development programs on commercially acceptable terms, if at all. The capital markets have experienced volatility in recent years, which has resulted in uncertainty with respect to availability of capital and hence the timing to meet an entity’s liquidity needs. Our existing debt may also negatively impact our ability to raise additional capital. If we are unable to raise capital on acceptable terms, our ability to continue our business would be materially and adversely affected. Actual results could differ materially from our expectations as a result of a number of risks and uncertainties, including the risks described in Item 1A Risk Factors, “Factors That May Affect Our Business and Results of Operations,” and elsewhere in our Quarterly Report on Form 10-Q. Our working capital and working capital requirements are affected by numerous factors and such factors may have a negative impact on our liquidity. Principal among these factors are the success of product commercialization and marketing products, the technological advantages and pricing

of our products, the impact of the regulatory requirements applicable to us, and access to capital markets that can provide us with the resources, when necessary, to fund our strategic priorities.

Off-Balance Sheet Arrangements

We did not have during the periods presented in this quarterly report on Form 10-Q, and we do not currently have, any off-balance sheet arrangements, as defined in the rules and regulations of the SEC.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Our exposure to market risk has not changed materially since our disclosure in Item 7A, "Quantitative and Qualitative Disclosures About Market Risk" in our Transition Report on Form 10-K for the Transition Period ended December 31, 2018.

ITEM 4. CONTROLS AND PROCEDURES

(a)Disclosure Controls and Procedures: We maintain controls and procedures designed to ensure that we are able to collect the information we are required to disclose in the reports we file with the SEC, and to record, process, summarize and report this information within the time periods specified in the rules and forms promulgated by the SEC. Our Chief Financial Officer, who serves as our principal executive officer and principal financial officer, and Principal Accounting Officer are responsible for establishing and maintaining these disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the "Exchange Act")) and, as required by the rules of the SEC, evaluating their effectiveness. Based on their evaluation of our disclosure controls and procedures as of the end of the period covered by this Quarterly Report on Form 10-Q, our Chief Financial Officer and Principal Accounting Officer believe that these procedures are effective to ensure that we are able to collect, process and disclose the information we are required to disclose in the reports we file with the SEC within the required time periods.

(b)Changes in Internal Controls over Financial Reporting: There were no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act), identified in connection with the evaluation of such internal control that occurred during the quarter ended June 30, 2019 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

The information called for by this item is incorporated by reference to "Note 11 - Commitments and Contingencies" of Notes to Unaudited Condensed Consolidated Financial Statements contained in Part I Item 1 of this Quarterly Report on Form 10-Q.

Item 1A. RISK FACTORS

Factors That May Affect Our Business and Results of Operations

Investing in our common stock involves a high degree of risk. You should carefully consider the risks described below, as well as the other information in this quarterly report, including our financial statements and the related notes and “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” before deciding whether to invest in our common stock. The occurrence of any of the events or developments described below could harm our business, financial condition, results of operations and growth prospects. In such an event, the market price of our common stock could decline, and you may lose all or part of your investment. Additional risks and uncertainties not presently known to us or that we currently deem immaterial also may impair our business operations

Risks Relating to Our Business, Operations and Product Development

We have a long history of operating losses and it is likely that our operating expenses will continue to exceed our revenues for the foreseeable future.

We have incurred significant operating losses since our formation in 1982. We continue to spend our cash resources to fund our research and development programs and, subject to adequate funding, we expect these expenses to increase for the foreseeable future. Our only significant sources of revenue in recent years have been derived from collaboration agreements and sales of our LeukoScan^® product in certain European countries. Additionally, the only product sales we have earned to date have come from the limited sales of our LeukoScan^® diagnostic imaging product for which our (i) patent protection has expired and (ii) future sales were discontinued during February 2018. There can be no assurance that we will be profitable in future quarters or other periods. Further, we have made the strategic decision to focus on our therapeutic pipeline. We have never had product sales of any therapeutic product. We expect to experience significant operating losses as we invest further in our research and development activities while simultaneously attempting to develop and commercialize our other therapeutic product candidates. Even if we are able to develop commercially viable therapeutic products, certain obligations the Company has to third parties, including, without limitation, our obligation to pay RPI royalties on certain sacituzumab govitecan revenues pursuant to the Royalty Agreement may erode profitability of such products. If we are unable to develop commercially viable therapeutic products or to license them to third parties, it is likely that we will never achieve significant revenues or become profitable, either of which would jeopardize our ability to continue as a going concern.

We have significant future capital needs and may be unable to raise capital when needed, which could force us to delay or reduce our clinical development efforts.

We believe our projected financial resources are adequate to (i) support our clinical development plan for developing sacituzumab govitecan in mTNBC, advanced urothelial cancer ("UC"), hormone receptor-positive ("HR+")/human epidermal growth factor receptor 2-negative ("HER2-") metastatic breast cancer ("mBC"), non-small cell lung cancer ("NSCLC"), (ii) further build our clinical and manufacturing infrastructure, and (iii) fund operations through 2020. However, in case of regulatory delays or other unforeseen events, we may require additional funding.

We may require additional funding in the future to complete our clinical trials currently planned or underway, continue research and new development programs, and continue operations. Potential sources of funding include (i) the entrance into various potential strategic partnerships targeted at advancing and maximizing our full pipeline for mTNBC and beyond, (ii) the sales and marketing of sacituzumab govitecan as a third-line therapy for mTNBC in the United States (pending FDA approval), and (iii) potential equity and debt financing transactions including the use of our ATM Agreement. Refer to "Note 7 - Stockholders' Equity" for additional information.

a third-line therapy for mTNBC in the United States (pending FDA approval), we expect to continue to fund our operations with our current financial resources. In the future, if we cannot obtain sufficient funding through the above methods, we could be required to finance future cash needs through the sale of additional equity and/or issuance of debt. However, there can be no assurance that we will be able to raise the additional capital needed to complete our pipeline of research and development programs on commercially acceptable terms, if at all. The capital markets have experienced volatility in recent years, which has resulted in uncertainty with respect to availability of capital and hence the timing to meet an entity’s liquidity needs. Our existing debt may also negatively impact our ability to raise additional capital. If we are unable to raise capital on acceptable terms, our ability to continue our business would be materially and adversely affected.

Other than our pending BLA resubmission for sacituzumab govitecan for patients with metastatic triple-negative breast cancer, our other most advanced therapeutic product candidates are still only in the clinical development stage, and may require us to raise capital in the future in order to fund further expensive and time-consuming studies before they can even be submitted for final regulatory approval. A failure of a clinical trial could severely harm our business and results of operations.

Clinical trials involve the administration of a product candidate to patients who are already extremely ill, making patient enrollment often difficult and expensive. Moreover, even in ideal circumstances where the patients can be enrolled and then followed for the several months or more required to complete the study, the trials can be suspended, terminated, delayed or otherwise fail for any number of reasons, including:


•	later-stage clinical trials may raise safety or efficacy concerns not readily apparent in earlier trials or fail to meet the primary endpoint;


•	unforeseen difficulties in manufacturing the product candidate in compliance with all regulatory requirements and in the quantities needed to complete the trial which may become cost-prohibitive;


•	we or any of our collaboration partners may experience delays in obtaining, or be unable to obtain, agreement for the conduct of our clinical trials from the FDA, institutional review boards ("IRBs"), or other reviewing entities at clinical sites selected for participation in our clinical trials;


•	while underway, the continuation of clinical trials may be delayed, suspended or terminated due to modifications to the clinical trial’s protocols based on interim results obtained or changes required or conditions imposed by the FDA, an IRB, a data and safety monitoring board (“DSMB”), or any other regulatory authority;


•	our third-party contractors may fail to meet their contractual obligations to us in a timely manner;


•	the FDA or other regulatory authorities may impose a clinical hold, for example based on an inspection of the clinical trial operations or trial sites;


•	we or any of our collaboration partners may suspend or cease trials in our or their sole discretion;


•	during the long trial process alternative therapies may become available which make further development of the product candidate impracticable; and


•	if we are unable to obtain the additional capital we need to fund all of the clinical trials we foresee, we may be forced to cancel or otherwise curtail such trials and other studies.

Any substantial delay in successfully completing clinical trials for our product candidates, sacituzumab govitecan and labetuzumab govitecan, could severely harm our business and results of operations.

Moreover, principal investigators for our clinical trials may serve as scientific advisers or consultants to us from time to time and receive compensation in connection with such services. Under certain circumstances, the Company may be required to report some of these relationships to the FDA. The FDA may conclude that a financial relationship between the Company and a principal investigator has created a conflict of interest or otherwise affected interpretation of the study. The FDA may therefore question the integrity of the data generated at the applicable clinical trial site and the utility of the clinical trial itself may be jeopardized. This could result in a delay in approval, or rejection, of our marketing applications by the FDA and may ultimately lead to the denial of regulatory approval of one or more of our product candidates.

Our clinical trials may not adequately show that our drugs are safe or effective, and a failure to achieve the planned endpoints could result in termination of product development.

Progression of our drug products through the clinical development process is dependent upon our trials indicating our drugs have adequate safety and efficacy in the patients being treated by achieving pre-determined safety and efficacy endpoints according to the trial protocols. Failure to achieve either of these endpoints could result in delays in our trials, require the performance of additional unplanned trials or require termination of any further development of the product for the intended indication.

These factors could result in delays in the development of our product candidates and could result in significant unexpected costs or the termination of programs.

Should the clinical development process be successfully completed, our ability to derive revenues from the sale of therapeutics will depend upon our first obtaining FDA as well as foreign regulatory approvals, all of which are subject to a number of unique risks and uncertainties.

Even if we are able to demonstrate the safety and efficacy of our product candidates in clinical trials, if we fail to gain timely approval to commercialize our product candidates from the FDA and other foreign regulatory authorities, we will be unable to generate the revenues we will need to build our business. The FDA or comparable regulatory authorities in other countries may delay, limit or deny approval of our product candidates for various reasons. For example, such authorities may disagree with the design, scope or implementation of our clinical trials; or with our interpretation of data from our preclinical studies or clinical trials; or may otherwise take the position that our product candidates fail to meet the requirements and standards for regulatory approval. There is limited FDA precedent or guidance on ADCs, and ADC product candidates may present more complex review considerations than conventional drugs, given their biologic (antibody), drug, and linker components. There are numerous FDA personnel assigned to review different aspects of a BLA, and uncertainties can be presented by their ability to exercise judgment and discretion during the review process. During the course of review, the FDA may request or require additional preclinical, clinical, chemistry, manufacturing, and control ("CMC"), or other data and information, and the development and provision of these data and information may be time consuming and expensive. Regulatory approvals may not be granted on a timely basis, if at all, and even if and when they are granted, they may not cover all the indications for which we seek approval. On May 21, 2018, we submitted a Biologics License Application (“BLA”) to the FDA for sacituzumab govitecan for the treatment of patients with mTNBC who have received at least two prior therapies for metastatic disease. On July 18, 2018, we received notification from the FDA that the BLA was accepted for filing and the original application was granted Priority Review with a PDUFA target action date of January 18, 2019. On January 17, 2019, we received a Complete Response Letter ("CRL") from the FDA for the BLA. On February 4, 2019, we received a written communication from the FDA enclosing the Establishment Inspection Report (“EIR”) from the chemistry, manufacturing and controls BLA pre-approval inspection conducted by the FDA at the Company’s Morris Plains, New Jersey antibody manufacturing facility for our ADC product candidate sacituzumab govitecan, which took place from August 6, 2018 through August 14, 2018. The FDA also notified the Company that the FDA will be conducting a re-inspection of the Company’s Morris Plains, New Jersey antibody manufacturing facility as part of the BLA resubmission process. The Company is finalizing its plans with respect to the matters raised in the CRL received from FDA on January 17, 2019 and the EIR. The Company met with the FDA on May 2, 2019 to review the FDA's findings and discussed the Company's BLA resubmission. Further, while we may develop a product candidate with the intention of addressing a large, unmet medical need, the FDA may only approve the use of the drug for indications affecting a relatively small number of patients, thus greatly reducing the market size and our potential revenues. The approvals may also contain significant limitations in the form of warnings, precautions or contraindications with respect to conditions of use, which could further narrow the size of the market. In certain countries, even if the health regulatory authorities approve a drug, it cannot be marketed until pricing for the drug is also approved. Finally, even after approval can be obtained, we may be required to recall or withdraw a product as a result of newly discovered safety or efficacy concerns, either of which would have a materially adverse effect on our business and results of operations.

In order to fund future operations, we will need to raise significant amounts of additional capital. Because it can be difficult for a mid-cap company like ours to raise equity capital on acceptable terms, we cannot assure you that we will be able to obtain the necessary capital when we need it, or on acceptable terms, if at all.

Even if our technologies and product candidates are superior, if we lack the capital needed to bring our future products to market, we will never be successful. We have obtained the capital necessary to fund our research and development programs to date primarily from the following sources:


•	upfront payments, milestone payments, and payments for limited amounts of our antibodies received from licensing partners;


•	proceeds from the public and private sale of our equity or debt securities; and


•	limited product sales of LeukoScan^®(which were discontinued during February 2018), licenses, grants and interest income from our investments.

Over the long term, we expect to commercialize sacituzumab govitecan in mTNBC in the United States and globally, to expand sacituzumab govitecan to treat patients with other solid tumors, including UC, HR+/HER2- mBC, NSCLC and other serious cancers, to expand research and development activities to continue to expand and we do not believe we will have adequate cash to continue commercial expansion and development of sacituzumab govitecan, or to complete development of product candidates in line with our pipeline included in our long term corporate strategy. Our capital requirements are dependent on numerous factors, including:


•	the rate of progress of commercialization of sacituzumab govitecan in mTNBC and our ability to develop it for other cancers;


•	the rate at which we progress our research programs and the number of product candidates we have in preclinical and clinical development at any one time;


•	the cost of conducting clinical trials involving patients in the United States, Europe and possibly elsewhere;


•	our need to establish the manufacturing capabilities necessary to produce the quantities of our product candidates we project we will need;


•	the time and costs involved in obtaining FDA and foreign regulatory approvals;


•	the cost of first obtaining, and then defending, our patent claims and other intellectual property rights; and


•	our ability to enter into licensing and other collaborative agreements to help offset some of these costs.

There may be additional cash requirements for many reasons, including, but not limited to, changes in our commercial expansion plans, our research and development plans, the need for unexpected capital expenditures or costs associated with any acquisitions of other businesses, assets or technologies that we may choose to undertake and marketing and commercialization of our product candidates. If we deplete our existing capital resources, we will be required to either obtain additional capital quickly, or significantly reduce our operating expenses and capital expenditures, either of which could have a material adverse effect on us.

Until we can generate significant cash through either (i) the entrance into various potential strategic partnerships targeted at advancing and maximizing the Company’s full pipeline for mTNBC and beyond, or (ii) the sales and marketing of sacituzumab govitecan as a third-line therapy for mTNBC in the United States (pending FDA approval), we expect to continue to fund our operations with our current financial resources. We believe our projected financial resources are adequate to (i) support our clinical development plan for developing sacituzumab govitecan in mTNBC, advanced urothelial cancer ("UC"), hormone receptor-positive ("HR+")/human epidermal growth factor receptor 2-negative ("HER2-") metastatic breast cancer ("mBC"), non-small cell lung cancer ("NSCLC"), (ii) further build our clinical and manufacturing infrastructure, and (iii) fund operations through 2020. However, in case of regulatory delays or other unforeseen events, we may require additional funding. If, however, we cannot obtain sufficient funding through the entrance into various potential strategic partnerships targeted at advancing and maximizing the Company’s full pipeline for mTNBC and beyond, we could be required to finance future cash needs through the sale of additional equity and/ or issuance of debt. However, there can be no assurance that we will be able to raise the additional capital needed to complete our pipeline of research and development programs on commercially acceptable terms, if at all. The capital markets have experienced volatility in recent years, which has resulted in uncertainty with respect to availability of capital and hence the timing to meet an entity’s liquidity needs. The Company’s existing debt will also negatively impact the Company’s ability to raise additional capital. If the Company is unable to raise capital on acceptable terms, its ability to continue its business would be materially and adversely affected. Having insufficient funds may require us to delay, scale-back, or eliminate some or all of our programs, or renegotiate less favorable terms than we would otherwise choose. Failure to obtain adequate financing also may adversely affect our ability to operate as a going concern.

Additionally, if we raise funds by issuing equity securities, dilution to existing stockholders would result; and if we raise funds by incurring additional debt financing, the terms of the debt may involve future cash payment obligations and/or conversion to equity as well as restrictions that may limit our ability to operate our business.

If we, or any of our collaboration partners, or our or their contract manufacturers, cannot successfully and efficiently manufacture the compounds that make up our products and product candidates, our ability, and the ability of our collaboration partners, to sell products and conduct clinical trials will be impaired.

Our ability to conduct our preclinical and clinical research and development programs depends, in large part, upon our ability to manufacture our proprietary compounds in accordance with the FDA and other regulatory requirements. We have limited historical experience in manufacturing these compounds in significant quantities, and we may not be able to do so in the quantities required to commercialize these products. Any interruption in manufacturing across the supply chain, whether by natural acts or otherwise, could significantly and adversely affect our operations, and delay our research and development programs.

We and our collaboration partners also depend on third parties to provide certain raw materials, and contract manufacturing and processing services. All manufacturers of biopharmaceutical products must comply with current cGMPs, required by the FDA and other regulatory agencies. Such regulations address, among other matters, controls in manufacturing processes, quality control and quality assurance requirements and the maintenance of proper records and documentation. The FDA and other regulatory agencies routinely inspect manufacturing facilities, including in connection with the review of a BLA. The FDA generally will issue a notice on Form 483 if it finds issues with respect to its inspections, to which the facility must adequately respond in order to avoid escalated regulatory concerns. If our manufacturing facility or those facilities of our collaboration partners and our respective contract manufacturers or processors do not comply with applicable cGMPs and other regulatory requirements, in addition to regulatory enforcement, we may be subject to product liability claims, we may be unable to meet clinical demand for our products, and we could suffer delays in the progress of clinical trials for products under development and of potential approval and commercialization.

Although historically we have been a research and development company, we currently plan to commercialize our lead product candidate internally rather than license such asset. There can be no assurance that we will be successful in developing and expanding commercial operations or balancing our research and development activities with our commercialization activities.

We have historically been engaged primarily in research and development activities, but plan to commercialize our lead product candidate, sacituzumab govitecan, ourselves. There can be no assurance that we will be able to successfully manage the balance of our research and development operations with our planned commercialization activities. Potential investors should be aware of the problems, delays, expenses and difficulties frequently encountered by companies balancing development of product candidates, which can include problems such as unanticipated issues relating to clinical trials and receipt of approvals from the FDA and foreign regulatory bodies, with commercialization efforts, which can include problems relating to managing manufacturing and supply, reimbursement, marketing problems and additional costs. Our product candidates will require significant additional research and clinical trials, and we will need to overcome significant regulatory burdens prior to commercialization in the United States and other countries. In addition, we may be required to spend significant funds on building out our commercial operations. If we are unable to develop commercially viable therapeutic products, certain obligations the Company has to third parties, including, without limitation, our obligation to pay RPI royalties on certain sacituzumab govitecan revenues pursuant to the funding agreement may also erode profitability of this product. There can be no assurance that after the expenditure of substantial funds and efforts, we will successfully develop and commercialize any of our product candidates, generate any significant revenues or ever achieve and maintain a substantial level of sales of our products.

We may not successfully establish and maintain collaborative and licensing arrangements, which could adversely affect our ability to develop and commercialize certain of our product candidates. Any of our collaboration partners may not adequately perform their responsibilities under our agreements, which could adversely affect our development and commercialization program.

A key element of our business strategy has been to develop, market and commercialize our product candidates through collaborations with more established pharmaceutical companies. To the extent we continue to rely on this business strategy, we may not be able to maintain or expand these licenses and collaborations or establish additional licensing and collaboration arrangements necessary to develop and commercialize any of our product candidates. Even if we are able to maintain or establish licensing or collaboration arrangements, these arrangements may not be on favorable terms and may contain provisions that will restrict our ability to develop, test and market our product candidates. Any failure to maintain or establish licensing or collaboration arrangements on favorable terms could adversely affect our business prospects, financial condition or ability to develop and commercialize our product candidates.

We expect to rely at least in part on third party collaborators to perform a number of activities relating to the development and commercialization of certain of our product candidates, including the manufacturing of product materials, the design and

conduct of clinical trials for certain of our product candidates, and potentially the obtaining of regulatory approvals and marketing and distribution of any successfully developed products. Our collaborative partners may also have or acquire rights to control aspects of our product development and clinical programs. As a result, we may not be able to conduct these programs in the manner or on the time schedule we currently contemplate. In addition, if any of these collaborative partners withdraw support for our programs or product candidates or otherwise impair their development, our business could be negatively affected. Our expenses may also increase as a result of our plan to undertake these activities internally to commercialize sacituzumab govitecan.

In addition, our success depends on the performance of our collaborators of their responsibilities under these arrangements. Some potential collaborators may not perform their obligations in a timely fashion or in a manner satisfactory to us. Because such agreements may be exclusive, we may not be able to enter into a collaboration agreement with any other company covering the same product field during the applicable collaborative period. In addition, our collaborators’ competitors may not wish to do business with us at all due to our relationship with our collaborators. If we are unable to enter into additional product discovery and development collaborations, our ability to sustain or expand our business will be significantly diminished.

Our future success will depend upon our ability to first obtain and then adequately protect our patent and other intellectual property rights, as well as avoiding the infringement of the rights of others.

Our future success will be highly dependent upon our ability to first obtain and then defend the patent and other intellectual property rights necessary for the commercialization of our product candidates. We have filed numerous patent applications on the technologies and processes that we use in the United States and certain foreign countries. Although we have obtained a number of issued United States patents to date, the patent applications owned or licensed by us may not result in additional patents being issued. Moreover, these patents may not afford us the protection we need against competitors with similar technologies or products. A number of jurisdictions where we have sought, or may in the future choose to seek, intellectual property protection, have intellectual property laws and patent offices which are still developing. Accordingly, we may have difficulty obtaining intellectual property protection in these markets, and any intellectual property protections which we do obtain may be less protective than in the United States, which could have an adverse effect on our operations and financial prospects.

The successful development of therapeutic products frequently requires the application of multiple technologies that may be subject to the patent or other intellectual property rights of third parties. Although we believe it is likely we will need to license technologies and processes from third parties in the ordinary course of our business, we are not currently aware of any material conflict involving our technologies and processes with any valid patents or other intellectual property rights owned or licensed by others that would affect commercial sales of sacituzumab govitecan or other products starting in 2020. In the event that a third party was to claim such a conflict existed, they could sue us for damages as well as seek to prevent us from commercializing our product candidates. It is possible that a third party could successfully claim that our products infringe on their intellectual property rights. Uncertainties resulting from the litigation and continuation of patent litigation or other proceedings could have a material adverse effect on our ability to compete in the marketplace. Any patent litigation or other proceeding, even if resolved in our favor, would require significant financial resources and management time.

Some of our competitors may be able to sustain these costs more effectively than we can because of their substantially greater financial and managerial resources. If a patent litigation or other proceeding is resolved unfavorably to us, we may be enjoined from manufacturing or selling our products without a license from the other party, in addition to being held liable for significant damages. We may not be able to obtain any such license on commercially acceptable terms, if at all.

In addition to our reliance on patents, we attempt to protect our proprietary technologies and processes by relying on trade secret laws, nondisclosure and confidentiality agreements and licensing arrangements with our employees and other persons who have access to our proprietary information. These agreements and arrangements may not provide meaningful protection for our proprietary technologies and processes in the event of unauthorized use or disclosure of such information. In addition, our competitors may independently develop substantially equivalent technologies and processes or otherwise gain access to our trade secrets or technology, either of which could materially and adversely affect our competitive position.

Expiry of our intellectual property rights could lead to increased competition.

Even where we are able to obtain and then defend patent and other intellectual property rights necessary for research, development and commercialization of our product candidates, such intellectual property rights will be for a limited term. Where patents which we own or license expire, the technology comprising the subject of the patent may be utilized by third parties in research and development or competing products (for example, biosimilars of a patented product may be manufactured by third parties once the patent expires). While we endeavor to maintain robust intellectual property protection, as our existing issued patents expire, it may materially and adversely affect our competitive position.

We face substantial competition in the biotechnology industry and may not be able to compete successfully against one or more of our competitors.

The biotechnology industry is highly competitive, particularly in the area of therapeutic oncology products. In recent years, there have been extensive technological innovations achieved in short periods of time, and it is possible that future technological changes and discoveries by others could result in our products and product candidates quickly becoming uncompetitive or obsolete. A number of companies, including Amgen, AstraZeneca, Bayer Healthcare Pharmaceuticals, Bristol-Myers Squibb, Celgene, Daiichi Sankyo, Eli Lilly, Genmab, GlaxoSmithKline, Immunogen, Johnson & Johnson, Merck, Merck Serono, Novartis, Pfizer, Roche, and Seattle Genetics, are engaged in the development of therapeutic oncology products. Many of these companies have significantly greater financial, technical and marketing resources than we do. In addition, many of these companies have more established positions in the pharmaceutical industry and are therefore better equipped to develop, commercialize and market oncology products. Even some smaller competitors may obtain a significant competitive advantage over us if they are able to discover or otherwise acquire patentable inventions, form collaborative arrangements or merge with larger pharmaceutical companies. Further, even if we are able to successfully develop and commercialize products, other manufacturers operating in emerging markets may also have a competitive advantage over us with respect to competing products due to their ability to manufacture with a lower cost base.

We expect to face increasing competition from universities and other non-profit research organizations. These institutions carry out a significant amount of research and development in the field of antibody-based technologies and they are increasingly aware of the commercial value of their findings. As a result, they are demanding greater patent and other proprietary rights, as well as licensing and future royalty revenues. It is possible that such competition could come from universities with which we have, or have previously had, collaborative research and development relationships, notwithstanding our efforts to protect our intellectual property in the course of such relationships.

We may be liable for contamination or other harm caused by hazardous materials that we use in the operations of our business.

In addition to laws and regulations enforced by the FDA, we are also subject to regulation under various other foreign, federal, state and local laws and regulations. Our manufacturing and research and development programs involve the controlled use of viruses, hazardous materials, chemicals and various radioactive compounds. The risk of accidental contamination or injury from these materials can never be completely eliminated, and if an accident occurs, we could be held liable for any damages that result, which could exceed our available resources.

The nature of our business exposes us to significant liability claims, and our insurance coverage may not be adequate to cover any future claims.

The use of our compounds in clinical trials and any future sale exposes us to liability claims that could be substantial. These claims might be made directly by healthcare providers, medical personnel, patients, consumers, pharmaceutical companies, and others selling or distributing our compounds. While we currently have product liability insurance that we consider adequate for our current needs, we may not be able to continue to obtain comparable insurance in the future at an acceptable cost, if at all. If for any reason we cannot maintain our existing or comparable liability insurance, our ability to clinically test and market products could be significantly impaired. Moreover, the amount and scope of our insurance coverage, as well as the indemnification arrangements with third parties upon which we rely, may be inadequate to protect us in the event of a successful product liability claim. Any successful claim in excess of our insurance coverage could materially and adversely affect our financial condition and operating results.

Certain potential for conflicts of interest, both real and perceived, exist which could result in expensive and time-consuming litigation.

Certain of our former officers and directors have relationships and agreements, both with us as well as among themselves and their respective affiliates, which create the potential for both real, as well as perceived, conflicts of interest. These include Dr. David M. Goldenberg, our former Chairman of our Board of Directors, our former Chief Scientific Officer and our former Chief Patent Officer, and Ms. Cynthia L. Sullivan, a former Director and our former President and Chief Executive Officer (who is also the wife of Dr. Goldenberg). Dr. Goldenberg is also a minority stockholder of our majority-owned subsidiary, IBC. Dr. Goldenberg was the primary inventor of new intellectual property for Immunomedics and IBC and was largely responsible for allocating ownership between the two companies. Immunomedics has incurred expenses on behalf of the IBC operations, including interest, over the past fifteen years. As of June 30, 2019, IBC has a liability to Immunomedics Inc. which is eliminated in consolidation.

On January 8, 2018, Morris Rosenberg joined the Company as Chief Technology Officer and became a full-time employee and was permitted to continue to provide certain limited outside consulting services through M Rosenberg BioPharma Consulting LLC.

On March 5, 2019, we entered into a Letter Agreement with Scott Canute, a member of our Board of Directors, in connection with his appointment as Executive Director of the Company.

As a result of these and other relationships, the potential for both real and perceived conflicts of interest exists and disputes could arise over the allocation of funds, research projects and ownership of intellectual property rights. In addition, in the event that we become involved in stockholder litigation regarding these potential conflicts, we might be required to devote significant resources and management time defending the Company from these claims, which could adversely affect our results of operations.

The commercial success of our product candidates depends on the availability and sufficiency of third-party payor coverage and reimbursement. Given that recent cancer therapeutics for solid cancers such as the ones we are developing can cost approximately in excess of $12,500 a month, even if our product candidates become available for sale it is likely that federal and state governments, insurance companies and other payors of health care costs will try to first limit the use of these drugs to certain patients, and may be reluctant to provide a level of reimbursement that permits us to earn a significant profit on our investment, if any.

Our ability to successfully commercialize therapeutic products will depend, in significant part, on the extent to which hospitals and physicians can obtain appropriate reimbursement levels for the cost of our products and related treatment. Third-party payors are increasingly challenging the prices charged for diagnostic and therapeutic products and related services. In addition, legislative proposals to reform health care or reduce government insurance programs may result in lower prices or the actual inability of prospective customers to purchase our products. Furthermore, even if reimbursement is available, it may not be available at price levels sufficient for us to realize a positive return on our investment.

The United States government, state legislatures and foreign governmental entities have shown significant interest in implementing cost containment programs to limit the growth of government-paid healthcare costs, including price controls, restrictions on reimbursement and coverage and requirements for substitution of generic products for branded prescription drugs. Adoption of government controls and measures, and tightening of restrictive policies in jurisdictions with existing controls and measures, could exclude or limit our product candidates from coverage and limit payments for pharmaceuticals.

In addition, we expect that increased emphasis on managed care and cost containment measures in the United States by third-party payors and government authorities to continue and will place pressure on pharmaceutical pricing and coverage. Coverage policies and third-party reimbursement rates may change at any time. Even if favorable coverage and reimbursement status is attained for one or more product candidates for which we receive regulatory approval, less favorable coverage policies and reimbursement rates may be implemented in the future.

If we are unable to obtain and maintain sufficient third-party coverage and adequate reimbursement for our product candidates, the commercial success of our product candidates may be greatly hindered and our financial condition and results of operations may be materially and adversely affected.

Our products may not achieve market acceptance.

If any of our product candidates fail to achieve sufficient market acceptance, we may not be able to generate sufficient revenue to become profitable. The degree of market acceptance of our product candidates, if and when they are approved for commercial sale, will depend on a number of factors, including but not limited to:


•	the timing of our receipt of marketing approvals, the terms of such approvals and the countries in which such approvals are obtained;


•	the safety, efficacy, reliability and ease of administration of our product candidates;


•	the prevalence and severity of undesirable side effects and adverse events;


•	the extent of the limitations or warnings required by the FDA or comparable regulatory authorities in other countries to be contained in the labeling of our product candidates;


•	the clinical indications for which our product candidates are approved;


•	the availability and perceived advantages of alternative therapies;


•	any publicity related to our product candidates or those of our competitors;


•	the quality and price of competing products;


•	our ability to obtain third-party payor coverage and sufficient reimbursement;


•	the willingness of patients to pay out of pocket in the absence of third-party payor coverage; and


•	the selling efforts and commitment of our commercialization collaborators.

If our approved product candidates fail to receive a sufficient level of market acceptance, our ability to generate revenue from sales of our product candidates will be limited, and our business and results of operations may be materially and adversely affected.

A portion of our funding has come from federal government grants and research contracts. Due to reductions in funding, we may not be able to rely on these grants or contracts as a continuing source of funds.

During the last few years, we have generated revenues from awards made to us by the National Institutes of Health and the Department of Defense to partially fund some of our programs. We cannot rely on grants or additional contracts as a continuing source of funds. Funds available under these grants and contracts must be applied by us toward the research and development programs specified by the government rather than for all our programs generally. The government’s obligation to make payments under these grants and contracts is subject to appropriation by the United States Congress for funding in each year. It is possible that Congress or the government agencies that administer these government research programs will continue to scale back these programs or terminate them due to their own budgetary constraints, as they have recently been doing. Additionally, these grants and research contracts are subject to adjustment based upon the results of periodic audits performed on behalf of the granting authority. Consequently, the government may not award grants or research contracts to us in the future, and any amounts that we derive from existing awards may be less than those received to date. In those circumstances, we would need to provide funding on our own, obtain other funding, or scale back or terminate the affected program. In particular, we cannot assure you that any currently contemplated or future efforts to obtain funding for our product candidate programs through government grants or contracts will be successful, or that any such arrangements which we do conclude will supply us with sufficient funds to complete our development programs without providing additional funding on our own or obtaining other funding. Where funding is obtained from government agencies or research bodies, our intellectual property rights in the research or technology funded by the grant are typically subject to certain licenses to such agencies or bodies, which could have an impact on our utilization of such intellectual property in the future.

We face a number of risks relating to the maintenance of our information systems and our use of information relating to clinical trials.

In managing our operations, we rely on computer systems and electronic communications, including systems relating to record keeping, financial information, sourcing, and back-up and the Internet (“Information Systems”). Our Information Systems include the electronic storage of financial, operational, research, patient and other data. Our Information Systems may be subject to interruption or damage from a variety of causes, including power outages, computer and communications failures, system capacity constraints, catastrophic events (such as fires, tornadoes and other natural disasters), cyber risks, computer viruses and security breaches. If our Information Systems cease to function properly, are damaged or are subject to unauthorized access, we may suffer interruptions in our operations, be required to make significant investments to fix or replace systems and/or be subject to fines, penalties, lawsuits, or government action. The realization of any of these risks could have a material adverse effect on our business, financial condition and results of operations. Our clinical trials information and patient data (which may include personally identifiable information) is part of our Information Systems and is therefore subject to all of the risks set forth above, notwithstanding our efforts to code and protect such information.

Risks Related to Government Regulation of our Industry

Legislative or regulatory reform of the healthcare system may affect our ability to sell our products profitably.

In recent years, there have been numerous initiatives on the federal and state levels in the United States for comprehensive reforms affecting the payment for, the availability of, and reimbursement for, healthcare services. There have been a number of federal and state proposals during the last few years regarding the pricing of pharmaceutical and biopharmaceutical products, limiting coverage and reimbursement for drugs and other medical products, government control and other changes to the healthcare system in the United States. For example, the Patient Protection and Affordable Care Act (“ACA”) and the Health Care and Education Reconciliation Act of 2010, which amends the ACA, collectively, the United States Health Reform Laws, were signed into law in the United States in March 2010.

Among the provisions of the ACA of importance to the pharmaceutical industry are the following:

•

the Medicaid Drug Rebate Program requires pharmaceutical manufacturers to enter into and have in effect a national rebate agreement with the Secretary of the Department of Health and Human Services as a condition of Medicare Part B and Medicaid coverage of the manufacturer's outpatient drugs furnished to Medicaid patients. Effective in 2010, the ACA made several changes to the Medicaid Drug Rebate Program, including increasing pharmaceutical manufacturers' rebate liability by raising the minimum basic Medicaid rebate on most branded prescription drugs from 15.1% of average manufacturer price, or AMP, to 23.1% of AMP, establishing new methodologies by which AMP is calculated and rebates owed by manufacturers under the Medicaid Drug Rebate Program are collected for drugs that are inhaled, infused, instilled, implanted or injected, adding a new rebate calculation for "line extensions" (i.e., new formulations, such as extended release formulations) of solid oral dosage forms of branded products, expanding the universe of Medicaid utilization subject to drug rebates to covered drugs dispensed to individuals who are enrolled in Medicaid managed care organizations, and expanding the population potentially eligible for Medicaid drug benefits;

•

the expansion of eligibility criteria for Medicaid programs by, among other things, allowing states to offer Medicaid coverage to additional individuals beginning in April 2010 and by adding new mandatory eligibility categories for certain individuals with income at or below 133.0% of the federal poverty level beginning in 2014, thereby potentially increasing both the volume of sales and manufacturers' Medicaid rebate liability;

•

in order for a pharmaceutical product to receive federal reimbursement under the Medicare Part B and Medicaid programs or to be sold directly to United States government agencies, the manufacturer must extend discounts to entities eligible to participate in the 340B drug pricing program. The required 340B discount on a given product is calculated based on the AMP and Medicaid rebate amounts reported by the manufacturer. Effective in 2010, the ACA expanded the types of entities eligible to receive discounted 340B pricing, although, under the current state of the law, with the exception of children's hospitals, these newly eligible entities will not be eligible to receive discounted 340B pricing on orphan drugs when used for the orphan indication. In addition, as 340B drug pricing is determined based on AMP and Medicaid rebate data, the revisions to the Medicaid rebate formula and AMP definition described above could cause the required 340B discount to increase. Recent proposed guidance from the United States Department of Health and Human Services Health Resources and Services Administration, if adopted in its current form, may affect manufacturers' rights and liabilities in conducting audits and resolving disputes under the 340B program;


•	the ACA imposed a requirement on manufacturers of branded drugs to provide a 50% (and 70% commencing on January 1, 2019) discount off the negotiated price of branded drugs dispensed to Medicare Part D patients in the coverage gap (i.e., the "donut hole");


•	the ACA imposed an annual, nondeductible fee on any entity that manufactures or imports certain branded prescription drugs, apportioned among these entities according to their market share in certain government healthcare programs, although this fee would not apply to sales of certain products approved exclusively for orphan indications;


•	the ACA implemented the Physician Payments Sunshine Act;


•	the ACA requires annual reporting of drug samples that manufacturers and distributors provide to physicians;


•	the ACA expanded healthcare fraud and abuse laws in the United States, including the False Claims Act and the federal Anti-Kickback Statute, new government investigative powers and enhanced penalties for non-compliance;


•	the ACA established a licensing framework for follow-on biologics;

•

the ACA established the Patient-Centered Outcomes Research Institute to oversee, identify priorities in and conduct comparative clinical effectiveness research, along with the funding for such research. The research conducted by the Patient-Centered Outcomes Research Institute may affect the market for certain pharmaceutical products by influencing decisions relating to coverage and reimbursement rates; and

•

the ACA established the Center for Medicare and Medicaid Innovation within the Centers for Medicare & Medicaid Center ("Innovation Center"), to test innovative payment and service delivery models to lower Medicare and Medicaid spending, potentially including prescription drug spending. The Innovation Center has been funded through 2019, and funding will be automatically renewed for each 10-year budget window thereafter.

Some of the provisions of the ACA have yet to be implemented, and there have been judicial and Congressional challenges to certain aspects of the ACA, as well as recent efforts by the Trump administration to repeal or replace certain aspects of the ACA. Since January 2017, President Trump has signed two Executive Orders and other directives designed to delay the implementation of certain provisions of the ACA or otherwise circumvent some of the requirements for health insurance mandated by the ACA. Concurrently, Congress has considered legislation that would repeal or repeal and replace all or part of the ACA. While Congress has not passed comprehensive repeal legislation, two bills affecting the implementation of certain taxes under the ACA have been signed into law. The Tax Cuts and Jobs Act of 2017 ("TCJA"), includes a provision repealing, effective January 1, 2019, the tax-based shared responsibility payment imposed by the ACA on certain individuals who fail to maintain qualifying health coverage for all or part of a year that is commonly referred to as the "individual mandate". Additionally, on January 22, 2018, President Trump signed a continuing resolution on appropriations for fiscal year 2018 that delayed the implementation of certain ACA-mandated fees, including the so-called "Cadillac" tax on certain high cost employer-sponsored insurance plans, the annual fee imposed on certain health insurance providers based on market share, and the medical device excise tax on non-exempt medical devices. Further, the Bipartisan Budget Act of 2018, or the BBA, among other things, amends the ACA, effective January 1, 2019, to close the coverage gap in most Medicare drug plans, commonly referred to as the "donut hole". In July 2018, CMS published a final rule permitting further collections and payments to and from certain ACA qualified health plans and health insurance issuers under the ACA risk adjustment program in response to the outcome of federal district court litigation regarding the method CMS uses to determine this risk adjustment. Congress may consider additional legislation to repeal or repeal and replace other elements of the ACA. More recently, the United States District Court for the Northern District of Texas struck down the ACA, deeming it unconstitutional given that Congress repealed the individual mandate in 2017. The decision has been stayed pending outcome of an appeal to the Fifth Circuit Court of Appeals. Although there is no immediate impact on the ACA, we will continue to evaluate the effect that the ACA and its possible repeal and replacement, or potential total revocation by the Supreme Court of the United States, has on our business.

In addition, other legislative changes have been proposed and adopted since the ACA was enacted. For example, in August 2011, the Budget Control Act of 2011, among other things, created measures for spending reductions by Congress. A Joint Select Committee on Deficit Reduction, tasked with recommending a targeted deficit reduction of at least $1.2 trillion for the years 2013 through 2021, was unable to reach required goals, thereby triggering the legislation's automatic reduction to several government programs. This includes aggregate reductions to Medicare payments to providers of up to 2.0% per fiscal year, which went into effect in 2013, and due to subsequent legislative amendments to the statute, including the BBA, will remain in effect through 2027 unless additional Congressional action is taken. In January 2013, then-President Barack Obama signed into law the American Taxpayer Relief Act of 2012 ("ATRA"), which, among others, delayed for another two months the budget cuts mandated by these sequestration provisions of the Budget Control Act of 2011. The ATRA also reduced Medicare payments to several providers, including hospitals, imaging centers and cancer treatment centers, and increased the statute of limitations period for the government to recover over-payments to providers from three to five years. Moreover, CMS has promulgated or amended a number of cost containment and value-based reimbursement measures in the ordinary course of business, and it is expected to continue revising its regulations and policies in response to market conditions and administration directives. These new laws may result in additional reductions in Medicare and other healthcare funding, which could have a material and adverse effect on our customers and accordingly, our financial operations.

Further, there has been increasing legislative and enforcement interest in the United States with respect to specialty drug pricing practices. Specifically, there have been several recent United States Congressional inquiries and proposed and enacted federal and state legislation designed to, among other things, bring more transparency to drug pricing, reduce the cost of prescription drugs under Medicare, review the relationship between pricing and manufacturer patient programs, and reform government program reimbursement methodologies for drugs. At the federal level, the Trump administration's budget proposal for fiscal year 2019 contains further drug price control measures that could be enacted during the 2019 budget process or in other future legislation, including, for example, measures to permit Medicare Part D plans to negotiate the price of certain drugs under Medicare Part B,

to allow some states to negotiate drug prices under Medicaid, and to eliminate cost sharing for generic drugs for low-income patients. Additionally, on May 11, 2018, President Trump laid out his administration's "Blueprint" to lower drug prices and reduce out of pocket costs of drugs, as well as additional proposals to increase drug manufacturer competition, increase the negotiating power of certain federal healthcare programs, incentivize manufacturers to lower the list price of their products, and reduce the out of pocket costs of product candidates paid by consumers. Although most of these, and other, proposals will require authorization through additional legislation to become effective, the United States Congress and the Trump administration have each indicated that it will continue to seek new legislative and administrative measures to control drug costs, including by addressing the role of pharmacy benefit managers in the supply chain. HHS has already started the process of soliciting feedback on some of these measures and, at the same time, is immediately implementing others under its existing authority. For example, in September 2018, CMS announced that it will allow Medicare Advantage Plans to use step therapy for Part B drugs beginning January 1, 2019 in October 2018, CMS proposed a new rule that would require direct-to-consumer television advertisements of prescription drugs and biological products, for which payment is available through or under Medicare or Medicaid to include in the advertisement that Wholesale Acquisition Cost, or list price, of that drug or biological product and a February 6, 2019 proposed rule aims to eliminate certain Anti-Kickback safe harbor protections for drug rebates. At the state level, legislatures have increasingly passed legislation and implemented regulations designed to control pharmaceutical and biological product pricing, including price or patient reimbursement constraints, discounts, restrictions on certain product access and marketing cost disclosure and transparency measures, and, in some cases, designed to encourage importation from other countries and bulk purchasing.

More recently, on May 30, 2018, the Trickett Wendler, Frank Mongiello, Jordan McLinn, and Matthew Bellina Right to Try Act of 2017, or Right to Try Act, was signed into law. The law, among other things, provides a federal framework for patients to access certain investigational new product candidates that have completed a Phase I clinical trial. Under certain circumstances, eligible patients can seek treatment without enrolling in clinical trials and without obtaining FDA approval under the FDA expanded access program. The Right to Try Act did not establish any new entitlement or positive right to any party or individual, nor did it create any new mandates, directives, or additional regulations requiring a manufacturer or sponsor of an eligible investigational new product candidates to provide expanded access.

We are unable to predict the future course of federal or state healthcare legislation in the United States directed at broadening the availability of healthcare and containing or lowering the cost of healthcare. The United States Health Reform Laws and any further changes in the law or regulatory framework that reduce our revenue or increase our costs could also have a material and adverse effect on our business, financial condition and results of operations.

Healthcare laws and regulations may affect the pricing of our product candidates and may affect our profitability.

In certain countries, the government may provide healthcare at a subsidized cost to consumers and regulate prices, patient eligibility or third-party payor reimbursement policies to control the cost of product candidates. Such a system may lead to inconsistent pricing of our product candidates from one country to another. The availability of our product candidates at lower prices in certain countries may undermine our sales in other countries where our product candidates are more expensive. In addition, certain countries may set prices by reference to the prices of our product candidates in other countries. Our inability to secure adequate prices in a particular country may adversely affect our ability to obtain an acceptable price for our product candidates in existing and potential markets. If we are unable to obtain a price for our product candidates that provides an appropriate return on our investment, our profitability may be materially and adversely affected.

Our industry and we are subject to intense regulation from the United States Government and such other governments and quasi-official regulatory bodies where our products are and product candidates may be sold.

Both before and after regulatory approval to market a particular product candidate, including our biologic product candidates, the manufacturing, labeling, packaging, adverse event reporting, storage, advertising, promotion, distribution and record keeping related to the product are subject to extensive, ongoing regulatory requirements, including, without limitation, submissions of safety and other post-marketing information and reports, registration, as well as continued compliance with cGMP requirements and good clinical practice requirements for any clinical trials that we conduct post-approval. As a result, we are subject to a number of governmental and other regulatory risks, which include:


•	clinical development is a long, expensive and uncertain process; delay and failure can occur at any stage of our clinical trials;


•	our clinical trials are dependent on patient enrollment and regulatory approvals; we do not know whether our planned trials will begin on time, or at all, or will be completed on schedule, or at all;


•	the FDA or other regulatory authorities may not approve a clinical trial protocol or may place a clinical trial on hold;

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we rely on third parties, such as consultants, contract research organizations, medical institutions, and clinical investigators, to conduct clinical trials for our drug candidates and if we or any of our third-party contractors fail to comply with applicable regulatory requirements, such as current Good Clinical Practices ("cGCP") requirements, the clinical data generated in our clinical trials may be deemed unreliable and the FDA, the European Medicines Agency ("EMA") or comparable foreign regulatory authorities may require us to perform additional clinical trials;


•	if the clinical development process is completed successfully, our ability to derive revenues from the sale of therapeutics will depend on our first obtaining FDA or other comparable foreign regulatory approvals, each of which are subject to unique risks and uncertainties;


•	there is no assurance that we will receive FDA or corollary foreign approval for any of our product candidates for any indication; we are subject to government regulation for the commercialization of our product candidates;


•	we have not received regulatory approval in the United States for the commercial sale of any of our biologic product candidates;

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even if one or more of our product candidates does obtain approval, regulatory authorities may approve such product candidate for fewer or more limited indications than we request, may not approve the price we intend to charge for our products, may grant approval contingent on the performance of costly post-marketing clinical trials, or may approve with a label that does not include the labeling claims necessary or desirable for the successful commercialization of that product candidate;


•	undesirable side effects caused by our product candidates could cause us or regulatory authorities to interrupt, delay or halt clinical trials and could result in a more restrictive label or the delay or denial of regulatory approval by the FDA or other comparable foreign authorities;


•	later discovery of previously unknown problems with a product, including adverse events of unanticipated severity or frequency, or with our third-party manufacturers or manufacturing processes, or failure to comply with the regulatory requirements of FDA and other applicable United States and foreign regulatory authorities could subject us to administrative or judicially imposed sanctions;


•	although several of our product candidates have received orphan drug designation in the United States and the EU for particular indications, we may not receive orphan drug exclusivity for any or all of those product candidates or indications upon approval, and even if we do obtain orphan drug exclusivity, that exclusivity may not effectively protect the product from competition; and

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even if one or more of our product candidates is approved in the United States, it may not obtain the 12 years of exclusivity from biosimilars for which innovator biologics are eligible, and even if it does obtain such exclusivity, that exclusivity may not effectively protect the product from competition; the FDA’s policies may change and additional government regulations may be enacted that could prevent, limit or delay regulatory approval of our drug candidates, and if we are slow or unable to adapt to changes in existing requirements or the adoption of new requirements or policies, or if we are not able to maintain regulatory compliance, we may lose any marketing approval that we may have obtained; and we may be liable for contamination or other harm caused by hazardous materials used in the operations of our business.

Healthcare providers, physicians and third-party payors often play a primary role in the recommendation and prescription of any currently marketed products and product candidates for which we may obtain marketing approval. Our current and future arrangements with healthcare providers, physicians, third-party payors and customers, and our sales, marketing and educational activities, may expose us to broadly applicable fraud and abuse and other healthcare laws and regulations (at the federal and state level) that may constrain our business or financial arrangements and relationships through which we market, sell and distribute our products for which we obtain marketing approval. In addition, our operations are also subject to various federal and state fraud and abuse, physician payment transparency and privacy and security laws, including, without limitation:

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The federal Anti-Kickback Statute, which prohibits, among other things, persons and entities including pharmaceutical manufacturers from knowingly and willfully soliciting, receiving, offering or paying remuneration, directly or indirectly, overtly or covertly, in case or in kind, to induce or reward, or in return for, or either the referral of an individual for, or the purchase, lease, order or recommendation of, an item or service reimbursable, in whole or in part, under a federal

healthcare program, such as the Medicare or Medicaid programs. This statute has interpreted broadly to apply to, among other things, arrangements between pharmaceutical manufacturers on the one hand and prescribers, purchasers and formulary managers on the other hand. The term "remuneration" expressly includes kickbacks, bribes or rebates and also has been broadly interpreted to include anything of value, including, for example, gifts, discounts, waivers of payment, ownership interest and providing anything at less than its fair market value. There are a number of statutory exceptions and regulatory safe harbors protecting certain common activities from prosecution or other regulatory sanctions, however, the exceptions and safe harbors are drawn narrowly, and practices that do not fit squarely within an exception or safe harbor may be subject to scrutiny. The failure to meet all of the requirements of a particular applicable statutory exception or regulatory safe harbor does not make the conduct per se illegal under the federal Anti-Kickback Statute. Instead, the legality of the arrangement will be evaluated on a case-by-case basis based on a cumulative review of all of its facts and circumstances. Our practices may not meet all of the criteria for safe harbor protection from federal Anti-Kickback Statute liability in all cases. A person or entity does not need to have actual knowledge of the federal Anti-Kickback Statute or specific intent to violate it to have committed a violation. In addition, the government may assert that a claim including items or services resulting from a violation of the federal Anti-Kickback Statute constitutes a false or fraudulent claim for purposes of the False Claims Act.

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The federal civil and criminal false claims laws and civil monetary penalty laws, including the False Claims Act, which prohibits individuals or entities from, among other things, knowingly presenting, or causing to be presented, claims for payment to, or approval by, the federal government that are false, fictitious or fraudulent or knowingly making, using or causing to be made or used, a false record or statement material to a false or fraudulent claim to avoid, decrease or conceal an obligation to pay money to the federal government. As a result of a modification made by the Fraud Enforcement and Recovery Act of 2009, a claim includes "any request or demand" for money or property presented to the federal government. Although we do not submit claims directly to payors, manufacturers can be held liable under these laws if they are deemed to "cause" the submission of false or fraudulent claims by, for example, providing inaccurate billing or coding information to customers, promoting a product off-label, marketing products of sub-standard quality, or, as noted above, paying a kickback that results in a claim for items or services. In addition, our activities relating to the reporting of wholesaler or estimated retail prices for our products, the reporting of prices used to calculate Medicaid rebate information and other information affecting federal, state and third-party reimbursement for our products, and the sale and marketing of our products, are subject to scrutiny under this law. For example, several pharmaceutical and other healthcare companies have faced enforcement actions under these laws for allegedly inflating drug prices they report to pricing services, which in turn were used by the government to set Medicare and Medicaid reimbursement rates, and for allegedly providing free product to customers with the expectation that the customers would bill federal programs for the product. The False Claims Act also permits a private individual acting as a "whistleblower" to bring actions on behalf of the federal government alleging violations of the False Claims Act and to share in any monetary recovery. In addition, federal Anti-Kickback Statute violations and certain marketing practices, including off-label promotion, may also implicate the False Claims Act. Although the False Claims Act is a civil statute, conduct that results in a False Claims Act violation may also implicate various federal criminal statutes.

The federal Health Insurance Portability and Accountability Act of 1996, or HIPAA, which imposes criminal and civil liability for knowingly and willfully executing, or attempting to execute, a scheme to defraud or to obtain, by means of false or fraudulent pretenses, representations or promises, any money or property owned by, or under the control or custody of, any healthcare benefit program, including private third-party payors and knowingly and willfully falsifying, concealing or covering up by trick, scheme or device, a material fact or making any materially false, fictitious or fraudulent statement in connection with the delivery of or payment for healthcare benefits, items or services. Similar to the federal Anti-Kickback Statute, a person or entity does not need to have actual knowledge of the statute or specific intent to violate it to have committed a violation.

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HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act of 2009, or HITECH, and their respective implementing regulations, including the Final Omnibus Rule published on January 25, 2013, impose, among other things, obligations, including mandatory contractual terms, with respect to safeguarding the privacy, security and transmission of individually identifiable health information held by certain healthcare providers, health plans and healthcare clearinghouses, known as covered entities, and business associates. Among other things, HITECH made certain aspects of HIPAA's rules (notably the Security Rule) directly applicable to business associates - independent contractors or agents of covered entities that receive or obtain individually identifiable health information in connection with providing a service on behalf of a covered entity. HITECH also created four new tiers of civil monetary penalties, amended HIPAA to make civil and criminal penalties directly applicable to business associates, and gave state attorneys general new authority to file civil actions for damages or injunctions in federal court to enforce the federal HIPAA laws and seek attorney's fees and costs associated with pursuing federal civil actions. The Department of Health and Human Services

Office of Civil Rights, or the OCR, has increased its focus on compliance and continues to train state attorneys general for enforcement purposes. The OCR has recently increased both its efforts to audit HIPAA compliance and its level of enforcement, with one recent penalty exceeding $5 million.

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The federal physician payment transparency requirements, sometimes referred to as the "Physician Payments Sunshine Act," created under the United States Patient Protection and Affordable Care Act of 2010, as amended, or the ACA, and its implementing regulations, which requires applicable manufacturers of covered drugs, devices, biologics and medical supplies for which payment is available under Medicare, Medicaid or the State Children's Health Insurance Program (with certain exceptions) to annually report to the United States Department of Health and Human Services, or HHS, information related to certain payments or other transfers of value made or distributed to physicians (defined to include doctors, dentists, optometrists, podiatrists and chiropractors) and teaching hospitals, or to entities or individuals at the request of, or designated on behalf of, the physicians and teaching hospitals, as well as ownership and investment interests held by physicians and their immediate family members.

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On October 25, 2018, President Trump signed into law the “Substance Use-Disorder Prevention that Promoted Opioid Recovery and Treatment for Patients and Communities Act.” This law, in part (under a provision entitled “Fighting the Opioid Epidemic with Sunshine”), will extend the Sunshine Act to payments and transfers of value to physician assistants, nurse practitioners, and other mid-level healthcare providers (with reporting requirements going into effect in 2022 for payments made in 2021.

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According to the United States Federal Trade Commission, or the FTC, failing to take appropriate steps to keep consumers' personal information secure constitutes unfair acts or practices in or affecting commerce in violation of Section 5(a) of the Federal Trade Commission Act, or the FTCA, 15 USC § 45(a). The FTC expects a company's data security measures to be reasonable and appropriate in light of the sensitivity and volume of consumer information it holds, the size and complexity of its business, and the cost of available tools to improve security and reduce vulnerabilities. Medical data is considered sensitive data that merits stronger safeguards. The FTC's guidance for appropriately securing consumers' personal information is similar to what is required by the HIPAA Security Rule.

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Analogous state laws and regulations, such as state anti-kickback and false claims laws, which may apply to items or services reimbursed by any third-party payor, including commercial insurers, some state laws require pharmaceutical companies to comply with the pharmaceutical industry's voluntary compliance guidelines and the relevant compliance guidance promulgated by the federal government in addition to requiring drug manufacturers to report pricing and marketing information, including, among other things, information related to payments to physicians and other healthcare providers or marketing expenditures, state and local laws that require the registration of pharmaceutical sales representatives, and state laws governing the privacy and security of health information and the use of prescriber-identifiable data in certain circumstances, many of which differ from each other in significant ways and may not have the same effect, thus complicating compliance efforts.

Because of the breadth of these laws and the narrowness of the statutory exceptions and safe harbors available under such laws, it is possible that certain business activities could be subject to challenge under one or more of such laws. The scope and enforcement of each of these laws is uncertain and subject to rapid change in the current environment of healthcare reform, especially in light of the lack of applicable precedent and regulations. Federal and state enforcement bodies have recently increased their scrutiny of interactions between healthcare companies and healthcare providers, which has led to a number of investigations, prosecutions, convictions and settlements in the healthcare industry. Ensuring that business arrangements with third parties comply with applicable healthcare laws, as well as responding to possible investigations by government authorities, can be time- and resource-consuming and can divert management's attention from the business.

If our operations are found to be in violation of any of the health regulatory laws described above or any other laws that apply to us, we may be subject to penalties, including, but not limited to, criminal, civil and administrative penalties, damages, fines, disgorgement, individual imprisonment, possible exclusion from participation in government healthcare programs, injunctions, private qui tam actions brought by individual whistleblowers in the name of the government and the curtailment or restructuring of our operations, as well as additional reporting obligations and oversight if we become subject to a corporate integrity agreement or other agreement to resolve allegations of non-compliance with these laws, any of which could adversely affect our ability to operate our business and our results of operations.

Our failure to comply with data protection laws and regulations could lead to government enforcement actions and significant penalties against us, and adversely impact our operating results.

European Union member states and other foreign jurisdictions, including Switzerland, have adopted data protection laws and regulations which impose significant compliance obligations. Moreover, the collection and use of personal health data in the European Union, which was formerly governed by the provisions of the European Union Data Protection Directive, was replaced with the European Union General Data Protection Regulation, or the GDPR, in May 2018. The GDPR, which is wide-ranging in scope, imposes several requirements relating to the consent of the individuals to whom the personal data relates, the information provided to the individuals, the security and confidentiality of the personal data, data breach notification and the use of third party processors in connection with the processing of personal data. The GDPR also imposes strict rules on the transfer of personal data out of the European Union to the United States, provides an enforcement authority and imposes large penalties for noncompliance, including the potential for fines of up to €20 million or 4% of the annual global revenues of the non-compliant company, whichever is greater. The recent implementation of the GDPR has increased our responsibility and liability in relation to personal data that we process, including in clinical trials, and we may in the future be required to put in place additional mechanisms to ensure compliance with the GDPR, which could divert management's attention and increase our cost of doing business. In addition, new regulation or legislative actions regarding data privacy and security (together with applicable industry standards) may increase our costs of doing business. In this regard, we expect that there will continue to be new proposed laws, regulations and industry standards relating to privacy and data protection in the United States, the European Union and other jurisdictions, and we cannot determine the impact such future laws, regulations and standards may have on our business.

Our employees and our independent contractors, principal investigators, consultants or commercial collaborators, as well as their respective sub-contractors, if any, may engage in misconduct or fail to comply with certain regulatory standards and requirements, which could expose us to liability and adversely affect our reputation.

Our employees and our independent contractors, principal investigators, consultants or commercial collaborators, as well as their respective sub-contractors, if any, may engage in fraudulent conduct or other illegal activity, which may include intentional, reckless or negligent conduct that violates, among others, (a) FDA laws and regulations, or those of comparable regulatory authorities in other countries, including those laws that require the reporting of true, complete and accurate information to the FDA, (b) manufacturing standards, (c) healthcare fraud and abuse laws (d) anti-bribery and anti-corruption laws, including the FCPA, or (e) laws that require the true, complete and accurate reporting of financial information or data. For example, such persons may improperly use or misrepresent information obtained in the course of our clinical trials, create fraudulent data in our preclinical studies or clinical trials or misappropriate our drug products, which could result in regulatory sanctions being imposed on us and cause serious harm to our reputation. It is not always possible for us to identify or deter misconduct by our employees and third parties, and any precautions we may take to detect or prevent such misconduct may not be effective. Any misconduct or failure by our employees and our independent contractors, principal investigators, consultants or commercial collaborators, as well as their respective sub-contractors, if any, to comply with the applicable laws or regulations may expose us to governmental investigations, other regulatory action or lawsuits. If any action is instituted against us as a result of the alleged misconduct of our employees or other third parties, regardless of the final outcome, our reputation may be adversely affected and our business may suffer as a result. If we are unsuccessful in defending against any such action, we may also be liable to significant fines or other sanctions, which could have a material and adverse effect on us.

Inadequate funding for the FDA, the SEC and other government agencies could hinder their ability to hire and retain key leadership and other personnel, prevent new products and services from being developed or commercialized in a timely manner or otherwise prevent those agencies from performing normal business functions on which the operation of our business may rely, which could negatively impact our business.

The ability of the FDA to review and approve new products can be affected by a variety of factors, including government budget and funding levels, ability to hire and retain key personnel and accept the payment of user fees, and statutory, regulatory, and policy changes. Average review times at the FDA have fluctuated in recent years as a result. In addition, government funding of the SEC and other government agencies on which our operations may rely, including those that fund research and development activities, is subject to the political process, which is inherently fluid and unpredictable.

Disruptions at the FDA and other agencies may also slow the time necessary for new drugs to be reviewed and/or approved by necessary government agencies, which would adversely affect our business. For example, over the last several years, including from December 22, 2018 until January 25, 2019, the U.S. government has shut down several times and certain regulatory agencies, such as the FDA and the SEC, have had to furlough critical FDA, SEC and other government employees and stop critical activities. If a prolonged government shutdown occurs, it could significantly impact the ability of the FDA to timely review and process our regulatory submissions, which could have a material adverse effect on our business. Further, in our operations as a public company,

future government shutdowns could impact our ability to access the public markets and obtain necessary capital in order to properly capitalize and continue our operations.

Risks Related to Our Securities

Conversion of the Convertible Senior Notes will dilute the ownership interest of existing stockholders and could adversely affect the market price of our common stock.

The conversion of some or all of the Convertible Senior Notes will dilute the ownership interests of existing stockholders. Any sales in the public market of the common stock issuable upon such conversion and exercise could adversely affect prevailing market prices of our common stock. In addition, the existence of the Convertible Senior Notes may encourage short selling by market participants.

Our indebtedness and debt service obligations may adversely affect our cash flow.

We intend to fulfill our current debt service obligations, including repayment of the principal from our existing cash and investments, as well as the proceeds from potential licensing agreements and any additional financing from equity or debt transactions. However, our ability to make scheduled payments of the principal of, to pay interest on, or to refinance, our indebtedness, depends on our future performance, which is subject to economic, financial, competitive and other factors beyond our control. Our business may not generate cash flow from operations in the future sufficient to service our debt and make necessary capital expenditures. If we are unable to generate such cash flow to meet these obligations, we may be required to adopt one or more alternatives, such as selling assets, restructuring debt or obtaining additional equity capital on terms that may be onerous or highly dilutive, or delaying or curtailing research and development programs. Our ability to refinance our indebtedness will depend on the capital markets and our financial condition at such time. We may not be able to engage in any of these activities or engage in these activities on desirable terms, which could result in a default on our debt obligations.

We may add lease lines to finance capital expenditures and may obtain additional long‑term debt and lines of credit. If we issue other debt securities in the future, our debt service obligations will increase further.

Our indebtedness could have significant additional negative consequences, including, but not limited to:


•	requiring the dedication of a substantial portion of our existing cash and marketable securities balances and, if available, future cash flow from operations to service our indebtedness, thereby reducing the amount of our expected cash flow available for other purposes, including capital expenditures;


•	increasing our vulnerability to general adverse economic and industry conditions;


•	limiting our ability to obtain additional financing;


•	limiting our ability to sell assets if deemed necessary;


•	limiting our flexibility in planning for, or reacting to, changes in our business and the industry in which we compete; and


•	placing us at a possible competitive disadvantage to less leveraged competitors and competitors that have better access to capital resources.

We may not have the ability to raise funds necessary to purchase the Convertible Senior Notes upon a fundamental change and our future debt may contain limitations on our ability to repurchase the Convertible Senior Notes.

Following a fundamental change (which includes matters such as a change in control of the Company, approval by the Company’s stockholders of a plan of dissolution or liquidation of the Company, and the cessation of listing of the Company’s common stock on Nasdaq or The New York Stock Exchange, among others as further described in the indenture), holders of Convertible Senior Notes will have the right to require the Company to purchase their Convertible Senior Notes for cash. A fundamental change may also constitute an event of default or require prepayment under, and result in the acceleration of the maturity of, our other then-existing indebtedness. We cannot assure you that we will have sufficient financial resources, or will be able to arrange financing, to pay the fundamental change purchase price in cash with respect to any Convertible Senior Notes surrendered by holders for purchase upon a fundamental change. In addition, restrictions in the agreements governing our then-outstanding indebtedness, if any, may not allow us to purchase the Convertible Senior Notes upon a fundamental change. Our

failure to purchase the Convertible Senior Notes upon a fundamental change when required would result in an event of default with respect to the Convertible Senior Notes which could, in turn, constitute a default under the terms of our other indebtedness, if any. If the repayment of the related indebtedness were to be accelerated after any applicable notice or grace periods, we may not have sufficient funds to repay the indebtedness and purchase the Convertible Senior Notes, which could have a material and adverse impact on our financial condition and results of operations.

Shares eligible for future sale may adversely affect our ability to sell equity securities.

Sales of our common stock (including the issuance of shares upon conversion of convertible debt) in the public market could materially and adversely affect the market price of shares. As of June 30, 2019 we had 191,972,321 shares of common stock issued, plus (1) outstanding options to purchase 4,342,844 shares of common stock with a weighted-average exercise price of $17.44 per share, (2) 58,002 outstanding restricted stock units held by certain executive officers of the Company, (3) 746,248 outstanding performance stock options held by certain executive officers and employees of the Company, (4) 6,303,344 shares of common stock reserved for potential future grant under the Plan, and (5) $7.1 million of principal amount of Convertible Senior Notes convertible into approximately 1,393,160 shares of common stock at the conversion rate of $5.11 subject to adjustment as described in the indenture. Of the 250,000,000 shares of common stock authorized under our Certificate of Incorporation, there are 45,184,081 shares of common stock that remain available for future issuance.

Our outstanding Convertible Senior Notes, options and warrants may adversely affect our ability to consummate future equity‑based financings due to the dilution potential to future investors.

Due to the number of shares of common stock we are obligated to issue pursuant to outstanding Convertible Senior Notes, options and warrants, potential investors may not purchase our future equity offerings at market price because of the potential dilution such investors may suffer as a result of the exercise of the outstanding options and warrants or conversion of the outstanding Convertible Senior Notes.

The market price of our common stock has fluctuated widely in the past, and is likely to continue to fluctuate widely based on a number of factors, many of which are beyond our control.

The market price of our common stock has been, and is likely to continue to be, highly volatile. Furthermore, the stock market and the market for stocks of comparable biopharmaceutical companies like ours have from time to time experienced, and likely will again experience, significant price and volume fluctuations that are unrelated to actual operating performance.

From time to time, stock market analysts publish research reports or otherwise comment upon our business and future prospects. Due to a number of factors, we may fail to meet the expectations of securities analysts or investors and our stock price would likely decline as a result. These factors include:


•	Announcements by us, any collaboration partners, any future alliance partners or our competitors of pre-clinical studies and clinical trial results, regulatory developments, technological innovations or new therapeutic products, product sales, new products or product candidates and product development timelines;


•	The formation or termination of corporate alliances;


•	Developments in patent or other proprietary rights by us or our respective competitors, including litigation;


•	Developments or disputes concerning our patent or other proprietary rights, and the issuance of patents in our field of business to others;


•	Government regulatory action;


•	Period-to-period fluctuations in the results of our operations; and


•	Developments and market conditions for emerging growth companies and biopharmaceutical companies, in general.

In addition, Internet “chat rooms” have provided forums where investors make predictions about our business and prospects, oftentimes without any real basis in fact, that readers may trade on.

In the past, following periods of volatility in the market prices of the securities of companies in our industry, securities class action litigation has often been instituted against those companies. Refer to “Legal Proceedings” for more information. If we face such litigation in the future, it would result in substantial costs and a diversion of management’s attention and resources, which could negatively impact our business.

Our principal stockholders can significantly influence all matters requiring the approval by our stockholders.

As of July 1, 2019, Avoro Capital Advisors LLC (“Avoro”) is the beneficial owner of approximately 11.0% of our outstanding common stock. Avoro is our largest stockholder, and Dr. Behzad Aghazadeh, the portfolio manager and controlling person of Avoro, serves as Chairman of our Board of Directors.

As a result of this voting power, Avoro has the ability to significantly influence the outcome of substantially all matters that may be put to a vote of our stockholders, including the election of our directors.

There are limitations on the liability of our directors, and we may have to indemnify our officers and directors in certain instances.

Our certificate of incorporation limits, to the maximum extent permitted under Delaware law, the personal liability of our directors for monetary damages for breach of their fiduciary duties as directors. Our bylaws provide that we will indemnify our officers and directors and may indemnify our employees and other agents to the fullest extent permitted by law. These provisions may be in some respects broader than the specific indemnification provisions under Delaware law. The indemnification provisions may require us, among other things, to indemnify such officers and directors against certain liabilities that may arise by reason of their status or service as directors or officers (other than liabilities arising from willful misconduct of a culpable nature), to advance their expenses incurred as a result of certain proceedings against them as to which they could be indemnified and to obtain directors’ and officers’ insurance. Section 145 of the Delaware General Corporation Law provides that a corporation may indemnify a director, officer, employee or agent made or threatened to be made a party to an action by reason of the fact that he or she was a director, officer, employee or agent of the corporation or was serving at the request of the corporation, against expenses actually and reasonably incurred in connection with such action if he or she acted in good faith and in a manner he or she reasonably believed to be in, or not opposed to, the best interests of the corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe his or her conduct was unlawful. Delaware law does not permit a corporation to eliminate a director’s duty of care and the provisions of our certificate of incorporation have no effect on the availability of equitable remedies, such as injunction or rescission, for a director’s breach of the duty of care.

We believe that our limitation of officer and director liability assists us to attract and retain qualified employees and directors. However, in the event an officer, a director or the board of directors commits an act that may legally be indemnified under Delaware law, we will be responsible to pay for such officer(s) or director(s) legal defense and potentially any damages resulting there from. Furthermore, the limitation on director liability may reduce the likelihood of derivative litigation against directors and may discourage or deter stockholders from instituting litigation against directors for breach of their fiduciary duties, even though such an action, if successful, might benefit our stockholders and us. Given the difficult environment and potential for incurring liabilities currently facing directors of publicly-held corporations, we believe that director indemnification is in our and our stockholders’ best interests because it enhances our ability to attract and retain highly qualified directors and reduce a possible deterrent to entrepreneurial decision-making.

Nevertheless, limitations of director liability may be viewed as limiting the rights of stockholders, and the broad scope of the indemnification provisions contained in our certificate of incorporation and bylaws could result in increased expenses. Our board of directors believes, however, that these provisions will provide a better balancing of the legal obligations of, and protections for, directors and will contribute positively to the quality and stability of our corporate governance. Our board of directors has concluded that the benefit to stockholders of improved corporate governance outweighs any possible adverse effects on stockholders of reducing the exposure of directors to liability and broadened indemnification rights.

We are exposed to potential risks from legislation requiring companies to evaluate controls under Section 404 of the Sarbanes-Oxley Act.

The Sarbanes-Oxley Act requires that we maintain effective internal controls over financial reporting and disclosure controls and procedures. Among other things, we must perform system and process evaluation and testing of our internal controls over financial reporting to allow management to report on, and our independent registered public accounting firm to attest to, our internal controls over financial reporting, as required by Section 404 of the Sarbanes-Oxley Act (“Section 404”). Compliance with Section 404 requires substantial accounting expense and significant management efforts. Our testing, or the subsequent review by

our independent registered public accounting firm, may reveal deficiencies in our internal controls that would require us to remediate in a timely manner so as to be able to comply with the requirements of Section 404 each year. If we are not able to comply with the requirements of Section 404 in a timely manner each year, we could be subject to sanctions or investigations by the SEC, the Nasdaq Stock Market or other regulatory authorities that would require additional financial and management resources and could adversely affect the market price of our common stock.

We do not intend to pay dividends on our common stock. Until such time as we pay cash dividends, our stockholders, must rely on increases in our stock price for appreciation.

We have never declared or paid dividends on our common stock. We intend to retain future earnings to develop and commercialize our product candidates and therefore we do not intend to pay cash dividends in the foreseeable future. Until such time as we determine to pay cash dividends on our common stock, our stockholders must rely on increases in the market price of our common stock for appreciation of their investment.

ITEM 6. EXHIBITS

The exhibits required by Item 601 of Regulation S-K are included with this Form 10-Q and are listed on the “Exhibit Index” immediately following the Signatures.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.



	IMMUNOMEDICS, INC.

August 7, 2019	/s/ Usama Malik
	Usama Malik
	Chief Financial Officer
	(Principal Executive Officer and Principal Financial Officer)

EXHIBIT INDEX



Exhibit Number		Description of Document

3.1		By-Laws of Immunomedics, Inc., as amended and restated on April 15, 2019, incorporated by reference from Exhibit 3.1 to the Company's Current Report on Form 8-K, as filed with the SEC on April 17, 2019.

10.1+*		Promotion Agreement, dated as of April 5, 2019, by and between Immunomedics, Inc. and Janssen Biotech, Inc.

10.2+*		License Agreement, dated as of April 29, 2019, by and between Immunomedics, Inc. and Everest Medicines II Limited.

10.3*		Consulting Agreement, dated as of May 28, 2019, by and between Immunomedics, Inc. and Dr. Robert Iannone.

31.1*		Certification of Principal Executive Officer and Principal Financial Officer pursuant to Section 302(a) of the Sarbanes-Oxley Act of 2002.

32.1**		Certifications of Principal Executive Officer and Principal Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101*		The following financial information from this Quarterly Report on Form 10-Q for the quarter ended June 30, 2019, formatted in iXBRL (Inline eXtensible Business Reporting Language) filed electronically herewith: (i) the Condensed Consolidated Balance Sheets as of June 30, 2019 (unaudited) and December 31, 2018; (ii) the Condensed Consolidated Statements of Comprehensive Loss (unaudited) for the three and six months ended June 30, 2019 and 2018; (iii) the Condensed Consolidated Statements of Changes in Stockholders' Equity (unaudited) for the three and six months ended June 30, 2019 and 2018; (iv) the Condensed Consolidated Statements of Cash Flows (unaudited) for the six months ended June 30, 2019 and 2018; and, (v) the Notes to Unaudited Condensed Consolidated Financial Statements.


+	Portions of this exhibit have been redacted in compliance with Regulation S-K Item 601(b)(10). The omitted information is not material and would likely cause competitive harm to the registrant if publicly disclosed.

* Filed herewith.

** In accordance with SEC Release 33-8238, Exhibit 32.1 is being furnished and not filed.

CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS NOT MATERIAL AND WOULD LIKELY CAUSE COMPETITIVE HARM TO THE REGISTRANT IF PUBLICLY DISCLOSED. [***] INDICATES THAT INFORMATION HAS BEEN REDACTED.

PROMOTION AGREEMENT

by and between

JANSSEN BIOTECH, INC.

and

IMMUNOMEDICS, INC.

Dated as of: April 5, 2019

TABLE OF CONTENTS



ARTICLE 1 DEFINITIONS			1

ARTICLE II BRAND PLAN			10
	2.1	Brand Plan Generally	10
	2.2	Contents of Brand Plan	10

ARTICLE III PROMOTION			12
	3.1	Scope	12
	3.2	Detailing Requirements	13
	3.3	Sales Representatives	14
	3.4	Promotional Materials	15
	3.5	Product Sales	16
	3.6	Product Recall	16
	3.7	Product Return	17

ARTICLE IV GOVERNANCE			17
	4.1	Authority	17
	4.2	Joint Commercial Team	17
	4.3	BALVERSA Sales Advisory Team	18

ARTICLE V COMPENSATION			18
	5.1	Definitions	18
	5.2	Service Fees	18
	5.3	Milestones	19
	5.4	Costs	20
	5.5	Reports and Payments	20

ARTICLE VI REGULATORY MATTERS			21
	6.1	Regulatory Approvals	21
	6.2	Pharmacovigilance Procedures	22
	6.3	Product Complaints	22
	6.4	Post-Marketing Surveillance	22
	6.5	Product Medical Inquiries	22
	6.6	Companion Diagnostic Inquiries	22
	6.7	Access, Affordability and Patient Support Inquiries	23

ARTICLE VII BOOKS, RECORDS AND AUDIT RIGHTS			23
	7.1	Books and Records	23
	7.2	Books and Records Audits	23

ARTICLE VIII TERM AND TERMINATION			24
	8.1	Term; Termination	24
	8.2	Effect of Termination or Expiration	26
	8.3	Suspension of Product Promotion	28



ARTICLE IX CONFIDENTIALITY; RESTRICTIVE COVENANTS			28
	9.1	Confidentiality	28
	9.2	Exclusivity	31
	9.3	Restrictions on Promotions	31
	9.4	Limitation on Soliciting Employees	31

ARTICLE X INTELLECTUAL PROPERTY			32
	10.1	Use of Trademarks	32
	10.2	Ownership of Intellectual Property Rights	32
	10.3	Prosecution and Maintenance	33
	10.4	Enforcement against Infringement	33
	10.5	Third Party Infringement Claims	33

ARTICLE XI REPRESENTATIONS AND WARRANTIES; CERTAIN COVENANTS			33
	11.1	Representations of Authority	33
	11.2	Consents	33
	11.3	No Conflict	33
	11.4	Enforceability	33
	11.5	Sales Representatives and Other Company Employees	34
	11.6	Other Compliance Matters	34
	11.7	Infringement of Third Party Intellectual Property; Clinical Trial Data	36
	11.8	Disclaimer	36

ARTICLE XII INDEMNIFICATION; LIMITS ON LIABILITY			37
	12.1	Scope of Indemnification	37
	12.2	Notice and Control of Actions	38
	12.3	Limitations on Liability	39

ARTICLE XIII DISPUTE RESOLUTION			39
	13.1	Disputes	39
	13.2	Negotiation	39
	13.3	Mediation	40
	13.4	Arbitration	40
	13.5	Confidentiality	42

ARTICLE XIV MISCELLANEOUS			42
	14.1	Press Announcements	42
	14.2	Force Majeure Event	42
	14.3	Independent Contractors	43
	14.4	Performance by Affiliates	43
	14.5	Notices	43
	14.6	Entire Agreement	44
	14.7	Amendments; Assignment	44



	14.8	Non-Waiver of Rights
	14.9	Further Assurances and Cooperation
	14.1	Severability
	14.11	Binding Effect
	14.12	Counterparts; Facsimile Signatures
	14.13	Third Party Beneficiaries
	14.14	Governing Law
	14.15	Construction

Schedule 1.16		Janssen Universal Calendar

Schedule 6.2		Pharmacovigilance Provisions

Exhibit A		Brand Plan

Exhibit B		Detailing Requirements

Exhibit C		Records and Information Management Requirements

Exhibit D		Health Care Compliance Provisions

PROMOTION AGREEMENT

This PROMOTION AGREEMENT (this “Agreement”) dated as of April 5, 2019 (the “Effective Date”), is entered into by and between Janssen Biotech, Inc., a corporation organized under the laws of Pennsylvania (“Janssen”) and Immunomedics, Inc., a corporation organized under the laws of Delaware (“Company”).

WHEREAS, before the Effective Date, Janssen submitted an application for approval to market and/or sell the Product (defined below) for the Initial Indication (defined below) in the Territory (defined below); and

WHEREAS, Janssen now wishes to engage Company to Promote (defined below) the Product for the Initial Indication in the Territory and Company wishes to be so engaged, subject to and upon the terms and conditions set forth in this Agreement;

NOW, THEREFORE, in consideration of the mutual representations, warranties, covenants and undertakings contained in this Agreement, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties, intending to be legally bound, agree as follows:

ARTICLE I

DEFINITIONS

Unless otherwise defined herein, capitalized terms used in this Agreement have the meanings set forth in this Article I.

1.1 “Acquirer” has the meaning set forth in Section 9.2.

1.2 “Acquisition” has the meaning set forth in Section 9.2.

1.3 “Action” means any claim, action, cause of action or suit (whether in contract or tort or otherwise), litigation (whether at law or in equity, whether civil or criminal), assessment, arbitration, investigation, hearing, charge, complaint, demand, notice or proceeding from, by or before any Governmental Authority.

1.4 “Affiliate” means with respect to a Party, any Person that is directly or indirectly controlling, controlled by or under common control with such Party at the time that the determination of affiliation is made. For the purposes of this definition, “control” of a Person means (a) beneficial ownership of at least fifty percent (50%) of the voting securities or other comparable equity interests of such Person (whether directly or pursuant to any option, warrant or other similar arrangement) or (b) the possession, directly or indirectly, of the power to direct the management and policies of such Person, whether through the ownership of voting securities, by contract, declaration of trust or otherwise, and the terms “controlling” and “controlled” shall have meanings correlative to the foregoing.

1.5 “Agreement” has the meaning set forth in the preamble to this Agreement.

1.6 “Approval Date” means the date upon which Marketing Approval is received for

the Product for the Initial Indication.

1.7 “Audit Report” has the meaning set forth in Section 7.2.2.

1.8 “Audited Party” has the meaning set forth in Section 7.2.1.

1.9 “Auditing Party” has the meaning set forth in Section 7.2.2.

1.10 “Balversa-only Target” has the meaning set forth in Exhibit B.

1.11 “Baseline” has the meaning set forth in Section 5.1.1.

1.12 “Books and Records” has the meaning set forth in Section 7.1.

1.13 “Brand Plan” has the meaning set forth in Section 2.1.

1.14 “BSAT” has the meaning set forth in Section 4.3.1.

1.15 “Business Day” means any day other than a Saturday or a Sunday or other day on which commercial banks are authorized or required to be closed in New York, New York.

1.16 “Calendar Quarter” means a calendar quarter based on that certain universal calendar system used by Janssen and each of its Affiliates for internal business purposes (a copy of which calendar for 2019 and 2020 is attached hereto as Schedule 1.16), such that each Calendar Quarter ends on the last date of the calendar quarter indicated on Schedule 1.16 (the “Quarter End Date”) and begins on the date following the Quarter End Date of the preceding Calendar Quarter.

1.17 “Calendar Year” means a calendar year based on that certain universal calendar system used by Janssen and each of its Affiliates for internal business purposes (a copy of which calendar for 2019 and 2020 is attached hereto as Schedule 1.16), such that each Calendar Year ends on the fourth Quarter End Date for such year and begins on the date following the fourth Quarter End Date of the preceding Calendar Year.

1.18 “Call” means an in-person visit by an adequately trained sales representative to the office of a health care professional in the Territory for the purpose of promoting or presenting one or more pharmaceutical products.

1.19 “Call Plan” has the meaning set forth in Section 2.2.3.

1.20 “CPR Mediation Procedure” has the meaning set forth in Section 13.3.1.

1.21 “CPR Rules” has the meaning set forth in Section 13.4.

1.22 “Companion Diagnostic” means the diagnostic test approved by FDA concurrently with the Product for use in conjunction with the Product.

1.23 “Company” has the meaning set forth in the preamble to this Agreement.

1.24 “Company Indemnified Parties” has the meaning set forth in Section 12.1.1.

1.25 “Company Internal Detail Reporting System” means the data and records collected by Company and its Affiliates, in accordance with its standard business practice, to monitor Details made by Sales Representatives, which, with respect to the Product, include the date a Detail was made, the name of the Target to whom the Detail was made, the indication(s) for which the Product was presented, and the identity of the Sales Representative who delivered the Detail.

1.26 “Company Product” means the drug that is being developed by Company on the Effective Date, known as “IMMU-132” or sacituzumab govitecan.

1.27 “Company Product Approval Date” means the date upon which Marketing Approval is first received in the Territory for the Company Product.

1.28 “Company Trademark” means any Trademark owned by Company or any of its Affiliates.

1.29 “Competing Product” means any pharmaceutical product that is (a) approved specifically for use, in the treatment of urothelial cancer in any patient population in the Territory or (b) a fibroblast growth factor receptor inhibitor. If the Parties agree to extend the Term beyond the Expiration Date, Competing Product shall not include Company Product after the Expiration Date.

1.30 “Confidential Information” of a Party means (a) all non-public or proprietary information and data (including clinical data, technology, trade secrets, design specifications, dossiers, manufacturing formulae, manufacturing procedures and instructions, methods and processes, formats, designs, applications and programs, raw material supply arrangements, projections, prescriber and target data, pharmacy data, sales data, analyses, rebate agreements, promotion plans, detailing information, financial statements, customer and target lists, marketing plans, budgets, Third Party contracts, market research data, pricing, reimbursement and costs relating to the Product) that is disclosed by or on behalf of such Party or any of its Affiliates to the other Party, any of its Affiliates or any of their respective employees, agents or contractors pursuant to or in connection with this Agreement and (b) any other non-public or proprietary information and data that is expressly deemed in this Agreement to be Confidential Information of such Party, whether or not disclosed by or on behalf of such Party to the other Party, any of its Affiliates or any of their respective employees, agents or contractors, in each case ((a) and (b)) without regard to whether any of the foregoing is marked “confidential” or “proprietary,” or in oral, written, graphic or electronic form.

1.31 “Cumulative Net Sales” has the meaning set forth in Section 5.1.1.

1.32 “Cure Period” has the meaning set forth in Section 8.1.4.

1.33 “Detail” means an in-person presentation of the Product and its uses for the Initial Indication made by an adequately trained sales representative during a Call to one or more Health Care Professionals in the Territory during which the sales representative describes the Product and such use(s) in a fair and balanced manner consistent with (a) the Product Label and Insert and any Promotional Materials approved in accordance with this Agreement, and (b) the other requirements of this Agreement, the Promotion Rules and applicable Laws, but shall not include reminder details or e-details, as such terms are generally understood in the pharmaceutical industry in the Territory, or any presentations made at conventions, consulting programs or similar gatherings, other than a pre-arranged or scheduled meeting at such gathering between the sales representative and a Health Care Professional. When used as a verb, “Detail” means to deliver the presentation described in this definition. “Detailing” shall have a corresponding meaning.

1.34 “Detailing Period” means each of the following periods: (a) the period beginning on the Start Date and ending on September 30, 2019; (b) October 1, 2019 through December 31, 2019; and (c) January 1, 2020 through March 31, 2020.

1.35 “Diligent Efforts” means, with respect to an activity to be undertaken by a Party pursuant to this Agreement, the level of efforts and resources normally used by such Party with respect to a pharmaceutical product owned or controlled by such Party, or to which such Party has similar rights, which product is of similar market potential and strategic value and is at a similar stage in its development or life as is the Product, taking into account all relevant factors, including issues of safety, efficacy, product profile, the competitiveness of the marketplace, the proprietary position of the Product, regulatory matters, profitability of the Product and other relevant commercial factors.

1.36 “Disclosing Party” has the meaning set forth in Section 9.1.3.

1.37 “Disputes” has the meaning set forth in Section 13.1.

1.38 “Dual Target” has the meaning set forth in Exhibit B.

1.39 “Effective Date” has the meaning set forth in the preamble to this Agreement.

1.40 “Expiration Date” means March 31, 2020.

1.41 “FDA” means the United States Food and Drug Administration or any successor agency thereto.

1.42 “Fee Notice” has the meaning set forth in Section 5.5.1.

1.43 “First Position Detail” means, with respect to any product, a detail or presentation that is dedicated solely to such product and constitutes at least 70% of the total presentation time for all products presented during a Call in which such product is the first product presented to the health care professional.

1.44 “Force Majeure” has the meaning set forth in Section 14.2.

1.45 “GAAP” means United States generally accepted accounting principles applied on a consistent basis. Unless otherwise defined or stated, financial terms shall be calculated by the accrual method under GAAP.

1.46 “Governmental Authority” means any government (including any national, federal, state or local government), or political subdivision thereof, or any multinational or other organization, authority, agency or commission entitled to exercise any administrative, executive, judicial, legislative, police, regulatory or taxing authority or power, any court or tribunal, or any governmental arbitrator or arbitral body (or any department, bureau or division of any of the foregoing).

1.47 “Health Care Professional” means a health care professional with prescribing authority who treats urothelial cancer.

1.48 “Indemnified Party” has the meaning set forth in Section 12.2.1.

1.49 “Indemnifying Party” has the meaning set forth in Section 12.2.1.

1.50 “Initial Indication” means the first indication for which the Product receives Marketing Approval in the Territory, which the Parties expect to be treatment of adult patients with locally advanced or metastatic urothelial carcinoma which has (a) susceptible FGFR 3 or 2 genetic alterations and (b) progressed during or following at least one line of prior platinum-containing chemotherapy including within 12 months of neoadjuvant or adjuvant platinum-containing chemotherapy, where patients are selected for therapy based on an FDA-approved companion diagnostic for the Product; provided, however, that, with respect to any such indication for which the Product receives Marketing Approval from the FDA, “Initial Indication” shall be defined by the exact wording used in the Product Label and Insert as so approved.

1.51 “Janssen” has the meaning set forth in the preamble to this Agreement.

1.52 “Janssen Brand Usage Guidelines” means Janssen’s group guidelines on the Janssen brand visual and verbal identity as they apply to the Trademarks of Janssen and its Affiliates and the use of other companies’ names and logos, as notified to Company by Janssen from time to time.

1.53 “Janssen Indemnified Parties” has the meaning set forth in Section 12.1.2.

1.54 “Joint Commercial Team” has the meaning set forth in Section 4.2.1.

1.55 “Launch Date” means the date of the commercial launch of the Product in the Territory selected by Janssen. As of the Effective Date, the Parties expect that the Launch Date shall be on or about May 1, 2019.

1.56 “Laws” means all laws, statutes, rules, regulations, ordinances and other pronouncements having the effect of law in any country, state, province, county, city or other political subdivision, and includes any rule or regulation of any Governmental Authority that may be in effect from time to time in the Territory.

1.57 “License Agreement” means that certain Collaboration and License Agreement between Janssen Pharmaceutica N.V. and Astex Therapeutics Limited executed in June 2008, as amended, pursuant to which Janssen was granted a license under one or more patents covering the Product.

1.58 “Losses” has the meaning set forth in Section 12.1.1.

1.59 “Marketing Approval” means, with respect to any product, approval by the FDA of an NDA for such product.

1.60 “Milestone Event” has the meaning set forth in Section 5.3.

1.61 “Milestone Payment” has the meaning set forth in Section 5.3.

1.62 “Minimum Number of Details Requirement” has the meaning set forth in Exhibit B.

1.63 “Minimum PDE Requirement” has the meaning set forth in Exhibit B.

1.64 “Minimum Reach Requirement” has the meaning set forth in Exhibit B.

1.65 “Minimum Top Target Requirement” has the meaning set forth in Exhibit B.

1.66 “NDA” means, with respect to any product, a New Drug Application for such product and all supplements to such New Drug Application filed pursuant to the requirements of the FDA.

1.67 “Net Sales” means [***].

1.68 “Other Company Employees” has the meaning set forth in Section 2.2.2(a).

1.69 “Party” means each of Janssen and Company, which together are referred to as the “Parties”.

1.70 “Passing Score” has the meaning set forth in Section 2.2.2(c).

1.71 “Payee Party” means, with regards to a payment pursuant to this Agreement, the Party that receives such payment from the other Party under this Agreement.

1.72 “Paying Party” means, with regards to a payment pursuant to this Agreement, the Party that makes such payment to the other Party under this Agreement.

1.73 “PDE” shall mean, with respect to any product, a primary detail equivalent, which consists of either a First Position Detail of such product or two Second Position Details of such product, such that a First Position Detail shall count as [***] PDE and a Second Position Detail shall count as [***] PDE.

1.74 “Performance Failure Notice” has the meaning set forth in Section 3.2.4(b).

1.75 “Person” means, as applicable, an individual, sole proprietorship, partnership, limited partnership, limited liability partnership, corporation, limited liability company, business trust, joint stock company, trust, incorporated association, joint venture or similar entity or organization, including a Governmental Authority.

1.76 “PMS” has the meaning set forth in Section 6.4.

1.77 “Product” means any or each of the tablets containing erdafitinib as its sole active ingredient in a dosage amount of 3 mg, 4 mg or 5 mg and that is currently expected to be approved by the FDA for the Initial Indication, as currently manufactured by or on behalf of Janssen or its Affiliate and planned to be marketed under the trademark BALVERSA™.

1.78 “Product Complaint” means an oral, written or electronic communication from any Person that implies dissatisfaction regarding the identity, purity, quality or stability of the Product.

1.79 “Product Label and Insert” means (a) all labels and other written, printed or graphic material affixed to any container, packaging or wrapper utilized with the Product; and (b) any written material physically accompanying the Product, including the Product package inserts.

1.80 “Product-Specific Training” means training with respect to (a) sales and scientific materials regarding the disease state information on urothelial cancer, (b) currently available clinical data supporting use of the Product for the treatment of urothelial cancer, and (c) clinical data for products that compete with the Product.

1.81 “Product Trademarks” means any Trademarks as may be selected by Janssen and its Affiliate, in their sole discretion, for use in connection with the Product in the Territory, including any Trademark owned or controlled by Janssen or its Affiliates that includes the name “BALVERSA”. For purposes of clarity, the term “Product Trademark” shall not include the corporate names and logos of either Party.

1.82 “Promotion” means the (a) Detailing of the Product in the Territory for the Initial Indication and (b) performance of the other promotional activities for the Product set forth in the Brand Plan. “Promote” and “Promoting,” when used as a verb, means to engage in such Promotion.

1.83 “Promotion Rules” means: (a) the PhRMA Code on Interactions with Health Care Professionals; and (b) upon reasonable notice by Janssen to Company, any other similar rules,

policies or procedures with respect to the promotion of pharmaceutical products in the Territory that Janssen deems necessary or advisable to follow (including Janssen’s compliance policies).

1.84 “Promotional Materials” has the meaning set forth in Section 3.4.2.

1.85 “Quarter End Date” has the meaning set forth in Section 1.16.

1.86 “Receiving Party” has the meaning set forth in Section 9.1.3.

1.87 “Regulatory Approval” means all technical, medical and scientific licenses, registrations, authorizations and approvals (including Marketing Approvals and labeling approvals) of all applicable Regulatory Authorities necessary for the commercial distribution, marketing, promotion, offer for sale, use, import and sale of a pharmaceutical product in a regulatory jurisdiction.

1.88 “Regulatory Authority” means any authority, agency, commission, official or other instrumentality inside or outside the Territory, including the FDA, having jurisdiction over the manufacture of Product for sale in the Territory, or over the commercial distribution, marketing, promotion, offer for sale, use, import or sale of the Product in the Territory.

1.89 “Remediation Plan” has the meaning set forth in Section 3.2.4(b).

1.90 “Sales Force” has the meaning set forth in Section 3.3.2(a).

1.91 “Sales Representative” means a sales representative used by Company to perform Details of the Product for the Initial Indication to Health Care Professionals in the Territory. Sales Representative shall not include any key account manager, medical science liaison or regional sales manager.

1.92 “Second Position Detail” means, with respect to any product, a detail or presentation that is dedicated solely to such product and constitutes at least 30% of the total presentation time for all products presented during a Call in which such product is the second product presented to the health care professional.

1.93 “Service Fee” has the meaning set forth in Section 5.1.

1.94 “Start Date” means the first date upon which Sales Representatives are able to Detail the Product in accordance with this Agreement and as approved by Janssen, which may be before, on or after the Launch Date.

1.95 “Supplementary Training” means supplemental training relating to a Product, including refresher training, training regarding any emerging Product safety information, or new Promotional Materials or Product messaging.

1.96 “Target” means a Health Care Professional who treats patients for locally advanced

or metastatic urothelial cancer and is included in the Target List in accordance with this Agreement.

1.97 “Target List” has the meaning set forth in Section 2.2.1.

1.98 “Tax” or “Taxes” means any present or future taxes, levies, imposts, duties, charges, assessments or fees of any nature (including interest, penalties and additions thereon or thereto) that are imposed upon a Party by a Governmental Authority or other taxing authority under any applicable Laws.

1.99 “Term” has the meaning set forth in Section 8.1.1.

1.100 “Territory” means the United States of America, including its territories and possessions.

1.101 “Third Party” means any Person other than a party to this Agreement or any of its Affiliates.

1.102 “Trademark” means any trademark, trade dress, trade name, brand name, logo, corporate name or service mark, used in connection with any product or service.

1.103 “Training Activities Plan” has the meaning set forth in Section 2.2.2(a).

ARTICLE II

BRAND PLAN

2.1 Brand Plan Generally. A written plan for the marketing and promotion of the Product for the Initial Indication in the Territory pursuant to this Agreement for Calendar Year 2019 is attached to this Agreement as Exhibit A (the “Brand Plan”). If the Launch Date is delayed beyond May 1, 2019, Janssen shall update the Brand Plan to adjust the Parties’ obligations appropriately to reflect such delay. Janssen shall have the sole authority and responsibility for updating the Brand Plan for Calendar Year 2020. Janssen shall use reasonable efforts to deliver the Brand Plan for Calendar Year 2020 to the Joint Commercial Team by no later than November 30, 2019.

2.2 Contents of Brand Plan. The Brand Plan shall include: (a) a description of the Target List; (b) the Training Activities Plan; (c) a description of the Call Plan; and (d) a description of the sales and promotional materials (including Health Care Provider and patient education sales materials and, where applicable, non-personal promotional materials) to be used during the relevant year in connection with the Product. The Brand Plan shall also include plans for other non-Detailing activities, if any, to be conducted in relation to the Product during the period covered by the Brand Plan, such as attendance at medical conferences and Janssen sales meetings, marketing plans for advisory boards and publication plans.

2.2.1 Target List. Prior to the Launch Date, Janssen shall provide to Company, in electronic form, a list that sets forth: (x) the name of each Target to which the Sales Representatives will perform Details; and (y) the priority classification of each such Target (high, medium or low). Such list, as amended from time to time by Janssen, shall be the “Target List”. Janssen shall furnish with or as part of the Target List the claims data upon which the Target priority classification was based if (a) Janssen is able to obtain an agreement with the relevant Third Party to provide such data to Company and (b) the Parties agree on which Party will bear the costs of providing such data to Company.

2.2.2 Training Activities Plan.

(a) Training Activities Plan. The Brand Plan includes a plan that sets forth all of the training that Janssen deems necessary or advisable for the Sales Representatives and any other employees of Company conducting activities under this Agreement (such other employees, the “Other Company Employees”) to complete prior to conducting activities under this Agreement (the “Training Activities Plan”). The Training Activities Plan shall indicate which Party is responsible for providing such training, when such training will be provided and how such training will be provided (e.g., in person or remotely, which may include live audio/video conference calls, or electronically such as via learning management systems). The initial Training Activities Plan includes a plan for conducting and completing the Product-Specific Training and (as applicable) state Law compliance training of the Sales Representatives before the Launch Date. The initial Training Activities Plan also includes a plan for conducting and completing before the Launch Date compliance training of the Sales Representatives and the Other Company Employees in a manner consistent with all applicable pharmaceutical industry standards. Janssen may update the Training Activities Plan from time to time to include any additional training that Janssen deems necessary or advisable to refresh or update the knowledge of the Sales Representatives and the Other Company Employees.

(b) Training Responsibilities. Janssen shall conduct all Product-Specific Training to the Sales Representatives and Other Company Employees. Company shall at all times ensure that each Sales Representative and Other Company Employee (including Sales Representatives and Other Company Employee that are engaged after Launch Date) has received the Product-Specific Training and any other training set forth in the Training Activities Plan.

(c) Examination. Janssen shall administer to each Sales Representative an examination of the Product-Specific Training topics and any other training topics that Janssen deems necessary or advisable. The first such examination of the Sales Representatives shall occur no later than the Launch Date. Janssen shall determine the minimum score that is considered a minimum passing score for each examination (the “Passing Score”). Company shall ensure that, before conducting any Detailing of the Product pursuant to this Agreement, each Sales Representative has completed the Product-Specific Training and other training described in the Training Activities Plan and has achieved a Passing Score on such examination. Upon Company’s request, Janssen shall provide, as soon as reasonably practicable, additional remedial training and re-testing of Sales Representatives who fail to achieve a Passing Score. Any Sales Representative

who does not obtain a Passing Score on such an examination shall not be permitted by Company to perform in-person presentations of the Product unless and until such Sales Representative is re-tested and achieves a Passing Score.

2.2.3 Call Plan. Janssen shall develop and provide to Company an annual plan that describes the amount, frequency and reach of Detailing to be performed by the Sales Representatives to the Targets on the Target List (the “Call Plan”).

ARTICLE III

PROMOTION

3.1 Scope.

3.1.1 Engagement; Obligations.

(a) Janssen hereby engages Company on a non-exclusive basis to Promote the Product for the Initial Indication in the Territory on the terms, and subject to the conditions, set forth in this Agreement, and Company hereby accepts such engagement. Company shall not Promote the Product for any indication other than the Initial Indication. Company shall not conduct any promotion or marketing activities with respect to the Product that are not set forth in the Brand Plan without the prior written consent of Janssen. Janssen and its Affiliates retain the right to Detail and otherwise promote the Product in the Territory.

(b) Each Party shall perform the obligations and activities assigned to it in, and comply with the applicable provisions of, the Brand Plan and this Agreement.

3.1.2 Retained Rights. Any rights of Janssen or any of its Affiliates related to the Product that are not expressly granted to Company hereunder shall be retained by Janssen or such Affiliate, including all decision-making and other authority relating to Product development, regulatory matters, medical affairs, distribution, manufacturing and supply, Product strategy, marketing, sales, pricing, discounting, reimbursement, life cycle management, positioning, marketing messages and other commercialization matters. Janssen shall book sales of the Product in the Territory and shall have the sole right and responsibility to manufacture the Product and to distribute the Product in the Territory. Company shall not distribute or sell the Product in the Territory, and nothing herein shall be construed to provide Company with any rights to develop, manufacture, supply, distribute or sell the Product in the Territory.

3.1.3 Compliance with Laws. Company shall ensure that all of its personnel involved in the activities set forth under this Agreement comply with all applicable Laws and the Promotion Rules. Company shall ensure that the Sales Representatives and Other Company Employees Promote the Product at all times in accordance with applicable Laws and the Promotional Materials provided and approved by Janssen, refrain from making any false or misleading statements about the Product and refrain from discussing any unapproved uses of the Product.

3.2 Detailing Requirements.

3.2.1 General. Subject to Janssen fulfilling its obligations under Section 2.2.2(b) to provide the initial training and under Section 3.4 to deliver the Promotional Materials, Company shall begin promoting and Detailing the Product for the Initial Indication to the Targets on the Start Date. Company shall perform Detailing during the Term in accordance with this Section 3.2, the Call Plan and the Detailing requirements set forth on Exhibit B. For reference, the term “Detail” is defined in Section 1.33.

3.2.2 Minimum Detailing Requirements. At a minimum, Company shall cause its Sales Force to satisfy the Minimum Number of Details Requirement, the Minimum Reach Requirement and, if applicable, the Minimum PDE Requirement and the Minimum Top Target Requirement set forth in Exhibit B in each Detailing Period. Company shall ensure that the Sales Force satisfies the Positioning Requirements set forth on Exhibit B. Details that do not satisfy the Positioning Requirements set forth on Exhibit B will not be counted for purposes of determining whether the Minimum Number of Details Requirement, the Minimum Reach Requirement, the Minimum PDE Requirement or the Minimum Top Target Requirement has been satisfied.

3.2.3 Effects of Failure to Meet Minimum Detailing Requirements. If Company fails to achieve the Minimum Number of Details Requirement, the Minimum Reach Requirement or, if applicable, the Minimum PDE Requirement or the Minimum Top Target Requirement in any Detailing Period, Janssen shall have the right to terminate this Agreement by giving thirty (30) days’ notice, unless:

(a) Company complied with and performed its Detailing activities in accordance with any Remediation Plans developed by Company and approved by Janssen during such Detailing Period; or

(b) if (i) neither Party provided a Performance Failure Notice under Section 3.2.4 during such Detailing Period and (ii) Company performs additional Details in the first month after such Detailing Period such that, if such Details had been performed during such Detailing Period, they would have been sufficient to cure the failure to achieve the Minimum Number of Details Requirement, the Minimum Reach Requirement, the Minimum PDE Requirement or the Minimum Top Target Requirement, as applicable. To avoid double-counting, such additional Details will not be taken into account when determining whether Company satisfies the Minimum Number of Details Requirement, Minimum Reach Requirement or, if applicable, the Minimum PDE Requirement or the Minimum Top Target Requirement in the then-current Detailing Period.

For clarity, (i) Company must achieve all of the applicable foregoing minimum requirements in order to avoid giving rise to Janssen’s rights and remedies under this Section 3.2.3, and (ii) such rights shall be in addition to any other rights and remedies that may be available to Janssen under applicable Laws in the event of any such failure on the part of Company.

3.2.4 Monthly Detailing Reports.

(a) No later than [***] ([***]) Business Days following the end of each month during the Term, Company shall report to Janssen the number of Details performed (and any other information necessary to determine whether the requirements set forth in Section 3.2.2 and Exhibit B have been satisfied) during such month by the Sales Representatives in accordance with this Agreement and the Call Plan, as reported by the Company Internal Detail Reporting System. The Joint Commercial Team shall review and discuss Company’s performance of its Detailing obligations on a monthly basis.

(b) In the event that either Party believes, based on such reports, review or discussion, that Company will fail to achieve the Minimum Number of Details Requirement, the Minimum Reach Requirement or, if applicable, the Minimum PDE Requirement or the Minimum Top Target Requirement under Section 3.2.2 for the then-current Detailing Period, such Party will promptly notify the other Party in writing (a “Performance Failure Notice”) and Company shall develop a plan to avoid such a failure within fifteen (15) Business Days after the end of the applicable month, which plan will be subject to Janssen’s approval, not to be unreasonably withheld or delayed (as so approved, a “Remediation Plan”).

(c) For clarity, the Joint Commercial Team shall have no authority to extend the time for performance or reduce the Minimum Number of Details Requirement, the Minimum Reach Requirement or, if applicable, the Minimum PDE Requirement or the Minimum Top Target Requirement without an amendment to this Agreement.

3.2.5 Ride-Alongs. Members of Janssen’s team shall have the right to conduct ride-alongs with the Sales Representatives for purposes of monitoring the Details delivered by the Sales Representatives upon Janssen’s request. Janssen will give reasonable notice to Company sales management of each request.

3.3 Sales Representatives.

3.3.1 Qualifications. Company shall ensure that each Sales Representative: (i) is a full-time employee of Company and a full-time member of its sales force; (ii) possesses skills, training and experience that are consistent with industry standards applicable to the promotion of an oncological pharmaceutical product; (iii) has completed the Product-Specific Training and other sales training described in this Agreement and the Brand Plan and achieved a Passing Score on an examination in accordance with Section 2.2.2(c); and (iv) has become adequately equipped and knowledgeable with respect to the Product, as determined in accordance with Company’s then-current standards for sales personnel selling pharmaceutical products in the Territory. No sales representative or other individual may be used by Company to perform in-person presentations of

the Product in the Territory unless and until such individual satisfies the conditions described in clauses (i) - (iv) above.

3.3.2 Size of Sales Force.

(a) At all times during the Term, Company shall use reasonable efforts to deploy and maintain a sales force (the “Sales Force”) of at least [***] ([***]) Sales Representatives who satisfy the conditions described in Section 3.3.1.

(b) Company shall notify Janssen (i) at least [***] ([***]) days in advance of any planned reduction by Company in the size of the Sales Force to less than [***] ([***]) Sales Representatives and (ii) promptly if the number of Sales Representatives on the Sales Force decreases to less than [***] ([***]). In either event, Company shall provide Janssen with a plan to continue meeting the Minimum Number of Details Requirements, Minimum Reach Requirements, Minimum PDE Requirements and, if applicable, Minimum Top Target Requirements under Section 3.2.2.

(c) If the average number of Sales Representatives on the Sales Force is less than twenty-five (25) over any forty-five (45)-day period, Janssen will have the right to terminate this Agreement by giving thirty (30) days’ notice.

3.3.3 Subcontracting. Company may not subcontract with or otherwise use any Affiliate or Third Party to perform any Detailing or any of its other obligations under this Agreement without the prior written consent of Janssen.

3.3.4 Compensation of Sales Force. In the event Company elects to provide incentives to Sales Representatives, such incentives will be appropriate, in accordance with the applicable Laws, and, in the aggregate, competitive in the marketplace with respect to the products promoted by the Sales Representatives. Janssen shall not have any responsibility for or authority over the hiring, supervision, termination or compensation of the Sales Representatives or any other Company employees or for any employee benefits of such employees.

3.3.5 Additional Obligations. Company shall ensure that the Sales Representatives do not identify or represent themselves as employees or agents of Janssen or any Affiliate of Janssen.

3.4 Promotional Materials.

3.4.1 Positioning and Messages. Janssen shall develop and, as deemed advisable or necessary by Janssen from time to time, update product positioning and core selling messages for the Promotion of the Product. Janssen agrees to consider in good faith Company’s feedback in the development of any such updates to such messaging.

3.4.2 Promotional Materials Development and Approval. Janssen shall be solely responsible for developing and providing to Company (at Janssen’s cost) all promotional materials

for use in connection with the Promotion of the Product (the “Promotional Materials”) and agrees to provide Company with sufficient quantities of the materials based on market demand and expected levels of Detailing efforts. Janssen agrees to consider in good faith Company’s feedback in the development of any new promotional materials during the Term. Such Promotional Materials shall comply with all applicable Laws and may include written sales and advertising materials, detail aids, brochures, hand-outs, reprints, booth panels and any other promotional support items. Company shall use only the Promotional Materials provided by Janssen and the Product Label and Insert in its Promotion of the Product in the Territory. Company shall not add any Company Trademark to the Promotional Materials or otherwise alter the Promotional Materials in any way. Company shall not develop or use any other promotional materials in its Promotion of the Product.

3.4.3 Janssen Right to Use Promotional Materials. Nothing in this Agreement shall restrict Janssen’s right to use any Promotional Materials for the purposes of promoting the Product in the Territory.

3.4.4 Revisions. Janssen may revise, update or develop additional Promotional Materials from time to time during the Term, as deemed necessary and appropriate by Janssen, including based on: (i) changes in the Product Label and Insert; (ii) requirements or mandates of the FDA or other Regulatory Authorities or any Laws; or (iii) changes in the Promotion Rules.

3.4.5 Revocation of Approval. If, at any time, Janssen notifies Company in writing that it no longer approves the use of specified Promotional Materials, Company shall immediately take action to remove the Promotional Materials from use by Sales Representatives and either (i) destroy such materials or (ii) return them to Janssen. The cost of such return shall be borne by Janssen.

3.5 Product Sales. Janssen shall have sole authority and responsibility for sale and distribution of the Product in the Territory. Company shall not, and shall not permit the Sales Representatives or Other Company Employees to, solicit or accept orders for the Product or otherwise engage in any distribution, sale or offer for sale of the Product, any Product samples or any other product containing erdafitinib, but rather shall promptly direct any orders that it receives for Product or Product samples, and cause the Sales Representatives and Other Company Employees to direct promptly any such orders they may receive, to Janssen or any Third Party designated by Janssen.

3.6 Product Recall. Janssen shall have sole authority and responsibility for any recall or withdrawal of the Product in the Territory. Following a decision by Janssen to conduct any such recall or withdrawal of the Product: (a) Janssen shall immediately notify Company of such decision, (b) Company shall immediately cease Detailing and all other promotion of the Product and (c) as soon as reasonably practicable, Janssen provide Company with a prepared statement for use in response to any inquiries regarding such recall or withdrawal. Company shall use such prepared statement to respond to any inquiries received with regard to the recall or withdrawal and shall not make any other statement regarding such recall or withdrawal except as required by

applicable Law. In the event of a recall or withdrawal, the obligations of the Parties under this Agreement (other than Janssen’s obligation to pay Service Fees or Milestone Payments to Company) will be suspended solely to the extent and for so long as necessary until the circumstances that were the reasons for the recall or withdrawal have been resolved.

3.7 Product Return. Janssen shall have the sole authority, right and responsibility to accept and handle, either directly or indirectly, any request to return Product in the Territory. Company shall not solicit the return of any Product and shall promptly direct any attempted returns and cause the Sales Representatives and Other Company Employees to direct promptly any attempted returns to Janssen or any Third Party designated by Janssen.

ARTICLE IV

GOVERNANCE

4.1 Authority. Janssen shall have sole decision-making authority with respect to all matters relating to the promotion and Detailing of the Product in the Territory under this Agreement (including making changes to the Brand Plan), but Janssen may not exercise such decision-making authority with respect to a change to the Brand Plan that would materially increase Company’s Detailing obligations or materially increase Company’s non-Detailing obligations.

4.2 Joint Commercial Team.

4.2.1 Formation; Purpose. Simultaneously with the execution of this Agreement the Parties shall establish a joint commercial team (the “Joint Commercial Team”) solely as a forum for the Parties’ representatives to discuss Company’s execution of the Brand Plan, potential changes to the Brand Plan and the promotion and Detailing of the Product to the Targets in the Territory. The Joint Commercial Team will have no decision-making authority. During the meetings of the Joint Commercial Team, the Parties may make recommendations to one another with respect to Company’s execution of the Brand Plan, potential changes to the Brand Plan and the promotion and Detailing of the Product to the Targets in the Territory.

4.2.2 Membership. The Joint Commercial Team shall consist of at least three (3) representatives of each Party, appointed by such Party from among its (or its Affiliates’) employees that have a level of experience customary for a committee of this type. Either Party may remove and replace any member that it appointed, with or without cause, at any time by prior notice to the other Party. The Joint Commercial Team shall at all times be chaired by a representative of Janssen. The chairperson shall be responsible for calling meetings, preparing and circulating an agenda in advance of each meeting, and preparing and issuing minutes of each meeting within thirty (30) days thereafter or within a timeframe agreed by the Parties.

4.2.3 Meetings. The Joint Commercial Team shall meet monthly. Meetings of the Joint Commercial Team may be held in person or by audio or video teleconference with the consent of each Party. Each Party shall bear its own costs associated with the attendance of its appointees at such meetings. Each Party shall ensure that at least two (2) of its appointed members

(or their alternates) attend each meeting. Other employee representatives of each Party may attend meetings of the Joint Commercial Team.

4.3 BALVERSA Sales Advisory Team.

4.3.1 Formation; Purpose. Upon request by Janssen, the Parties shall establish a BALVERSA Sales Advisory Team (the “BSAT”). The BSAT will serve solely as an advisory forum and will have no decision-making authority.

4.3.2 Membership. The BSAT shall consist of at least one Sales Representative per region, at least two (2) regional managers of Company and at least one representative of Janssen’s BALVERSA marketing team. Either Party may remove and replace any member that it appointed, with or without cause, at any time by prior notice to the other Party. The BSAT shall at all times be chaired by a representative of Janssen. The chairperson shall be responsible for calling meetings.

4.3.3 Meetings. The BSAT shall meet every other week during the first sixty (60) days after the Launch Date and monthly for the rest of the Term, with each meeting not to exceed ninety (90) minutes in duration. Meetings of the BSAT shall be held by audio or video teleconference and the parties agree to make reasonable efforts to ensure the meetings do not interfere with territory detailing time. Each Party shall bear its own costs associated with the attendance of its appointees at such meetings. Other employee representatives of each Party may attend meetings of the BSAT.

ARTICLE V

COMPENSATION

5.1 Definitions.

5.1.1 “Baseline” means (i) with respect to Calendar Year 2019, [***] Dollars ($[***]); and (ii) with respect to Calendar Year 2020, [***]Dollars ($[***]).

5.1.2 “Cumulative Net Sales” means, with respect to any Calendar Quarter, the aggregate amount of Net Sales that were made during such Calendar Quarter and any prior Calendar Quarter(s) during the same Calendar Year.

5.2 Service Fee. In partial consideration of Company’s Promotion of the Product in accordance with the terms of this Agreement, and subject to the terms and conditions of this Agreement, with respect to each Calendar Quarter during Calendar Year 2019 and Calendar Year 2020, Janssen shall pay Company a service fee (the “Service Fee”), as follows:

(a) with respect to each Calendar Quarter during Calendar Year 2019, an amount equal to (i) [***] percent ([***]%) of that portion of Cumulative Net Sales that is greater than the Baseline for Calendar Year 2019, less (ii) the total Service Fees that have been invoiced by Company to Janssen for all preceding Calendar Quarters of Calendar Year 2019; and

(b) with respect to each Calendar Quarter during Calendar Year 2020, an amount equal to (i) [***] percent ([***]%) of that portion of Cumulative Net Sales that is greater than the Baseline for Calendar Year 2020, less (ii) the total Service Fees that have been invoiced by Company to Janssen for all preceding Calendar Quarters of Calendar Year 2020.

Unless and until the Cumulative Net Sales exceed the Baseline for a particular Calendar Year, the Service Fee shall be zero. The foregoing calculation method is intended to ensure that each Service Fee for a Calendar Quarter includes a true-up amount of all Service Fees earned year-to-date in the same Calendar Year.

5.3 Milestones.

5.3.1 In partial consideration of Company’s Promotion of the Product in accordance with the terms of this Agreement, and subject to the terms and conditions of this Agreement, Janssen shall pay Company milestone payments in accordance with this Section 5.3. Janssen shall notify Company in the applicable Fee Notice the first time the Cumulative Net Sales in the applicable Calendar Year exceed the amounts set forth in the following table (each, a “Milestone Event”). Janssen shall pay to Company the applicable milestone payments set forth in the table below (each, a “Milestone Payment”) within [***] ([***]) days after receipt of an invoice from Company with respect to achievement of each Milestone Event. Each Milestone Payment shall be non-refundable and non-creditable.



Milestone Event	Milestone Payment
Upon the first occasion that Cumulative Net Sales in Calendar Year 2019 exceed US$[***]	US$[***]
Upon the first occasion that Cumulative Net Sales in Calendar Year 2019 exceed US$[***]	US$[***]
Upon the first occasion that Cumulative Net Sales in Calendar Year 2019 exceed US$[***]	US$[***]
Upon the first occasion that Cumulative Net Sales in Calendar Year 2020 exceed US$[***]	US$[***]

5.3.2 Each Milestone Payment shall be payable only once upon the first occurrence of the relevant Milestone Event, even if the Milestone Event occurs multiple times.

In the event Regulatory Approval of the Product for the Initial Indication in the Territory is delayed beyond May 18, 2019, or in the event commercial availability of the Product is delayed beyond June 1, 2019, Janssen agrees to make proportional adjustments to the Milestone Events in 2019, Milestone Payments in 2019 and the Baseline for 2019

consistent with the period of delay in Regulatory Approval or commercial availability, whichever is greater, as shown in the following sample calculation.

Sample Calculation:

Example: Regulatory Approval date is June 18, 2019 – 30 days delayed approval

New Baseline for Calendar Year 2019:

$[***] – ($[***] X [***] days / [***] days) = $[***]

New Milestone Event and Payment for First 2019 Milestone:

Cumulative Net Sales:

$[***] – ($[***]X [***] days / [***] days) = $[***]

Payment:

$[***] – ($[***] X [***] days / [***] days) = $[***]

5.4 Costs. Unless otherwise expressly stated in this Agreement, each Party shall bear and be responsible for all internal and out-of-pocket costs and expenses incurred by such Party in the performance of this Agreement.

5.5 Reports and Payments.

5.5.1 After the end of each Calendar Quarter of Calendar Year 2019 and 2020, Janssen shall calculate in good faith, based on Janssen’s Books and Records and in accordance with Janssen’s customary and consistently-applied accounting practices, the Net Sales in such Calendar Quarter and for such Calendar Year in the aggregate, as well as the Cumulative Net Sales and the Service Fee for such Calendar Quarter. Janssen shall deliver to Company, within thirty (30) days following the last day of such Calendar Quarter, a report setting forth the Cumulative Net Sales, the Service Fee and, if applicable, the Milestone Payment for such Calendar Quarter (the “Fee Notice”).

5.5.2 Following receipt of a Fee Notice from Janssen pursuant to Section 5.5.1, Company shall invoice Janssen for the amount of the Service Fee payable with respect thereto, if any.

5.5.3 Subject to Janssen obtaining appropriate consents from its Third Party specialty pharmacy partner, and the Parties reaching mutual agreement on the allocation between them of the associated costs, if any, Janssen shall provide prescriber level unit sales data generated from the specialty pharmacy partner on a weekly basis for the Company to track business trends, direct resources, measure sales force effectiveness, detailing sensitivity, and to design an effective sales incentive program.

5.5.4 If a Party incurs any costs that are the responsibility of the other Party under this Agreement, such Party shall invoice the other Party for such costs promptly following the

Calendar Quarter during which such costs were incurred. Such invoice shall include reasonable documentation of the costs for which the invoicing Party is seeking reimbursement.

5.5.5 All invoices delivered in accordance with Section 5.5.2 or 5.5.4 shall be paid by the Paying Party within [***] ([***]) days after receipt of such invoice.

5.5.6 All payments hereunder will be paid in U.S. Dollars and made available by bank wire transfer, in immediately available funds, to the account designated in writing by the Payee Party from time to time. Any changes to such account designation shall be made at least thirty (30) Business Days before the due date of the applicable payment.

5.6 Tax Matters. The Paying Party shall make all payments to the Payee Party under this Agreement without deduction or withholding for any Taxes except to the extent that any such deduction or withholding is required by any Law in effect at the time of payment. Each Party shall otherwise be responsible for its own income taxes and corporate taxes and any other Taxes payable by such Party arising under or in connection with this Agreement and shall pay all such Taxes and file any applicable tax returns on a timely basis. Any Tax required to be withheld on amounts payable under this Agreement shall timely and promptly be paid by the Paying Party on behalf of the Payee Party to the appropriate Governmental Authority, and the Paying Party shall furnish the Payee Party with proof of payment of such Tax. Any such Tax required to be withheld shall be an expense of and borne by the Payee Party. If any such Tax is assessed against and paid by the Paying Party, then the amount of such Tax withheld shall be treated as paid by the Paying Party to the Payee Party and the Payee Party shall indemnify and hold harmless the Paying Party from and against such Tax. Both Parties will cooperate with respect to all documentation required by any taxing authority or reasonably requested by the Paying Party to secure a reduction in the rate of applicable withholding Taxes.

ARTICLE VI

REGULATORY MATTERS

6.1 Regulatory Approvals.

6.1.1 Obligations of Janssen. Janssen, either itself or through one of its Affiliates, shall use Diligent Efforts to obtain Regulatory Approval of the Product for the Initial Indication in the Territory and to maintain the validity of such Regulatory Approval throughout the Term, including the submission of any additional information requested by any Regulatory Authority in connection with such Regulatory Approval. Janssen shall have no obligation to file any application for Regulatory Approval for the Product in respect of any indication other than the Initial Indication.

6.1.2 Rights of Janssen. Janssen shall be the holder of any and all Regulatory Approvals for the Product in the Territory and shall retain sole authority over all regulatory matters relating to the Product in the Territory.

6.1.3 Communications with Regulatory Authorities. As between Janssen and Company, Janssen shall have the sole authority and responsibility for communicating with any Regulatory Authority regarding any Regulatory Approval of the Product in the Territory or any application or filing therefor, or regarding any other obligation to any Regulatory Authority in relation to the Product. Except as expressly set forth herein or as required by applicable Law or as approved in advance by Janssen in writing, Company shall not communicate directly with any Regulatory Authority regarding the Product or otherwise take any action concerning any application, registration, authorization or approval under which the Product is manufactured, imported, maintained, marketed, reimbursed or sold in the Territory.

6.2 Pharmacovigilance Procedures. The Parties shall comply, and Company shall cause the Sales Representatives and Other Company Employees to comply, with the provisions set forth on Schedule 6.2, which govern the reporting of adverse events/adverse drug reactions associated with the Product, Product quality complaints associated with adverse events and other information concerning the safety of the Product within the Territory.

6.3 Product Complaints. Janssen shall have the sole right and responsibility to accept and handle any Product Complaint associated with the use of the Product. Company shall, and shall cause each of its Sales Representatives and Other Company Employees to, notify Janssen as soon as possible, but no later than 24 hours after the time he or she becomes aware of any Product Complaint associated with the Product, which notice shall include the name of the person making such Product Complaint, the Target that prescribed the Product (if any), and the date the relevant Sales Representative or Other Company Employee received such Product Complaint. Details regarding the process for notifying Janssen of any such Product Complaints shall be as set forth in “product complaints standard operating procedures”, a copy of which Janssen will provide to Company promptly following the Effective Date.

6.4 Post-Marketing Surveillance. Janssen shall have the sole right to conduct any post marketing surveillance with respect to the Product (“PMS”), whether such PMS is elected by Janssen or required by applicable Law.

6.5 Product Medical Inquiries. Janssen shall handle all medical questions from members of the medical profession regarding the Product in the Territory. Company shall refer all medical inquiries regarding the Product to Janssen through the established process outlined by Janssen for reporting of medical information requests, a copy of which Janssen will provide to Company promptly following the Effective Date.

6.6 Companion Diagnostic Inquiries. Company shall direct all inquiries relating to the Companion Diagnostic in accordance with the procedures established by Janssen, a copy of which Janssen will provide to Company promptly following the Approval Date.

6.7 Access, Affordability and Patient Support Inquiries. Company shall direct all inquiries relating to access, affordability, or patient support for the Product to the dedicated specialty pharmacy responsible for addressing such questions, in accordance with the procedures

established by Janssen, a copy of which Janssen will provide to Company promptly following the Effective Date.

ARTICLE VII

BOOKS, RECORDS AND AUDIT RIGHTS

7.1 Books and Records. Janssen and Company shall each maintain true and complete books and records with respect to the performance of its obligations hereunder, including the Company Internal Detail Reporting System and items underlying all payment obligations and invoices related to this Agreement (the “Books and Records”). Company shall maintain and manage its Books and Records in accordance with the records and information management requirements set forth on Exhibit C.

7.2 Books and Records Audits.

7.2.1 Right to Audit. Upon [***] ([***]) days prior notice from a Party (the “Auditing Party”), the other Party (the “Audited Party”) will permit an independent certified public accounting firm of internationally recognized standing selected by the Auditing Party and reasonably acceptable to the Audited Party, to examine the relevant Books and Records of the Audited Party, as may be reasonably necessary to verify the accuracy of the reports provided by the Audited Party pursuant to Section 3.2.4 or Section 5.5.1, as applicable, and the payments made or invoiced under this Agreement. An examination by each Auditing Party under this Section shall occur not more than once with respect to the Term and will be limited to the pertinent Books and Records for Calendar Year 2019 and Calendar Year 2020.

7.2.2 Scope of Audit. The independent certified public accounting firm will be provided access to the Books and Records of the Audited Party, and such examination will be conducted during the Audited Party’s normal business hours. The Audited Party may require the accounting firm to sign a standard non-disclosure agreement before providing the accounting firm access to the Audited Party’s facilities or Books and Records. The draft report of the accounting firm will be provided to the Audited Party so that justifying remarks can be included in the final report to be shared with the Auditing Party. Upon completion of the audit, the accounting firm will provide both Parties a final copy of the written report disclosing any discrepancies in the reports submitted by the Audited Party or the payments made or owed by the Audited Party, if any, and shall not include any confidential information (or additional information that is ordinarily not included in the Fee Notice or Detailing reports, as applicable) disclosed to the auditor during the course of the audit (such report, an “Audit Report”).

7.2.3 Results of Audit. If an Audit Report shows that the Audited Party underpaid or failed to pay any amount due to the Auditing Party, then the Audited Party will pay to the Auditing Party the amount of such underpayment or non-payment. Such payment shall be made within [***] ([***]) days after the Audited Party’s receipt of the Audit Report. If an Audit Report shows that Company overstated or otherwise misreported any information relating to Calls and Details, then Janssen shall be entitled to exercise any rights and seek any remedies it would have

had if such information had been accurately reported. If the Audited Party disagrees with the findings of the Audit Report, the Parties will first seek to resolve the matter between themselves, and in the event they fail to reach agreement the dispute resolution provisions outlined in Article XIII shall be followed to resolve the dispute. Any unpaid Service Fees or Milestone Payments finally determined by such resolution to be payable shall be paid within [***] ([***]) days after such final resolution. If an Audit Report shows any overpayment by either Party, such Party will be entitled to receive, at its option, either a refund of such overpayment or a credit equal to such overpayment against the amounts otherwise payable by such Party to the other Party under this Agreement.

7.2.4 Costs of Audit. If an Audit Report shows unpaid Service Fees or Milestones that exceeds [***] percent ([***]%) of the total amount owed by the Audited Party for the period being audited, then the reasonable and documented fees and expenses of such independent public accountant performing the examination shall be paid by the Audited Party, subject to reasonable substantiation thereof. Otherwise, the costs of the examination shall be solely borne by the Auditing Party.

7.3 Compliance Audits. Janssen or an authorized representative of Janssen, and any governmental agency that regulates a Party, may, at reasonable times during the Term and upon reasonable notice to Company, inspect and audit the Books and Records of Company with respect to Company’s obligations under this Agreement for the sole purpose of evaluating Company’s compliance with Sections 3.1.3, 3.4.2, 11.5 and 11.6 of this Agreement, applicable Laws and the Promotion Rules. The costs of any such audit shall be borne by Janssen, unless such audit reveals noncompliance by Company due to a failure by Company that is not excused by Janssen under this Agreement, in which case Company shall reimburse Janssen for any out-of-pocket costs reasonably incurred in connection with the audit.

ARTICLE VIII

TERM AND TERMINATION

8.1 Term; Termination.

8.1.1 Term. This Agreement shall commence on the Effective Date and, unless earlier terminated, shall expire on the Expiration Date (the “Term”). For the avoidance of doubt, the Parties agree that Janssen’s obligations under Section 5.2 (subject to Section 8.2.5) and Section 5.3 (subject to Section 8.2.5) shall remain in effect beyond the Expiration Date.

8.1.2 Failure or Delay in Obtaining Regulatory Approval. This Agreement may be terminated by either Party, before the date that Marketing Approval has been obtained for the Product for the Initial Indication in the Territory, in the event that Janssen withdraws its application for Marketing Approval for the Product for the Initial Indication in the Territory or is notified by FDA that Janssen’s application for such Marketing Approval in the Territory has been or will be denied. Further, this Agreement may be terminated by either Party in the event that Marketing Approval for the Product in the Territory is not obtained before June 30, 2019. Any such

termination pursuant to this Section 8.1.2 shall be effective thirty (30) days following written notice of such termination being given to the non-terminating Party.

8.1.3 Termination Scenarios Following Regulatory Approval. Without limiting either Party’s rights under Section 8.3, this Agreement may be terminated by either Party with thirty (30) days’ prior written notice to the other, in the event that (a) a Governmental Authority requires Janssen to withdraw permanently the Product from the market in the Territory for the Initial Indication or Regulatory Approval for the Product for the Initial Indication is otherwise withdrawn, (b) Janssen permanently withdraws the Product from the market in the Territory for the Initial Indication for safety reasons or (c) promotion and sale of the Product in the Territory for the Initial Indication has been suspended for more than three (3) months or is permanently suspended, in either case, as a consequence of and pursuant to Section 8.3. To the extent practicable, each Party will consult with the other Party before terminating this Agreement pursuant to this Section and will consider the other Party’s input in good faith; provided, however, that the decision to withdraw the Product pursuant to clause (b) above will be made by Janssen in its sole discretion, acting in good faith.

8.1.4 Material Breach. This Agreement may be terminated by either Party in the event that the other Party commits a material breach of this Agreement and (a) such breach shall not have been cured within thirty (30) days after the giving of notice of such material breach, unless (i) the specific provision to which such breach relates expressly provides for a different period, or (ii) the Parties mutually agree in writing to an extension of such period (the “Cure Period”); or (b) such breach, by its nature, is not curable. Unless such breach in clause (a) is cured during the Cure Period, such termination will be effective immediately upon the expiration of the Cure Period without any further action or notice by the non-breaching Party. In the case of a breach in clause (b), such termination will be effective thirty (30) days following written notice of such breach being given to the breaching Party.

8.1.5 Performance Failure. This Agreement may be terminated by Janssen in accordance with Section 3.2.3 or 3.3.2(c).

8.1.6 Competing Products. In the event that Company commits a breach of Section 9.2 or Section 9.3, then Janssen shall have the right to terminate this Agreement in its entirety at any time immediately upon written notice to Company.

8.1.7 Insolvency Proceeding. This Agreement may be terminated by either Party, immediately and without notice, if the other Party at any time (a) commences a voluntary case or other proceeding seeking liquidation, reorganization or other relief with respect to itself or its debts under any bankruptcy, insolvency or other similar Law or seeking the appointment of a trustee, receiver, liquidator, custodian or similar official of it or of any substantial part of its property, or consents to any such relief or to the appointment of or taking possession by any such official in an involuntary case or other proceeding commenced against it, or makes a general assignment for the benefit of creditors, or takes any corporate action to authorize any of the foregoing, (b) has an involuntary case or other proceeding commenced against it seeking liquidation, reorganization or

other relief with respect to it or its debts under any bankruptcy, insolvency or other similar Law or seeking the appointment of a trustee, receiver, liquidator, custodian or other similar official of it or any substantial part of its property, and such involuntary case or other proceeding remains undismissed and unstayed for a period of ninety (90) days; or an order for relief is entered against such Party under applicable bankruptcy Laws, or (c) is insolvent or is generally unable to pay its debts as they become due.

8.1.8 Force Majeure. This Agreement may be terminated by either Party in accordance with Section 14.2.

8.1.9 Health Care Compliance. This Agreement may be terminated by Janssen in accordance with Section 2(d) of Exhibit D.

8.1.10 Third Party Agreement. This Agreement may be terminated by Janssen with effect on December 31, 2019 or January 31, 2020, in either case with fifteen (15) days’ advance written notice, and only in the event that Janssen has entered into an agreement with a Third Party that provides for (a) a license, sublicense, assignment, divestiture or other transfer or disposition of substantial rights or assets relating to the Product in the Territory, or (b) a collaboration involving the development and/or commercialization in the Territory of the Product or any other pharmaceutical product that contains erdafitinib. If Janssen terminates this Agreement pursuant to this Section 8.1.10, then Janssen shall, within [***] ([***]) days following the effective date of such termination, pay Company an amount equal to $[***] and, if the Milestone Event listed in the first line of the table in Section 5.3.1 has occurred, Janssen shall pay to Company an additional amount of $[***] (which shall be in addition to the Milestone Payment earned in respect of such Milestone Event).

8.1.11 Company Product Additional Indication. This Agreement may be terminated by Janssen with thirty (30) days’ prior written notice in the event that the Company Product is approved by the FDA for use in the treatment of urothelial cancer in any patient population in the Territory.

8.2 Effect of Termination or Expiration.

8.2.1 Materials. Upon the effective date of termination or expiration of this Agreement, Company shall immediately (a) cease, and cause the Sales Representatives and Other Company Employees to cease, all Promotion of the Product, (b) discontinue the use of any Promotional Materials, and (c) discontinue the use of any Janssen sales data, Target List and other documents and data related to the Product provided to Company by Janssen hereunder. As requested by Janssen, Company shall either maintain (subject to the provisions of Section 9.1 and Exhibit C) or promptly destroy (and certify to Janssen the destruction) or return to Janssen all Promotional Materials, all training materials and all other materials related to the Product provided by Janssen pursuant to this Agreement or the Brand Plan. With respect to any information, data, or reports provided by Janssen to Company under this Agreement, including Janssen sales data, that Janssen requests Company to destroy or return, Company shall upon the effective date of

termination or expiration of this Agreement remove such information from its internal systems and certify to Janssen to such removal; provided, however, that such information shall not be required to be removed from inactive back-up computer files created pursuant to standard, automated archiving procedures.

8.2.2 Confidential Information. Following the effective date of termination or expiration of this Agreement, without prejudice to Section 8.2.1, each Party shall use reasonable efforts to return, destroy or maintain (subject to the provisions of Section 9.1 and Exhibit C), at the Disclosing Party’s election, all Confidential Information of the other Party (provided that the Receiving Party may keep one copy of such Confidential Information subject to an ongoing obligation of confidentiality for archival purposes only).

8.2.3 Transition Plan. The Parties shall reasonably cooperate in good faith to effect the transition to Janssen of all Product promotional activities to minimize disruptions to customers and patients. In furtherance of the foregoing, and at the request of either Party, the Joint Commercial Team, reasonably in advance of the expected end of the Term shall develop and approve a transition plan that contains, among other things, a plan for notifying Targets and other customers or health care providers of such termination or expiration and transition, and, if applicable, provides for the completion of any events set forth in a Brand Plan which are already scheduled but will take place after the effective date of termination or expiration.

8.2.4 Non-Exclusive Remedies. The consequences set forth in this Section 8.2 are not intended to be the exclusive remedies of the Parties in connection with the breach of or termination of this Agreement.

8.2.5 Compensation in Certain Termination Events. If this Agreement is terminated pursuant to any of the following Sections, Janssen shall not be obligated to pay to Company (a) any Service Fees with respect to any period after the effective date of termination of this Agreement or (b) any Milestone Payments with respect to any Milestone Events that are achieved after the effective date of termination of this Agreement: Section 8.1.4 (if terminated by Janssen for breach by Company), 8.1.5, 8.1.6, 8.1.7 (if terminated by Janssen for the insolvency of Company), 8.1.8 (if terminated by Janssen for Force Majeure applicable to Company), 8.1.9, 8.1.10 (except that this Section 8.2.5 shall not affect Janssen’s obligation to pay the amounts set forth in Section 8.1.10 as being payable in accordance with and subject to the conditions set forth in such Section 8.1.10) or 8.1.11.

8.2.6 Survival. Termination or expiration of this Agreement shall not relieve a Party of any liability for any breach that occurred, or of any obligation to make payment that accrued, before or on the effective date of such termination or expiration, nor prejudice either Party’s right to obtain performance of any obligation provided for in this Agreement that survives termination or expiration. All provisions of this Agreement which, in accordance with their terms, are intended to have effect after the expiration or termination of this Agreement shall survive such termination or expiration, including: Sections 3.1.2, 3.2.4(a) (with respect to the last month of the Term), 5.2 (subject to Section 8.2.5), 5.3 (subject to Section 8.2.5), 5.5.1, 5.5.2, 5.5.5, 5.5.6, 5.6,

7.1, 7.2, 8.1.1 (last sentence only), 8.1.10 (only if the Agreement is terminated pursuant to Section 8.1.10), 8.2, 9.1, 10.2, 11.8, and Articles XII, XIII and XIV.

8.3 Suspension of Product Promotion

8.3.1 Right to Suspend. Janssen shall have the right to require that both Parties suspend the promotion of the Product in the Territory for the Initial Indication if Janssen decides, in its sole discretion, acting in good faith, that it is necessary to do so due to safety reasons, or to comply with applicable Law or a request or mandate of a Regulatory Authority, or because of any Third Party’s claim or potential claim of intellectual property infringement in relation to the Product. In any such event, Company shall cease promoting the Product in the Territory immediately upon Company’s receipt of notice from Janssen directing it to do so, and Janssen shall have the right to cease the sale and/or distribution of the Product for so long as promotion thereof is suspended. Janssen shall discuss its decision with Company as soon as it is practicable to do so and consider Company’s input in good faith; provided, however, that all decisions regarding such matters shall be made by Janssen in its sole discretion. If Janssen decides to end any such suspension of the promotion, sale or distribution of the Product in the Territory, Janssen shall immediately notify Company of its decision.

8.3.2 Adjustments Due to Suspension. In the event Janssen suspends the promotion and/or sale of the Product in the Territory for the Initial Indication pursuant to Section 8.3.1, and such suspension results in any restriction or prohibition on Detailing activities by Company for a period of one week or more, then the Parties will discuss and attempt to agree upon an appropriate adjustment to Company’s Detailing obligations under the Brand Plan and/or the Baselines.

ARTICLE IX

CONFIDENTIALITY; RESTRICTIVE COVENANTS

9.1 Confidentiality.

9.1.1 Non-Disclosure and Non-Use. Except to the extent expressly authorized by this Agreement or otherwise agreed in writing, each of Janssen and Company agrees that, during the Term and until the conclusion of the [***] ([***]) year period beginning upon the expiration or earlier termination of this Agreement, such Party shall: (a) maintain in confidence the Confidential Information of the other Party using not less than the efforts such Party uses to maintain in confidence its own confidential or proprietary information of similar kind and value (but not less than reasonable efforts); (b) not disclose the Confidential Information of the other Party to any Third Party; and (c) not use the Confidential Information of the other Party for any purpose other than as provided for in this Agreement.

9.1.2 Certain Information. The Brand Plan (including the Training Activities Plan and Call Plan), the Target List and all information and data contained within such documents is deemed to be the Confidential Information of Janssen. The reports of Details provided by Company pursuant to Section 3.2.4 and all data in the Company Internal Detailing System relating

to the Product are deemed to be (a) the Confidential Information of both Parties during the Term and (b) the Confidential Information of Janssen after the Term.

9.1.3 Exceptions. The obligations of Section 9.1.1 do not apply to any portion of the Confidential Information of a Party (the “Disclosing Party”) that the other Party (the “Receiving Party”) can show by competent written evidence:

(a) is already known to the Receiving Party before the time of disclosure by the Disclosing Party, as evidenced by the Receiving Party’s written records made or obtained before the date of disclosure; provided, however, that this clause (a) shall not apply to the reports and data described in the second sentence of Section 9.1.2;

(b) is disclosed to the Receiving Party on a non-confidential basis by a Third Party who, to the knowledge of the Receiving Party, is under no obligation to the Disclosing Party (or any of its Affiliates) with respect to confidentiality, secrecy or restriction on the use of such information or data;

(c) is now, or hereafter becomes, through no act or failure of the Receiving Party or any of its Affiliates in violation of this Agreement, generally known or available to the public;

(d) is independently discovered or developed by or on behalf of the Receiving Party or any of its Affiliates (i) not pursuant to or in connection with this Agreement and (ii) without the use of or reference to the Confidential Information of the Disclosing Party as evidenced by the Receiving Party’s written records; or

(e) is publicly disclosed by the Disclosing Party, either before or after it is disclosed to the Receiving Party under this Agreement.

9.1.4 Permitted Disclosure. The Receiving Party may disclose the Disclosing Party’s Confidential Information only to the extent such disclosure is reasonably necessary in the following instances, or to the extent permitted under the other applicable provisions of this Agreement:

(a) to those of the Receiving Party’s Affiliates and its and their respective officers, directors, employees, agents, advisors and consultants who (a) are bound in writing (or, with respect to counsel to the Receiving Party, by professional or ethical obligations) by obligations of confidentiality and non-use substantially similar to and consistent with those of this Section 9.1, (b) need to receive the Confidential Information in order for the Receiving Party to exercise its rights, conduct the activities required by or fulfill its other obligations under this Agreement and (c) are made aware of the confidential nature of the information, and then only to the extent required for the Receiving Party to exercise its rights under, conduct the activities required by or fulfill its other obligations under this Agreement; provided that the Receiving Party shall be responsible and liable for any breach of the provisions of this Section 9.1 by any Person who receives Confidential Information pursuant to this Section 9.1.4(a);

(b) with respect to Janssen as the Receiving Party, to the FDA or other applicable Regulatory Authority where such disclosure is required in connection with any filing, application, or request for any Regulatory Approval of the Product in the Territory;

(c) to the extent that such disclosure is necessary to prosecute litigation for the protection, preservation, or return of Confidential Information or to enforce its rights under this Agreement;

(d) to comply with applicable Law or the rules of any stock exchange on which such Party’s securities (or the securities of a Party’s Affiliate) are traded, subject to the terms of Section 9.1.5;

(e) with respect to Janssen as the Receiving Party, to counterparties under the License Agreement to the extent such disclosure is required under the License Agreement or is advisable for the purpose of carrying out more fully Janssen’s obligations under this Agreement or otherwise increasing Net Sales of the Product in the Territory; or

(f) to comply with court orders or administrative orders pursuant to Law.

In the case of disclosure pursuant to Section 9.1.4(c), 9.1.4(d) or 9.1.4(f), the Receiving Party (i) shall, to the extent reasonably practicable under the circumstances, give reasonable advance notice of the disclosure requirement to the Disclosing Party, so as to provide the Disclosing Party with the opportunity to secure, to the extent available, a protective order (or similar remedy) or other assurance of confidential treatment of the Confidential Information to be disclosed, and (ii) shall reasonably cooperate with the Disclosing Party, at its expense and request, in seeking such protective orders or other relief.

Any permitted use of the Disclosing Party’s Confidential Information by the Receiving Party for purposes of its performance hereunder will not be deemed a license or other right of the Receiving Party to use any such Confidential Information for any other purpose. The Receiving Party shall not acquire any right, title, or interest in or to any Confidential Information (including copies and summaries thereof and extracts therefrom, whether tangible or in electronic or other form) of the Disclosing Party by virtue of its disclosure hereunder.

9.1.5 Terms of this Agreement. The terms of this Agreement are deemed to be, and shall be treated by each Party as, Confidential Information of each Party. Either Party may disclose the terms of this Agreement and other information relating to this Agreement or the transactions contemplated by this Agreement to the extent required, in the reasonable opinion of such Party’s counsel, to comply with the rules and regulations promulgated by the United States Securities and Exchange Commission, New York Stock Exchange, Nasdaq Stock Market or similar security regulatory authorities or stock market in other countries. If a Party intends to disclose this Agreement or any of its terms or other Confidential Information of the other Party pursuant to this Section 9.1.5, such Party will, except where impracticable or not legally permitted, give reasonable advance notice to the other Party of such disclosure and seek confidential treatment

of portions of this Agreement or such terms or information, as may be reasonably requested by the other Party in a timely manner.

9.1.6 Prior Non-Disclosure Agreement. As of the Effective Date, the terms of this Section 9.1 supersede any prior non-disclosure, secrecy or confidentiality agreement between the Parties (or their Affiliates) relating to the subject matter of this Agreement, including the Mutual Confidentiality Agreement between the Parties dated February 1, 2019. Any information disclosed pursuant to any such prior agreement shall be deemed Confidential Information under this Agreement.

9.2 Exclusivity. During the Term, neither Company nor any of its Affiliates (including, for the avoidance of doubt, any Third Party that becomes an Affiliate of Company after the Effective Date) shall, alone or in collaboration with any Third Party, market, promote, sell, distribute or otherwise commercialize in the Territory any Competing Product without the prior written consent of Janssen. In the event that, after the Effective Date, a Third Party (an “Acquirer”) either (a) merges with Company, (b) acquires “control” (as defined in Section 1.4) of Company or (c) acquires substantially all the assets of the Company (each of (a), (b) and (c), an “Acquisition”), and such Acquirer or any of its Affiliates immediately prior to such Acquisition is commercializing a Competing Product in the Territory, then either Party shall have the right to terminate this Agreement on [***] ([***]) days written notice delivered within [***] ([***]) days of the closing of such Acquisition, and Company shall not be deemed to be marketing, promoting, selling, distributing or commercializing a Competing Product in breach of this Section for so long as it is conducting such activities solely through personnel who are not involved in any activities under this Agreement and do not have access to Janssen’s Confidential Information hereunder.

9.3 Restrictions on Promotion. During the Term, Company and its Affiliates (including, for the avoidance of doubt, any Third Party which becomes an Affiliate of Company after the Effective Date) (a) will not, whether alone or in collaboration with any Third Party or for itself or any Third Party, during the promotion of any product, compare such product (other than the Product) with the Product in any aspect nor disparage the Product in any manner, and (b) with respect to any such product that is a product of Company or its Affiliates and that Company or its Affiliates promotes, sells, distributes, or otherwise commercializes using or through a Third Party, will (i) cause any such Third Party, during the promotion of such product, not to compare such product with the Product in any aspect nor disparage the Product in any manner and (ii) not authorize any Third Party to make any such comparison or disparagement.

9.4 Limitation on Soliciting Employees. During the Term, Janssen shall not directly or indirectly solicit for employment any Sales Representative who is an employee of Company, and Company shall not directly or indirectly solicit for employment any employee of Janssen with whom Company has had contact in the course of the evaluation or negotiation of this Agreement or with whom Company interacts during the Term; provided, however, that the foregoing provision will not prohibit either Party from (a) conducting general solicitations of employment in publications (including but not limited to websites, newspapers and/or journals) available to the public, or solicitations through the use of search firms, and which, in any case, are not directed

specifically toward such employees of the other Party or (b) any contact with any such employee of the other Party (i) that was initiated by such employee without any solicitation prior thereto by the contacting Party (other than solicitation permitted by clause (a) of this sentence) or (ii) with whom the contacting Party is already in employment discussions as of the Effective Date, or (iii) by any person other than (A) one who was introduced to, or became aware of, the relevant employee of the other Party solely in connection with this Agreement, and (B) one who is acting at the direction or suggestion of a person described in (A).

ARTICLE X

INTELLECTUAL PROPERTY

10.1 Use of Trademarks. Janssen and its Affiliates shall retain all right, title and interest in and to its and their respective Trademarks. Company shall Promote pursuant to this Agreement only under the Product name and other Product Trademarks used by Janssen in the Territory. Janssen hereby grants to Company, during the Term, a non-exclusive, royalty free right to use such Product name and Product Trademarks, and Janssen corporate names and logos, solely to the extent they are included on the Promotional Materials and solely for the purpose of using the Promotional Materials to Promote in the Territory under this Agreement. Company shall not, without the express, prior written consent of Janssen, alter or modify in any manner any Product Trademark or any other Trademark of Janssen. Company agrees to comply with such Janssen standard guidelines regarding the use of the Product Trademarks and any other Trademarks of Janssen, and any amendments thereto, as Janssen provides to Company from time to time after the Effective Date (including the Janssen Brand Usage Guidelines).

10.2 Ownership of Intellectual Property Rights. Company acknowledges and agrees that Janssen or one of its Affiliates (a) is the sole and exclusive owner of all rights in and to the Product Trademarks and any other Trademarks of Janssen, including any form or embodiment thereof, and the goodwill now or hereafter associated therewith, (b) shall own the copyrights to all Promotional Materials and the Product Label and Insert, and (c) has the sole right to assert or control any action to enforce its rights in or to any of the Product Trademarks, any other Trademarks of Janssen or such copyrights and to receive the proceeds of any such action. Company further acknowledges and agrees that it does not, by virtue of this Agreement or its activities hereunder, obtain or acquire any right or interest in the Product Trademarks, any other Trademarks of Janssen, such copyrights, or any other intellectual property right of Janssen or its Affiliates. To the extent that Company, by operation of Law or otherwise, acquires any right (other than pursuant to this Agreement) to any of the Product Trademarks, any other Trademarks of Janssen, such copyrights or such other intellectual property rights, Company shall assign to Janssen all such rights at Janssen’s cost and will not claim ownership. Company agrees that it shall not seek to register or obtain ownership rights in any of Janssen’s corporate names, logos, or Product Trademarks (or any confusingly similar trademark).

10.3 Prosecution and Maintenance. Janssen will have the right (and not the obligation) to prepare, file, prosecute and maintain any intellectual property right of Janssen or its Affiliates claiming or covering the Product or its use in its sole discretion and at its own cost.

10.4 Enforcement against Infringement. Janssen and Company will each promptly notify the other in writing of any alleged or threatened infringement by a Third Party in the Territory of any intellectual property right of Janssen or its Affiliates claiming or covering the Product or its use in treating urothelial cancer, or any alleged or threatened assertion by a Third Party of invalidity of any of the intellectual property rights of Janssen or its Affiliates claiming or covering the Product or its use in treating urothelial cancer in the Territory, of which such Party becomes aware. Janssen and its Affiliates shall have the sole right (but not the obligation) to prosecute any such infringement in its sole discretion and at its sole cost.

10.5 Third Party Infringement Claims. In the event that Janssen or its Affiliate(s) decides to obtain a license to intellectual property from a Third Party in the Territory in order to commercialize the Product, whether or not due to a Third Party claim, notice, or suit or other inter partes proceeding against Janssen, Company and/or their Affiliates alleging that the commercialization of the Product in the Territory infringes or misappropriates any intellectual property rights of such Third Party, Janssen and its Affiliate(s) shall be solely responsible for the costs associated with such license and Company shall provide reasonable cooperation to Janssen or its applicable Affiliate(s) in procuring and complying with such license.

ARTICLE XI

REPRESENTATIONS AND WARRANTIES; CERTAIN COVENANTS

11.1 Representations of Authority. Janssen and Company each represents and warrants to the other Party that, as of the Effective Date, it has full right, power and authority to enter into this Agreement and to perform its respective obligations under this Agreement and that it has the right to grant to the other Party the rights granted pursuant to this Agreement as set forth herein.

11.2 Consents. Janssen and Company each represents and warrants to the other Party that all necessary consents, approvals, and authorizations of all Government Authorities and other Persons required to be obtained by it as of the Effective Date in connection with the execution, delivery, and performance of this Agreement have been obtained by the Effective Date.

11.3 No Conflict. Janssen and Company each represents and warrants to the other Party that the execution and delivery of this Agreement by it and the performance of its obligations hereunder (a) do not conflict with or violate any Laws existing as of the Effective Date as applicable to such Party and (b) do not conflict with, violate, breach, or constitute a default under any of its material contractual obligations existing as of the Effective Date.

11.4 Enforceability. Janssen and Company each represents and warrants to the other Party that, as of the Effective Date, this Agreement is a legal and valid obligation binding upon it and is enforceable against it in accordance with its terms, subject to the laws of bankruptcy, insolvency, and creditors’ rights.

11.5 Sales Representatives and Other Company Employees.

11.5.1 Company covenants to Janssen that:

(a) with respect to the Product, the Sales Representatives and Other Company Employees in the Territory shall make no statements, claims, or undertakings to any health care provider with whom they discuss or promote the Product that are not consistent with, nor provide nor use any labeling, literature, or other materials other than, the Product Label and Insert and those Promotional Materials provided and approved for use pursuant to this Agreement; and

(b) it shall ensure that all statements, comments and claims made by the Sales Representatives and Other Company Employees (i) about the Product, including as to efficacy and safety, are truthful and accurate and are consistent with and in strict compliance with the Product Label and Insert and all applicable Laws, and (ii) about Janssen in relation to the Product are truthful, accurate, and in strict compliance with all applicable Laws.

Any statement, claim or comment that is contained in the Promotional Materials or the Product Label and Insert, in each case, as in effect when such statement, claim or comment is made, shall be deemed not to violate this Section 11.5.1.

11.5.2 Company shall perform all Detailing and other promotional activities with respect to the Product in compliance with applicable Laws and the Promotion Rules.

11.6 Other Compliance Matters.

11.6.1 Company represents and warrants that it has established, and covenants that it will maintain during the Term, a compliance program consistent with the Compliance Program Guidance for Pharmaceutical Manufacturers published by the Office of Inspector General, U.S. Department of Health and Human Services.

11.6.2 Company represents and warrants that it has implemented, and covenants that it will maintain during the Term, adequate systems, policies, and procedures governing (1) interactions with health care professionals, (2) material that can be distributed or discussed with health care professionals, (3) the manner in which personnel should handle unsolicited requests for off-label information, and (4) the review and approval of all marketing, promotion, and sales materials, call plans, and incentive compensation structures. Company represents and warrants that such policies and procedures are and will be consistent with applicable Law and with this Agreement.

11.6.3 Company represents and warrants that neither Company, nor any of its employees, officers, directors, or agents, has been debarred by the FDA, is the subject of a conviction described in 21 U.S.C. 335a, or is subject to any similar sanction. Company represents and warrants that it has not, and covenants that it will not engage, in any capacity in connection with this Agreement, any person who has been debarred by FDA, is the subject of a conviction

described in 21 U.S.C. 335a, or is subject to any similar sanction. Company shall promptly inform Janssen in writing if it or any person performing services under this Agreement is debarred or is the subject of a conviction described in 21 U.S.C. 335a, or if any action, suit, claim, investigation, or legal or administrative proceeding is pending or threatened relating to the debarment or such conviction of Company or any such person performing services in connection with this Agreement. Upon written request from Janssen, Company shall, within ten (10) days, provide written confirmation that it has complied with the foregoing obligation.

11.6.4 Company represents and warrants that it is in compliance, and covenants that it will continue to comply during the Term, with all applicable Laws, rules and regulations, including the federal anti-kickback statute (42 U.S.C. § 1320a-7b), the related safe harbor regulations, and the Limitation on Certain Physician Referrals, also referred to as the “Stark Law” (42 U.S.C. § 1395nn).

11.6.5 Company shall conduct activities in accordance with applicable state and federal Laws and any applicable regulations regarding Medicare, Medicaid, and other third party-payer programs, if any. Company represents and warrants that (1) it is not excluded from, and has not been convicted of any crime or engaged in any conduct that could result in exclusion from, participation in any state or federal healthcare program, as defined in 42 U.S.C. §1320a-7b(f), for the provision of items or services for which payment may be made by a federal healthcare program; (2) it has not contracted, and will not contract, with any employee, contractor, agent, or vendor to perform work under the Agreement who is excluded from participation in any state or federal healthcare program; and (3) it is not subject to a final adverse action, as defined in 42 U.S.C.§ 1320a-7a(e) and 42 U.S.C. § 1320a-7a(g), and has no adverse action pending or threatened against it. Company shall notify Janssen of any final adverse action, discovery of contract with an excluded entity or individual, or exclusion within thirty (30) days of such action.

11.6.6 Company will comply with Exhibit D.

11.6.7 Janssen represents and warrants that neither Janssen, nor any of its employees, officers, directors, or agents, has been debarred by the FDA, is the subject of a conviction described in 21 U.S.C. 335a, or is subject to any similar sanction. Janssen represents and warrants that it has not, and covenants that it will not engage, in any capacity in connection with this Agreement, any person who has been debarred by FDA, is the subject of a conviction described in 21 U.S.C. 335a or is subject to any similar sanction. Janssen shall promptly inform Company in writing if it or any person performing services under this Agreement is debarred or is the subject of a conviction described in 21 U.S.C. 335a, or if any action, suit, claim, investigation, or legal or administrative proceeding is pending or threatened relating to the debarment or such conviction of Janssen or any such person performing services in connection with this Agreement.

11.6.8 Janssen represents and warrants that it has established, and covenants that it will maintain during the Term, Promotional Materials which are truthful, accurate, and in strict compliance with all applicable Laws.

11.6.9 Janssen represents and warrants that it is in compliance, and covenants that it will continue to comply during the Term, with all applicable Laws, rules and regulations, including the federal anti-kickback statute (42 U.S.C. § 1320a-7b), the related safe harbor regulations, and the Limitation on Certain Physician Referrals, also referred to as the “Stark Law” (42 U.S.C. § 1395nn).

11.6.10 Janssen shall conduct all activities hereunder in accordance with applicable state and federal Laws, including any applicable regulations regarding Medicare, Medicaid, and other third party-payer programs, if any. Janssen represents and warrants that (1) it is not excluded from, and has not been convicted of any crime or engaged in any conduct that could result in exclusion from, participation in any state or federal healthcare program, as defined in 42 U.S.C. §1320a-7b(f), for the provision of items or services for which payment may be made by a federal healthcare program; (2) it has not contracted, and will not contract, with any employee, contractor, agent, or vendor to perform work under the Agreement who is excluded from participation in any state or federal healthcare program; and (3) it is not subject to a final adverse action, as defined in 42 U.S.C.§ 1320a-7a(e) and 42 U.S.C. § 1320a-7a(g), and has no adverse action pending or threatened against it.

11.7 Infringement of Third Party Intellectual Property; Clinical Trial Data. Janssen represents and warrants to Company that, to its knowledge, as of the Effective Date, the manufacture, use, import, or sale of the Product in the Territory for the Initial Indication does not, and will not during the Term, infringe or misappropriate any intellectual property rights of any Third Party. Janssen represents and warrants to Company that, as of the Effective Date, [***].

11.8 Disclaimer. EXCEPT AS OTHERWISE EXPRESSLY SET FORTH IN THIS ARTICLE XI, NEITHER JANSSEN NOR COMPANY, NOR ANY OF THEIR AFFILIATES, MAKES ANY REPRESENTATION OR EXTENDS ANY WARRANTY OF ANY KIND, EITHER EXPRESS OR IMPLIED, TO THE OTHER PARTY IN CONNECTION WITH THE PRODUCT, AND HEREBY DISCLAIMS ALL IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE AND NON-INFRINGEMENT WITH RESPECT TO THE PRODUCT. EACH PARTY HEREBY DISCLAIMS ANY REPRESENTATION OR WARRANTY THAT THE EXPLOITATION OF THE PRODUCT PURSUANT TO THIS AGREEMENT WILL BE SUCCESSFUL OR THAT ANY PARTICULAR SALES LEVEL WITH RESPECT TO THE PRODUCT WILL BE ACHIEVED.

ARTICLE XII

INDEMNIFICATION; LIMITS ON LIABILITY

12.1 Scope of Indemnification.

12.1.1 Janssen shall indemnify and hold harmless Company, its Affiliates and its and their respective directors, officers, employees, and agents (collectively, the “Company Indemnified Parties”), from, against, and in respect of any and all liabilities, costs, fines, penalties, orders of any Governmental Authorities, Taxes, expenses, or amounts paid as damages or in settlement (in each case, including reasonable attorneys’ and experts fees and expenses), involving an Action asserted by a Third Party (collectively, “Losses”), incurred or suffered by the Company Indemnified Parties or any of them and arising out of or resulting from:

(a) any breach by Janssen or any of the other Janssen Indemnified Parties of any representation, warranty or covenant under this Agreement;

(b) the negligence or willful misconduct of Janssen or any of the other Janssen Indemnified Parties in connection with Janssen’s performance under this Agreement;

(d) any recall, withdrawal, product return or suspension of product promotion under Section 3.6, 3.7 or 8.3.

except, in each case ((a), (b) (c), and (d)), to the extent caused by the negligence or willful misconduct of Company or any of the other Company Indemnified Parties or the breach by Company of any of its representations, warranties or covenants set forth herein.

12.1.2 Company shall indemnify and hold harmless Janssen, its Affiliates, and its and their respective directors, officers, employees, and agents (collectively, the “Janssen Indemnified Parties”), from, against and in respect of any and all Losses incurred or suffered by the Janssen Indemnified Parties or any of them and arising out of or resulting from:

(a) any breach by Company or any of the other Company Indemnified Parties of any representation, warranty or covenant under this Agreement; or

(b) the negligence or willful misconduct of Company or any of the other Company Indemnified Parties in connection with Company’s performance under this Agreement;

except in each case ((a) and (b)), to the extent caused by the negligence or willful misconduct of Janssen or any of the other Janssen Indemnified Parties or the breach by Janssen of any of its representations, warranties or covenants set forth herein.

12.2 Notice and Control of Actions.

12.2.1 A Person entitled to indemnification under this Article XII (an “Indemnified Party”) shall give prompt written notification to the Person from whom indemnification is sought (the “Indemnifying Party”) of the assertion of any Action by a Third Party for which indemnification may be sought (it being understood and agreed, however, that the failure by an Indemnified Party to give such notice of a Third Party Action as provided in this Section 12.2.1 shall not relieve the Indemnifying Party of its indemnification obligation under this Agreement except and only to the extent that such Indemnifying Party is actually prejudiced as a result of such failure to give notice).

12.2.2 Within thirty (30) days after delivery of such notification, the Indemnifying Party may, upon written notice thereof to the Indemnified Party, assume control of the defense of such Action with counsel reasonably satisfactory to the Indemnified Party; provided, however, that the Indemnifying Party shall not have the right to control the defense of any Action against any Indemnified Party involving criminal charges or tax matters. If the Indemnifying Party does not assume control of the defense of an Action, the Indemnified Party shall control such defense.

12.2.3 The Party not controlling such defense shall reasonably cooperate with the other Party at such other Party’s request and expense, and may participate therein at its own expense; provided, however, that if the Indemnifying Party assumes control of such defense and the Indemnified Party reasonably concludes, based on advice from counsel, that the Indemnifying Party and the Indemnified Party have conflicting interests with respect to such Action, the Indemnifying Party shall be responsible for the reasonable fees and expenses of counsel to the Indemnified Party solely in connection with such Action; provided further, however, that in no event shall the Indemnifying Party be responsible for the fees and expenses of more than one counsel for all Indemnified Parties.

12.2.4 The Party controlling such defense shall keep the other Party advised of the status of such Action and the defense thereof and shall consider recommendations made by the other Party with respect thereto.

12.2.5 The Indemnified Party shall not agree to any settlement of such Action, consent to any judgment in respect thereof or admit any liability with respect thereto, without the prior written consent of the Indemnifying Party, which shall not be unreasonably withheld or delayed.

12.2.6 The Indemnifying Party shall not agree to any settlement of such Action or consent to any judgment in respect thereof without the prior written consent of the Indemnified Party, which shall not be unreasonably withheld or delayed; provided, however, that no such consent shall be required with respect to any such settlement, compromise or consent to judgment that (a) involves solely the payment of money damages as to which the Indemnifying Party has acknowledged its obligation to indemnify hereunder, (b) does not involve any claim for injunctive

or other equitable relief, and (c) effects a full and unconditional release of the Indemnified Party with respect to all claims related to the Action.

12.3 Limitations on Liability. SUBJECT TO AND WITHOUT LIMITING THE INDEMNIFICATION OBLIGATIONS OF EACH PARTY WITH RESPECT TO THIRD PARTY ACTIONS UNDER SECTIONS 12.1 AND 12.2, AND EXCEPT WITH RESPECT TO LIABILITY ARISING FROM BREACH OF SECTION 9.1 BY A PARTY, NO PARTY OR ANY OF ITS AFFILIATES WILL BE LIABLE TO THE OTHER PARTY OR ITS AFFILIATES UNDER ANY CONTRACT, WARRANTY, NEGLIGENCE, TORT, STRICT LIABILITY OR OTHER LEGAL OR EQUITABLE THEORY FOR ANY SPECIAL, INDIRECT, INCIDENTAL, PUNITIVE, MULTIPLIED OR CONSEQUENTIAL DAMAGES, OR OTHER DAMAGES FOR LOSS OF PROFIT, SALES OR FEES, ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT OR ITS SUBJECT MATTER. FURTHER, SUBJECT TO AND WITHOUT LIMITING THE INDEMNIFICATION OBLIGATIONS OF EACH PARTY WITH RESPECT TO THIRD PARTY ACTIONS UNDER SECTIONS 12.1 AND 12.2, AND EXCEPT WITH RESPECT TO LIABILITY ARISING FROM BREACH OF SECTION 9.1 BY A PARTY OR ARISING FROM THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF A PARTY, EACH PARTY’S AGGREGATE LIABILITY TO THE OTHER PARTY FOR ALL CASES AND CONTROVERSIES ARISING OUT OF THE SUBJECT MATTER OF THIS AGREEMENT, REGARDLESS OF THE CAUSE OF ACTION AND WHETHER BROUGHT IN CONTRACT, TORT (INCLUDING NEGLIGENCE), STRICT LIABILITY OR OTHERWISE, WILL BE LIMITED TO $[***]. THE AMOUNT OF SERVICE FEES AND MILESTONE PAYMENTS PAID OR DUE TO COMPANY UNDER THIS AGREEMENT WILL NOT BE INCLUDED IN THE CALCULATION OF SUCH AGGREGATE LIABILITY AMOUNT.

12.4 Insurance. Company agrees to comply with Exhibit E attached hereto, which is incorporated herein by this reference.

ARTICLE XIII

DISPUTE RESOLUTION

13.1 Disputes. All disputes, claims or controversies (other than matters that are expressly stated herein to require the consent of either or both Parties) arising from or related to this Agreement, or to the interpretation, application, breach, termination or validity of this Agreement, whether based on contract, tort, statute, or other theory of liability (“Disputes”), shall be resolved in accordance with this Article XIII. It is the intent of the Parties that all Disputes relating in any way to this Agreement should be resolved in accordance with this Article, including Disputes that may involve the parent companies, subsidiaries, and other Affiliates of any Party.

13.2 Negotiation. Before any Dispute may be submitted to mediation or arbitration as provided below, the Dispute shall be referred to the President of Janssen and the Chief Executive Officer of Company for discussion and attempted resolution. No statements made by either Party during such discussions will be used by the other Party or admissible in arbitration or any other

subsequent proceeding for resolving the dispute. If such executives do not resolve the Dispute within thirty (30) days of such referral by either Party, then either Party may, upon written notice to the other Party, submit the Dispute to mediation pursuant to Section 13.3 and binding arbitration pursuant to Section 13.4.

13.3 Mediation.

13.3.1 The Parties shall first attempt in good faith to resolve any Dispute that is not resolved pursuant to Section 13.2 by confidential mediation in accordance with the then current Mediation Procedure of the International Institute for Conflict Prevention and Resolution (“CPR Mediation Procedure”) (http://www.cpradr.org) before initiating arbitration. The CPR Mediation Procedure shall control, except where the CPR Mediation Procedure conflicts with these provisions, in which case these provisions control. The mediator shall be chosen pursuant to the CPR Mediation Procedure. The mediation shall be conducted in English in New York, New York. At the request of either Party (and at the shared expense of the Parties), the mediation shall have simultaneous translation from and into English.

13.3.2 Either Party may initiate mediation with respect to any Dispute that is not resolved pursuant to Section 13.2 by written notice to the other Party. The Parties agree to select the mediator within twenty (20) days of the notice and the mediation will begin promptly after the selection. The mediation will continue until the mediator or either Party, declares in writing, no sooner than after the conclusion of one full day of a substantive mediation conference attended on behalf of each Party by a senior business person with authority to resolve the Dispute, that the Dispute cannot be resolved by mediation. In no event, however, shall mediation continue more than sixty (60) days from the initial notice by a Party to initiate meditation unless the Parties agree in writing to extend that period.

13.3.3 Any period of limitations that would otherwise expire between the initiation of mediation and its conclusion shall be extended until twenty (20) days after the conclusion of the mediation.

13.4 Arbitration. If the Parties fail to resolve a Dispute by mediation under Section 13.3 and either Party desires to pursue resolution of the Dispute, the Dispute shall be submitted by either Party for resolution in arbitration pursuant to the then current CPR Rules for Non-Administered Arbitration of International Disputes (“CPR Rules”) (http://www.cpradr.org), except where they conflict with these provisions, in which case these provisions control. CPR is designated as the Neutral Organization for all purposes.

13.4.1 Language/Location. The arbitration shall be conducted in English in New York, New York.

13.4.2 Selection of Arbitrators.

(a) The arbitrators will be chosen from the CPR Panels of Distinguished Neutrals, unless a candidate not on the CPR Panels of Distinguished Neutrals is approved by both

Parties. Each arbitrator shall be a lawyer with at least fifteen (15) years’ experience with a law firm or corporate law department of over twenty-five (25) lawyers or who was a judge of a court of general jurisdiction. To the extent that the Dispute requires special expertise, the Parties will so inform CPR prior to the beginning of the selection process.

(b) The arbitration tribunal shall consist of three (3) arbitrators, chosen in accordance with Rules 5.3 and 6 of the CPR Rules. If, however, the aggregate award sought by the Parties is less than five million United States dollars (USD $5,000,000) and equitable relief is not sought, a single arbitrator shall be chosen in accordance with Rules 5.3 and 6 of the CPR Rules.

(c) Candidates for the arbitrator position(s) may be interviewed by representatives of the Parties in advance of their selection, provided that all Parties are represented.

(d) The Parties agree to select the arbitrator(s) within forty-five (45) days of initiation of the arbitration.

13.4.3 Conduct of Proceedings.

(a) The hearing will be concluded within nine (9) months after selection of the arbitrator(s) and the award will be rendered within 60 days of the conclusion of the hearing, or of any post hearing briefing, which briefing will be completed by both sides within 45 days after the conclusion of the hearing. In the event the Parties cannot agree upon a schedule, then the arbitrator(s) shall set the schedule following the time limits set forth above as closely as practical.

(b) The arbitrator(s) shall be guided, but not bound, by the IBA Rules on the Taking of Evidence in International Commercial Arbitration (www.ibanet.org).

(c) The hearing will be concluded in ten hearing days or less. Multiple hearing days will be scheduled consecutively to the greatest extent possible. A transcript of the testimony adduced at the hearing shall be made and shall be made available to either Party.

13.4.4 Applicable Law. The arbitrator(s) shall decide the merits of any Dispute in accordance with the law governing this Agreement, without application of any principle of conflict of laws that would result in reference to a different law. The arbitrator(s) may not apply principles such as “amiable compositeur” or “natural justice and equity.”

13.4.5 Award.

(a) The arbitrator(s) shall render a written opinion stating the reasons upon which the award is based. The arbitrator(s) may award the costs and expenses of the arbitration as provided in the CPR Rules, but each Party shall bear its own attorney fees.

(b) The award may be entered and enforced in any court of competent jurisdiction. If a court is called upon to enforce an award in a court proceeding, the Parties consent

to the court’s requiring the Party resisting enforcement to pay the reasonable attorneys’ fees and costs incurred in that proceeding by the Party seeking enforcement.

13.4.6 Provisional Relief. Any Party may seek emergency, interim, or provisional relief prior to the appointment of the arbitrator(s) from any court of competent jurisdiction, without waiver of the agreements to mediate and arbitrate. After appointment of the arbitrator(s), any request for emergency, interim, or provisional relief shall either be addressed to the arbitrator(s), which shall have the power to enter an interim award granting relief using the standards provided by applicable law, or to a court, but only with the permission of the arbitrator(s). Any interim award of the arbitrator(s) may be enforced in any court of competent jurisdiction.

13.4.7 WAIVER. EACH PARTY HERETO WAIVES: (A) ITS RIGHT TO TRIAL OF ANY ISSUE BY JURY, (B) WITH THE EXCEPTION OF RELIEF MANDATED BY STATUTE, ANY CLAIM FOR THE TYPES OF DAMAGES EXCLUDED BY SECTION 12.3 (SUBJECT TO THE EXCEPTIONS SPECIFIED IN SUCH SECTION), AND (C) ANY CLAIM FOR ATTORNEY FEES, COSTS AND PREJUDGMENT INTEREST.

13.5 Confidentiality. All proceedings and decisions of the mediator(s) and/or arbitrator(s) shall be deemed Confidential Information of each of the Parties and shall be subject to Section 9.1.

ARTICLE XIV

MISCELLANEOUS

14.1 Press Announcements. Neither Party, nor any of its Affiliates, shall issue any press release or make any other public statement relating to the terms and conditions of this Agreement or the relationship contemplated hereunder without the prior written consent of the other Party. Notwithstanding the foregoing, each Party (or its applicable Affiliate) may make any disclosure relating to the Product or the terms and conditions of this Agreement that such Party (or Affiliate), in the opinion of its counsel, is obligated to make pursuant to Laws applicable to publicly-traded companies, including, inter alia, regulations of the Securities and Exchange Commission, the New York Stock Exchange or the Nasdaq Stock Market. In such event, the announcement shall be brief and factual (to the extent consistent with applicable Laws), and the Party required to make such disclosure shall, to the extent practicable, notify the other Party of the method and content of such disclosure a reasonable period of time (at least five (5) Business Days if possible) in advance thereof, so as to allow such other Party to review it for the use of its name and disclosure of Confidential Information.

14.2 Force Majeure Event. All incidents of force majeure, being circumstances beyond the reasonable control of either Party and which have, or may have, a material effect on the ability of such Party to perform under this Agreement, including, failure of power or other utility or sanitary supplies; fire; flood; earthquake; other natural disaster; explosion; riot; strike or lock-out of such Party’s workforce; civil insurrection or unrest; terrorist activity; war (whether declared or not); and regulations of any Governmental Authority, in each case, to the extent beyond the

reasonable control of such Party (“Force Majeure”), shall, for the duration and to the extent of the effects caused thereby, release such Party from the performance of its contractual obligations hereunder. The Party who has suffered the Force Majeure shall notify the other Party without delay of any such incident(s) occurring, and the Parties shall discuss the effects and extent of such incident(s) on this Agreement and the measures to be taken. Each Party shall use Diligent Efforts to avoid or restrict Force Majeure and to mitigate any loss therefrom. In the event of an incident or incidents of Force Majeure, the Party whose performance has been affected thereby shall as soon as reasonably possible resume performance of its obligations hereunder. If any Force Majeure substantially prevents, hinders, or delays performance by a Party in a manner and to an extent that would, but for this Section, constitute a material breach or give rise to a right of termination hereunder, and the performance is not materially restored within one hundred eighty (180) days, the other Party may terminate this Agreement upon written notice to such Party.

14.3 Independent Contractors. Nothing in this Agreement shall create or imply an association, partnership, or joint venture between the Parties, it being agreed and understood that the Parties are independent contractors; and neither Party, with respect to a Third Party, shall have the power or authority to bind or obligate the other Party in any way. Neither Party shall have any responsibility for the hiring, termination or compensation of the other Party’s employees or for any employee benefits of such employee. No employee or representative of a Party shall have any authority to bind or obligate the other Party to this Agreement for any sum or in any manner whatsoever, or to create or impose any contractual or other liability on the other Party without said Party’s approval.

14.4 Performance by Affiliates. To the extent that this Agreement purports to impose obligations on the Affiliates of a Party, such Party agrees to cause its Affiliates to perform such obligations. Company shall not use an Affiliate to exercise any of its rights or perform any of its obligations or duties hereunder without Janssen’s prior written consent. Janssen may use an Affiliate to exercise its rights or perform its obligations and duties hereunder with prior written notice to Company. If either Janssen or Company uses an Affiliate to exercise any of its rights or perform any of its obligations or duties hereunder, as the case may be, such Party shall remain liable hereunder for the prompt payment and performance of all of its obligations hereunder.

14.5 Notices.

14.5.1 All notices, statements, requests or other documents that either Party shall be required or shall desire to give to the other hereunder shall be in writing and shall be given by the Parties only as follows: (a) by personal delivery; (b) by facsimile, receipt confirmed; (c) by addressing it as indicated below, and by depositing it certified mail, postage prepaid, in the mail, first class (airmail if the address is outside of the country in which such notice is deposited); or (d) by addressing it as indicated below, and by delivering it toll prepaid to a recognized courier service (e.g., Federal Express or DHL).

14.5.2 If so delivered, transmitted by facsimile, mailed, or couriered, each such notice, statement, request or other document shall, except as herein expressly provided, be

conclusively deemed to have been given when personally delivered or faxed during a Business Day, or on the fifth (5th) Business Day after the date of mailing, or on the second (2nd) Business Day after delivery to a courier service, as the case may be. The address of a Party shall be the address of which the other Party actually receives written notice pursuant to this Section 14.5 and until further notice such addresses are:

If to Janssen, to:

Janssen Biotech, Inc.

800 Ridgeview Dr.

Horsham, PA 19044

Attention: President, Oncology

Facsimile: [***]

With a copy (which shall not constitute notice) to:

Office of the General Counsel

Johnson & Johnson

One Johnson & Johnson Plaza

New Brunswick, NJ 08933

Attn: General Counsel, Pharmaceuticals

Fax No.: [***]

If to Company, to:

Immunomedics, Inc.

300 The American Road

Morris Plains, NJ 07950

Attn: General Counsel

14.6 Entire Agreement. This Agreement, including the exhibits and schedules attached hereto (which are hereby incorporated by reference), sets forth the entire agreement and understanding between the Parties as to the subject matter hereof and supersedes all agreements or understandings, oral or written, made between the Parties before the Effective Date with respect to the subject matter hereof.

14.7 Amendments; Assignment. This Agreement may not be revised, amended, supplemented, or varied except by an instrument in writing signed by Janssen and Company. Neither this Agreement nor any rights or obligations of a Party may be assigned, delegated or otherwise transferred by such Party without the prior written consent of the other Party; provided, however, that Janssen may, without such consent but with prior written notice to Company, assign, delegate and transfer this Agreement or all or any of its rights and obligations under this Agreement to (a) any Third Party that acquires substantially all Janssen’s assets relating to the Product in the

Territory or (b) any Affiliate of Janssen. Any attempted assignment, transfer or delegation not in accordance with this Section shall be void.

14.8 Non-Waiver of Rights. Failure of a Party to enforce any of the provisions of or any rights with respect to this Agreement shall in no way be considered a waiver of such provisions or rights or in any way affect the validity of this Agreement. The failure of either Party to enforce any of such provisions or rights shall not preclude or prejudice such Party from later enforcing or exercising the same or any other provisions or rights which it may have under this Agreement. The waiver of any provision, right or obligation under this Agreement shall be effective only if in a written instrument signed by the Party to be bound thereby.

14.9 Further Assurances and Cooperation. Each Party agrees that after the Effective Date it will execute and deliver, or cause its Affiliates to execute and deliver, such further documents and instruments as may be reasonably necessary or proper to fully effectuate this Agreement and the transactions contemplated hereby.

14.10 Severability. This Agreement is intended to be valid and effective under any Laws and, to the extent permissible under Law, shall be construed in a manner to avoid violation of or invalidity under any Laws. Should any provisions of this Agreement be or become invalid, illegal, or unenforceable under any Laws, the other provisions of this Agreement shall not be affected and shall remain in full force and effect, and, to the extent permissible under the Laws, any such invalid, illegal, or unenforceable provision shall be deemed amended lawfully to conform with the intent of the Parties.

14.11 Binding Effect. This Agreement shall be binding upon and inure to the benefit of the Parties hereto and their respective successors and permitted assigns.

14.12 Counterparts; Facsimile Signatures. This Agreement may be executed in counterparts, each of which counterparts, when so executed and delivered, will be deemed to be an original, and all of which counterparts, taken together, will constitute one and the same instrument even if all parties have not executed the same counterpart. Signatures provided by any photocopy and transmitted by facsimile or other electronic means will be deemed to be original signatures.

14.13 Third Party Beneficiaries. The provisions of this Agreement are not intended legally to benefit or be enforceable by any Person who is not a party to this Agreement, and no such Person shall obtain any right under any such provisions or shall by reason of such provisions make any claim against a party to this Agreement.

14.14 Governing Law. The interpretation, construction and performance of this Agreement, and the rights granted and obligations arising hereunder, shall be governed in accordance with the substantive laws of the State of New York, without regard to its conflicts of law rules.

14.15 Construction. Except where expressly stated otherwise in this Agreement, the following rules of interpretation apply to this Agreement: (a) “include”, “includes”, and “including” are not limiting and mean include, includes, and including, without limitation; (b) definitions contained in this Agreement are applicable to the singular as well as the plural forms of such terms; (c) references to an agreement, statute, regulation, or instrument mean such agreement, statute, regulation, or instrument as from time to time amended, modified, or supplemented; (d) references to a Person are also to its successors and permitted assigns; (e) references to an “Article”, “Section”, “Exhibit”, or “Schedule” refer to an Article or Section of, or any Exhibit or Schedule to, this Agreement unless otherwise indicated; (f) the word “will” shall be construed to have the same meaning and effect as the word “shall”; (g) the use of any gender shall be applicable to all genders; and (i) the words “hereof” and “hereunder”, and words of similar import, shall be construed to refer to this Agreement as an entirety and not to any particular provision. The captions of this Agreement are for convenience of reference only and in no way define, describe, extend, or limit the scope or intent of this Agreement or the intent of any provision contained in this Agreement. Any reference in this Agreement to a matter or action being subject to the “mutual agreement” or “mutual consultation” of the Parties, or words of similar import, shall not be construed as an agreement that the Parties shall agree to such matter or action. The language of this Agreement shall be deemed to be the language mutually chosen by the Parties and no rule of strict construction shall be applied against either Party on the basis that such Party drafted this Agreement or any portion hereof.

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IN WITNESS WHEREOF, the Parties have executed this Agreement as of the Effective Date.



JANSSEN BIOTECH, INC.
By:	/s/Reshema Keups-Polanco
Name:	Reshema Keups-Polanco
Title:	VP, Sales and Marketing, Solid Tumor

IMMUNOMEDICS, INC.
By:	/s/Jared Freedberg
Name:	Jared Freedberg
Title:	General Counsel

Schedule 1.16

Janssen Universal Calendar

Schedule 6.2

Pharmacovigilance Provisions

1 Definitions

1.1 “Adverse Event” (AE) means any untoward medical occurrence in a patient or a clinical-trial subject administered a medicinal product and which does not necessarily have to have a causal relationship with this treatment. An adverse event can therefore be any unfavourable and unintended sign (for example, an abnormal laboratory finding), symptom, or disease temporally associated with the use of a medicinal product, whether or not considered related to this medicinal product.

1.2 “Agreement” means the Promotion Agreement to which this Schedule is attached.

1.3 “Applicable Law” means the applicable laws, rules, regulations, including any guidelines or other requirements of any Regulatory Authority in the relevant country of the Territory, and industry guidelines or codes of conduct that may apply to the review and analysis of safety information, the reporting of safety information to Regulatory Authorities and the maintenance of records thereof.

1.4 “Company Employee” means any employee of Immunomedics, Inc. or any of its Affiliates conducting activities under the Agreement.

1.5 “Date of First Receipt” means the date of receipt or coming into possession or control of safety information, which contains at a minimum a suspect medicinal product and a suspect event i.e. an incomplete case. Unless otherwise indicated in the Applicable Law the Regulatory Clock Start Date or Day Zero for regulatory reporting, is the date the minimum criteria for reporting as defined by the Applicable Law becomes available (i.e., an identifiable subject/ patient, identifiable reporter, suspect product, and event).

1.6 “Incomplete Case” means a case that does not contain minimum criteria for reporting (as defined by the Applicable Law) to a Regulatory Authority (i.e., an identifiable subject/ patient, identifiable reporter, suspect medicinal product, and event), but at a minimum contains a suspect medicinal product and a suspect event. Such reports are entered on the safety database maintained by Janssen as potential cases of value for signal detection purposes.

1.7 “Personal Data” means any information relating to an identified or identifiable natural person.

1.8 “Product” has the meaning set forth in Section 1.77 of the Agreement.

1.9 “Product Quality Complaint” (PQC) Any written, electronic or oral communication that alleges deficiencies related to the identity, quality, durability, reliability, safety, effectiveness or performance of a product after it is released for distribution.

1.10 “Regulatory Authority” means any applicable federal, national, regional, state, provincial or local regulatory agencies, departments, bureaus, commissions, councils or other government entities regulating or otherwise exercising authority with respect to the Product in the relevant Territory.

1.11 “Special Situation” Occurrences or reports that may not contain an adverse event, which must still be collected and reported in order to meet regulatory safety reporting requirements and Janssen policies:

• Overdose of Product,

• Pregnancy exposure (maternal and paternal),

• Exposure to the Product from breastfeeding,

• Suspected abuse/misuse of the Product,

• Inadvertent or accidental exposure to the Product (including occupational exposure),

• Any failure of expected pharmacological action (i.e. lack of effect) of the Product,

• Unexpected therapeutic or clinical benefit from use of the Product,


•	Medication error (includes potential, intercepted or actual) involving the Product with or without patient/consumer exposure to the Product, (e.g. name confusion) OR that caused an unintended effect or could cause an intended effect (e.g. adult medicine given to a young child),

• Suspected transmission of an infectious agent via Product,

• Expired drug use and falsified medicine,


•	Off-label use - situations where the Product is intentionally used for a medical purpose not in accordance with the authorized product information.

Off-label use without an associated AE, Special Situation, UE or AEPQC should be collected only when it is specifically and voluntarily brought to the attention of a Company Employee in an unsolicited manner by a reporter e.g., Health Care Professional or data obtained from databases where off-label use may be systematically collected (e.g., reimbursement database in US), and in accordance with local procedure in compliance with local laws and regulations. Follow-up of off-label use is not required.

1.12 “Territory” means the United States of America, including its territories and possessions.

1.13 "Undesirable Effect” (UE) shall mean an adverse reaction for human health attributable to the normal or reasonably foreseeable use of a cosmetic product.

Note: All capitalized terms used but not defined in this Schedule shall have the meanings ascribed to them (if any) in the Agreement.

2 Reporting Requirements

2.1 If any Company Employee receives or otherwise comes into possession or control of any information about the Product, regardless of source, relating to an Adverse Event (AE), Special Situation, AE associated with a Product Quality Complaint (AEPQC), Undesirable Effect (UE) or an Incomplete Case, such Company Employee shall provide such information immediately, but in no case later than twenty-four (24) hours from the Date of First Receipt by the Company Employee, to Janssen by using the Janssen Online Complaint Form available at Janssensafety.com. For the avoidance of doubt, all information regarding Incomplete Cases should also be provided immediately, but in no case later than twenty-four (24) hours from the date the Company Employee receives such information.

3 Training

4.1 Company shall ensure that all Company Employees are trained in the reporting of AEs, Special Situations, AEPQC or UEs, prior to the start of performing services under the Agreement and at least annually thereafter if such services remain in effect, to ensure

compliance with this Schedule and the Applicable Law. This includes, but is not limited to, monitoring applicable AE, Special Situation, AEPQC and UE training, and maintaining documentation of such training. Such training shall be conducted in the manner set forth in the Agreement using materials to be provided by Janssen. Janssen may require Company Employees to complete additional training provided by Janssen when there is a change in the governing contracts and/or processes or changes in Company’s personnel.

5 [Intentionally Omitted.]

5 Retention Policy

5.1 Company shall maintain and archive records of all source documentation generated by the activity (records, questionnaires, reports), personnel training records and other relevant information relating to its obligations under this Schedule for a period consistent with Section 7.1 of the Agreement (including Exhibit C thereto) and Applicable Law. Company must have appropriate storage capabilities (e.g., preventing accidental damage of physical records and appropriate back up of electronic storage systems) if storing original AE, Special Situations, AEPQC and UE documentation. Notwithstanding the above, before Company destroys any safety records it will notify Janssen of its intention to do so, affording Janssen the opportunity to retain such records if it so wishes.

6 Audit

6.1 Without prejudice to Section 7.5 of the Agreement, Janssen or its designee shall have the right to audit Company to verify Company’s compliance with this Schedule and the Applicable Law, provided that Janssen provides Company with at least [***] ([***]) calendar days prior written notice. The Parties shall agree upon the scope of the audit with a written audit plan to be submitted by Janssen [***] ([***]) calendar days prior to the audit. Company will allow such access to its facilities, systems, personnel and records, in whatever form and in any location (including locations owned or operated by a third party) as may reasonably be necessary to enable Janssen or its designee to evaluate and ensure compliance with this Schedule and the Applicable Law. Janssen shall communicate audit findings in a written audit report in a timely manner. The Parties undertake to cooperate with

each other to diligently investigate and resolve any such audit findings.

7 Data Privacy

7.1 In the performance of the above safety activities, both Parties will comply with all Applicable Laws in respect of data privacy in order to protect Personal Data.

7.2 Each Party shall collect, use and disclose any Personal Data obtained in the course of performing the safety activities under this Schedule solely for the purposes of complying with the regulatory obligations as described in this Schedule, or as otherwise required by Applicable Law or by a court order. Both Parties will use electronic, physical and any other safeguards appropriate to the nature of the information to prevent any use or disclosure of Personal Data other than as provided for above. Both Parties will also take reasonable precautions to protect the Personal Data from accidental, unauthorised, or unlawful alteration or destruction.

7.3 Each Party shall notify the other Party promptly of any accidental, unauthorised, unlawful destruction, loss, alteration, or disclosure of, or access to the Personal Data, and take immediate steps to rectify any such security breach.

8 Follow Up

8.1 Janssen will be responsible to diligently follow up on safety information.

9 Miscellaneous

9.1 Notwithstanding the above, in the event any Company Employee is informed of AE, Special Situations, AEPQC or UE related to the use of any other products of Janssen or its Affiliates that such Company Employee is aware of, such Company Employee shall report these to Janssen (in the same manner as any such report relating to the Products) within twenty-four (24) hours of the Date of First Receipt of such information by such Company Employee.

CONTACT DETAILS



For Janssen	Name:
	Company:
	Telephone:
	Fax:
	Email:

For Company	Name:
	Company:
	Telephone:
	Fax:
	Email:

EXHIBIT A

Brand Plan

[***]

EXHIBIT B

Detailing Requirements

[***]

EXHIBIT C

Records and Information Management (“RIM”) Requirements

1. Maintenance. Company shall maintain and manage all paper and electronic records, files, documents, work papers and other information in any form provided by Janssen or generated pursuant to this Agreement (the “Files and Work Papers”): (a) in accordance with Janssen’s records management policies (which may be changed by JBI from time to time and communicated to Company), including as set forth in “RIM Requirements” below, (b) separately from files generated, managed or maintained by Company under agreements with other customers, (c) as required by applicable statutes and regulations, and (d) as set out in any preservation request issued to Company by Janssen.

2. Preservation. Company shall comply promptly and fully with any request from Janssen, for any reason, to preserve Files and Work Papers or to promptly deliver such materials to Janssen. Steps to comply include, when requested by Janssen, periodic meetings to identify and implement documented procedures to preserve or deliver such data. Files and Work Papers created or modified by Company in electronic format must be delivered to Janssen in the same electronic format or as otherwise directed by Janssen.

3. Third Party Requests. Upon receipt from Third Parties of any request, demand, notice, subpoena, order, or other legal information-request for any Files and Work Papers, Company shall take all reasonable steps to protect Janssen’s legal rights in any response to such request and, to the extent that Company legally may do so, shall immediately notify Janssen, shall provide Janssen with a copy of such request, and shall meet and cooperate with Janssen in the implementation of procedures to comply with the request.

4. RIM Requirements. This section specifies RIM requirements applicable to Files and Work Papers that Company personnel create, maintain, manage or manipulate on behalf of Janssen. Company is responsible for understanding and complying with Janssen’s RIM requirements.

a. Records and Information Management requirements shall be applied consistently and regularly.

b. Company’s Files and Work Papers:

i) shall be created, stored and managed throughout their lifecycle using proper protection;


ii)	shall be protected and access controlled according to their value as described in the Johnson & Johnson Supplier Information Security Requirements;

iii) shall be retained in accordance with the Johnson & Johnson

Enterprise Retention Schedule, which defines retention requirements for business, legal, regulatory and privacy purposes; and

iv) relevant to litigation or an investigation and subject to a legal hold shall be retained and preserved, regardless of the retention requirement set forth in the Johnson & Johnson Enterprise Retention Schedule.


c.	Company shall ensure that the Files and Work Papers are retained upon the departure of personnel employed by Company.


d.	Janssen or the applicable Janssen Affiliate shall provide written approval prior to the disposition (disposal or deletion) of any Files and Work Papers.


e.	Company personnel with access to Janssen’s network shall annually complete Records and Information Management training as specified by Janssen.

EXHIBIT D

Health Care Compliance Provisions

1. “HCP” is defined as (i) any person who is licensed by a state to provide health care services directly or indirectly to patients, such as a physician, a nurse, a technician, a psychologist, or a lab specialist and/or (ii) any person or organization to whom a Party markets its products and services that is in a position to influence the selection of the products furnished or purchased, including but not limited to hospitals and health systems, administrators, procurement personnel, group purchasing organizations, pharmacy benefit managers, and business people.

2. Company shall, with respect to each HCP engaged under this Agreement:

a. Ensure that the HCP’s services are provided in compliance with all applicable laws and regulations, including but not limited to laws and regulations pertaining to the promotion of products regulated by the United States Food and Drug Administration (FDA); laws, regulations and guidance pertaining to federal and state anti-kickback and submission of false claims to governmental or private health care payors (collectively, “Health Care Compliance” or “HCC”); state and federal laws and regulations relating to the protection of individual and patient privacy; and any other laws and regulations applicable to such services.

b. Ensure that HCP’s services are provided in compliance with Janssen’s written policies and procedures of which Company is provided notice, including, but not limited to, policies and procedures related to FDA and Health Care Compliance and the protection of individual and patient privacy (collectively, “Janssen Policies”). The requirements of this Agreement and any additional policies attached to this Agreement shall constitute Janssen Policies of which Janssen provides notice to Company.

c. Comply with professional and/or employment rules (such as conflicts of interest or ethics policies) established by Company or a professional organization or institution with which HCP is affiliated when the provision of services by an HCP is subject to such rules, including, as applicable, obtaining any required approval(s) prior to providing services and making any required reports.

3. Company shall provide notice to each HCP of the following:

The Physician Payments Transparency Requirements of the Patient Protection and Affordable Care Act of 2010 (codified at 42 U.S.C. 1320a-7h) and implementing regulations, require certain pharmaceutical, medical device, and other companies to annually report to the Centers for Medicare and Medicaid Services (CMS) certain information about payments and transfers of value provided directly or indirectly to U.S. physicians and teaching hospitals, which CMS will make publicly available. This includes any payments or transfers of value that Janssen provides indirectly through Company to U.S. physicians and teaching hospitals. As required by law, Janssen will report to CMS information about payments and transfers of value that Company

provides to U.S. physicians and teaching hospitals pursuant to this Agreement. This includes any portion of any payment or transfer of value that Janssen furnishes to Company which Company then provides directly or indirectly to U.S. physicians or teaching hospitals, including its employees, agents, or contractors. Information that Janssen must report includes the identity and business address of each relevant U.S. physician or teaching hospital, the value and purpose of any payments or transfers of value that are furnished, and any other information as may be required by law. To enable Janssen to comply with its legal obligations, Company shall track, maintain, and provide Janssen information and data related to any payments or transfers of value that Company provides to U.S. physicians and teaching hospitals under this Agreement. Company shall provide such information and data in the form and manner that Janssen requests in a timely manner. Janssen may also report information about compensation, payments or transfers of value that Company provides to U.S. physicians and teaching hospitals as otherwise required by law and Janssen reserves the right to post on a website accessible to the public such information, whether or not required by law.

4. In accordance with Janssen’s request, Company shall, within thirty (30) days thereafter, provide or upload to Janssen’s health care compliance data system (the “Totality Third Party Company Portal”) or any similar system, all compliance documents and data templates related to services. Data requirements regarding Totality Third Party Company Portal can be found at https://totalitygateway.jnj.com. Compliance documents and data templates include the following:

a. Copies of written agreements including compensation terms, with each HCP providing services.

b. Documentation indicating that each HCP providing services is not excluded or debarred and, for any health care practitioner, duly licensed under state law, as set forth above. Company shall obtain such documentation prior to engaging such HCP to provide services.

c. Documentation of services provided by such HCP (e.g., a written report, comments collected at a meeting, presentation materials, etc.).

d. HCP data templates capturing details on HCP value exchange. Value exchanges shall include, without limitation, any gifts, meals, compensation, travel reimbursement and patient-related materials provided to HCPs in connection with this Agreement.

e. Documentation that shows that Company provided notice to each HCP that information provided pursuant to this Agreement may be made publicly available at any time at the sole discretion of Janssen.

f. Electronic report of overall expenses paid to or on behalf of each HCP and electronic copies of all original receipts documenting such expenses; and

g. Written evidence of any required ethics or other authorizations allowing HCPs employed by federal, state or local government agencies, including but not limited to pharmacy and therapeutics committees, to provide services under this Agreement.

5. In the event that Janssen is charged any fee or penalty because Company failed to comply with the requirements set forth in this Exhibit, Company agrees to reimburse Janssen for such fees or penalties. Janssen reserves the right to reduce or not pay any invoice in the event that Company fails to comply with the requirements set forth in this Exhibit.

6. Company shall produce and send to Janssen electronic reports each month in which payments were made or gifts or meals were provided to HCPs by Company on behalf of Janssen, listing the following:

a. value of any gifts, meals, compensation paid, and/or entertainment provided to HCPs, whether their services were obtained through a written agreement or not;

b. nature, purpose and date of payments or other items of value provided; and

c. names, addresses, and federal Tax I.D. number of HCPs who were paid remuneration for services relating to Janssen.

7. Company shall report any violations of the compliance obligations set forth in this Agreement to Janssen at the name and address listed in Section 14.5 (Notices) or through the Vendor & Distributor Hotline at 1-800-556-2496.

8. Company, at its expense, shall ensure that all personnel and subcontractors involved in providing services attend and participate in training and educational programs reasonably scheduled by Janssen. Company, at its expense, agrees to train and periodically provide refresher training to all its new and current personnel and subcontracted personnel providing services regarding the compliance obligations set forth in this Agreement, including any Janssen Policies applicable to services. Company shall, upon request, provide Janssen with a record of the training provided and the dates training was attended by any Company personnel and subcontractors.

EXHIBIT E

Insurance Requirements

[***]

Execution Version

LICENSE AGREEMENT

BY AND BETWEEN

IMMUNOMEDICS, INC.

AND

EVEREST MEDICINES II LIMITED

DATED AS OF APRIL 28TH, 2019

TABLE OF CONTENTS



ARTICLE 1 DEFINITIONS			1
ARTICLE 2 LICENSES AND RELATED RIGHTS AND OBLIGATIONS			13
	2.1	Grant of Rights to License	13
	2.2	Grant of Rights to Company	14
	2.3	No Non-Permitted Use	15
	2.4	No Other Licenses	15
	2.5	Upstream Licenses	15
	2.6	Third Party Licenses	15
	2.7	Exclusivity	15
ARTICLE 3 GOVERNANCE AND MANAGEMENT			16
	3.1	Joint Steering Committee	16
	3.2	Alliance Managers	18
ARTICLE 4 TRANSFER AND TECHINICAL ASSISTANCE			18
	4.1	Transfer of Company Know-How	18
	4.2	Assistance by Company	18
ARTICLE 5 DEVELOPMENT			19
	5.1	Research and Development Responsibility	19
	5.2	Development Plan	19
	5.3	Priority Indications	20
	5.4	Amendment to the Development Plan	20
	5.5	Clinical Trials	20
	5.6	Developmental Diligence	21
	5.7	Costs of Development	21
	5.8	Records; Reports	21
	5.9	Development Data	22
	5.10	Regulatory Responsibility	22
	5.11	Materials; Limited User	24
ARTICLE 6 COMMERCIALIZATION			25
	6.1	Commercialization of Licensed Products	25
	6.2	Commercialization Plan	25
	6.3	Commercial Diligence	26
	6.4	Commercialization Costs	27
	6.5	Commercialization Reporting	27



	6.6	Cross-Territory Sales	27
	6.7	Right of First Negotiation for Co-Commercialization	27
ARTICLE 7 MANUFACTURING			28
	7.1	Non-Commercial Supply of Licensed Product	28
	7.2	Commercial Supply Agreement	28
	7.3	Commercial Supply Price Adjustment	29
	7.4	Supply Shortage	29
	7.5	Manufacture by License	29
ARTICLE 8 FINANCIAL PROVISIONS			29
	8.1	Upfront Payment	29
	8.2	Development Milestone Payments	30
	8.3	Sales Milestones	31
	8.4	Non-creditable Payments	32
	8.5	Royalty Payments	32
ARTICLE 9 PAYMENTS; PAYMENT REPORTS; AUDITS			33
	9.1	Timing of Payment	33
	9.2	Sublicenses	33
	9.3	Mode of Payment	34
	9.4	Payment Reports and Records Retention	34
	9.5	Audits	34
	9.6	Interest	35
	9.7	Taxes	35
ARTICLE 10 INVENTIONS AND PATENTS			36
	10.1	Ownership of Inventions	36
	10.2	Disclosure of Inventions	37
	10.3	Key Patents	37
	10.4	Prosecution of Patents	37
	10.5	Infringement by Third Parties	39
	10.6	Defense of Patents	40
	10.7	Infringement of Third Party Rights	41
	10.8	Patent Marking	41
	10.9	Personnel Obligations	41
	10.10	Trademarks	42
ARTICLE 11 CONFIDENTIALITY; SOLICITATION BY COMPANY			42



	11.1	Confidentiality Obligations	42
	11.2	Authorized Disclosure	43
	11.3	Confidentiality of Agreement Terms	43
	11.4	Publicity	44
	11.5	Publications	45
ARTICLE 12 INDEMNIFICATION			45
	12.1	Indemnification by Licensee	45
	12.2	Indemnification by Company	46
	12.3	Indemnification Procedures	46
	12.4	Insurance	47
	12.5	Limitation of Liability	47
ARTICLE 13 REPRESENTATIONS AND WARRANTIES			48
	13.1	Mutual Representations, Warranties and Covenants	48
	13.2	Additional Representations, Warranties and Covenants by Company	49
	13.3	Additional Representations, Warranties and covenants by Licensee	51
	13.4	Disclaimer of Warranties	51
ARTICLE 14 TERM AND TERMINATION			52
	14.1	Term and Expiration	52
	14.2	Termination for Material Breach	52
	14.3	Termination for Patent Challenge	52
	14.4	Termination for Insolvency	53
	14.5	Consequences of Termination	53
	14.6	Additional Consequences of Termination	53
	14.7	Accrued Rights; Surviving Obligations	55
	14.8	Rights in Bankruptcy	55
ARTICLE 15 DISPUTE RESOLUTION			56
	15.1	Disputes	56
	15.2	Arbitration	56
	15.3	Language of Dispute Resolution	56
	15.4	Injunctive Relief	56
ARTICLE 16 MISCELLANEOUS PROVISIONS			56
	16.1	Relationship of the Parties	56
	16.2	Assignment	56
	16.3	Performance by/Responsibility for Affiliates	57



	16.4	Further Assurances	57
	16.5	Force Majeure	57
	16.6	Entire Agreement of the Parties; Amendments	57
	16.7	Captions	57
	16.8	Governing Law	57
	16.9	Notice and Deliveries	58
	16.10	Waiver	59
	16.11	Translation	59
	16.12	Export Laws	59
	16.13	Severability	59
	16.14	No Implied Licenses	59
	16.15	Third Party Beneficiaries	59
	16.16	Advice of Counsel	60
	16.17	Other Obligations	60
	16.18	Counterparts	60

Exhibit A - Key Patents
Exhibit B - Pre-Existing Company Patents
Exhibit C - Upstream Licenses
Exhibit D - Company Know-How to be Transferred

LICENSE AGREEMENT

THIS LICENSE AGREEMENT (the “Agreement”) is effective as of April 28th, 2019 (the “Effective Date”), by and between IMMUNOMEDICS, INC., a Delaware corporation having its principal place of business at 300 The American Road, Morris Plains, New Jersey 07950, U.S.A. (“Company”), and EVEREST MEDICINES II LIMITED, an exempted company organized and existing under the laws of Cayman Islands, having its principal place of business at Room 3306-3307, Two Exchange Square, 8 Connaught, Hong Kong (“Licensee”). Company and Licensee are sometimes referred to herein individually as a “Party” and collectively as the “Parties.”

RECITALS

WHEREAS, Company is engaged in the research, development and commercialization of pharmaceutical products and has developed the Licensed Product (as defined below) to treat various forms of cancer;

WHEREAS, Company has conducted pre-clinical and clinical testing on the Licensed Product, which is currently pending FDA (as defined below) approval in the U.S.;

WHEREAS, Company owns or controls intellectual property rights relating to the Licensed Product;

WHEREAS, Licensee is engaged in the research, development and commercialization of pharmaceutical products in the Territory (as defined below); and

WHEREAS, Licensee desires to obtain, and Company desires to grant to Licensee exclusive license rights under Company’s intellectual property rights, for the research, Development, and Commercialization of such Licensed Product in the Field (each as defined below) in the Territory, under the terms set forth below.

NOW, THEREFORE, in consideration of the mutual covenants and agreements of the Parties contained herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereby agree as follows:

ARTICLE 1

DEFINTIONS

As used in this Agreement, the following capitalized terms shall have the following meanings, and singular forms, plural forms and derivative forms thereof shall be interpreted accordingly:

1.1 “Affiliate” means, with respect to a first Person, a second Person that controls, is controlled by or is under common control with such first Person. For the purposes of the definition in this Section 1.1, the word “control” (including, with correlative meaning, the terms “controlled by” or “under common control with”) means (a) the direct or indirect ownership of at least fifty

percent (50%) of the voting stock of an entity, or (b) the possession of the power to direct or cause the direction of the management and policies of an entity, whether through the ownership of voting securities or by contract or otherwise.

1.2 “Applicable Law” means any and all laws, statutes, ordinances, regulations, permits, orders, decrees, judgments, directives, rulings or rules of any kind whatsoever that are promulgated by a federal, state, provincial, municipal, or other Governmental Authority, in each case pertaining to any of the activities contemplated by this Agreement, including any regulations promulgated by any Regulatory Authority in the Territory, all as amended from time to time.

1.3 “Bundled Product” means collectively a Licensed Product sold together with another product at a one (1)-unit price, whether packaged together or separately.

1.4 “Business Day” means each day of the week excluding Saturday, Sunday or a day on which banking institutions in New York, New York, Shanghai, the PRC, Hong Kong or Singapore are closed.

1.5 “Calendar Quarter” means a three (3) month period beginning on January 1, April 1, July 1, or October 1 of a Calendar Year.

1.6 “Calendar Year” means a twelve (12) month period beginning on January 1 of any year during the Term.

1.7 “cGMP” means all applicable current Good Manufacturing Practices including, as applicable, (a) the principles detailed in the U.S. Current Good Manufacturing Practices, 21 C.F.R. Parts 4, 210, 211, 601, 610 and 820, (b) European Directive 2003/94/EC and Eudralex 4, and (c) the principles detailed in the ICH Q7 guidelines, each as may be amended from time to time.

1.8 “Clinical Trial” means any clinical trial or any other test or study in human subjects, whether sponsor- or principal investigator-initiated, intended to determine the safety, tolerability, pharmacokinetics, efficacy, pharmacodynamics or benefit/risk analysis of a Licensed Product in human subjects as may be required by Applicable Law or recommended by a Regulatory Authority to obtain or maintain Regulatory Approval for a Licensed Product.

1.9 “Commercialization” means any and all activities directed to the launch, marketing, detailing, promotion, securing of pricing and reimbursement, medical support and distribution of any Licensed Product, whether before or after Regulatory Approval has been obtained, including (a) pre-launch marketing research, preparation of sales force, and preparation of marketing materials and labels for finished goods, (b) post-launch marketing, advertising, promoting, detailing, research, customer service, invoicing, administering and commercially selling Licensed Products after Regulatory Approval, (c) importing, exporting, customs clearance, building inventory, warehousing, distributing, and transporting Licensed Product for commercial sale, (d) activities required to perform the foregoing in accordance with Applicable Law and Regulatory Approvals, and (e) interacting with Regulatory Authorities regarding any of the foregoing. “Commercialize” means the performance of any of the foregoing Commercialization activities.

1.10 “Commercially Reasonable Efforts” means, with respect to a Party’s obligation under this Agreement, such efforts that are consistent with the level of efforts and resources used by such Party in connection with one of its large molecule products (whether internally developed or licensed in from a Third Party), but in any event no less than those used by biopharmaceutical companies of similar size and market capitalization would typically devote to a large molecule product, as applicable, at a similar stage in its development or commercial life as the relevant product and that has commercial and market potential similar to the relevant product. A Party that is required to use Commercially Reasonable Efforts with respect to a task or obligation must: (a) promptly assign responsibility for such task or obligation to specific employees who are held accountable for progress and monitor such progress on an ongoing basis, (b) set and consistently seek to achieve specific, meaningful and measurable objectives for carrying out such task or obligation, and (c) consistently make and implement decisions and allocate resources designed to advance progress with respect to such task or obligation.

1.11 “Company Know-How” means all Information that is Controlled by Company or its Affiliates as of the Effective Date or any time during the Term and is necessary or reasonably useful for the research, Development, use or Commercialization of Licensed Products in the Field in the Territory. For clarity, Company Know-How excludes rights under any Company Patents and Company’s interests in any Joint Patents and Joint Inventions. Notwithstanding the foregoing, in the event that after the Effective Date, a Third Party becomes an Affiliate of Company or becomes Company’s successor in interest with respect to this Agreement, any Information Controlled by such entity or its Affiliates immediately prior to such transaction shall not be considered to be Company Know-How for the purposes of this Agreement unless such Information was also Controlled by Company or its Affiliate prior to such transaction.

1.12 “Company Patents” means all Patents (other than any Joint Patents) in the Territory that are Controlled as of the Effective Date or any time during the Term by Company or its Affiliates that cover the composition of matter, formulation, manufacture, use or Commercialization in the Field of a Licensed Product, including without limitation the Key Patents and Pre-Existing Company Patents. Notwithstanding the foregoing, in the event that after the Effective Date, a Third Party becomes an Affiliate of Company or becomes Company’s successor in interest with respect to this Agreement, any Patent Controlled by such entity or its Affiliates immediately prior to such transaction shall not be considered to be a Company Patent for the purposes of this Agreement unless such Patent was also Controlled by Company or its Affiliate prior to such transaction.

1.13 “Competing ADC Product” means any antibody-drug conjugate that is a Competing Product in a region or country in the Territory for an indication in which Licensee has, prior to entry of such Competing ADC Product in such region or country in the Territory, obtained Regulatory Approval for such indication in such region or country.

1.14 “Competing Product” means any product, other than a Licensed Product, that targets TROP-2 for use in the Field.

1.15 “Controlled” means, with respect to an item of Information or an intellectual property right, that a Party or one of its Affiliates owns or has a license to such item or right and

has the ability to disclose to the other Party and grant a license or sublicense under such item or right as provided for in this Agreement without violating the terms of any agreement with any Third Party or other obligation to any Third Party.

1.16 “Costs of Goods” or “COGS” means the costs to manufacture the Licensed Product. COGS shall be a “standard cost” per unit (calculated annually), which shall be comprised of the following elements which shall be calculated in accordance with GAAP: (a) direct labor (the actual cost of employees engaged in direct manufacturing activities and quality control and quality assurance activities who are directly employed in manufacturing the Licensed Product), (b) direct materials (the actual costs incurred in manufacturing or purchasing materials for manufacture, including freight-in costs, sales and excise taxes imposed thereon and customs duty and charges levied by government authorities, and all costs of packaging components), (c) pro rata facility costs (meaning rent, property taxes, depreciation of leaseholds, utilities, spare parts, maintenance contracts) for the manufacture of the Licensed Product, (d) manufacturing equipment depreciation, and (e) document control, purchasing, warehouse management (with such allocations to be based on estimated service levels, headcount or square footage occupancy depending on the category). To the extent that the Licensed Product is sourced from a Third Party manufacturer, the actual price paid to the Third Party for the manufacture and supply of the Licensed Product, respectively, shall be the COGS, and shall include reasonable costs incurred by Company for manufacturing services necessary in support of manufacture by such Third Party. For clarity, COGS specifically excludes the profit margins of Company or its Affiliates.

1.17 “Develop” or “Development” or “Developing” means all development activities for any Licensed Product that are directed to obtaining Regulatory Approval(s) of such Licensed Product and to support appropriate usage for such Licensed Product, including: all clinical activities, testing and studies of such Licensed Product; safety, tolerability and pharmacological studies conducted in connection with the Clinical Trials of such Licensed Product; distribution of such Licensed Product for use in Clinical Trials (including placebos and comparators); statistical analyses; the preparation, filing and prosecution of any application for Regulatory Approval for such Licensed Product; development activities directed to label expansion (including prescribing information) or obtaining Regulatory Approval for one or more additional indications following initial Regulatory Approval; development activities conducted after receipt of Regulatory Approval that are required, recommended or requested in writing by a Regulatory Authority as a condition of, or in connection with, obtaining or maintaining a Regulatory Approval; Licensed Product-related medical affairs; pharmacoeconomic studies relating to the indication for which the applicable Licensed Product is being developed; in each case above, including investigatoror institution-sponsored studies for which a Party is providing material or assistance or otherwise has written obligations to such investigator or institution; and all regulatory activities related to any of the foregoing; provided, however, that Development shall exclude Commercialization and manufacturing activities (including manufacturing activities related to Development).

1.18 “Development Data” means any and all research data, pharmacology data, chemistry, manufacturing and control data, preclinical data, clinical data and all other documentation (including raw data) or Information compiled, developed or generated with respect to the Licensed Product.

1.19 “Dollars” or “$” means U.S. dollars.

1.20 “Drug Approval Application” means (a) a Biologics License Application in the U.S., as defined in the U.S. Public Health Service Act, and applicable regulations promulgated thereunder by the FDA; or (b) any equivalent application filed with any equivalent Regulatory Authority in a region or country other than the U.S., including an application for an import drug license in the PRC.

1.21 “Executive Officers” means (a) in the case of Company, the Chief Executive Officer of Company (or a designee thereof) and (b) in the case of Licensee, the Chief Executive Officer of Licensee (or a designee thereof).

1.22 “FDA” means the U.S. Food and Drug Administration, or any successor federal agency in the U.S. performing similar functions.

1.23 “Field” means (a) the treatment of metastatic triple negative breast cancer (“mTNBC”), (b) any other oncological indication, or (c) any other indication as defined by the wording of the label approved by Regulatory Authorities in the U.S. or the Territory for the Licensed Product.

1.24 “First Commercial Sale” means, with respect to a Licensed Product in a particular region or country, the first commercial sale of such Licensed Product in such region or country after all necessary Regulatory Approvals have been obtained in such region or country.

1.25 “FTE” means the equivalent of a full-time individual’s work time for a twelve (12) month period.

1.26 “Fully Burdened Cost” means the direct cost of the applicable good, product or service plus indirect charges and overheads reasonably allocable to the provision of such good, product or service, including, but not limited to, applicable FTE costs.

1.27 “GAAP” means generally accepted accounting principles in the U.S., or the International Financial Reporting Standards (IFRS) if the generally accepted accounting principles in the U.S. are not generally applied in such country or region, consistently applied.

1.28 “GCP” means all applicable Good Clinical Practice standards for the design, conduct, performance, monitoring, auditing, recording, analyses and reporting of Clinical Trials, including, as applicable (a) as set forth in the International Conference on Harmonization of Technical Requirements for Registration of Pharmaceuticals for Human Use Harmonized Tripartite Guideline for Good Clinical Practice (CPMP/ICH/135/95) and any other guidelines for good clinical practice for trials on medicinal products in the Territory, (b) the Declaration of Helsinki (2004) as last amended at the 52nd World Medical Association in October 2000 and any further amendments or clarifications thereto, (c) U.S. Code of Federal Regulations Title 21, Parts 50 (Protection of Human Subjects), 56 (Institutional Review Boards) and 312 (Investigational New Drug Application), and (d) each as maybe amended from time to time.

1.29 “Global Study” means a multi-regional clinical study that is designed to obtain Regulatory Approvals for the Licensed Products in multiple regions and countries through the conduct of Clinical Trials for a Licensed Product in multiple countries, regions, territories and medical institutions, in all circumstances conducted either as part of one (1) unified Clinical Trial or separately but concurrently in accordance with a common Clinical Trial protocol.

1.30 “GLP” means all applicable Good Laboratory Practice standards as set forth in the then current good laboratory practice standards promulgated or endorsed by the U.S. Food and Drug Administration as defined in 21 C.F.R. Part 58, as may be amended from time to time.

1.31 “GSP” means all applicable Good Supply Practice standards as set forth in the then current good supply practice standards promulgated or endorsed by the FDA as defined in Good Supply Practice for Pharmaceutical Products, as may be amended from time to time.

1.32 “Governmental Authority” means any government, any governmental or quasigovernmental entity or municipality or political or other subdivision thereof, department, commission, board, self-regulating authority, bureau, branch, authority, official, agency or instrumentality, and any court, tribunal, arbitrator or judicial body, in each case, whether federal, state, city, county, or local.

1.33 “Greater China” means the PRC, Taiwan, Hong Kong and Macao (with each of Taiwan, Hong Kong and Macao deemed a region for the purposes of this Agreement).

1.34 “Gross Profit” means, for specific units of Licensed Product sold during a particular time period, (a) the Net Sales arising from such Licensed Product sales minus (b) the Transfer Price for manufacturing such units of Licensed Product, to the extent actually paid or incurred by Licensee, its Affiliate, and/or its permitted sublicensee (as appropriate) and not otherwise reimbursed.

1.35 “IND” means an Investigational New Drug Application filed with the FDA or an analogous application or filing with any analogous Regulatory Authority outside of the U.S. under any analogous foreign law for the purposes of obtaining permission to conduct human Clinical Trials in such jurisdiction.

1.36 “Information” means any data, results, and information of any type whatsoever, in any tangible or intangible form, including, without limitation, Inventions, trade secrets, knowhow, skill, knowledge, expertise, technology, practices, techniques, methods, processes, procedures, Inventions (patentable or otherwise), developments, specifications, formulations, formulae, Materials, software, algorithms, marketing or financial reports, clinical and nonclinical study reports, Regulatory Materials, Regulatory Approvals, test data including pharmacological, biological, chemical, biochemical, toxicological and clinical test data, analytical and quality control data, and stability data.

1.37 “Insolvency Event” means:

(a) a voluntary case or proceeding under any applicable bankruptcy, insolvency, or other similar law is commenced by such Party, or such Party consents to the entry of an order for relief in an involuntary case or proceeding under any such law or against such Party, or such Party consents to the appointment of or taking possession by a receiver, liquidator, assignee, trustee, custodian, sequestrator, conservator, supervisor, rehabilitator (or other similar official) of such Party or for any material portion of such Party’s assets and properties, or such Party makes a general assignment for the benefit of creditors;

(b) the commencement of an involuntary case or proceeding under any applicable bankruptcy, insolvency, or other similar law against such Party, and such case or proceeding is not dismissed within ninety (90) calendar days;

(c) the entry by a Regulatory Authority having jurisdiction over such Party of a decree or order appointing a receiver, liquidator, assignee, custodian, trustee, sequestrator, conservator, supervisor, rehabilitator (or similar official) for such Party or for any material portion of such Person’s assets and properties, or ordering the winding-up, supervision, or liquidation of such Party’s affairs; or

(d) the taking of any formal action by such Party, its board of directors (or similar governing body) or holders of its voting securities authorizing any of the foregoing.

1.38 “Inventions” means any and all inventions and improvements, whether or not patentable, including but not limited to compositions of matter, formula, formulations, articles of manufacture, processes, methods, or other inventions, discoveries, or findings, compounds, products, biological materials, cell lines, samples of assay components, media, designs, ideas, programs, software models, algorithms, developments, experimental works, compilations of data, and any intellectual property rights therein, in each case relating to Licensed Products.

1.39 “Key Patents” means the Company Patents Controlled by the Company that are set forth in Exhibit A.

1.40 “Licensed Product” means IMMU-132 (sacituzumab govitecan), which is an antibody-drug conjugate or pharmaceutical preparation in final form containing the humanized antibody known as “hRS7,” the linker known as “CL2A” and small molecule known as “SN38” and no other active ingredient.

1.41 “Licensee Know-How” means all Information that is Controlled by Licensee or its Affiliates as of the Effective Date or any time during the Term and is reasonably necessary or useful for the research, Development, manufacture, use or Commercialization of Licensed Products in the Field including any Development Data or Regulatory Materials disclosed or disclosable under Section 5.9. For clarity, Licensee Know-How excludes rights under any Licensee Patents and Licensee’s interests in any Joint Patents and Joint Inventions. Notwithstanding the foregoing, in the event that after the Effective Date, a Third Party becomes an Affiliate of Licensee or becomes Licensee’s successor in interest with respect to this Agreement, any Information Controlled by such entity or its Affiliates immediately prior to such

transaction shall not be considered to be Licensee Know-How for the purposes of this Agreement unless such Information was also Controlled by Licensee or its Affiliate prior to such transaction.

1.42 “Licensee Patents” means all Patents (other than any Joint Patents) that are Controlled as of the Effective Date or any time during the Term by Licensee or its Affiliates that cover the composition of matter, formulation, manufacture or use in the Field of a Licensed Product or is otherwise is reasonably necessary or useful for the research, Development, manufacture, use or sale of Licensed Products in the Field. Notwithstanding the foregoing, in the event that after the Effective Date, a Third Party becomes an Affiliate of Licensee or becomes Licensee’s successor in interest with respect to this Agreement, any Patent Controlled by such entity or its Affiliates immediately prior to such transaction shall not be considered to be a Licensee Patent for the purposes of this Agreement unless such Patent was also Controlled by Licensee or its Affiliate prior to such transaction.

1.43 “Marketing Approval” means approval, including any conditional approval, of a Drug Approval Application by the applicable Regulatory Authority.

1.44 “Materials” means any chemical or biological substances including any: (a) organic or inorganic chemical or compound; (b) gene; (c) vector or construct, whether plasmid, phage, virus or any other type; (d) host organism, including bacteria and eukaryotic cells; (e) eukaryotic or prokaryotic cells, cell line or expression system; (f) protein, including any peptide or amino acid sequence, enzyme, antibody or protein conferring targeting properties and any fragment of a protein or peptide or enzyme; (g) genetic material, including any genetic control element (e.g., promoters); (h) virus; or (i) assay or reagent.

1.45 “NDA” or “BLA” means a new drug (or a biologics license) application or marketing authorization application filed with the FDA or an analogous application or filing with any analogous Regulatory Authority outside of the U.S. under any analogous foreign law, which application is required for Regulatory Approval for a Licensed Product in the Field in such country or jurisdiction.

1.46 “Net Sales” means, with respect to a given period of time, the gross amount invoiced by Licensee, its Affiliates, and its sublicensees for sales of Licensed Products to Third Parties, less the following deductions and offsets that are actually incurred, allowed, accrued and/or taken in accordance with GAAP and are specifically allocated with respect to such sale, but solely to the extent that such deductions or offsets are not otherwise recovered by or reimbursed to Licensee, its Affiliates and its sublicensees:

(a) reasonable and customary cash discounts, trade and quantity discounts, promotional discounts or stocking allowances, rebates, chargebacks and other allowances;

(b) reasonable and customary credits and allowances taken upon rejection, return or recall of Licensed Product;

(d) actual deductions to gross invoice price of the Licensed Product imposed by Regulatory Authorities or other Governmental Authorities specifically identified on the applicable invoice and not subsequently reimbursed or credited by Regulatory Authorities or other Governmental Authorities;

(e) the amount invoiced to cover bad debt, provided that such amount shall not exceed [***] percent ([***]%) of the underlying sales and such amount shall be added back to Net Sales if and when collected;

(f) reasonable and customary transportation charges and other charges directly related thereto, such as insurance, in each case, to the extent actually incurred and not charged to or reimbursed by the customer;

(g) reasonable and customary freight and insurance costs incurred with respect to the shipment of Licensed Product to customers, in each case if charged separately and invoiced to the customer; and

(h) sales, use, value-added, excise and other similar taxes (excluding income taxes), all to the extent added to the sales price and paid and not refundable in accordance with Applicable Law.

The methodology for calculating (a)–(f) shall conform to GAAP consistently applied by Licensee and its Affiliates across its product lines. No amount for which deduction is permitted pursuant to this Section 1.46 shall be deducted more than once. Licensed Products transferred to Third Parties in connection with Clinical and non-Clinical Trials, Licensed Product samples, compassionate sales or use, or an indigent program or similar bona fide arrangements in which the Licensee, its Affiliate or permitted sublicensee forego a normal profit margin for good faith business reasons shall give rise to Net Sales only to the extent that Licensee, the Affiliate or sublicensee receives amounts therefor.

With respect to Bundled Products, Net Sales, for purposes of determining royalty payments on such Bundled Product, shall be calculated by multiplying the Net Sales of the Bundled Product by the fraction A/(A+B), in which A is the net selling price of the Licensed Product portion of the Bundled Product when such Licensed Product is sold separately in the applicable country in the same potency during the applicable accounting period in which the sales of the Bundled Product were made, and B is the net selling price of the other independent components of the Bundled Product sold separately in the applicable country during the accounting period in question. All net selling prices of the independent components of such Bundled Product shall be calculated as the net selling price of the said components in the applicable country during the applicable accounting period for which the Net Sales are being calculated. In the event that, in any country or countries, no separate sale of either such above-designated Licensed Product or such above designated other independent components of the Bundled Product are made during the accounting period in which the sale was made or if net selling price for an independent component cannot be determined for an accounting period, Net Sales allocable to the Licensed Product in each such country shall be determined in good faith by the Parties prior to the end of the accounting period in question based on an equitable method of determining same that takes into account, on a country-by-country basis,

the relative contribution of each independent component in the bundle, and relative value to the end user of each such independent component.

Net Sales shall include the fair market value of all consideration received by Licensee, its Affiliates, and its sublicensees in respect of any sale of Licensed Products, whether such consideration is in cash, payment in kind, exchange for value or another form.

With respect to sales of Licensed Product invoiced in Dollars, Net Sales shall be determined in Dollars. With respect to sales of Licensed Product invoiced in a currency other than Dollars, the rate of exchange to be used in computing the amount of currency equivalent in Dollars shall be the rate of exchange as reported in the Wall Street Journal at the close of the last day of each month of the Calendar Quarter to which such sales relate.

Sales of Licensed Product among Licensee, its Affiliates, and its sublicensees, where such Licensed Product is ultimately resold by the purchaser to an unaffiliated Third Party, shall not be included in Net Sales hereunder, but the resale of such Licensed Product by such purchaser to the unaffiliated Third Party shall be included in Net Sales.

1.47 “NMPA” means the National Medical Products Administration under the PRC’s State Administration for Market Regulation, or any successor thereto. For the avoidance of doubt, the NMPA shall refer to the agency formerly known as the PRC’s Food and Drug Administration (CFDA).

1.48 “Patents” means (a) unexpired letters patent (including inventor’s certificates) which have not been held invalid or unenforceable by a court of competent jurisdiction from which no appeal can be taken or has been taken within the required time period (and which have not been admitted to be invalid or unenforceable through reissue, disclaimer or otherwise, or been abandoned in accordance with or as permitted by the terms of this Agreement or by mutual written agreement), including any substitution, extension, registration, confirmation, reissue, reexamination, supplementary protection certificates, confirmation patents, patent of additions, renewal or any like filing thereof; (b) pending applications for letters patent which have not been canceled, withdrawn from consideration, finally determined to be unallowable by the applicable Governmental Authority or court for whatever reason (and from which no appeal is or can be taken), and/or abandoned in accordance with or as permitted by the terms of this Agreement or by mutual written consent, including any continuation, division or continuation-in-part thereof and any provisional applications; and (c) any international or regional counterparts to (a) and (b) above.

1.49 “Person” means any natural person, corporation, firm, business trust, joint venture, association, organization, company, partnership or other business entity, or any government or agency or political subdivision thereof.

1.50 “PRC” means the People’s Republic of China and for the purpose of this Agreement, excludes Taiwan, Hong Kong and Macao.

1.51 “Pre-Existing Company Patents” means the Patents Controlled by Company as of the Effective Date that are not Key Patents. A complete and accurate list of all Pre-Existing Company Patents is set forth in Exhibit B.

1.52 “Regulatory Approval” means any and all approvals (including Marketing Approvals, supplements, amendments, pre- and post-approvals, and pricing and reimbursement approvals), licenses, registrations or authorizations of any national, supra-national, regional, state or local regulatory agency, department, bureau, commission, council or other governmental entity, that are necessary for the manufacture, distribution, use or sale of a product in the particular regulatory jurisdiction.

1.53 “Regulatory Authority” means, in respect of a jurisdiction, any agency, department, bureau or other governmental entity with authority over the Development, manufacture, use or sale (including Marketing Approvals) with respect to products in the jurisdiction, including the FDA and the NMPA.

1.54 “Regulatory Materials” means regulatory applications (including Drug Approval Applications), submissions, notifications, registrations, and/or other filings made to or with a Regulatory Authority that are necessary or reasonably desirable in order to Develop, use, import, sell, offer to sell, register, market, manufacture, or otherwise Commercialize the Licensed Product in the Field for the Territory, along with any documents related to Regulatory Approval issued by a Regulatory Authority for the Territory.

1.55 “Royalty Term” means, on a region-by-region or country-by-country basis, the period that commences upon the First Commercial Sale of the Licensed Product in such region or country after receipt of Regulatory Approval in such region or country and terminates upon the last of: (a) the date on which the sale of such Licensed Product is no longer covered by a Valid Claim in such region or country; (b) expiration of regulatory exclusivity in such region or country; and (c) [***] ([***]) years from the First Commercial Sale of such Licensed Product in such region or country (the “Standard Royalty Term”); provided, however, that notwithstanding the preceding sentence, the Royalty Term for the Licensed Product in such region or country shall continue on an indication-by-indication basis for up to [***] ([***]) additional years in a region or country after the occurrence of the events in subsection (a), (b) and (c) so long as there is no Competing ADC Product for sale in such region or country for such indication (the “Additional Royalty Term”).

1.56 “Territory” means Greater China, Indonesia, Philippines, Vietnam, Thailand, South Korea, Malaysia, Singapore, and Mongolia.

1.57 “Third Party” means any Person other than (a) Company, (b) Licensee, (c) an Affiliate of Company or (d) an Affiliate of Licensee.

1.58 “Transfer Price” means the price at which Company shall transfer the Licensed Product to Licensee, which price shall be [***] percent ([***]%) of the COGS.

1.59 “U.S.” means the United States of America, including its territories, protectorates and possessions.

1.60 “Upstream Licenses” means all agreements with Third Parties as of the Effective Date, pursuant to which Company has licensed a certain part of the Company Patent and Company Know-How from such Third Parties, and such Third Parties are “Upstream Licensors.” Exhibit C contains a complete and accurate list of all Upstream Licenses.

1.61 “Valid Claim” means a claim of any Company Patent that covers the composition of matter of the Licensed Product whose validity, enforceability, or patentability has not been affected by any of the following: (a) expiration; (b) irretrievable lapse, abandonment, revocation, dedication to the public, or disclaimer; or (c) a holding, finding, or decision of invalidity, unenforceability, or non-patentability by a court, governmental agency, national or regional patent office, or other appropriate body that has competent jurisdiction, such holding, finding, or decision being final and unappealable or unappealed within the time allowed for appeal; provided that in the case of a pending claim in any such Company Patent, such claim shall be [***] years or less from the date that the first action on the merits (excluding restriction requirements, notices to file missing parts, and the like) was received in a patent application in which such claim is examined, and that has not been abandoned (without the possibility of refiling) or finally rejected by the applicable Governmental Authority or court (and from which no appeal is or can be taken).

1.62 “VAT” means value added tax.

Each of the following definitions is set forth in the Section of this Agreement indicated below:



Definition	Section
$60M mTNBC Milestone	8.2
Acquirer	2.7
Additional Royalty Term	1.55
Agreement	Preamble
Alliance Manager	3.2(a)
Combination Trial	2.1(c)
Commercial Quality Agreement	7.2
Commercial Supply Agreement	7.2
Commercialization Plan	6.2
Company	Preamble
Company Indemnitees	12.1
Confidential Information	11.1
Development Plan	5.2
ER+ HER2- mBC	5.3
Exchange Act	11.4(c)
[***] Period	6.3(b)(i)
Fourth Indication Milestone	8.2
Improvements	10.1
Indemnitee	12.3(a)
Indemnitor	12.3(a)
Joint Inventions	10.1
Joint Patent	10.4(c)
JSC	3.1(a)
Liscensee	Preamble
Licensee Indemnitees	12.2
Licensee Mark(s)	14.6(d)
Mark	10.10



Definition	Section
mTNBC	1.23
Non-Commercial Quality Agreement	7.1(b)
Non-Commercial Supply Agreement	7.1(b)
OS	0
Party	Preamble
PFS	0
Priority Indications	5.3
Product Infringement	10.5(a)
Publication	11.5
RPI	11.2(g)
Sole Inventions	10.1
Standard Royalty Term	1.55
Supply Price Cap	7.3
Term	14.1
Third Party License	2.6
Transferred Materials	5.11(a)
UC Upstream Licensors	1.60

ARTICLE 2

LICENSES AND RELATED RIGHTS AND OBLIGATIONS

2.1 Grant of Rights to Licensee.

(a) License. Subject to the terms and conditions of this Agreement, Company hereby grants to Licensee an exclusive (even as to Company and its Affiliates, but subject to Company’s retained rights set forth in Section 2.1(d)), royalty-bearing license, with the right to grant sublicenses in accordance with Section 2.1(b), under the Company Patents, Company Know-How, and Company’s interest in the Joint Patents and Joint Inventions, to Develop, use, import, export, offer for sale, sell, and otherwise Commercialize Licensed Products in the Field in the Territory. For clarity, the foregoing license does not include the right to make or have made Licensed Products.

(b) Sublicensing. The licenses granted to Licensee in Section 2.1(a) shall be sublicenseable solely (i) to Licensee’s Affiliates freely; and (ii) to Third Parties in the Territory with Company’s prior written consent, which consent shall not be unreasonably withheld, conditioned or delayed. Any sublicense that Licensee grants hereunder shall be consistent with, and subject to, the terms and conditions of this Agreement. Licensee shall be responsible for all of its sublicensees’ activities and any and all failures by its sublicensees to comply with the applicable terms of this Agreement. In no event shall Licensee’s granting of any sublicense relieve Licensee of any of its obligations under this Agreement. Licensee shall provide Company with a true and complete copy of each proposed sublicense agreement with a sublicensee and each proposed amendment thereto prior to execution to permit Company to review such sublicense agreement and/or amendment and to exercise its consent right, and upon execution shall provide a fully executed copy. In each sublicense that Licensee or its sublicensee grants hereunder, Licensee shall, and shall cause its sublicensee to, require that, upon a termination of such sublicense, the sublicensee must assign to Licensee, and provide to Licensee full copies of, all Regulatory Approvals and Regulatory Materials that relate to Licensed Products and are owned or controlled by such sublicensee (such that Licensee shall be able to, pursuant to Section 14.6(b), assign to Company), and provide Company with full copies of, all such Regulatory Approvals and Regulatory Materials upon termination of this Agreement. In addition, Licensee shall ensure that any sublicense that Licensee grants hereunder explicitly states that such sublicense shall immediately terminate upon termination of this Agreement.

(c) Combination Trial. Subject to the JSC’s approval in accordance with Section 3.1, Licensee shall also be permitted to (and to grant sublicenses to Affiliates or Third Parties in accordance with Section 2.1(b)) to conduct Clinical Trials in the Territory administering any of the Licensed Products in combination with the Licensee's, its Affiliate's, or a Third Party’s proprietary product (a "Combination Trial").

(d) Company Retained Rights. Notwithstanding Section 2.1(a) but subject to Section 2.7, Company retains the right under the Company Patents and Company Know-How (a) to fulfill, either itself or through subcontractors, its obligations under this Agreement, including its manufacturing and supply obligations under ARTICLE 7; and (b) to research, Develop, manufacture and use the Licensed Product for the sole purpose of (i) obtaining Regulatory Approvals for the Licensed Product outside the Territory and (ii) Commercializing the Licensed Products outside the Territory irrespective of where such activities occur in the world, including the Territory. For clarity, Company retains all rights to make and have made Licensed Products, all rights with respect to compounds and products other than Licensed Products, and all rights with respect to countries outside the Territory.

2.2 Grant of Rights to Company.

(a) Licenses. Subject to the terms and conditions of this Agreement, Licensee hereby grants to Company, under the Licensee Patents, Licensee Know-How and Licensee’s interest in the Joint Patents and Joint Inventions, (i) a non-exclusive, worldwide, royalty-free, fully paid license, with the right to grant sublicenses in accordance with Section 2.2(b), to fulfill, either itself or through subcontractors, its obligations under this Agreement, including its manufacturing and supply obligations under Article 7; and (ii) an exclusive (even as to Licensee and its Affiliates),

royalty-free, fully paid license, with the right to grant sublicenses in accordance with Section 2.2(b) solely to (A) to Develop, use, import, make, have made, offer for sale, sell, and otherwise Commercialize Licensed Products outside the Territory; (B) to conduct research, Development and manufacturing activities in the Territory solely in support of the Regulatory Approval of Licensed Products outside the Territory; and (C) make and have made Licensed Products anywhere in the world.

(b) Sublicensing. The license granted to Company in clause (i) of Section 2.2(a) shall be sublicenseable solely to Company’s Affiliates or to any of Company’s subcontractors or sublicensees. The license granted to Company in clause (ii) of Section 2.2(a) may be freely sublicensed by Company through multiple tiers. Any sublicense that Company grants hereunder shall be consistent with the terms and conditions of this Agreement.

2.3 No Non-Permitted Use. Each Party hereby covenants that it shall not, nor shall it cause or permit any Affiliate or sublicensee to use or practice, any of the other Party’s intellectual property rights licensed to it under this Article 2 except for the purposes expressly permitted in the applicable license grant(s).

2.4 No Other Licenses. No rights or licenses in or to any intellectual property, whether by implication, estoppel, or otherwise, are hereby granted, other than the license rights that are expressly granted under this Agreement.

2.5 Upstream Licenses. Licensee acknowledges and agrees that the license granted by Company to Licensee pursuant to Section 2.1(a) constitutes a sublicense under each applicable Upstream License. Company shall bear all costs, expenses, and payments owed by Company to Upstream Licensors under each applicable Upstream License.

2.6 Third Party Licenses. During the Term, Licensee shall be solely responsible for all costs and expenses of any license or other agreement entered into by Licensee during the Term in order to lawfully Develop and Commercialize Licensed Products in the Field in the Territory by Licensee, its Affiliates, or its sublicensees (each a “Third Party License”). Licensee shall ensure that each Third Party License that Licensee (or any Affiliate or sublicensee) enters into related to Licensed Products contains provision(s) permitting such Third Party License to be assigned in accordance with Section 14.6(e).

2.7 Exclusivity. Licensee hereby covenants that, during the Term, neither it nor its Affiliates shall, directly or indirectly (including via a license to a Third Party), Develop, market, promote, sell, or otherwise Commercialize any Competing Product in the Field in the Territory. Company hereby covenants that, during the Term, neither it nor its Affiliates shall, directly or indirectly (including via a license to a Third Party), market, promote, sell, or otherwise Commercialize any Competing Product in the Field in the Territory. In the event that after the Effective Date a Third Party (an “Acquirer”) acquires Licensee or otherwise becomes Licensee’s successor in interest with respect to this Agreement and such Acquirer or any of its Affiliates is Developing, manufacturing and/or Commercializing a Competing Product, then within [***] calendar days of the closing of such acquisition, either (a) Licensee or its successor in interest shall return all rights to the Licensed Product to Company, including assigning all Patents relating solely

to the Licensed Product that were owned by Licensee or its Affiliate immediately prior to such transaction, or (b) Acquirer and all of its Affiliates shall cease all Development, manufacturing and/or Commercialization activities with respect to such Competing Product; provided, however, that Company may waive such requirement upon written notice to Licensee. For avoidance of doubt, Licensee shall have the right to Develop and Commercialize products or treatments that can be combined with or sequentially applied before/after the Licensed Product (e.g. immunotherapy, PARP inhibitor or CDK4/6 inhibitor); provided, however, sales of such products or treatments when sold together with a Licensed Product shall be included in Net Sales as a Bundled Product.

ARTICLE 3

GOVERNANCE AND MANAGEMENT

3.1 Joint Steering Committee.

(a) Formation. Within sixty (60) calendar days following the Effective Date, the Parties shall form a joint steering committee (the “JSC”) comprised of three (3) representatives of each of the Parties, unless otherwise agreed by the Parties. One representative of Licensee at the JSC shall be selected to act as the chairperson of the JSC. The JSC shall meet at least four (4) times per year until the receipt of the first Marketing Approval with respect to a Licensed Product in the Territory, and thereafter shall meet at least two (2) times per year. Each Party may also schedule a meeting of the JSC on an ad hoc basis at any time upon two (2) weeks’ notice to the other Party, subject to the reasonable availability of the JSC members. Meetings of the JSC may be conducted by videoconference, teleconference or in person, as agreed by the Parties. The JSC shall agree upon the time and location of the meetings. The chairperson, or his or her designee, shall circulate an agenda for each meeting approximately one week before the date scheduled for the meeting, and shall include all matters requested to be included on such agenda by either Party. The chairperson, or his or her designee, shall take complete and accurate minutes of all discussions occurring at the JSC meetings and all matters decided upon at the meetings, except that matters reflecting legal advice of counsel shall not be included in such minutes. A copy of the draft minutes of each meeting shall be provided to each Party by the chairperson, or his or her designee, after each meeting, and such minutes shall be reviewed by the JSC members, any needed changes discussed and final minutes agreed to and provided to each Party within thirty (30) calendar days after each meeting unless otherwise agreed upon by the Parties. A reasonable number of additional representatives of a Party may attend meetings of the JSC in a non-voting capacity upon written notice to the other Party. Each Party is responsible for their travel costs and expenses associated with attending meetings.

(b) JSC Functions and Powers. The responsibilities of the JSC shall be as follows:

(i) encouraging and facilitating communication between the Parties with respect to the Development and Commercialization of Licensed Products;

(ii) providing a forum for the Parties to discuss and mutually agree on the overall strategy and priorities for Development of Licensed Products in the Field in the Territory and to assist Company in coordinating Development activities outside Territory;

(iii) providing a forum for the Parties to discuss and mutually agree on an initial Development Plan (prepared as described in Section 5.2) and updates or amendments, as appropriate, to the Development Plan;

(iv) providing a forum for the Parties to discuss the conduct of any Combination Trial;

(v) monitoring the progress of the Development of Licensed Products against the Development Plan and each Party’s diligence in carrying out its responsibilities thereunder;

(vi) providing a forum for the Parties to discuss the Commercialization Plan (prepared as described in Section 6.2);

(vii) monitoring the progress of the Commercialization of Licensed Products against the Commercialization Plan and each Party’s diligence in carrying out its responsibilities thereunder;

(viii) establishing projected timelines for the performance of Development and Commercialization activities and goals (other than any timelines expressly set forth in this Agreement); provided, however, that to the extent such timelines are not met by Licensee in a certain region or country, the JSC shall discuss in good faith to decide (A) whether to modify the timelines for such Development activities in such region or country, or (B) how to address any unmet timelines.

(ix) establishing subcommittees on an as-needed basis, and overseeing the activities of all subcommittees, and attempting to resolve disputes or disagreements arising in all such subcommittees; and

(x) carrying out the other duties and responsibilities described for it in this Agreement.

(c) JSC Decision Making. The JSC is intended to serve primarily as an advisory body and to serve as a forum for the Parties to discuss matters relating to this Agreement and to provide a convenient mechanism for implementation of any review and/or approval rights granted to a Party under this Agreement. However, to the extent that the JSC is required to make a decision on a matter, all such decisions of the JSC shall be made by unanimous vote, with each Party’s representatives collectively having one (1) vote, irrespective of the number of representatives it has on the JSC. If after reasonable discussion and consideration of each of the Parties’ views on a particular matter before the JSC, the JSC is unable to reach a decision by unanimous vote on that matter within fifteen (15) Business Days, then such matter shall be referred to the Executive Officers of both Parties for resolution. The Executive Officers shall confer with

each other as soon as reasonably practicable, and if the Executive Officers are unable to reach a mutually agreeable decision on such matter within fifteen (15) Business Days after such referral, then the Executive Officer of Licensee shall have the final decision making authority on such matter to the extent such matter is solely related to the activities with respect to the Licensed Product in the Territory except for those decisions that would reasonably be expected to have (i) a material adverse effect on the research, Development, manufacture, or Commercialization of the Licensed Product outside the Territory or (ii) a material adverse effect on the Global Study, in each such case of (i) and (ii) the Executive Officer of Company shall have the final decision making authority on such matter. The JSC shall not have any authority other than that expressly set forth in Section 3.1(b) and, specifically, shall have no authority (A) to amend or interpret this Agreement, (B) to determine whether or not a Party has met its diligence or other obligations under this Agreement, or (C) to determine whether or not a breach of this Agreement has occurred.

3.2 Alliance Managers.

(a) Appointment. Each Party shall appoint an individual to act as the point of contact between the Parties (each, an “Alliance Manager”). Each Party may change its designated Alliance Manager from time to time upon written notice to the other Party. Any Alliance Manager may designate a substitute to temporarily perform the functions of that Alliance Manager by written notice to the other Party.

(b) Responsibilities. Alliance Managers shall be non-voting participants at the JSC meetings to the extent they are not representatives of the Parties at the JSC. An Alliance Manager may bring any matter to the attention of JSC if such Alliance Manager reasonably believes that such matter warrants such attention. Each Alliance Manager shall be charged with creating and maintaining a collaborative work environment within the JSC. In addition, each Alliance Manager: (i) shall be the point of first referral in all matters of conflict resolution; (ii) shall coordinate the relevant functional representatives of the Parties in developing and executing strategies and plans for the Licensed Products in an effort to ensure consistency and efficiency throughout the world; (iii) shall provide a single point of communication for seeking consensus both internally within the respective Parties’ organizations and between the Parties regarding key strategy and plan issues; (iv) shall identify and bring disputes to the attention of the JSC in a timely manner; (v) shall plan and coordinate cooperative efforts and internal and external communications; and (vi) shall take responsibility for ensuring that governance activities, such as the conduct of JSC meetings and production of meeting minutes, occur as set forth in this Agreement, and that relevant action items resulting from such meetings are appropriately carried out or otherwise addressed.

ARTICLE 4

TRANSFER AND TECHNICAL ASSISTANCE

4.1 Transfer of Company Know-How. Within [***] calendar days after the Effective Date, Company shall transfer all Information, documents and reports comprising all Company Know-How as of the Effective Date, including those listed in Exhibit D. During the Term, Company shall provide Licensee with additional necessary or reasonably useful Information,

documents, and reports comprising the Company Know-How that is necessary or reasonably useful for Licensee to Develop and Commercialize Licensed Products, to the extent such Information, documents, and reports come to Company’s attention (or are reasonably requested by Licensee) and have not previously been provided to Licensee.

4.2 Assistance by Company. At Licensee’s reasonable request, Company shall cooperate with Licensee to provide such reasonable technical assistance as may be necessary in connection with (a) the transfer to Licensee of the Development of Licensed Products in the Territory and (b) the seeking of Regulatory Approval for Licensed Products in the Territory, in each case as is consistent with the capacity and capabilities of Company. Licensee will compensate Company for such assistance by making cash payments to Company equal to Company’s Fully Burdened Cost of providing such assistance, based on written invoices provided by Company from time to time; provided, however, that Company shall (i) for the first [***] months following the Effective Date, provide a reasonable amount of hours of such assistance pursuant to this Section 4.2 to Licensee free of charge (for clarity, such amount shall be uncapped for so long as it is reasonable); (ii) thereafter, provide up to [***] total hours of employee and/or full-time contractor time per month pursuant to this Section 4.2 free of charge. For clarity, Licensee shall not be responsible for any costs or expenses incurred by Company, its Affiliates or their respective employees or contractors for the normal activities performed by Company’s employees and contractors at the JSC level, routine communications or activities regarding the Development and Commercialization in the Territory, communications with or between Licensee’s and/or Company’s executive officers (including CEO, CFO, COO, CFO, CBO, CMO) and the like, including discussing, updating, and reviewing the Development Plan and Commercialization Plan.

ARTICLE 5

DEVELOPMENT

5.1 Research and Development Responsibility. Licensee shall have sole responsibility and discretion for the Development of Licensed Products in the Field in the Territory, subject to the oversight of the JSC and its decision making authority in accordance with Section 3.1(c). Company shall, at Licensee’s cost and expense, reasonably cooperate with Licensee for such Development of the Licensed Products in the Territory, including providing to Licensee all data Controlled by Company or its Affiliates during the Term to the extent necessary or reasonably useful for (a) the Development of the Licensed Product in the Field in the Territory and (b) obtaining and maintaining of any Regulatory Approvals of the Licensed Product in the Field in the Territory, in each case, at Company’s cost. Notwithstanding the foregoing, Company shall (i) for the first [***] months following the initiation of the Development of the Licensed Product in accordance with the Development Plan, provide a reasonable amount of hours of such assistance to Licensee pursuant to this Section 5.1 free of charge (for clarity, such amount shall be uncapped for so long as it is reasonable); (ii) thereafter, provide up to [***] total hours of employee and/or full-time contractor time per month pursuant to this Section 5.1 free of charge. For clarity, Licensee shall not be responsible for any costs or expenses incurred by Company, its Affiliates or their respective employees or contractors for the normal activities performed by Company’s employees and contractors at the JSC level, routine communications or activities regarding the Development and Commercialization in the Territory, communications with or between

Licensee’s and/or Company’s executive officers (including CEO, CFO, COO, CFO, CBO, CMO), and the like, including discussing, updating, and reviewing the Development Plan and Commercialization Plan.

5.2 Development Plan. The Development of Licensed Products shall be governed by a written multi-year, research and Development plan that sets forth the anticipated research, preclinical and clinical Development activities to be performed with respect to Licensed Products throughout the Territory, including clinical and registrational strategies and priorities, trial designs, planned sample sizes, data readouts and regulatory submissions, and projected timelines. for completion of such activities (the “Development Plan”). The Parties, via JSC, shall finalize an initial Development Plan no later than [***] calendar days after the Effective Date.

5.3 Priority Indications. The Parties agree that each of the following indications shall be a “Priority Indication” in the initial Development Plan: mTNBC (3rd line), estrogen receptor-positive human epidermal receptor 2-negative metastatic breast cancer (excluding mTNBC) (“ER+ HER2- mBC”), metastatic urothelial bladder cancer (“UC”), and a fourth indication to be mutually agreed upon by the Parties in the initial Development Plan pursuant to Section 5.2. During the Term, each Party may propose additional indications to be Developed in the Territory along with their projected timelines, trial designs, and planned sample sizes, in the updated or amended Development Plan for the JSC’s review and approval. After JSC’s approval, such indications shall be deemed Priority Indications and Licensee shall use Commercially Reasonable Efforts to Develop and obtain Regulatory Approvals for the Licensed Product for such indications in accordance with the updated or amended Development Plan.

5.4 Amendment to the Development Plan. On a semi-annual basis (no later than March 31 or September 30 of each Calendar Year, commencing on June 30, 2019), or as often as the Parties deem appropriate, the Parties, via JSC, shall update or amend, as appropriate, the then-current Development Plan. Such updates and amendments shall reflect any agreed changes to the then-current agreed-upon Development activities, including proposal of any new indications to be Priority Indications or removal of any existing Priority Indication. Once approved by the JSC, such amended Development Plan shall become effective immediately and supersede the then-current Development Plan immediately prior to such approval. In the event of any inconsistency between the Development Plan and this Agreement, the terms of this Agreement shall prevail.

5.5 Clinical Trials. All Clinical Trial protocols for Licensed Product in the Territory shall be reviewed and approved by Company prior to any patient enrollment; provided that Company shall in good faith approve or propose amendments to any such Clinical Trial protocols within thirty (30) calendar days.

(a) Global Study. Company shall consider in good faith to include any regions or countries in the Territory in any Global Study. For clarity, inclusion of any region or country in the Territory in a Global Study shall be at the sole discretion of the Company.

(i) With respect to any Global Study that involves Clinical Trial sites in the Territory, Company shall provide the JSC with a study schematic and rationale for the study

prior to initiation of such study for Licensee’s review and invite Licensee to participate in such study.

(ii) If Licensee elects to participate in such Global Study, then (A) Licensee shall be responsible for enrolling in the Territory a certain number of patients, as reasonably determined by Company, for such Global Study (such number of patients shall not exceed [***] percent ([***]%) of the number of the total patients enrolled in such Global Study unless mutually agreed upon by the Parties); provided, however, that if Licensee considers the total enrollment in the Territory along with the overall enrollment in such Global Study to be insufficient to support obtaining Regulatory Approval for the Licensed Product in the Field in the Territory, upon reasonable consultation with Company, Licensee shall have the right to enroll additional patients for the Clinical Trials conducted by Licensee in the Territory that may or may not be part of such Global Study unless such additional enrollment would reasonably be expected to have a material adverse effect on the Global Study and provided that Licensee’s desire to continue enrollment in the Territory cannot materially negatively impact the sufficiency of the Global Study or materially impede Company’s ability to conduct a Global Study database lock and analysis based on Company’s original timelines for the Global Study; (B) Company shall provide Licensee with access to all data generated during such Global Study including a right of reference for the Licensed Product in the Field in the Territory; (C) Licensee shall bear all direct costs in connection with enrolling in the Territory the number of patients that will be part of such Global Study set in accordance with the clause (A) of this Section 5.5(a)(ii); and (D) Company shall be responsible for all other costs and expenses for such Global Study. Notwithstanding the foregoing, Licensee shall be obligated to participate in the Global Study for each of ER+ HER2- mBC and UC unless otherwise mutually agreed upon by the Parties.

(iii) If Licensee elects not to participate in any Global Study involving Clinical Trial sites in the Territory, then (A) Company shall keep Licensee reasonably informed of any progress of any such Global Study involving Clinical Trial sites in the Territory; and (B) Company shall consider in good faith any comments or suggestions provided by Licensee related to such Global Study that involves Clinical Trial sites in the Territory.

(iv) For clarity, in all cases, including if Licensee elects not to participate in a Global Study, Company shall provide Licensee with all data generated from such Global Study for Licensee to use solely for purposes of Developing Licensed Products in the Field in the Territory, including a right of reference in the Field in the Territory.

5.6 Developmental Diligence. Licensee shall use Commercially Reasonable Efforts to Develop and obtain Regulatory Approval for the Licensed Product in the Field throughout the Territory for the Priority Indications in accordance with the Development Plan. Licensee shall use Commercially Reasonable Efforts to, but not guarantee to, obtain reimbursement for the Licensed Product in the Territory for all Priority Indications; provided, however, that Company shall provide all reasonable assistance to Licensee as requested by Licensee, including providing all necessary or reasonably useful Information Controlled by Company. Without limiting the generality of the foregoing, Licensee shall, either itself or through an Affiliate or sublicensee, use Commercially Reasonable Efforts to (a) perform all of its obligations under the Development Plan in accordance with the projected time schedules set forth therein and (b) assign a dedicated clinical team to

accelerate the Development in the Territory, including, but not limited to, a regulatory lead, a commercial Development lead, a medical director, a medical scientist, a safety physician, a study director, a project manager, and a data manager.

5.7 Costs of Development. Licensee shall pay all costs associated with the Development of the Licensed Products in the Territory unless such costs are incurred in the Territory as part of a Global Study, in which case Section 5.5(a) shall govern.

5.8 Records; Reports. Licensee shall prepare and maintain complete and accurate records of all activities of Licensee under the Development Plan and all Information resulting from such activities in sufficient detail and in a good scientific manner for the purposes of filing for Patent and Regulatory Approvals. The JSC shall have the right to review such records upon reasonable requests. Licensee shall provide the JSC with regular reports summarizing in reasonably sufficient details its activities under the Development Plan and the outcomes of such activities reasonably in advance of any regularly scheduled JSC meeting. At the JSC’s reasonable request, Licensee shall provide the JSC with any requested additional Information regarding its Licensed Product Development activities no later than [***] calendar days following such request. Without limiting the forgoing, Licensee shall promptly inform Company of any significant Development or regulatory event relating to Licensed Products in the Territory, including the initiation or completion of a Clinical Trial, the submission of a regulatory filing, the receipt of a response to such regulatory filing, or any major adverse event for the Licensed Products. At the JSC’s reasonable request and to the extent permitted under Applicable Law, Company shall from time to time update the JSC with its Development efforts with respect to Licensed Product.

5.9 Development Data. During the Term, at no additional cost to Company, Licensee shall promptly disclose and provide Company with copies of Development Data and Regulatory Materials that come to Licensee’s attention (or that are reasonably requested by Company) and that have not previously been provided to Company by Licensee. For any documents that are not in English, Licensee shall prepare and provide to Company English translations of such documents (to the extent such documents were not translated from English documents provided to Licensee by Company). Company shall have the right, without any additional payment, to access and use such Development Data and Regulatory Materials in support of the Development (including seeking Regulatory Approval), manufacturing, and/or Commercialization of Licensed Product by Company, its Affiliates or licensees outside the Territory. Within [***] calendar days following the Effective Date, the Parties shall enter into a mutually agreeable Safety Information Exchange Agreement to govern the exchange of Development Data in connection with this Agreement. Licensee shall ensure that its sublicensees, research and clinical partners, and other Third Parties with which Licensee conducts Development or any other activities with respect to Licensed Product to comply with the obligations substantially similar to those in this Section 5.9.

5.10 Regulatory Responsibility.

(a) Licensee, its Affiliates, and/or permitted sublicensees shall be the legal and beneficial owner of all Regulatory Approvals for Licensed Product in the Field in the Territory and Regulatory Materials relating to such Regulatory Approvals in the Field in the Territory shall be filed by, and in the name of, Licensee (or its Affiliates or permitted sublicensees, as the case

may be); provided that (i) the Parties shall use good faith efforts to cooperate to effectuate this Section 5.10, and (ii) in the event that after the Parties’ use of good faith efforts, Licensee, its Affiliate, and/or permitted sublicensee is unable to become the legal and beneficial owner of the Regulatory Approvals for Licensed Products in the Field in the Territory (or it is determined to be commercially infeasible for Licensee, its Affiliate, and/or permitted sublicensee to be the legal and beneficial owner of all Regulatory Approvals) in order to exercise its rights and perform its obligations under this Agreement, (A) Company shall be the legal and beneficial owner of the Regulatory Approvals for Licensed Product in the Field and in the Territory, (B) Company hereby designates Licensee, its Affiliates, and/or permitted sublicensees as Company’s regulatory agent and exclusive general distributor for the Licensed Product in the Territory, and (C) to the extent later permitted by Applicable Law, Company shall promptly cooperate with Licensee, its Affiliates, and/or permitted sublicensees, including but not limited to transferring and assigning all Regulatory Approvals and Regulatory Materials to Licensee, its Affiliates, and/or permitted sublicensees, to allow Licensee, its Affiliates, and/or permitted sublicensees to be the legal and beneficial owner of all Regulatory Approvals for Licensed Products in the Field in the Territory. As such, Licensee, its Affiliates, and/or permitted sublicensees shall be solely responsible for reporting all adverse drug reactions related to Licensed Products to the appropriate Regulatory Authorities in the relevant countries in the Territory, in accordance with Applicable Law of such countries. Licensee, its Affiliates, and/or permitted sublicensees shall also be solely responsible for attending all meetings with Regulatory Authorities and fulfilling all post-Regulatory Approval commitments to Regulatory Authorities; provided that (y) in Licensee’s sole discretion, Licensee, its Affiliates, and/or permitted sublicensees may ask Third Party experts to attend any meetings with Regulatory Authorities, and (z) Company shall provide reasonable assistance to Licensee, its Affiliates, and/or permitted sublicensees, including but not limited to providing Company personnel to attend meetings with Regulatory Authorities with Licensee, its Affiliates, and/or permitted sublicensees, upon Licensee’s reasonable request and at Licensee’s cost and expense.

(b) During the Term, Licensee shall keep Company reasonably and regularly informed of the submission to Regulatory Authorities of all material Regulatory Materials, meetings with Regulatory Authorities, and receipt of, or any material changes to existing, Regulatory Approvals, in each case for the Licensed Product in the Territory. Any new Regulatory Materials, to the extent created by Licensee, its Affiliates or its sublicensees, shall be provided to Company at least [***] calendar days prior to the submission to Regulatory Authorities (or at a different time mutually agreed upon by the Parties) for the Company’s review, and Licensee shall consider in good faith any comments Company may have on such Regulatory Materials.

(c) Without limiting the foregoing, Licensee shall keep Company reasonably informed, in a timely manner, of any Information that Licensee receives (directly or indirectly) that (i) raises any material concerns regarding the safety or efficacy of the Licensed Product; (ii) indicates or suggests a potential material liability of either Party to Third Parties in connection with the Licensed Product; (iii) is reasonably likely to lead to a recall or market withdrawal of the Licensed Product; or (iv) relates to the Licensed Product and is reasonably likely to have a material adverse impact on a Regulatory Approval or the Commercialization of the Licensed Product.

(d) Company hereby grants to Licensee a right of reference to all Regulatory Materials Controlled by Company with respect to Licensed Products as of the Effective Date and

during the Term solely for the purpose of obtaining or maintaining the Regulatory Approvals for the Licensed Product in the Territory. Licensee hereby grants to Company a right of reference to all Regulatory Materials Controlled by Licensee, its Affiliates, or its permitted sublicensees with respect to Licensed Products during the Term solely for the purpose of obtaining or maintaining the Regulatory Approvals for Licensed Product outside the Territory.

(e) Details regarding the management of information of adverse events related to the clinical Development and the use of the Licensed Product in and outside the Territory shall be delineated in a separate pharmacovigilance agreement that shall be agreed to by the Parties within [****] calendar days after the Effective Date. Each Party shall be primarily responsible for filing of all required reports with respect to adverse events in its own territory as required under Applicable Law.

(f) Notwithstanding anything in this Agreement or the Development Plan to the contrary, Licensee must (i) (w) apply to the NMPA for the applicable Clinical Trial approval or Regulatory Approval for mTNBC cancer in PRC within [***] months of Marketing Approval by the FDA of the Drug Approval Application for the mTNBC indication (provided that all documents for U.S. approval reasonably necessary for Licensee to file for Clinical Trial approval or Regulatory Approval (as applicable) have been transferred to Licensee), and (x) if needed, perform an add-on Clinical Trial for the mTNBC Indication, and (ii) apply to the NMPA for the Regulatory Approval for each other Priority Indication (y) within [***] months of the filing of a Drug Approval Application for the Licensed Product for the same Priority Indication by Company in the U.S. if the PRC is included in the Global Study for such Priority Indication or (z) within [***] months of any Regulatory Approval of the Licensed Product for the same Priority Indication in the U.S. if (A) the PRC is not included in the Global Study for such Priority Indication and (B) nonetheless the data from the Global Study for such Priority Indication is deemed sufficient for a Drug Approval Application by the NMPA and no additional Clinical Trial is needed; provided, however, that (1) Licensee may request Company’s consent for a reasonable extension to any time period set forth in clauses (i)-(ii) to the extent it has been reasonably diligent and actively pursuing Development for such, such consent not to be unreasonably withheld, conditioned or delayed; and (2) Company shall provide all relevant data Controlled by Company or its Affiliates to the extent necessary or reasonably useful for such filing pursuant to the terms and conditions hereunder at least, to the extent feasible, [***] months prior to any anticipated filing date of any filing to the NMPA by Licensee. The Parties shall mutually agree upon filing timelines for Regulatory Approval related to any indications in addition to the Priority Indications.

(g) Licensee shall be responsible for, and bear the costs of, all regulatory activities with respect to the Licensed Product in the Territory.

5.11 Materials; Limited Use.

(a) Transfer of Materials. In order to facilitate the Development Plan, Company shall, to the extent allowed by Applicable Law, provide to Licensee, its permitted Affiliates or sublicensees, certain Materials owned by Company or its Affiliates that are necessary or reasonably useful for Licensee to perform its obligations under the Development Plan or this Agreement (“Transferred Materials”).

(b) Limited Use. Licensee shall use the Transferred Materials solely for the activities provided for in this Agreement (including the Development Plan). Except as necessary or reasonably useful to carry out the activities described in this Agreement and the Development Plan, Licensee, or any of its permitted Affiliates or sublicensees shall not, without the express prior written consent of Company, (i) cause or permit the transfer of any Transferred Materials or any Materials derived therefrom to any Third Party, or (ii) attempt to reverse engineer, reconstruct, synthesize or otherwise modify or copy any Transferred Materials.

(c) Experimental Material. The Parties acknowledge that the Transferred Materials are experimental in nature and may have unknown characteristics and therefore agree to use prudence and reasonable care in the use, handling, storage, transportation and disposition and containment of the Transferred Materials.

(d) Compliance with Laws. Each of the Parties shall use the Transferred Materials in compliance with Applicable Law.

ARTICLE 6

COMMERCIALIZATION

6.1 Commercialization of Licensed Products. Licensee shall have sole responsibility for Commercialization of Licensed Products in the Field in the Territory, subject to Section 3.1. Licensee shall have the sole discretion with respect to the Commercialization, Commercialization strategies, and pricing of the Licensed Products in the Field in the Territory. Notwithstanding the foregoing, Company shall, at Licensee’s cost and expense, reasonably cooperate with Licensee by providing all data Controlled by Company or its Affiliates during the Term to the extent necessary or reasonably useful for (a) the Commercialization of the Licensed Product in the Field in the Territory and (b) obtaining and maintaining of any Marketing Approvals of the Licensed Product in the Field in the Territory. Notwithstanding the foregoing, Company shall (i) for the [***] months following the initiation of the Commercialization of the Licensed Product, provide a reasonable amount of hours of such assistance to Licensee pursuant to this Section 6.1 free of charge (for clarity, such amount shall be uncapped for so long as it is reasonable); (ii) thereafter, provide up to [***] total hours of employee and/or fulltime contractor time per month pursuant to this Section 6.1 free of charge. For clarity, Licensee shall not be responsible for any costs or expenses incurred by Company, its Affiliates or their respective employees or contractors for the normal activities performed by Company’s employees and contractors at the JSC level, routine communications or activities regarding the Development and Commercialization in the Territory, communications with or between Licensee’s and/or Company’s executive officers (including CEO, CFO, COO, CFO, CBO, CMO) and the like, including discussing, updating, and reviewing the Development Plan and Commercialization Plan.

6.2 Commercialization Plan. Commercialization of the Licensed Product under this Agreement shall be governed by a written Commercialization plan that describes the anticipated Commercialization activities to be performed with respect to Licensed Product in the Territory by Licensee, its Affiliates, or it permitted sublicensees, as well as projected timelines and lineitem quarterly budgets for such activities (the “Commercialization Plan”). Each Commercialization

Plan shall address, in reasonable detail, call plans for detailing of Licensed Product, sales force training, sample distribution strategies and quantities, product positioning and communication strategy, and advertising. Licensee shall prepare and present to the JSC for review the initial Commercialization Plan no later than [***] months prior to the first anticipated Marketing Approval in the Territory; provided, however, that for clarity, the JSC shall not have the right to approve the Commercialization Plan. As often as Licensee deems appropriate, Licensee shall, update or amend the then-current Commercialization Plan; provided, however, that Licensee shall submit to the JSC an updated or amended Commercialization Plan on at least a semi-annual basis. Once presented to the JSC, such updated or amended Commercialization Plan shall become effective immediately and supersede the then-current Commercialization Plan immediately prior to such presentation. Licensee shall use Commercially Reasonable Efforts to perform the tasks and obligations set forth in the Commercialization Plan in accordance with the projected timelines set forth therein and in accordance with the terms and conditions of this Agreement. At Licensee’s request, Company shall provide additional Commercialization support for the Commercialization of the Licensed Product in the Territory, including, but not limited to, training, travel for training, global market research, global launch readiness, and other related Commercialization activities; provided, however, that Licensee shall reimburse Company for any reasonable costs and expenses incurred thereof. In the event of any inconsistency between the Commercialization Plan and this Agreement, the terms of this Agreement shall prevail.

6.3 Commercial Diligence.

(a) Licensee shall use Commercially Reasonable Efforts, either by itself or through permitted Affiliates or sublicensees, to market, promote and Commercialize Licensed Products in the Field in the Territory, subject to any Regulatory Approvals that may be necessary in particular countries prior to conducting certain Commercialization activities.

(b) Licensee shall use Commercially Reasonable Efforts to (i) Commercialize the Licensed Product in the Territory to maximize the commercial return; and (ii) allocate reasonably sufficient resources for conducting necessary Commercialization activities, including, but not limited to, fielding, training (including any reasonably necessary medical education) and supervising a sales force (including an appropriate management structure), in each case consistent with the Commercialization Plan. For the first [***] Priority Indications of the Licensed Product that Licensee (or such Affiliates or permitted sublicensee) obtains Regulatory Approvals for:

(i) The Licensed Product, on an indication-by-indication and regionby- region basis, [***] following commercial launch of the Licensed Product for an indication in a region in the Territory for a period of [***] years after Licensee (or such Affiliates or permitted sublicensee) obtains the Marketing Approval for the Licensed Product for such indication in such region (the “[***]Period”); provided that if Licensee (or such Affiliate or sublicensee) obtains the Marketing Approval for the Licensed Product for a later indication within [***] years following the Marketing Approval for the Licensed Product for an earlier indication, the [***] Period for the Licensed Product for the earlier indication shall terminate automatically on the day

immediately prior to the date of the Marketing Approval for the Licensed Product for the later indication.

(ii) On an indication-by-indication and region-by-region basis, during the corresponding [***] Period for the Licensed Product for an indication in a region, incentives of Licensee’s (or such Affiliate’s or permitted sublicensee’s) sales representatives for the Licensed Product will be [***].

6.4 Commercialization Costs. Licensee shall be responsible for all costs and expenses associated with the Commercialization of Licensed Product in the Territory, including, but not limited to, importing, exporting, distributing, marketing, advertising, promoting and selling the Licensed Product in the Territory.

6.5 Commercialization Reporting. Licensee shall keep the JSC and Company regularly informed about all of Licensee’s efforts to Commercialize the Licensed Products, including progress towards meeting the goals and milestones in the Commercialization Plan, significant Developments in the Commercialization of the Licensed Products, any reasons for any deviations or variances (either in time or in sales or other numerical figures) in meeting sales projections, milestones or timelines in the Commercialization Plan, and any proposed changes in its marketing strategies. Such disclosures shall be made in a written report provided to the JSC and Company at least once every [***] months for as long as Licensed Products are being sold in the Territory.

6.6 Cross-Territory Sales. Neither Party shall Commercialize or authorize the Commercialization of any Licensed Product in the other Party’s territory. Neither Party shall, itself or through other Persons, directly solicit, advertise, sell, distribute, ship, consign, or otherwise transfer any Licensed Product outside such Party’s territory. Without limiting the generality of the foregoing, neither Party shall sell any Licensed Product to a purchaser if such Party knows, or has reasons to believe, that such purchaser intends to export such Licensed Product from such Party’s territory for sale outside such Party’s territory. Each Party shall use Commercially Reasonable Efforts to ensure that its Affiliates, sublicensees, distributors, and wholesalers comply with all of the foregoing obligations.

6.7 Right of First Negotiation for Co-Commercialization. In the event that after the Effective Date and during the Term that Company is acquired by an Acquirer, Licensee shall provide a copy of the Drug Approval Application in the PRC to Acquirer within [***] calendar days of the later of (a) Licensee’s receipt of Company’s written notice of the closing of such acquisition or (b) the date that Licensee files such Drug Approval Application. Within [***] calendar days after its receipt of such Drug Approval Application, Acquirer may provide written notice to Licensee of Acquirer’s interest in negotiating a license to co-Commercialize the Licensed Product in the Field in the Territory. Only if Acquirer provides notice to Licensee during such [***]-day period and Acquirer and Licensee are able to negotiate and reach a definitive agreement with respect to the co-Commercialization of the Licensed Product in the Territory within [***] calendar days from the date of such notice from Acquirer, shall Acquirer have the co-

Commercialization rights with respect to the Licensed Product in the Field in the Territory during the Term in accordance with such agreement.

ARTICLE 7

MANUFACTURING

7.1 Non-Commercial Supply of Licensed Product.

(a) Subject to the terms of this Article 7, the Non-Commercial Supply Agreement and Non-Commercial Quality Agreement, Company shall, itself or through one or more Third Party contract manufacturers, supply all quantities of the Licensed Product as required (i) for Clinical Trials in the Territory at the Transfer Price or (ii) for quality inspection by Regulatory Authorities in the Territory at no cost to Licensee. Such quantities of the Licensed Product and the schedule of such supply shall be confirmed by the JSC and consistent with the Development Plan. Licensed Products for any patient assistance program in the Territory shall be supplied at no cost to Licensee in a manner and amount to be determined and approved by the JSC.

(b) Non-Commercial Supply Agreement. Customary terms of forecasting and ordering procedures, Licensed Product specifications, and other operational matters relating to the supply of Licensed Product under Section 7.1(a) shall be set forth in a non-commercial supply agreement to be mutually agreed upon by the Parties consistent with this ArticleARTICLE 7 no later than [***] calendar days after the Effective Date (the “Non- Commercial Supply Agreement”). In connection with such Non-Commercial Supply Agreement, the Parties shall enter into a quality agreement governing the agreed upon specifications and other technical aspects of the Licensed Product and including all regulatory requirements for the Licensed Products for the Development of the Licensed Products in the Territory (the “Non-Commercial Quality Agreement”).

7.2 Commercial Supply Agreement. Within [***] following the Effective Date, the Parties shall negotiate in good faith and enter into a commercial supply agreement (the “Commercial Supply Agreement”) under which Company shall supply, itself or through one or more Third Party contract manufacturers, Licensed Products to Licensee for sale in the Field in the Territory consistent with this ArticleARTICLE 7. Subject to Section 7.3, Company shall supply Licensed Product in the final ready-to-use form or in vial form for final-packaging in the Territory at Transfer Price in accordance with the terms and conditions of the Commercial Supply Agreement. The Commercial Supply Agreement shall include customary forecasting and supply terms that Licensee shall provide Company with forecasts based on historical and future demands in the Territory on a quarterly basis. In connection with such Commercial Supply Agreement, the Parties shall enter into a quality agreement governing the agreed upon specifications and other technical aspects of the Licensed Product and including all regulatory requirements for the Licensed Products for the Commercialization of the Licensed Products in the Territory (the “Commercial Quality Agreement”). Notwithstanding anything to the contrary herein, the Parties may mutually agree to enter into one (1) supply agreement to govern all matters to be addressed in the Non-Commercial Supply Agreement and the Commercial Supply Agreement and one (1) quality agreement to govern all matters to be addressed in the Non-Commercial Quality Agreement and the Commercial Quality Agreement.

7.3 Commercial Supply Price Adjustment. If the Transfer Price for the Licensed Product for commercial sale exceeds (a) $[***] per gram after [***], (b) $[***] per gram after [***], (c) $[***] per gram after [***], or (d) $[***] per gram after [***] (each, the “Supply Price Cap”), then Licensee shall be entitled to deduct the excess from any royalty payments owed during the Term on sales of any Licensed Product on a Dollar-for-Dollar basis for so long as necessary to recoup the amounts Licensee paid to Company for Licensed Product at a Transfer Price that exceeded any applicable Supply Price Cap; provided, however, in no event shall Company be required to reimburse any amounts paid by Licensee to Company due to such excess.

7.4 Supply Shortage. In the event of a shortage of supply of the Licensed Product, whether due to a force majeure event or otherwise, Company shall allocate supplies of Licensed Product to Licensee for its Development and Commercialization efforts on a pro rata basis based off of Licensee’s remaining binding forecast under the Non-Commercial Supply Agreement and Commercial Supply Agreement and actual demand at the time of such supply; provided that in the event of a shortage of clinical supply of the Licensed Product to Licensee, Company shall (a) use Commercially Reasonable Efforts, to the extent reasonably practical, to convert any Licensed Products manufactured by Company or on Company’s behalf for Commercialization by any party to the Licensed Products that can be used by Licensee for Development in the Territory and (b) supply such converted Licensed Products to Licensee in accordance with the Non- Commercial Supply Agreement. For clarity, in the event that Company determines that supply of the Licensed Product to Licensee for Commercialization based off of the remaining binding forecast and actual demand constitutes [***] percent ([***]%) of all Licensed Product manufactured by Company or on Company’s behalf, Licensee shall be allocated [***] percent ([***]%) of all Licensed Product during such shortage, subject to reasonable adjustment from time to time due to changes in forecast and actual demand.

7.5 Manufacture by Licensee. Licensee shall not be permitted to manufacture Licensed Product inside or outside of the Territory without the written consent of Company. During the Term, upon Licensee’s request, Company shall (a) discuss with Licensee in good faith and (b) have the discretion to determine whether to transfer the manufacture capabilities of the Licensed Product in the Territory by (i) designating a Company Affiliate or a contract manufacturing organization (a “CMO”) to manufacture the Licensed Product in the Territory, (ii) transferring to such Affiliate or CMO the Information Controlled by Company or its Affiliates to the extent necessary or reasonably useful for the manufacture of Licensed Product in the Territory, (iii) permitting such Affiliate or CMO to deliver Licensed Product so manufactured by the CMO directly to Licensee, its Affiliates or permitted sublicensees; provided, however, Company shall have no obligation to transfer the manufacture capabilities of the Licensed Product in the Territory to Licensee.

ARTICLE 8

FINANCIAL PROVISIONS

8.1 Upfront Payment. Within thirty (30) Business Days after the Effective Date, Licensee shall pay to Company a one-time upfront payment of sixty-five million Dollars ($65,000,000). Such payment shall be non-refundable and shall not be creditable against any other

other amount due to Company pursuant to this Agreement. In the event that such payment is not made in accordance with this Section 8.1, Company shall have the right to immediately terminate this Agreement upon written notice. Notwithstanding the foregoing, in the event that (a) the FDA does not approve the Licensed Product for the mTNBC (3rd line) indication within [***] months, or such later date in the event that the FDA extends its review period, following Company’s resubmission of the BLA for the Licensed Product, (b) the NMPA does not approve the Licensed Product for the mTNBC (3rd line) indication prior to [***], and (c) Company does not file for Regulatory Approval from the FDA for the Licensed Product for the UC indication prior to [***], then Company shall issue to Licensee a credit in the amount of [***] Dollars ($[***]) which may be netted against certain Development milestone payments otherwise payable to Company as follows: (i) [***] Dollars ($[***]) for any ER+ HER2- mBC Development milestone, (ii) [***] Dollars ($[***]) for any UC Development milestone, (iii) [***] Dollars ($[***]) for any mTNBC Development milestone, and (iv) [***] Dollars ($[***]) for the Fourth Indication Milestone.

8.2 Development Milestone Payments. Licensee shall pay to Company the onetime milestone payments set forth in the table below within [***] Business Days upon and only after the first achievement of the listed milestone events with respect to the first Licensed Product to achieve such milestone. Licensee shall notify Company within [***] Business Days after the occurrence of each milestone event under this Section 8.2.



Milestone	Amount (USD)
FDA approval for the Licensed Product in an mTNBC indication for patients who have received at least two prior anti-cancer therapies in the metastatic setting (the “$60M mTNBC Milestone”)	$60M
The first Marketing Approval in the PRC for the Licensed Product in an mTNBC indication for patients who have received at least two (2) prior anti-cancer therapies in the metastatic setting	$[***]
The first Marketing Approval in the PRC for the Licensed Product in an mTNBC indication for patients who have received at least one (1) prior anti-cancer therapy in the metastatic setting	$[***]
The first Marketing Approval in the PRC for the Licensed Product in an ER+ HER2- mBC indication for patients who have received two (2) prior chemotherapies in the metastatic setting	$[***]
The first Marketing Approval in the PRC for the Licensed Product in an ER+ HER2- mBC indication for patients who have not received prior chemotherapy in the metastatic setting	$[***]
The first Marketing Approval in the PRC for the Licensed Product in a UC indication	$[***]
The first Marketing Approval in the PRC for the Licensed Product in one of the following indications: [***] (the “Fourth Indication Milestone”)	$[***]



The first Marketing Approval in the PRC for the Licensed Product in an indication for any cancer not covered in any of the above milestones for up to four (4) additional cancers	$[***]
The first patient is recruited by Licensee in the PRC that is a part of a Global Study to register the Licensed Product in a for a [***] indication	$[***]

Notwithstanding the foregoing, Company shall issue to Licensee a refund of the $60M mTNBC Milestone in the amounts and upon occurrence of the events set forth below within [***] Business Days of occurrence of such events:

(a) [***] Dollars ($[***]) in the event that (i) the FDA revokes its approval for the mTNBC indication within [***] months of issuing its approval, and (ii) (A) Company’s ASCENT trial fails to achieve its overall survival (“OS”) endpoint and progression-free survival (“PFS”) endpoint and (B) a prospectively defined high TROP-2 subgroup (with a score of 3 or 4) trial fails to achieve its OS endpoint and its PFS endpoint;

(b) [***] Dollars ($[***]) in the event that either (i) the FDA revokes its approval for the mTNBC indication within [***] months of issuing its approval or (ii) (A) Company’s ASCENT trial fails to achieve its OS endpoint and PFS endpoint and (B) a prospectively defined high TROP-2 subgroup (with a score of 3 or 4) trial fails to achieve its OS endpoint and its PFS endpoint; or

(c) [***] Dollars ($[***]) in the event that the FDA revokes its approval for the mTNBC indication during the period commencing any time after [***] months after the FDA issued its approval and ending [***] months after the FDA issued its approval.

8.3 Sales Milestones. During the Standard Royalty Term, Licensee shall pay to Company each of the one-time milestone payments set forth below within [***] Business Days upon and only after Net Sales of all Licensed Products in the Territory first exceed the indicated Dollar value in a Calendar Year; and during the Additional Royalty Term, to the extent any such milestones have not been achieved during the Standard Royalty Term, Licensee shall pay to Company [***] percent ([***]%) of each corresponding one-time milestone payments set forth below within [***]([***]) Business Days upon and only after Net Sales of all Licensed Products in the Territory first exceed the indicated Dollar value in a Calendar Year. Licensee shall promptly notify Company of the occurrence of the first achievement of each such sales level.



Annual Net Sales in the Territory	Milestone Payment
$[***]	$[***]
$[***]	$[***]
$[***]	$[***]



$[***]	$[***]
$[***]	$[***]
$[***]	$[***]

8.4 Non-creditable Payments. All milestone payments made to Company pursuant to Sections 8.2 and 8.3 shall be non-refundable and shall not be creditable against any other amount due to Company pursuant to this Agreement. For clarity, each milestone payment under Sections 8.2 and 8.3 shall be only paid once by Licensee, upon the first achievement of such event.

8.5 Royalty Payments.

(a) Royalty Rates. Subject to Sections 7.3 and 8.5(b), during the Standard Royalty Term, Licensee shall pay to Company a royalty based upon a percentage of Net Sales as follows:

(i) 14% of the portion of annual Net Sales up to $[***];

(ii) [***]% of the portion of annual Net Sales more than $[***] but less than or equal to $[***];

(iii) [***]% of the portion of annual Net Sales more than $[***] but less than or equal to $[***]; and

(iv) 20% of the portion of annual Net Sales more than $[***]. Subject to Sections 7.3 and 8.5(b), during the Additional Royalty Term, Licensee shall pay to Company a royalty based on a percentage of Net Sales equal to [***] percent ([***]%) of applicable royalties that Licensee would need to pay to Company if the corresponding Net Sales occurred during the Standard Royalty Term.

For clarity, for the royalties payments in each Calendar Quarter, the above tiered royalties are calculated such that the higher tiered royalties are only paid after the Net Sales in such Calendar Year exceed the top threshold of the previous tier.

(b) Royalty Adjustments.

(i) Competing ADC Product Entry. In the event that (i) one (1) or more Competing ADC Products comes to the market in a region or country in the Territory (other than by Licensee, its Affiliate, any permitted sublicensee, or any Person in a chain of distribution with any of the foregoing) and (ii) after the entry of such one (1) or more Competing ADC Products in such region or country, in any given Calendar Quarter of any given year, the Licensed Product’s market share for all TROP-2 antibody-drug conjugates for the applicable indication in such region or country during the one (1)-year period ending on the last day of such Calendar Quarter of such year decreases by [***] percent ([***]%) from the Licensed Product’s market share for all TROP-

2 antibody-drug conjugates for the applicable indication in such region or country during the one (1)-year period ending on the last day preceding the entry of such one (1) or more Competing ADC Products, the royalty due above shall be reduced to [***] percent ([***]%) of Gross Profit, including the royalties incurred during such Calendar Quarter of such year; provided, however, that in the event that the Competing ADC Product later leaves the market in such region or country, such reduction shall cease and the original royalty shall be reinstated.

(ii) Notwithstanding the foregoing, during any Calendar Quarter in the Royalty Term for a Licensed Product in a particular region or country in the Territory, the operation of Section 8.5(b)(i) shall not reduce the final royalties to less than [***] percent ([***]%) of the royalties that would have applied prior to any reduction, in each case, in such region or country during such Calendar Quarter.

ARTICLE 9

PAYMENTS; PAYMENT REPORTS; AUDITS

9.1 Timing of Payment. Within [***] Business Days after the end of each Calendar Quarter, commencing with the Calendar Quarter during which the First Commercial Sale of a Licensed Product is made anywhere in the Territory, Licensee shall provide Company with a report that contains the following information for the applicable Calendar Quarter, on a region-by-region basis: (a) the amount of Net Sales of such Licensed Product, (b) a calculation of the royalty payment due on such Net Sales, including any royalty reduction made in accordance with Section 8.5(b) and commercial supply price adjustment in accordance with Section 7.3, and (c) the exchange rate used for converting any Net Sales recorded in a currency other than Dollars. Promptly following the delivery of the applicable quarterly report, Company shall invoice Licensee for the royalties due to Company with respect to Net Sales by Licensee, its Affiliates and their respective sublicensees for such Calendar Quarter, and Licensee shall pay such amounts to Company in Dollars within [***] Business Days following Licensee’s receipt of such invoice; provided that, if a government or regulatory action (or inaction) prevents Licensee from making such payment to Company within such [***]-Business Day period, then Licensee shall have up to [***] Business Days following its receipt of such invoice from Company to remit such payment to Company.

9.2 Sublicenses. In the event Licensee grants licenses or sublicenses to others to sell Licensed Products, such licenses or sublicenses shall include an obligation for the sublicensee to account for and report its sales of Licensed Products on the same basis as if such sales were sales by Licensee, and Licensee shall pay to Company, with respect to such sales, such royalties as if such sales of the sublicensee were sales of Licensee.

9.3 Mode of Payment. All payments to Company hereunder shall be made by deposit of Dollars by wire transfer in immediately available funds in the requisite amount to such bank account as Company may from time to time designate by notice to Licensee.

9.4 Payment Reports and Records Retention. Prior to or simultaneously with each payment of royalty payment due under Section 9.1, Licensee shall deliver to Company a written report that shall contain at a minimum for the applicable Calendar Quarter:

(a) the number of units of each Licensed Product sold by Licensee or its Affiliates or sublicensees (on a region-by-region basis);

(b) the Net Sales of each Licensed Product (on a region-by-region basis);

(c) a calculation of the amount of royalty payment due on sales during such Calendar Quarter, and calculations showing how such royalties were determined, including the royalty rate(s) applied to calculate the royalties due;

(d) the amount of taxes, if any, withheld to comply with any Applicable Law;

(e) the exchange rates used in determining the payments due Company; and

(f) any royalty offsets or other adjustments applied in calculating the royalties due to Company, and stepwise calculations showing the royalties due to Company for the applicable Licensed Product after any such offset or adjustments.

For three (3) years after each sale of each Licensed Product, Licensee shall, and shall cause its Affiliates and sublicensees to, keep complete and accurate records of such sales in sufficient detail to confirm the accuracy of the royalty and other payment calculations hereunder.

9.5 Audits.

(a) Upon the written request of Company, and not more than [***] in each Calendar Year (except in the event that Company has reasonable cause), Licensee shall permit an independent certified public accounting firm selected by Company and reasonably acceptable to Licensee, to have access to and to review, during normal business hours and upon no less than [***] Business Days prior written notice, the applicable records of Licensee and its Affiliates to verify the accuracy and timeliness of the reports and payments made by Licensee under this Agreement. Such review may cover the records for sales made in any Calendar Year ending not more than [***] years prior to the date of such request. The accounting firm shall disclose to Company only whether the royalty reports are correct or incorrect and the specific details concerning any discrepancies.

(b) If such accounting firm concludes that any payments were late or additional amounts were owed during such period, Licensee shall pay the late payments and/or additional amounts, with interest from the date originally due as set forth in Section 9.6, within [***] Business Days after the date Company delivers to Licensee a notice referencing the accounting firm’s written report and requesting such payment. If the amount of the underpayment is greater than [***] percent ([***]%) of the total amount actually owed for the period audited, then Licensee shall reimburse Company for all costs related to such audit; otherwise, Company shall pay all costs of the audit. In the event of overpayment, any amount of such overpayment shall be fully creditable against amounts payable for the immediately succeeding Calendar Quarter(s); provided,

however, that in no event shall Company be required to reimburse Licensee for any such overpaid amounts out-of-pocket.

(c) Licensee shall include in each sublicense granted by it pursuant to this Agreement a provision requiring the sublicensee to make reports to Licensee, to keep and maintain records of sales made pursuant to such distribution agreement or sublicense and to grant access to such records by Company’s independent accountant to the same extent required by Licensee under this Agreement.

(d) Company shall (i) treat all information that it receives under this Section 9.5 or under any sublicense agreement of Licensee in accordance with the confidentiality provisions of Article 11 and (ii) cause its accounting firm to enter into a reasonably acceptable confidentiality agreement with Licensee obligating such firm to retain all such financial information in confidence pursuant to such confidentiality agreement, in each case except to the extent necessary for Company to enforce its rights under this Agreement.

9.6 Interest. If Licensee fails to make any payment due to Company under this Agreement, then interest shall accrue on all unpaid amounts on a daily basis from the date such payment was due at an annual rate of [***] percentage points above the then-applicable prime rate published by the Wall Street Journal (or, if not available therein, as quoted in a reputable source reasonably acceptable to both Parties), on the first day of such Calendar Quarter, or at the maximum rate permitted by Applicable Law, whichever is the lower. The imposition and payment of any interest shall not constitute a waiver of Company’s rights with respect to any payment default by Licensee.

9.7 Taxes.

(a) Tax Responsibilities. To the extent (i) any payment under this Agreement is triggered due to the activities of Licensee’s Affiliate or sublicensee incorporated or established in the PRC and Applicable Law in the PRC requires the deduction or withholdings of income taxes in relation to such payment if it were to be made from such Licensee’s Affiliate or sublicensee to Company, and (ii) Licensee receives a payment from such Licensee’s Affiliate or sublicensee in relation to such activities and such payment is reduced due to deduction or withholding of income taxes required by Applicable Law to be made on such payment, then (A) Licensee shall have the right to deduct an amount that equals to such deducted or withheld income taxes from the payment due to Company under this Agreement, and (B) Licensee shall pay the remainder of the payment after such deductions or withholdings to Company, and (C) Licensee shall use Commercially Reasonable Efforts to obtain any credit or refund available to avoid or minimize such income tax deductions or withholdings; provided that (1) if Licensee obtains a credit or refund for such deductions or withholdings, Licensee shall pay to Company such obtained credit or refund, and (2) Licensee shall not be obligated to pay Company any portion of such deductions or withholdings that Licensee is unable to obtains a credit or refund for.

(b) VAT. All payments are stated exclusive of VAT and VAT-related miscellaneous tax. Accordingly, if any VAT or VAT related miscellaneous tax is chargeable on the recipient of any payment, Licensee shall pay an additional amount equal to such VAT and, as

appropriate, VAT related miscellaneous tax at the applicable rate in respect of such payment, on the due date of the payment to which such VAT and, as appropriate, VAT related miscellaneous tax relates. If VAT or VAT related miscellaneous tax is required to be withheld or deducted from any payment, Licensee shall inform Company in writing at least [***] calendar days prior to the invoice being required and shall increase the payment by such sum as will, after the deduction or withholding has been made, leave Company with the same amount as it would have been entitled to receive in the absence of any such requirement to make a deduction or withholding.

ARTICLE 10

INVENTIONS AND PATENTS

10.1 Ownership of Inventions. Each Party shall own all Inventions generated solely by it and its Affiliates and their respective employees, agents and independent contractors in the course of conducting such Party’s activities under this Agreement (collectively, “Sole Inventions”). All Inventions that are generated jointly by employees, Affiliates, agents, or independent contractors of each Party in the course of performing activities under this Agreement (collectively, “Joint Inventions”) shall be owned jointly by the Parties in accordance with joint ownership interests of co-inventors under the U.S. patent laws (that is, each Party shall have full rights to license, assign and exploit such Joint Inventions (and any Patents arising therefrom) anywhere in the world, without any requirement of gaining the consent of, or accounting to, the other Party), subject to the licenses granted herein and subject to any other intellectual property held by such other Party. Inventorship shall be determined in accordance with the U.S. patent laws. Notwithstanding the foregoing, any and all changes, discoveries, improvements, developments, enhancements or modifications (“Improvements”) to the Licensed Product, Company Patents or Company Know-How developed by Licensee in the course of the Development, make, use or sale of the Licensed Product shall be owned by Company; provided, however, that any such Improvements are hereby incorporated into the license grant under Section 2.1 during the Term without any additional consideration owed by Licensee. Licensee hereby transfers and assigns (and shall cause its, its Affiliates’ and its sublicensees’ employees, agents, contractors, subcontractors, and representatives to transfer and assign) to Company all right, title and interest that Licensee may have in and to any Improvements and all intellectual property rights related thereto. Licensee shall sign and deliver any and all documents reasonably required by Company to implement such assignment and transfer to Company of such and take such other actions as may be necessary or reasonably requested by Company to document the aforesaid assignment and transfer of the Improvements to Company, or to enable Company to secure, register, maintain, enforce or otherwise fully protect its rights in and to the Improvements and all intellectual property rights related thereto. If Company is unable because of Licensee’s unavailability, refusal, dissolution or for any other reason to secure a signature by or on behalf of Licensee to apply for or to pursue any application, registration, filing or other instrument for intellectual property rights covering the Improvements, then Licensee hereby irrevocably designates and appoints Company and its duly authorized officers and agents as Licensee’s agent and attorney in fact, to act for and on Licensee’s behalf and stead to execute and file any such application, registration, filing or other instrument, and to do all other lawfully permitted acts to further the prosecution and issuance of such intellectual property rights, with the same legal force and effect as if executed by Licensee.

10.2 Disclosure of Inventions. Each Party shall promptly disclose to the other all Sole Inventions, Joint Inventions and (in the case of Licensee) Improvements, including all invention disclosures or other similar documents submitted to such Party by its, or its Affiliates’, employees, agents or independent contractors describing such Sole Inventions, Joint Inventions or Improvement. Such Party shall also respond promptly to reasonable requests from the other Party for more Information relating to such Inventions.

10.3 Key Patents. During the Term, Company shall prosecute and maintain the Key Patents licensed to Licensee pursuant to Section 2.1.

10.4 Prosecution of Patents.

(a) Company Patents. Except as otherwise provided in this Section 10.4(a), as between the Parties, Company shall have the sole right and authority to prepare, file, prosecute (including any oppositions, interferences, reissue proceedings, reexaminations and post-grant proceedings) and maintain the Company Patents in any jurisdiction in the Territory. Company shall provide Licensee with a reasonable opportunity to review and comment on such filing and prosecution efforts regarding such Company Patents in the Territory, to the extent relevant to the Licensed Product, reasonably prior to any submissions with applicable patent authorities. To the extent relevant to the Licensed Product, Company shall provide Licensee with a copy of material communications from any patent authority in the Territory regarding such Company Patents, and shall provide drafts of any material filings or material responses to be made to such patent authorities a reasonable amount of time in advance of submitting such filings or responses so that Licensee may have an opportunity to review and comment thereon. If Company determines in its sole discretion to abandon, cease prosecution or not maintain any Company Patent anywhere in the Territory, then Company shall provide Licensee written notice of such determination at least [***] calendar days before any deadline for taking action to avoid abandonment (or other loss of rights) and shall provide Licensee with the opportunity to prepare, file, prosecute and maintain such Company Patent in the Territory on behalf of Company and in Company’s name. Licensee’s rights under this Section 10.4(a) with respect to any Company Patent licensed to Company by a Third Party shall be subject to the rights of such Third Party to file, prosecute, and/or maintain such Company Patent in the Territory. Licensee shall reimburse Company for all internal and out-of-pocket costs (including external patent attorney fees) incurred by Company in the course of preparing, filing, prosecuting and maintaining the Company Patents, on a monthly basis based on invoices submitted by Company. If Licensee assumes responsibility for any Company Patents pursuant to this Section 10.4(a), then all costs incurred by Licensee in the course of preparing, filing, prosecuting and maintaining such Company Patents shall be borne by Licensee, without reimbursement by Company.

(b) Licensee Patents. Licensee shall have the sole right and authority to prepare, file, prosecute (including any oppositions, interferences, reissue proceedings reexaminations and post-grant proceedings) and maintain the Licensee Patents. Licensee shall provide Company with a reasonable opportunity to review and comment on such prosecution efforts regarding Licensee Patents claiming Licensee’s Sole Inventions. Licensee shall provide Company with a copy of material communications from any patent authority regarding such Licensee Patents claiming Licensee’s Sole Inventions, and shall provide drafts of any material

filings or material responses to be made to such patent authorities a reasonable amount of time in advance of submitting such filings or responses. Licensee shall be responsible for all costs incurred by it in the course of preparing, filing, prosecuting and maintaining the Licensee Patents, without reimbursement by Company.

(c) Joint Patents. With respect to any potentially patentable Joint Invention, Licensee shall have the first right, but not the obligation, to prepare patent applications based on such Joint Invention, to file and prosecute (including any oppositions, interferences, reissue proceedings, reexaminations and post-grant proceedings) such patent applications, and to maintain any Patents issuing therefrom (any such Patent, a “Joint Patent”). Licensee shall provide Company with a reasonable opportunity to review and comment on such prosecution efforts regarding such Joint Patent, and Company shall provide Licensee reasonable assistance in such efforts. Licensee shall provide Company with a copy of all material communications from any patent authority in the applicable jurisdictions regarding the Joint Patent being prosecuted by Licensee, and shall provide drafts of any material filings or material responses to be made to such patent authorities a reasonable time in advance of submitting such filings or responses. Each Party agrees to provide the other Party with all information necessary or desirable to enable the other Party to comply with the duty of candor/duty of disclosure requirements of any patent authority. If Licensee declines to file, or if Licensee subsequent to filing determines that it is no longer interested in supporting the continued prosecution or maintenance of a particular Joint Patent in a country or jurisdiction: (i) then Licensee shall provide Company written notice of such determination at least [***] calendar days before any deadline for taking action to avoid abandonment (or other loss of rights) and shall provide Company with the opportunity to prepare, file, prosecute and maintain such Joint Patent, at Company’s sole cost; and (ii) Licensee shall, if requested in writing by Company, assign its ownership interest in such Joint Patent in such country or jurisdiction to Company for no additional consideration (except in the case of a U.S. Patent that is tied by a terminal disclaimer to another patent right owned by the Licensee). If such assignment is effected (or if it is not effected because of a terminal disclaimer), any such Joint Patent shall thereafter be excluded from the license granted by Company under Section 2.1. The prosecuting Party shall bear its own internal costs and out-of-pocket costs (including external patent attorney fees) incurred by such Party in respect of the filing, prosecution and maintenance of Joint Patents.

(d) Cooperation. Each Party shall provide the other Party with all reasonable assistance and cooperation in the Patent prosecution efforts provided above in this Section 10.4, including providing any necessary powers of attorney and executing any other required documents or instruments for such prosecution. Licensee shall consult with Company before applying for or obtaining any patent term extension or related extension of rights, including supplementary protection certificates and similar rights for any Company Patent or Joint Patent. Company shall provide reasonable assistance to Licensee in connection with obtaining any such extensions for the Company Patent or Joint Patent. To the extent reasonably and legally required in order to obtain any such extension in a particular country, each Party shall make available to the other a copy of the necessary documentation to enable such other Party to use the same for the purpose of obtaining the extension in such country.

10.5 Infringement by Third Parties.

(a) Notification. If there is any infringement, threatened infringement, or alleged infringement of a Key Patent, Licensee Patent, or Joint Patent on account of a Third Party’s manufacture, use, offer for sale, or sale of a Licensed Product in the Field (in each case, a “Product Infringement”), then each Party shall promptly notify the other Party in writing of any such Product Infringement of which it becomes aware, and shall provide evidence in such Party’s possession demonstrating such Product Infringement.

(b) Enforcement Rights.

(i) Key Patents and Joint Patents. Subject to Section 10.5(e) and the remainder of this Section 10.5(b)(i), Company shall have the first right, but not the obligation, to bring an appropriate suit or other action against any Person allegedly engaged in any Product Infringement of the Key Patents or the Joint Patents in the Territory (and to defend any related counterclaim). In the event Company elects not to resolve such Product Infringement or such possibility of Product Infringement, then Licensee shall have the right, but not the obligation, to commence a suit or take action to enforce the applicable Key Patents or Joint Patents with respect to such Product Infringement in the Territory. The enforcing Party shall consider in good faith the other Party’s comments with respect to strategy and negotiation of any action or proceeding, and the enforcing Party shall not, without the other Party’s prior written consent, enter into any compromise or settlement that (i) admits the invalidity of any Patent in the Territory or elsewhere in the world, or (ii) requires either Party to relinquish any Patent in the Territory or elsewhere in the world. The non-enforcing Party shall, at the request of the enforcing Party, agree to timely commence or join in any necessary litigation, and in any event to cooperate with the enforcing Party in such litigation, all at the enforcing Party’s expense. The non-enforcing Party shall have the right to consult with the enforcing Party about any such litigation and to participate in and be represented by independent counsel in such litigation at the non-enforcing Party’s own expense. The non-enforcing Party shall provide to the enforcing Party any such rights under this Section 10.5(b)(i) reasonable assistance in such enforcement, at such enforcing Party’s request and expense, including joining such action as a party plaintiff if required by Applicable Law to pursue such action. The enforcing Party shall keep the nonenforcing Party regularly informed of the status and progress of such enforcement efforts, and shall reasonably consider the non-enforcing Party’s comments on any such efforts. For the avoidance of doubt, Licensee shall have no rights under this Section 10.5(b)(i) with respect to Company Patents other than those rights expressly set forth in this Section 10.5(b)(i) regarding Key Patents.

(ii) Licensee Patents. Licensee shall have the sole right, but not the obligation, to bring an appropriate suit or other action against any Person allegedly engaged in any Product Infringement of the Licensee Patents. Company shall provide reasonable assistance to Licensee in such enforcement, at Licensee’s request and expense. Licensee shall keep Company regularly informed of the status and progress of such enforcement efforts, and shall reasonably consider Company’s comments on any such efforts. Licensee shall not, without Company’s prior written consent, enter into any compromise or settlement that (i) admits the invalidity of any Company Patent or Joint Patent in the Territory or elsewhere in the world, or (ii) requires either Party to relinquish any Company Patent or Joint Patent in the Territory or elsewhere in the world.

(c) Settlement. Without the prior written consent of the other Party, neither Party shall settle any claim, suit or action that it brought under this Section 10.5 that admits the invalidity or unenforceability of any Key Patent, Licensee Patent, or Joint Patent, requires abandonment or limits the scope of any Key Patent, Licensee Patent, or Joint Patent or would limit or restrict the ability of either Party to sell Licensed Products anywhere in the Territory.

(d) Expenses and Recoveries. A Party bringing a claim, suit or action under Section 10.5(b)(i) or 10.5(b)(ii) against any Person engaged in Product Infringement shall be solely responsible for any expenses incurred by such Party as a result of such claim, suit or action. If such Party recovers monetary damages from such Third Party in such claim, suit or action, such recovery shall be allocated first to the reimbursement of any expenses incurred by the Parties in such litigation, and any remaining amount shall be retained by such Party; provided, however, that any amounts so retained by Licensee shall be included in Net Sales.

(e) Patents Licensed from Third Parties. Each Party’s rights under this Section 10.5 with respect to any Key Patent, Licensee Patent, or Joint Patent licensed to the other Party by a Third Party shall be subject to the rights of such Third Party to enforce such Patent and/or defend against any claims that such Patent is invalid or unenforceable.

10.6 Defense of Patents.

(a) If any Party receives notice by counterclaim, declaratory judgment action or otherwise, alleging the invalidity or unenforceability of any Key Patent or Joint Patent, it shall bring such fact to the attention of the other Party, including all relevant information related to such claim. Where such allegation is made in an opposition, reexamination, interference or other patent office proceeding, the provisions of Section 10.4 shall apply. Where such allegation is made in a counterclaim to a suit or other action brought under Section 10.5, the provisions of Section 10.5 shall apply. Where such allegation is made in a declaratory judgment or other court action, (i) the Party who prosecuted such Key Patent or Joint Patent pursuant to Section 10.4 shall have the first right to defend such action at its own expense, provided that if a Party pursuant to Section 10.5 elects to bring an infringement counterclaim, the provisions of Section 10.5 shall thereafter apply; and (ii) Licensee shall have the sole right, but no obligation, to defend such Licensee Patent. If the Party with the first right to defend a Key Patent or Joint Patent elects not to defend such action, it shall so notify the other Party in writing, and the other Party shall have the right to defend such action, at the other Party’s own expense. For any such action involving a Key Patent or Joint Patent, the non-defending Party shall provide to the defending Party all reasonable assistance in such defense, at the defending Party’s request and expense; and the defending Party shall keep the other Party regularly informed of the status and progress of such efforts, and shall reasonably consider the other Party’s comments on any such efforts. For the avoidance of doubt, Licensee shall have no rights under this Section 10.6 with respect to Company Patents other than those rights expressly set forth in this Section 10.6 regarding Key Patents.

(b) Without the prior written consent of the other Party, neither Party shall enter into any settlement of any claim, suit or action that it defended under this Section 10.6 that admits the invalidity or unenforceability of any Key Patent or Joint Patent, requires abandonment or limits

the scope of any Key Patent or Joint Patent or would limit or restrict the ability of either Party to sell Licensed Products anywhere in the Territory.

10.7 Infringement of Third Party Rights. If, during the Term, either Party receives any notice, claim or proceedings from any Third Party alleging infringement of that Third Party’s intellectual property in the Territory by reason of either Party’s activities in relation to the definitive Agreement, either Party receiving such notice shall promptly notify the other Party of such notice, claim or proceeding and Licensee shall have the first right, but not the obligation, to resolve such infringement or such possibility, including entering into a Third Party License with such Third Party in its sole discretion. In the event that Licensee elects not to resolve such infringement or such possibility of infringement, then (a) Company shall, at Licensee’s cost and expense, resolve such infringement or such possibility, (b) Company shall consider in good faith Licensee’s comments with respect to strategy and negotiation of any action or proceeding, and (c) Company shall not, without Licensee’s prior written consent, enter into any compromise or settlement that (i) admits the invalidity of any Company Patent or Joint Patent in the Territory or elsewhere in the world, or (ii) requires Licensee or Company to relinquish any Company Patent or Joint Patent in the Territory or elsewhere in the world. Licensee shall, at the request of Company, agree to timely commence or join in any necessary litigation, and in any event to cooperate with Company in such litigation. Licensee shall have the right to consult with Company about any such litigation and to participate in and be represented by independent counsel in such litigation at Licensee’s own expense.

10.8 Patent Marking. Licensee shall, and shall require its Affiliates and sublicensees, to, mark Licensed Products sold by it hereunder (in a reasonable manner consistent with industry custom and practice) with appropriate patent numbers or indicia to the extent permitted by Applicable Law, in those countries in which such markings or such notices impact recoveries of damages or equitable remedies available with respect to infringements of Patents.

10.9 Personnel Obligations. Prior to beginning work under this Agreement relating to any research, Development or Commercialization of a Licensed Product, each employee, agent or independent contractor of Licensee or Company or of either Party’s respective Affiliates shall be bound by non-disclosure and invention assignment obligations that are consistent with the obligations of Licensee or Company, as appropriate, in this Article 10, including without limitation: (a) promptly reporting any Invention, discovery, process or other intellectual property right; (b) assigning to Licensee or Company, as appropriate, all of his or her right, title and interest in and to any Invention, discovery, process or other intellectual property right; (c) cooperating in the preparation, filing, prosecution, maintenance and enforcement of any Patent; (d) performing all acts and signing, executing, acknowledging and delivering any and all documents required for effecting the obligations and purposes of this Agreement; and (e) abiding by the obligations of confidentiality and non-use set forth in Article 11. It is understood and agreed that such non-disclosure and invention assignment agreement need not reference or be specific to this Agreement.

10.10 Trademarks. Licensee shall be responsible for the selection, searching, clearance, filing, registration, maintenance and defense of the trademarks used to identify the Licensed Products, and all trademarks, logos, taglines, trade dress, domain names and/or indicia of origin

for use in connection with the sale or marketing of Licensed Products in the Field in the Territory (the “Marks”), as well as all expenses associated therewith. Notwithstanding the foregoing, in order to further the Development of a consistent worldwide brand for the Licensed Product, Licensee agrees to consult with Company on the selection of Marks and to use good faith efforts to implement suggestions made by Company in furtherance of such worldwide brand. All uses of the Marks shall be reviewed by the JSC (or a subcommittee thereof) and shall comply with all Applicable Law (including, without limitation, those laws and regulations particularly applying to the proper use and designation of trademarks in the applicable countries). Neither Party shall, without the other Party’s prior written consent, use any trademarks or house marks of the other Party (including the other Party’s corporate name), or marks confusingly similar thereto, in connection with such Party’s marketing or promotion of Licensed Products under this Agreement, except to the extent required to comply with Applicable Laws or by any Regulatory Authority, in which case, such Party’s use of the other Party’s trademarks or house marks shall be at no cost to such Party.

ARTICLE 11

CONFIDENTIALITY; SOLICITATION BY COMPANY

11.1 Confidentiality Obligations. All Information disclosed by one Party to the other Party pursuant to this Agreement shall be the “Confidential Information” of the disclosing Party for all purposes hereunder. Each Party agrees that, for the Term and for [***] ([***]) years thereafter, such Party shall, and shall ensure that its officers, directors, employees and agents shall, keep confidential (using at least the same standard of care as it uses to protect proprietary information or Confidential Information of its own, but in no event less than reasonable care) and not publish or otherwise disclose and not use for any purpose except as expressly permitted hereunder any Confidential Information or materials furnished to it by the other Party (including, without limitation, know-how of the disclosing Party). The foregoing obligations shall not apply to any Information disclosed by a Party hereunder to the extent that the receiving Party can demonstrate with competent evidence that such Information:

(a) was already known to the receiving Party or its Affiliate, other than under an obligation of confidentiality, at the time of disclosure;

(b) was generally available to the public or otherwise part of the public domain, at the time of its disclosure to the receiving Party;

(c) became generally available to the public or otherwise part of the public domain after its disclosure to the receiving Party and other than through any act of the receiving Party in breach of this Agreement;

(d) was subsequently lawfully disclosed on a non-confidential basis to the receiving Party or its Affiliate by a Third Party, other than in contravention of a confidentiality obligation of such Third Party to the disclosing Party; or

(e) was independently developed or discovered by employees of the receiving Party or its Affiliates without reference to or reliance upon Confidential Information of the disclosing Party as demonstrated by clear and convincing evidence.

11.2 Authorized Disclosure. A Party may disclose the Confidential Information belonging to the other Party to the extent such disclosure is reasonably necessary in the following instances:

(a) Filing or prosecuting Patents relating to Joint Inventions and Sole Inventions;

(b) Regulatory filings relating to Licensed Products;

(d) Disclosure required by Applicable Law or a valid court order, or by applicable rules or regulations of any regulatory body including without limitation the U.S. Securities and Exchange Commission or similar regulatory agency in a country other than the United States, or stock exchanges (such as Nasdaq);

(e) Disclosure, on a need-to-know basis in connection with the performance of this Agreement (and/or in the case of Company, in connection with its monitoring of Licensee’s performance), to Affiliates, permitted sublicensees, and its and their employees, consultants, subcontractors, advisors, or agents, each of whom prior to disclosure must be bound by similar obligations of confidentiality and non-use at least equivalent in scope to those set forth in this Article 11;

(f) Disclosure to its potential investors, and other sources of funding, including debt financing, or potential partners, collaborators or acquirers, and their respective accountants, financial advisors and other professional representatives, provided, that (i) such disclosure shall be made only to the extent customarily required to consummate such investment, financing transaction partnership, collaboration or acquisition, (ii) each recipient of Confidential Information must be bound by customary obligations of confidentiality and nonuse, and (iii) no disclosures shall be made by Licensee under this Section 11.2(f) to competitors of Company except with Company’s prior written consent; and

(g) In the case of Company, disclosures to RPI Finance Trust (“RPI”), as required by that certain Funding Agreement between Company and RPI, dated as of January 7, 2018.

With respect to any disclosures permitted under subsections (c) or (d) above, the Party making such disclosure shall give the other Party reasonable advance notice of such disclosure, limit the disclosure to that actually required, and cooperate in the other Party’s attempts to obtain a protective order or confidential treatment of the information required to be disclosed.

11.3 Confidentiality of Agreement Terms. The Parties acknowledge that the terms of this Agreement shall be treated confidentially as Confidential Information of both Parties.

Notwithstanding the foregoing, such terms may be disclosed by a Party to investment bankers, actual or potential investors or acquirers, and their respective advisors, in the context of a potential transaction, each of whom prior to disclosure must be bound by similar obligations of confidentiality and non-use at least equivalent in scope to those set forth in this Article 11. In addition, a copy of this Agreement may be filed by a Party with the U.S. Securities and Exchange Commission, or similar regulatory agency in a country other than the United States or of any stock exchange or other securities trading institution, as required by Applicable Law. In connection with any such filing, such Party shall endeavor to obtain confidential treatment of economic and trade secret information. In any event, the Parties agree to take all reasonable action to avoid disclosure of Confidential Information except as permitted hereunder. The Party subject to such disclosure requirement shall, if reasonably practicable under the circumstances, provide the other Party with a reasonable opportunity to review and comment in advance on the disclosing Party’s proposed disclosure and such disclosing Party shall consider in good faith any comments thereon provided by the other Party.

11.4 Publicity.

(a) The Parties shall issue a joint press release announcing the execution of this Agreement, the timing and content of which shall be mutually agreed, such agreement not to be unreasonably withheld. During the Term, each Party may issue additional press releases so long as prior to issuing any such individual press release or public disclosures relating to this Agreement, the disclosing Party shall provide copies of such press releases or public disclosure statements to the non-disclosing Party to provide a reasonable opportunity to review and comment in advance on the disclosing Party’s proposed disclosure and such disclosing Party shall consider in good faith any comments provided by the non-disclosing Party.

(b) During the Term, neither Party shall issue a press release or public announcement relating to Licensed Products and/or this Agreement without the prior written approval of the other Party, which approval shall not be unreasonably withheld or delayed. Notwithstanding the above, a Party may issue a press release or public announcement if and to the extent required by Applicable Law, including without limitation by the rules or regulations of the U.S. Securities and Exchange Commission or similar regulatory agency in a country other than the U.S. or the rules of any stock exchange or Nasdaq, in each case after first notifying the other Party of such planned press release or public announcement at least [***] Business Days in advance of issuing such press release or making such public announcement (or with as much advanced notice as reasonably practicable under the circumstances if it is not reasonably practicable to provide notice at least [***] Business Days in advance) for the sole purpose of allowing the other Party to review the proposed press release or public announcement for the inclusion of Confidential Information or the use of its name. Licensee agrees that the timely announcement of the progression of a Licensed Product into and through clinical Development is required for Company to communicate effectively with its stockholders and prospective investors and to cooperate with Company in preparing and issuing such announcements in a timely manner. Further, Licensee agrees that Company shall have the right to issue a press release with respect to the occurrence of the following events under this Agreement, subject to Licensee’s right to prior review of and opportunity to comment on the content of such press release: (i) achievement of any milestone event described in Article 8, (ii) initiation, completion and results of a Clinical Trial, (iii) filing

and/or approvals of any regulatory applications; and (iv) commercial launch of a Licensed Product in a country. The Parties acknowledge the importance of supporting each other’s efforts to publicly disclose results and significant Developments regarding Licensed Products. The principles to be observed by the Parties in such public disclosures shall be: accuracy, the requirements of confidentiality for information that would materially benefit a competitor, and the standards and customs in the biotechnology and pharmaceutical industries for such disclosures by companies comparable to Company and Licensee.

(c) Notwithstanding the above, if the relevant text of a press release or public announcement has already previously been reviewed and commented upon and/or approved by the other Party and the text remains accurate and complete (such as the description of this Agreement in filings under the U.S. Securities Exchange Act of 1934, as amended (the “Exchange Act”)), then such text may be republished without further review by the other Party. In addition, the advance review provided in Section 11.4(a) or 11.4(b) shall apply only to the portion of the public announcement that concerns Licensed Products, this Agreement and/or the other Party and shall not be interpreted to require a Party to provide an advance copy of the entire public announcement (such as an advance copy of an entire filing under the Exchange Act).

11.5 Publications. Neither Party shall publicly present or publish results of studies carried out under this Agreement relating to any Licensed Product in the Field in the Territory (each such presentation or publication, a “Publication”) without the opportunity for prior review by the other Party. The submitting Party shall provide the other Party the opportunity to review any proposed Publication at least [***] calendar days prior to the earlier of its presentation or intended submission for publication. The submitting Party agrees, upon request by the other Party, not to submit or present any Publication until the other Party has had an additional [***] calendar days to comment on any material in such Publication, and to allow time to prepare and file patent applications on any Invention. The submitting Party shall consider the comments of the other Party in good faith, but shall retain the sole authority to present or submit for publication the Publication. The submitting Party shall provide the other Party a copy of the Publication at the time of the submission or presentation. Notwithstanding the foregoing, Licensee shall not have the right to publish or present Company’s Confidential Information without Company’s prior written consent, and Company shall not have the right to publish or present Licensee’s Confidential Information without Licensee’s prior written consent. The Parties further acknowledge that Company has made significant contributions to the Development of Licensed Products as of the Effective Date, and the Parties agree that any public disclosure and/or scientific publications made after the Effective Date regarding Licensed Products shall give appropriate recognition to Company scientists who are responsible for the Development of Licensed Products.

ARTICLE 12

INDEMNIFICATION

12.1 Indemnification by Licensee. Licensee shall indemnify, defend and hold Company and its Affiliates and each of their respective employees, officers, directors and agents (the “Company Indemnitees”) harmless from and against any and all liability, damages, loss, cost, fine, penalty or expense (including without limitation reasonable attorneys’ fees and expenses

incurred in connection with the enforcement of this provision) arising out of Third Party claims, actions, proceedings, or suits (“Third Party Claims”) against a Company Indemnitee resulting from (a) gross negligence or willful misconduct in Licensee’s performance or non-performance of its obligations under this Agreement; (b) the research, Development, manufacture, use, importation, storage, handling, promotion, sale, marketing, or Commercialization of Licensed Products by Licensee and/or its Affiliates, sublicensees, distributors and/or agents in the Territory; (c) any infringement of any Third Party’s intellectual property rights arising from the research Development, manufacture, use, importation, storage, handling, promotion, sale, marketing or Commercialization of Licensed Products by Licensee and/or its Affiliates, sublicensees, distributors and/or agents in the Territory; (d) material breach by Licensee of this Agreement, including material breach by Licensee of its representations and warranties set forth in Article 13; provided, however, that Licensee’s obligations pursuant to this Section 12.1 shall not apply to the extent such Third Party Claims result from Third Party Claims for which Company has an obligation to indemnify Licensee pursuant to Section 12.2.

12.2 Indemnification by Company. Company shall indemnify, defend and hold Licensee and its Affiliates and each of their respective employees, officers, directors and agents (the “Licensee Indemnitees”) harmless from and against any and all liability, damages, loss, cost, fine, penalty or expense (including without limitation reasonable attorneys’ fees and expenses incurred in connection with the enforcement of this provision) arising out of Third Party Claims against a Licensee Indemnitee resulting from (a) the gross negligence or willful misconduct in Company’s performance or non-performance of its obligations under this Agreement; (b) the research, Development, manufacture, use, importation, storage, handling, promotion, sale, marketing, or Commercialization of Licensed Products by Company and/or its Affiliates, sublicensees, distributors and/or agents outside the Territory; (c) any infringement of any Third Party’s intellectual property rights arising from the research Development, manufacture, use, importation, storage, handling, promotion, sale, marketing or Commercialization of Licensed Products by Company and/or its Affiliates, sublicensees, distributors and/or agents outside the Territory; or (d) material breach by Company of this Agreement, including breach by Company of its representations and warranties set forth in Article 13; provided, however, that Company’s obligations pursuant to this Section 12.2 shall not apply to the extent that such Third Party Claims result from Third Party Claims for which Licensee has an obligation to indemnify Company pursuant to Section 12.1.

12.3 Indemnification Procedure.

(a) To be eligible to seek indemnification under this Article 12 in respect to a liability, damage, loss, cost, fine, penalty or expense arising from a Third Party Claim against such Licensee Indemnitee or Company Indemnitee (each, an “Indemnitee”), an Indemnitee shall promptly give written notice thereof to the Party from whom indemnification is sought (such Party hereinafter referred to as the “Indemnitor”) within a reasonable period of time after the assertion of such Third Party Claim by such Third Party; provided, however, that the failure to provide written notice of such Third Party Claim within a reasonable period of time shall not relieve the Indemnitor of any of its obligations hereunder, except to the extent that the Indemnitor is prejudiced by such failure.

(b) The Indemnitor shall have the right to assume the complete control of the defense, compromise or settlement of any Third Party Claim (provided that no settlement of any Third Party Claim shall include any admission of wrongdoing on the part of an Indemnitee or the invalidity, unenforceability or absence of infringement of any Patent Controlled, owned in whole or part by the Indemnitee, and shall not grant any right inconsistent with the terms of this Agreement, without the prior written consent of such Indemnitee, which consent shall not be unreasonably withheld), including, at its own expense, employment of legal counsel reasonably acceptable to the Indemnitee. At any time thereafter the Indemnitor shall be entitled to exercise, on behalf of the Indemnitee, any rights that may mitigate the extent or amount of such Third Party Claim; provided, however, that if the Indemnitor shall have exercised its right to assume control of such Third Party Claim, the Indemnitee (i) may, in its sole discretion and at its own expense (which expense shall not be subject to indemnification hereunder), employ legal counsel to represent it (in addition to the legal counsel employed by the Indemnitor) in any such matter, and in such event legal counsel selected by the Indemnitee shall be required to confer and cooperate with counsel of the Indemnitor in such defense, compromise or settlement for the purpose of informing and sharing information with the Indemnitor; (ii) shall, at its own expense, make available to Indemnitor those employees, officers and directors of Indemnitee whose assistance, testimony or presence is necessary or appropriate to assist the Indemnitor in evaluating and in defending any such Third Party Claim (provided, however, that any such access shall be conducted in such a manner as not to interfere unreasonably with the operations of the businesses of Indemnitee); and (iii) shall otherwise fully cooperate with the Indemnitor and its legal counsel in the investigation and defense of such Third Party Claim.

(c) The Parties shall cooperate with each other in connection with any such claim, action, proceeding or suit and shall keep each other reasonably informed of all material Developments in connection with any such claim, action, proceeding or suit.

(d) If the Parties acting in good faith cannot agree as to the applicability of Section 12.1 and/or 12.2 to a particular Third Party Claim, then each Party (and its respective Indemnitees) reserves the right to conduct its own defense of such Third Party Claim and seek indemnification from the applicable Party upon its resolution.

12.4 Insurance. Licensee, at its own expense, shall maintain Clinical Trial and product liability insurance (or self-insure) in an amount consistent with industry standards during the Term. Company agrees during the Term to maintain (a) workers’ compensation insurance for all of its employees, the limits of which shall be as required under statute and (b) commercial general liability insurance on a claims made basis having limits not less than $[***] in the aggregate and $[***] per occurrence, including coverage for premises liability, Clinical Trial liability, products/completed operations, and contractual liability coverage for the indemnity provided under this agreement. A Party shall provide evidence of insurance in accordance with this Section 12.4 to the other Party upon the request of the other Party.

12.5 Limitation of Liability. NEITHER PARTY SHALL BE LIABLE TO THE OTHER FOR ANY SPECIAL, CONSEQUENTIAL, INCIDENTAL, PUNITIVE, OR INDIRECT DAMAGES ARISING FROM OR RELATING TO ANY BREACH OF THIS AGREEMENT, REGARDLESS OF ANY NOTICE OF THE POSSIBILITY OF SUCH

DAMAGES. NOTWITHSTANDING THE FOREGOING, NOTHING IN THIS SECTION 12.5 IS INTENDED TO OR SHALL LIMIT OR RESTRICT THE INDEMNIFICATION RIGHTS OR OBLIGATIONS OF ANY PARTY UNDER SECTION 12.1 OR 12.2 OR DAMAGES AVAILABLE FOR A PARTY’S BREACH OF CONFIDENTIALITY OBLIGATIONS IN ARTICLE 11, INTELLECTUAL PROPERTY OBLIGATIONS IN ARTICLE 10, OR COMPANY’S BREACH OF SECTION 13.2(d), 13.2(l), OR 13.2(m).

ARTICLE 13

REPRESENTATIONS AND WARRANTIES

13.1 Mutual Representations, Warranties and Covenants. Company and Licensee, each for itself and its Affiliates, represent, warrant and covenant to the other Party as of the Effective Date:

(a) the execution, delivery to the other Party and performance by it of this Agreement and its compliance with the terms and provisions of this Agreement do not and shall not conflict, in any material respect, with, or result in a breach of, any of the terms or provisions of: (i) any other contractual obligations of such Party; (ii) the provisions of its charter, operating documents or bylaws; or (iii) any order, writ, injunction or decree of any court or Governmental Authority entered against it or by which it or any of its property is bound except where such breach or conflict would not materially impact the warranting Party’s ability to meet its obligations hereunder;

(b) this Agreement is a legal and valid obligation binding upon such Party and enforceable in accordance with its terms except as enforceability may be limited by (i) bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the enforcement of creditors’ rights and (ii) equitable principles of general applicability;

(c) such Party is a corporation duly organized, validly existing and in good standing under the laws of the state or other jurisdiction of incorporation or formation and has full corporate power and authority to enter into this Agreement and to carry out the provisions hereof except where failure to be in good standing would not materially impact the Party’s ability to meet its obligations hereunder;

(d) such Party is duly authorized, by all requisite corporate action, to execute and deliver this Agreement and the execution, delivery and performance of this Agreement by such Party does not require any shareholder action or approval, and the Person executing this Agreement on behalf of such Party is duly authorized to do so by all requisite corporate action; and

(e) no consent, approval, order or authorization of, or registration, qualification, designation, declaration or filing with, any federal, state or local Governmental Authority is required on the Part of such Party in connection with the valid execution, delivery and performance of this Agreement.

13.2 Additional Representations, Warranties and Covenants by Company. Company represents, warrants and covenants to Licensee:

(a) as of the Effective Date, (i) Company is the sole owner of, or has a valid and enforceable license with respect to, the Pre-Existing Company Patents; (ii) Company has the right to grant the license granted to Licensee in Section 2.1 on the terms set forth therein; and (iii) Company has not granted any license or other right under the Company Patents or Company Know-How inconsistent with the terms of this Agreement or any of the Upstream Licenses;

(b) Exhibit A contains a complete and accurate list of all Key Patents as of the Effective Date and all such Key Patents are valid and subsisting, except as noted in Exhibit A;

(c) Exhibit B contains a complete and accurate list of all Pre-Existing Company Patents as of the Effective Date and all such Pre-existing Patents are valid and subsisting, except as noted in Exhibit B;

(d) Exhibit C contains a complete and accurate list of all Upstream Licenses and Company and its Affiliates (i) has been in compliance in all terms and conditions with the Upstream Licenses as of the Effective Date and all Upstream Licenses as of the Effective Date are in full force and effect; (ii) have not received any written notice that alleges breach or default by Company of, requests a material amendment of, termination of any Upstream License; and (iii) are not aware of any material breach, potential breach, default, or potential default of any Upstream License;

(e) as of the Effective Date, there is no pending litigation against Company or any Affiliate of Company that (i) alleges that any of Company’s activities relating to Licensed Products have violated, or the Development or Commercialization of Licensed Products in the future shall violate, any of the intellectual property rights of any Third Party, or (ii) seeks to invalidate any of the Key Patents and Pre-Existing Company Patents, and Company has not received any written notice threatening any such litigation or claim;

(f) as of the Effective Date, to Company’s knowledge, there is no use, infringement or misappropriation of the Company Patents or the Company Know-How, in derogation of the rights granted to Licensee in this Agreement;

(g) as of the Effective Date, to Company’s knowledge, there are no investigations, inquiries, actions or other proceedings pending before any Regulatory Authority or other government agency with respect to Licensed Products, and Company has not received at its corporate offices any written notice addressed to senior management threatening any such investigation, inquiry, action or other proceeding;

(h) as of the Effective Date, except as otherwise disclosed to Licensee prior to the Effective Date, Company has not received any written notice that any of the regulatory submissions relating to Licensed Products is not currently in good standing with the FDA and other Regulatory Authorities;

(i) as of the Effective Date, except as otherwise disclosed to Licensee prior to the Effective Date, the Licensed Product has been and is being (and during the Term, shall continue to be) manufactured, imported, exported, processed, developed, promoted, distributed, packaged, labeled, stored in material compliance with Applicable Laws, including all provisions of the FDA’s current cGMP regulations as set forth at 21 C.F.R. Parts 210 and 211 (including, but not limited to, cGMP requirements related to data integrity);

(j) as of the Effective Date, except as otherwise disclosed to Licensee prior to the Effective Date, all information, including data and conclusions derived therefrom, utilized as the basis for or submitted to FDA in connection with any and all IND and BLA applications involving the Licensed Product, when submitted to the FDA, was to the knowledge of the Company true, complete and correct in all material respects as of the date of submission, and any necessary and required updates or modifications to such information have been submitted to FDA or will be submitted to FDA with the BLA resubmission for the Licensed Product. Neither the Company nor, to the knowledge of the Company, any officer, employee, or agent of the Company, has made an untrue statement of a material fact or fraudulent statement to the FDA, failed to disclose a material fact required to be disclosed to FDA, or committed any other similar act, in each case that would reasonably be expected to provide a basis for FDA to invoke its Application Integrity Policy as set forth in 56 Fed. Reg. 46191 (September 10, 1991);

(k) as of the Effective Date, except as otherwise disclosed to Licensee prior to the Effective Date, the Company and, to the knowledge of the Company, any Third Parties engaged in activities on behalf of the Company have (i) prepared and timely submitted material responses and any corrective action plans required to be prepared and submitted by the Company in response to all inspections, investigations, audits, analyses and examinations performed by the FDA or any other Governmental Authority with respect to the Licensed Product and (ii) to the knowledge of the Company, fully implemented all corrective actions described in such corrective action plans;

(l) Company shall use Commercially Reasonable Efforts to provide Licensee with a true and complete copy of each Upstream License, including any amendment thereto, within thirty (30) Business Days following the Effective Date;

(m) Company and its Affiliates (i) shall remain in compliance with all terms and conditions of each Upstream License; (ii) shall ensure that the Upstream Licenses are in full force and effect for so long as any Company Patents and Company Know-How licensed to Company under such Upstream Licenses are necessary or reasonably useful for the research, Development, or Commercialization of Licensed Products in the Field and in the Territory; and (iii) shall provide prompt notice to Licensee of its receipt of any written notice that alleges breach or default by Company of, requests a material amendment of, termination of any Upstream License and provide to Licensee a copy of each of the foregoing and any amendment to any Upstream License; and

(n) in the course of performing its obligations or exercising its rights under this Agreement, shall, and shall cause its Affiliates, sublicensees to, comply with all Applicable Laws, including as applicable, cGMP, GCP, GLP, and GSP standards, and shall not employ or engage any party who has been debarred by any Regulatory Authority, or, to Company’s knowledge, is the subject of debarment proceedings by a Regulatory Authority.

13.3 Additional Representations, Warranties and covenants by Licensee. Licensee represents and warrants to Company, as of the Effective Date,

(a) Licensee has maintained and shall maintain appropriate skilled personnel and facilities to carry out its obligations under this Agreement;

(b) No Licensee employees or other Persons performing services on behalf of Licensee under this Agreement have been debarred or excluded, or are the subject of debarment or exclusion proceedings, under Section 306 of the FD&C Act; and if Licensee becomes aware that a Person performing on its behalf under this Agreement has been debarred, or has become the subject of debarment or exclusion proceedings, under Section 306 of the FD&C Act, Licensee shall promptly notify Company and shall prohibit such Person from performing on its behalf under this Agreement;

(c) Licensee is not aware of any Patents or know-how owned by any Third Party which are necessary for the Development, manufacturing or Commercialization of the Licensed Product in the Territory;

(d) There is no action, claim, demand, suit, proceeding, arbitration, grievance, citation, summons, subpoena, inquiry or investigation of any nature, civil, criminal, regulatory or otherwise, in law or in equity, pending or, to the best of Licensee’s knowledge, threatened against Licensee in connection with or relating to the transactions and/or activities contemplated by this Agreement;

(e) Licensee is not aware of any Licensee Patents which are necessary for the Development, manufacturing or Commercialization of the Licensed Product in the Territory;

(f) Licensee is and shall be financially solvent, able to pay its debts as they mature, and possesses and shall possess sufficient working capital to fully comply and honor its obligations and liabilities set forth in this Agreement; and

(g) in the course of performing its obligations or exercising its rights under this Agreement, shall, and shall cause its Affiliates, sublicensees to, comply with all Applicable Laws, including as applicable, the applicable equivalent in the Territory to cGMP, GCP, GLP, and GSP standards, and shall not employ or engage any party who has been debarred by any Regulatory Authority, or, to Licensee’s knowledge, is the subject of debarment proceedings by a Regulatory Authority.

13.4 Disclaimer of Warranties. EXCEPT AS SET FORTH IN SECTIONS 13.1 THROUGH 13.3, THE NON-COMMERCIAL SUPPLY AGREEMENT OR COMMERCIAL SUPPLY AGREEMENT, EACH PARTY EXPRESSLY DISCLAIMS ALL WARRANTIES, EXPRESS OR IMPLIED, INCLUDING WITHOUT LIMITATION WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, OR NONINFRINGEMENT OF THIRD PARTY RIGHTS. IN PARTICULAR, THE LICENSED PRODUCTS ARE PROVIDED “AS IS” AND WITHOUT ANY REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, INCLUDING WITHOUT LIMITATION ANY

IMPLIED WARRANTY OF MERCHANTABILITY OR OF FITNESS FOR ANY PARTICULAR PURPOSE OR ANY WARRANTY THAT THE USE OF SUCH COMPOUNDS OR PRODUCTS WILL NOT INFRINGE OR VIOLATE ANY PATENT OR OTHER PROPRIETARY RIGHTS OF ANY THIRD PARTY.

ARTICLE 14

TERM AND TERMINATION

14.1 Term and Expiration. This Agreement shall become effective on the Effective Date and, unless earlier terminated in whole pursuant to Section 14.2, 14.3 or 14.4, shall continue thereafter in full force and effect on a country-by-country (or in the case of Greater China, region-by-region) basis until the expiration of the Royalty Term for such country (the “Term”). On a country-by-country (or in the case of Greater China, region-by-region) basis, upon the expiration of the Royalty Term for such Licensed Product in a country or region, all licenses granted to Licensee hereunder in relation to such Licensed Product in such country or region shall become perpetual, irrevocable, royalty-free, fully paid up, transferrable, and sublicensable through multiple tiers.

14.2 Termination for Material Breach.

(a) If a Party commits a material breach of this Agreement, the other Party may provide to the breaching Party a written notice specifying the nature of the breach, requiring it to make good or otherwise cure such breach, and stating its intention to terminate this Agreement if such breach is not cured. If such breach is not cured within sixty (60) calendar days after the receipt of such notice, the non-defaulting Party shall be entitled, without prejudice to any of its other rights conferred under this Agreement, and in addition to any other remedies available to it by law or in equity, to terminate this Agreement by written notice to the other Party, provided, however, that if the cause of the material breach is non-payment of the amounts due under this Agreement, then the cure period for such non-payment shall be [***] calendar days from the date of notice of material breach by the non-breaching Party; provided further, that if either Party disputes (i) whether such material breach has occurred; or (ii) whether the defaulting Party has cured such material breach, the Parties agree to resolve the dispute as expeditiously as possible under ARTICLE 15. It is understood and acknowledged that during the pendency of such a dispute, all of the terms and conditions of this Agreement shall remain in effect and the Parties shall continue to perform all of their respective obligations hereunder.

(b) The right of a Party to terminate this Agreement, as provided in this Article 14, shall not be affected in any way by its waiver or failure to take action with respect to any prior default or breach.

14.3 Termination for Patent Challenge. In the event that Licensee or any of its Affiliates or sublicensees brings an action alleging that any Company Patent is invalid or unenforceable, Company may terminate this Agreement immediately upon written notice to Licensee; provided, however, that in the event that a Licensee’s sublicensee initiates such challenge, Company may not terminate this Agreement if (a) Licensee successfully causes such

sublicensee to abort such challenge within such [***]-day period, or (b) Licensee (i) provides Company a written notice of its intent to terminate with such sublicensee within such [***]-day period, and (ii) successfully terminates such sublicense within [***] days after the delivery of such written notice to Company.

14.4 Termination for Insolvency. Each Party may terminate this Agreement in the event that the other Party suffers an Insolvency Event, by delivery of written notice thereof by such Party to the other Party.

14.5 Consequences of Termination. Upon termination (not the expiration of this Agreement in its entirety or the expiration of the Royalty Term in relation to a Licensed Product in a country or region) of this Agreement in its entirety for any reason prior to expiration, subject to Section 14.6, (a) each Party shall promptly return to the other Party all relevant records and materials in its possession or control containing or comprising the other Party’s Confidential Information and to which the Party does not retain rights hereunder; provided, however, that each Party shall be entitled to retain copies of the other Party’s Confidential Information to the extent necessary to comply with applicable regulatory obligations and shall be entitled to retain one copy of the other Party’s Confidential Information for archival purposes; (b) all licenses granted by Company to Licensee shall terminate; (c) all rights in any and all Licensed Products shall revert to Company; and (d) any and all claims and payment obligations that accrued prior to the date of such termination shall survive such termination.

14.6 Additional Consequences of Termination. Upon any termination of this Agreement, with respect to one or more regions or countries in the Territory:

(a) Licenses to Company. Licensee shall be automatically deemed to grant to Company a worldwide, irrevocable, perpetual license (with full rights to sublicense) under the Licensee Know-How, Licensee Patents and Licensee’s interest in the Joint Patents and Joint Inventions, in each case that are necessary for the manufacture or use of the Licensed Products, to make, have made, import, use, offer for sale and sell Licensed Products.

(b) Regulatory Filings. To the extent permitted by Applicable Law, Licensee shall promptly assign to Company, and shall provide full copies of, all Regulatory Approvals and Regulatory Materials that relate to Licensed Products and are owned or Controlled by Licensee or its Affiliates. Licensee shall also take such actions and execute such other instruments, assignments and documents as may be necessary to effect the transfer of rights thereunder to Company.

(c) Data Disclosure. Licensee shall provide to Company copies of the relevant portions of all material reports and data, including clinical and non-clinical data and reports, obtained or generated by or on behalf of Licensee or its Affiliates or sublicensees to the extent that they relate to Licensed Products, within [***] calendar days of such termination unless otherwise agreed, and Company shall have the right to use any such Information in Developing and Commercializing the Licensed Products, and to license any Third Parties to do so.

(d) Trademarks. If Licensee used, with regard to any Licensed Product in a country, any trademark, tradename or logo related solely to a Licensed Product (“Licensee Mark(s)”) Licensee shall either assign or license to Company (upon written request from Company within [***] of termination) the Licensee Mark(s), it being understood that the choice between assignment and licensing shall be made by Licensee at its discretion. Company shall bear all costs and expenses associated with the maintenance of the Licensee Mark(s) from the date of such license or assignment. For clarity, Company shall under no circumstance receive any rights under the house marks of Licensee or its Affiliates, except with respect to selling off existing inventory.

(e) Third Party Licenses. At Company’s request, Licensee shall promptly provide to Company copies of all Third Party Licenses under which Licensee or its Affiliates obtained a license under Patents claiming Inventions or know-how specific to or used or incorporated into the Development, manufacture and/or Commercialization of the Licensed Products. At Company’s request, Licensee shall: (i) with respect to such Third Party Licenses relating solely to the applicable Licensed Products, immediately assign (or cause to be assigned), such agreements to Company, and (ii) with respect to all other Third Party Licenses, at Licensee’s option either assign the agreement or grant (or cause to be granted) to Company a sublicense thereunder of a scope equivalent to that described in Section 14.6(a) to the extent permitted under such Third Party Licenses. In any case, thereafter Company shall be fully responsible for all obligations due for its actions under the Third Party Licenses. Notwithstanding the above, if Company does not wish to assume any financial or other obligations associated with a particular assignment or sublicense, then Company shall so notify Licensee and Licensee shall not make such assignment or grant such sublicense (or cause it to be made or granted).

(f) Further Sales. In the event of any such termination (other than termination for Licensee’s material breach), Licensee may continue to sell its remaining inventory of the Licensed Product for a period of [***] months from the effective date of such termination, subject to the payment of royalties pursuant to Section 8.5. Licensee covenants that promptly after such [***] month period it and its Affiliates and former sublicensees hereunder shall cease to sell, and thereafter shall not sell, any Licensed Products.

(g) Remaining Materials. At the end of the period described in Section 14.6(f) or if this Agreement is terminated prior to the First Commercial Sale, at the request of Company, Licensee shall transfer to Company, all quantities of Licensed Products in the possession of Licensee or its Affiliates (including, without limitation, Clinical Trial supplies and Licensed Products intended for commercial sale). Licensee shall transfer to Company all such quantities of Licensed Products without charge, except that Company shall pay the reasonable costs of shipping.

(h) Ongoing Clinical Trials. To the extent permitted by Applicable Law, Licensee shall promptly (i) assign to Company the management and continued performance of any Clinical Trials for Licensed Product ongoing hereunder as of the effective date of such termination at Company’s costs, and (ii) continue to conduct such Clinical Trials, at Company’s cost, for so long as necessary to enable such assignment to be completed without interruption of any such Clinical Trials.

(i) No Further Representations. Subject to Section 14.6(f), Licensee and its Affiliates shall (i) discontinue making any representation regarding its status as a licensee of or distributor for Company, for all Licensed Products and (ii) cease conducting any activities with respect to the marketing, promotion, sale or distribution of the Licensed Products.

(j) Commercialization. Company shall have the right to Develop and Commercialize the Licensed Products itself or with one or more Third Parties, and shall have the right, without obligation to Licensee, to take any such actions in connection with such activities as Company (or its designee), at its discretion, deems appropriate.

(k) Costs and Expenses. Notwithstanding anything to the contrary, in the event this Agreement is terminated by Licensee in accordance with Section 14.2 or Section 14.4, Company shall be responsible for any and all internal and out-of-pocket costs incurred by Licensee, its Affiliates or its permitted sublicensees in the course of performing the activities set forth in this Section 14.6.

14.7 Accrued Rights; Surviving Obligations.

(a) Termination, relinquishment or expiration of this Agreement for any reason shall be without prejudice to any liabilities that shall have accrued prior to such termination, or expiration. Such termination, relinquishment or expiration shall not relieve a Party from obligations that are expressly indicated to survive termination or expiration of this Agreement.

(b) Without limiting the foregoing, Sections 5.10(c) (in relation to obligations in Section 14.6(h)), 5.11(b), 5.11(c), 5.11(d), 10.1, 10.2, 12.1, 12.2, 12.3, 12.5, 13.4, the last sentence of Section 14.1 (solely in the event of expiration as set forth in that sentence and not in the event of earlier termination), 14.5, 14.6, 14.7 and 14.8 and Articles 1, 9 (solely in relation to payments or payment obligations that have occurred or accrued prior to the effective date of termination or expiration), 11, 15, and 16 of this Agreement shall survive the expiration or termination of this Agreement for any reason.

14.8 Rights in Bankruptcy. All licenses granted under this Agreement by Licensee or Company are, and shall otherwise be deemed to be, for purposes of Section 365(n) of the U.S. Bankruptcy Code, licenses of rights to “intellectual property” as defined under Section 101(34A) of the U.S. Bankruptcy Code. The Parties agree that the Parties, as licensees of such rights under this Agreement, shall retain and may fully exercise all of their rights and elections under the U.S. Bankruptcy Code. The Parties further agree that, in the event of the commencement of a bankruptcy proceeding by or against either Party under the U.S. Bankruptcy Code, the Party hereto that is not a party to such proceeding shall be entitled to a complete duplicate of (or complete access to, as appropriate) any such intellectual property and all embodiments of such intellectual property (including all Information related to such intellectual property and rights of reference with respect to Regulatory Approvals), and same, if not already in their possession, shall be promptly delivered to them (a) upon any such commencement of a bankruptcy proceeding upon their written request therefore, unless the Party subject to such proceeding continues to perform all of its obligations under this Agreement, or (b) if not delivered or granted under (a) above,

following the rejection of this Agreement by or on behalf of the Party subject to such proceeding upon written request therefore by the non-subject Party.

ARTICLE 15

DISPUTE RESOLUTION

15.1 Disputes. In the event of any controversy or claim arising out of, relating to or in connection with any provision of this Agreement, or the rights or obligations of the Parties hereunder, the Parties shall try to settle their differences amicably between themselves. Either Party may initiate such informal dispute resolution by sending written notice of the dispute to the other Party, and within [***] calendar days after such notice appropriate representatives of the Parties shall meet for attempted resolution by good faith negotiations. If such representatives are unable to resolve promptly such disputed matter, it shall be referred to the Executive Officers for discussion and resolution. If such personnel are unable to resolve such dispute within [***] calendar days of initiating such negotiations, unless otherwise agreed by the Parties, such dispute shall be finally settled under Section 15.2.

15.2 Arbitration. If a dispute arises out of or relates to this Agreement, or the breach thereof, and if the dispute cannot be settled through negotiation (as provided by Section 15.1), then such disputes shall be submitted for arbitration under the rules of Conciliation and Arbitration of the International Chamber of Commerce. Such arbitration shall be held in English language, and shall be conducted in New York City. The award rendered by the arbitrator(s) shall be final and binding upon the Parties hereto.

15.3 Language of Dispute Resolution. All proceedings under this Article 15 shall be conducted in the English language and all documents exchanged between the Parties and/or submitted in the context of a proceedings under this Article 15 shall be in English or shall be accompanied with a certified English translation of the original document.

15.4 Injunctive Relief. Notwithstanding any other provision of this Article 15, either Party, at any time, may seek from a court of competent jurisdiction any interim or provisional injunctive relief that may be necessary to protect the rights or property of that Party.

ARTICLE 16

MISCELLANEOUS PROVISIONS

16.1 Relationship of the Parties. Nothing in this Agreement is intended or shall be deemed to constitute a partnership, agency or employer-employee relationship between the Parties. Neither Party shall incur any debts or make any commitments for the other.

16.2 Assignment. Neither Party may assign or transfer this Agreement or any rights or obligations hereunder without the prior written consent of the other Party, except that each Party may make such an assignment without the other Party’s consent to such Party’s Affiliate, provided that the assigning Party shall remain liable under this Agreement. Any permitted successor or

assignee of rights and/or obligations hereunder shall, in a writing to the other Party, expressly assume performance of such rights and/or obligations. Any permitted assignment shall be binding on the successors of the assigning Party. Any assignment or attempted assignment by either Party in violation of the terms of this Section 16.2 shall be null, void and of no legal effect.

16.3 Performance by/Responsibility for Affiliates. Each of Company and Licensee acknowledge that their obligations and rights under this Agreement may be performed and exercised by Affiliates of Company and Licensee, respectively. Obligations of the Party for which one of its Affiliates is performing hereunder shall be deemed to extend to such performing Affiliate. Each of Company and Licensee guarantee performance of this Agreement by its Affiliates. Wherever in this Agreement the Parties delegate responsibility to Affiliates, the Parties agree that such entities shall not make decisions inconsistent with this Agreement, amend the terms of this Agreement or act contrary to its terms in any way. If a Party’s Affiliate breaches any aspect of this Agreement in the performance of any activity that has been delegated to such Affiliate, then the other Party shall be entitled to proceed against the Party whose Affiliate so breached, and shall not first be required to proceed against the Affiliate that so breached.

16.4 Further Assurances. Each Party agrees to execute, acknowledge and deliver such further instruments and to do all such other reasonable acts as may be necessary or appropriate in order to carry out the purposes and intent of this Agreement.

16.5 Force Majeure. Neither Party shall be liable to the other for failure or delay in the performance of any of its obligations under this Agreement for the time and to the extent such failure or delay is caused by earthquake, riot, civil commotion, war, strike, flood, act of terrorism, governmental acts or restrictions or any other reason that is beyond the control of the respective Party. The Party affected by force majeure shall provide the other Party with full particulars thereof as soon as it becomes aware of the same (including its best estimate of the likely extent and duration of the interference with its activities), and shall use Commercially Reasonable Efforts to overcome the difficulties created thereby and to resume performance of its obligations as soon as practicable.

16.6 Entire Agreement of the Parties; Amendments. This Agreement and the attachments hereto constitute and contain the entire understanding and agreement of the Parties respecting the subject matter hereof and cancel and supersede any and all prior negotiations, correspondence, understandings and agreements between the Parties, whether oral or written, regarding such subject matter. No waiver, modification or amendment of any provision of this Agreement shall be valid or effective unless made in writing and signed by a duly authorized officer of each Party.

16.7 Captions. The captions to this Agreement are for convenience only, and are to be of no force or effect in construing or interpreting any of the provisions of this Agreement.

16.8 Governing Law. This Agreement shall be governed by and interpreted in accordance with the laws of the State of New York, excluding application of any conflict of laws principles that would require application of different laws and without regard to the United Nations Convention on Contracts for the International Sale of Goods. Notwithstanding the above, any

dispute regarding and limited to validity or enforceability of any Patent shall be governed by the patent laws of the jurisdiction in which such Patent was granted.

16.9 Notices and Deliveries. Any notice, request, delivery, approval or consent required or permitted to be given under this Agreement shall be in writing and shall be deemed to have been sufficiently given if delivered in person, transmitted by facsimile (receipt verified) or by express courier service (signature required) or five (5) calendar days after it was sent by registered letter, return receipt requested (or its equivalent), to the Party to which it is directed at its address or facsimile number shown below or such other address or facsimile number as such Party shall have last given by notice to the other Parties.

If to Licensee, addressed to:

Suite 3307, Two Exchange Square

8 Connaught Place, Central

Hong Kong

Attention: Oak Ma

Fax: [***]

Email: [***]

With a copy to:

Ropes & Gray LLP

36F Park Place

1601 Nanjing Road West

Shanghai, China 200040

Attention: Arthur Mok and Geoffrey Lin

Fax: [***]

Email: [***]; and [***]

If to Company, addressed to:

Immunomedics, Inc.

300 The American Road

Morris, Plains NJ 07950

U.S.A.

Attention: Jared Freedberg, General Counsel

Email: [***]

With a copy to:

DLA Piper LLP (US)

One Liberty Place

1650 Market Street, Suite 5000

Philadelphia, PA 19103

Attention: Fahd M.T. Riaz, Esquire

16.10 Waiver. The failure or delay of a Party to enforce or to exercise, at any time for any period of time, any provisions hereof or any right or remedy hereunder shall not be construed as a waiver of such provision or right or remedy or of the right of such Party thereafter to enforce or exercise the same; provided, however, that such right or remedy is not time-barred or otherwise precluded by law or by a writing expressly waiving such right or remedy and signed by that Party seeking to assert such right or remedy. The written waiver by either Party of a breach of any term or provision of this Agreement by the other Party shall not be construed as a waiver of any subsequent breach.

16.11 Translation. This Agreement is in English language only, which language shall be controlling in all respects, and all versions hereof in any other language shall be for accommodation only and shall not be binding upon the Parties. All communications and notices to be made or given pursuant to this Agreement, and any dispute proceeding related to or arising hereunder, shall be in the English language. If there is a discrepancy between any translation of this Agreement and this Agreement, this Agreement shall prevail.

16.12 Export Laws. Notwithstanding anything to the contrary contained herein, all obligations of Company and Licensee are subject to prior compliance with U.S. export regulations and such other U.S. laws and regulations as may be applicable, and to obtaining all necessary approvals required by the applicable agencies of the government of the U.S. or the European Union. Company and Licensee, respectively, shall each use its reasonable efforts to obtain such approvals for its own activities. Each Party shall cooperate with the other Party and shall provide assistance to the other Party as reasonably necessary to obtain any required approvals.

16.13 Severability. When possible, each provision of this Agreement shall be interpreted in such manner as to be effective and valid under Applicable Law, but if any provision of this Agreement is held to be prohibited by or invalid under Applicable Law, such provision shall be ineffective only to the extent of such prohibition or invalidity, without invalidating the remainder of this Agreement. The Parties shall make a good faith effort to replace the invalid or unenforceable provision with a valid one that conforms as nearly as possible with the original intent of the Parties.

16.14 No Implied Licenses. Except as expressly and specifically provided under this Agreement, the Parties agree that neither Party is granted any implied rights to or under any of the other Party’s current or future Patents, trade secrets, copyrights, moral rights, trade or service marks, trade dress, or any other intellectual property rights.

16.15 Third Party Beneficiaries. Except for the rights of the Company Indemnitees and Licensee Indemnitees set forth in Article 12, all rights, benefits and remedies under this Agreement are solely intended for the benefit of Company and Licensee, and no Third Party shall have any rights whatsoever to (i) enforce any obligation contained in this Agreement; (ii) seek a benefit or remedy for any breach of this Agreement; or (iii) take any other action relating to this Agreement under any legal theory, including but not limited to, actions in contract, tort (including but not

limited to negligence, gross negligence and strict liability), or as a defense, setoff or counterclaim to any action or claim brought or made by the Parties.

16.16 Advice of Counsel. Company and Licensee have each consulted counsel of their choice regarding this Agreement, and each acknowledges and agrees that this Agreement shall not be deemed to have been drafted by one Party or another and shall be construed accordingly.

16.17 Other Obligations. Except as expressly provided in this Agreement or as separately agreed upon in writing between Company and Licensee, each Party shall bear its own costs incurred in connection with the implementation of the obligations under this Agreement.

16.18 Counterparts. This Agreement may be executed simultaneously in any number of counterparts, any one of which need not contain the signature of more than one Party but all such counterparts taken together shall constitute one and the same agreement. Copies of original signature pages sent by facsimile and/or PDF shall have the same effect as signature pages containing original signatures.

[The remainder of this page has been intentionally left blank.]

IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed by their respective duly authorized officers as of the Effective Date.

IMMUNOMEDICS, INC.



By:	/s/Behzad Aghazadeh
Name:	Behzad Aghazadeh
Title:	Chairman

EVEREST MEDICINES II LIMITED



By:	/s/Fu Wei
Name:	Fu Wei
Title:	Director

Page 61 of 61

Exhibit A

Key Patents



Application Serial No.	Country	Filing Date	Title	Patent No.	Expires
[***]	[***]	[***]	[***]	[***]	[***]
[***]	[***]	[***]	[***]	[***]	[***]
[***]	[***]	[***]	[***]	[***]	[***]
[***]	[***]	[***]	[***]	[***]	[***]
[***]	[***]	[***]	[***]	[***]	[***]
[***]	[***]	[***]	[***]	[***]	[***]
[***]	[***]	[***]	[***]	[***]	[***]
[***]	[***]	[***]	[***]	[***]	[***]
[***]	[***]	[***]	[***]	[***]	[***]
[***]	[***]	[***]	[***]	[***]	[***]
[***]	[***]	[***]	[***]	[***]	[***]
[***]	[***]	[***]	[***]	[***]	[***]
[***]	[***]	[***]	[***]	[***]	[***]
[***]	[***]	[***]	[***]	[***]	[***]
[***]	[***]	[***]	[***]	[***]	[***]
[***]	[***]	[***]	[***]	[***]	[***]
[***]	[***]	[***]	[***]	[***]	[***]
[***]	[***]	[***]	[***]	[***]	[***]
[***]	[***]	[***]	[***]	[***]	[***]
[***]	[***]	[***]	[***]	[***]	[***]
[***]	[***]	[***]	[***]	[***]	[***]
[***]	[***]	[***]	[***]	[***]	[***]
[***]	[***]	[***]	[***]	[***]	[***]

Exhibit B

Company Patents

Pre-Existing Patents, US



Application Serial No.	Country	Filing Date	Title	Patent No.	Expires
[***]	[***]	[***]	[***]	[***]	[***]
[***]	[***]	[***]	[***]	[***]	[***]
[***]	[***]	[***]	[***]	[***]	[***]
[***]	[***]	[***]	[***]	[***]	[***]
[***]	[***]	[***]	[***]	[***]	[***]
[***]	[***]	[***]	[***]	[***]	[***]
[***]	[***]	[***]	[***]	[***]	[***]
[***]	[***]	[***]	[***]	[***]	[***]
[***]	[***]	[***]	[***]	[***]	[***]
[***]	[***]	[***]	[***]	[***]	[***]
[***]	[***]	[***]	[***]	[***]	[***]
[***]	[***]	[***]	[***]	[***]	[***]
[***]	[***]	[***]	[***]	[***]	[***]
[***]	[***]	[***]	[***]	[***]	[***]
[***]	[***]	[***]	[***]	[***]	[***]
[***]	[***]	[***]	[***]	[***]	[***]
[***]	[***]	[***]	[***]	[***]	[***]
[***]	[***]	[***]	[***]	[***]	[***]
[***]	[***]	[***]	[***]	[***]	[***]
[***]	[***]	[***]	[***]	[***]	[***]
[***]	[***]	[***]	[***]	[***]	[***]
[***]	[***]	[***]	[***]	[***]	[***]
[***]	[***]	[***]	[***]	[***]	[***]
[***]	[***]	[***]	[***]	[***]	[***]
[***]	[***]	[***]	[***]	[***]	[***]
[***]	[***]	[***]	[***]	[***]	[***]
[***]	[***]	[***]	[***]	[***]	[***]
[***]	[***]	[***]	[***]	[***]	[***]
[***]	[***]	[***]	[***]	[***]	[***]
[***]	[***]	[***]	[***]	[***]	[***]
[***]	[***]	[***]	[***]	[***]	[***]
[***]	[***]	[***]	[***]	[***]	[***]
[***]	[***]	[***]	[***]	[***]	[***]
[***]	[***]	[***]	[***]	[***]	[***]
[***]	[***]	[***]	[***]	[***]	[***]
[***]	[***]	[***]	[***]	[***]	[***]
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Pre-Existing Patents, Non-US



Application Serial No.	Country	Filing Date	Title	Patent No.	Expires
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[***]	[***]	[***]	[***]	[***]	[***]

Exhibit C

Upstream Licenses

• License Agreement by and between The Scripps Research Institute (TSRI) and Immunomedics, Inc., dated April 4, 2018.

Exhibit D

Company Know-How to be Transferred

All clinical and regulatory data and related documents necessary or reasonably useful for the Development, use, and Commercialization of the Licensed Product in the Territory.

CONSULTING AGREEMENT

CONSULTING AGREEMENT, dated as of May 28, 2019, by and between Immunomedics, Inc., a Delaware corporation having its principal offices in Morris Plains, New Jersey (the "Company"), and Robert Iannone ("Consultant") (each, a "Party"; together, the "Parties"):

WHEREAS, Consultant and Company entered into an Executive Employment Agreement, dated as of March 27, 2018 (the "Employment Agreement");

WHEREAS, Consultant subsequently resigned, without Good Reason (as defined in the Employment Agreement), from his employment with the Company, effective as of May 28, 2019 ("Date of Employment Termination"); and

WHEREAS, Company wishes to engage Consultant, and Consultant wishes to be engaged by Company, as an independent contractor consultant, on the terms and conditions set forth herein effective May 29, 2019;

NOW THEREFORE, in consideration of the promises made herein, the Parties hereby agree as follows:

1. Consulting Services.

(a) The Company hereby engages Consultant, and Consultant hereby accepts the Company's engagement, to provide those consulting services to the Company (the "Services") as are set forth on Schedule A hereto.

(b) Consultant shall determine the manner, means, details and methods for the performance of the Services, and shall use Consultant's own tools, unless otherwise provided by the Company, and facilities for purposes of performing the Services. It is understood and agreed by and between the Parties that during the Consultant's engagement, Consultant shall not be, nor will Consultant represent that Consultant is, an agent, officer, employee or servant of Company.

(c) Consultant agrees that Consultant shall secure and maintain any and all licenses, appointments and registrations necessary to perform the Services hereunder, and further shall immediately notify the Company if any such license, appointment or registration is revoked, suspended and/or not renewed, including the circumstances relating to any such revocation, suspension and/or non-renewal.

(d) Consultant shall have the discretion to determine the hours and time of performance of the Services, provided that Consultant agrees to provide the Services in a timely manner, and further to maintain reasonable contact with Company and be reasonably available to Company to discuss the Services, as may be requested by Company from time to time.

2. Duration of Services. From May, 29, 2019 through December 31, 2019, Consultant shall be engaged by the Company as an independent contractor (the "Consultancy Term"),

provided, however, that the Company may terminate the Consultant's engagement at any time, for any reason, so long as the Company provides Consultant with no less than two (2) weeks' advance written notice of the Company's intent to terminate Consultant's engagement. All work-in-progress at the time of the termination of Consultant's engagement shall be considered work product of, and shall be delivered to, the Company and shall be the property of the Company. If this Consulting Agreement is terminated in accordance with this Section 2, Consultant will be entitled to receive Consultant's Consulting Fee for Services actually rendered prior to the effective date of termination and during the termination notice period, and no further amount will be payable by the Company.

3. Consideration. The Company agrees to pay Consultant a consulting fee in accordance with, and subject to the terms and conditions set forth in, Schedule A hereto, in consideration of Consultant's performance of the Services (the "Consulting Fee"). Consultant shall invoice Company monthly in arrears for any Consulting Fee. Each invoice shall specify an invoice number, the dates covered in the invoice, a description of Services performed in the month and the time spent on such Services with reasonable particularity. Company agrees to pay Consultant's invoices within forty-five (45) days of receipt thereof.

4. Status as Independent Contractor.

(a) In performing the Services, Consultant shall act solely in a consulting capacity and not as the agent, employee or servant of the Company (or its parents, subsidiaries, divisions and affiliates), shall not be nor in any way hold Consultant out as an agent, officer or employee of the Company (or its parents, subsidiaries, divisions and affiliates), and shall not have authority to act for the Company (or its parents, subsidiaries, divisions and affiliates) or to commit or otherwise obligate any of them with respect to any matter.

(b) Because the Consultant is an independent contractor, the Company will not deduct or withhold from the Consulting Fee any federal, state or local income taxes or Federal Insurance Contributions Act ("FICA") taxes or any other employment tax, nor will it pay on behalf of the Consultant any FICA taxes or Federal Unemployment Tax Act taxes or any other employment tax. It will be the sole responsibility of the Consultant to pay all applicable federal, state and local income taxes and any Self Employment Contribution Act taxes and any other employment tax that are owed with respect to the Consulting Fee. The Consultant shall indemnify and hold harmless the Company (and its parents, subsidiaries, divisions and affiliates) from any and all liability, cost or expense (including without limitation any interest, find or penalty) incurred or imposed as a result of any failure of the Consultant to comply with Consultant's obligations set forth in this subparagraph.

(c) Consultant understands and agrees that as an independent contractor, Consultant shall not be entitled to, and shall make no claim to, any rights or fringe benefits offered to employees of the Company or any of its parents, subsidiaries, divisions and/or affiliates, including but not limited to any retirement, savings, health, medical, welfare, life insurance, disability, vacation, stock purchase, stock option or other benefit plans or programs maintained for employees by or on behalf the Company or its parents, subsidiaries, divisions and/or affiliates.

(d) In the event that performance of the Services requires travel, Consultant shall be solely responsible for injuries, emergencies and/or death to Consultant that may occur while traveling. Consultant shall be responsible for any theft, loss or damage to any materials, equipment or property delivered to Consultant or otherwise entrusted to Consultant's possession by or on behalf of the Company in connection with the Services.

(e) This Consulting Agreement shall not be construed as creating a partnership or joint venture between the parties or as vesting any other form of legal association that would impose liability upon one party for the act or failure to act of the other part.

5. Vesting of Options; Time to Exercise Options. Notwithstanding any provision in the Incentive Stock Option Grant, dated as of April 9, 2018, between the Company and the Consultant, or the Nonqualified Stock Option Grants, dated as of April 9, 2018, and any and all other stock option grants between the Company and the Consultant (the "Option Grants"), continued vesting of such options will cease and Consultant's "Service" for purposes of the Option Grant will cease as of the Employment Termination Date. Consultant acknowledges that he will have 90 days from the Employment Termination Date to exercise his options that are exercisable as of the Employment Termination Date.

6. Services to Others. Consultant is not restricted from performing services for or being employed by such additional entities or persons as Consultant shall see fit, provided, however, that, subject to Section 10 below, such other services do not interfere in any way with Consultant's provision of the Services or Consultant's other obligations as set forth herein, or do not create an actual or apparent conflict of interest with respect to Consultant's provision of the Services to the Company. The Company acknowledges that Consultant will be employed by Jazz Pharmaceuticals, Inc. ("Jazz") as a full-time employee during the Consultancy Term, and the Company agrees that Consultant's employment relationship with Jazz does not create an actual or apparent conflict of interest with Consultant's provision of the Services to the Company and shall not be considered a violation of any non-competition obligations that Consultant may have under this Agreement or the Employment Agreement.

7. Work Product.

(a) If at any time or times during the Consultancy Term, Consultant (either alone or with others) shall make, conceive, discover or reduce to practice any invention, modification, discovery, design, development, improvement, process, software program, work of authorship, documentation, formula, data, technique, know-how, secret or intellectual property right whatsoever or any interest therein (whether or not patentable or registrable under copyright or similar statutes or subject to analogous protection) (herein called "Developments") that (i) relates to the business of the Company, actual or demonstrably anticipated research of the Company, or any of the products or services being researched, developed, manufactured or sold by the Company or which may be used in relation therewith, (ii) results from Consultant's performance of the Services or (iii) results from the use of premises or personal property (whether tangible or intangible) owned, leased or contracted for by the Company, such Developments and the benefits thereof shall immediately become the sole and absolute property of the Company and its assigns, and Consultant shall promptly disclose to the Company (or any persons designated by it) each

such Development, and Consultant hereby assigns any rights Consultant may have or acquire in the Developments and benefits and/or rights resulting therefrom, whether during the Consultancy Term or thereafter, to the Company and its assigns without further compensation and shall communicate, without cost or delay, and without publishing the same, all available information relating thereto (with all necessary plans and models) to the Company. For the sake of clarification, the Company and Consultant agree that any invention, modification, discovery, design, development, improvement, process, software program, work of authorship, documentation, formula, data, technique, know-how, secret or intellectual property right whatsoever or any interest therein (whether or not patentable or registrable under copyright or similar statues or subject to analogous protection) arising or resulting from Consultant's activities as an employee of Jazz will be exclusively owned by Jazz, and are not considered Developments of the Company.

(b) Upon disclosure of each Development to the Company, Consultant will, during the Consultancy Term and at any time thereafter, at the request and cost of the Company, sign, execute, make and do all such deeds, documents, acts and things as the Company and its duly authorized agents may reasonably require:

(i) to apply for, obtain and vest in the name of the Company alone (unless the Company otherwise directs) letters patent, copyrights or other analogous protection in any country throughout the world and when so obtained or vested to renew and restore the same; and

(ii) to defend any opposition proceedings in respect of such applications and any opposition proceedings or petitions or applications for revocation of such letters patent, copyright or other analogous protection.

(c) Consultant agrees that the Company will be the sole owner of the Developments, and all underlying rights therein, in all media now known or hereinafter devised, throughout the universe and in perpetuity without any further obligations to Consultant. If the rights in any Developments do not otherwise automatically vest in the Company, Consultant hereby irrevocably conveys, transfers and assigns to the Company, all rights, in all media now known or hereinafter devised, throughout the universe and in perpetuity, in and to the Developments, including, without limitation, all of Consultant's right, title and interest in the copyrights (and all renewals, revivals and extensions thereof) to the Developments, including the right to sue, counterclaim and recover for all past, present and future infringement, misappropriation or dilution thereof, and all rights corresponding thereto throughout the world. In addition, Consultant hereby waives any so-called "moral rights" with respect to the Developments. To the extent that Consultant has any rights in the results and proceeds of Consultant's service to the Company that cannot be assigned in the manner described herein, Consultant agrees to unconditionally waive the enforcement of such rights. Consultant hereby waives any and all currently existing and future monetary rights in and to the Developments and all patents and other registrations for intellectual property that may issue thereon, including without limitation, any rights that would otherwise accrue to Consultant's benefit.

(d) In the event Company is unable, after reasonable effort, to secure Consultant's signature on any letters patent, copyright or other analogous protection relating to a Development, whether because of Consultant's physical or mental incapacity or for any other reason whatsoever, Consultant hereby irrevocably designates and appoints the Company and its duly authorized officers and agents as Consultant's agent and attorney-in-fact for the sole purpose of acting for and on Consultant's behalf and in his stead to execute and file any such application or applications and to do all other lawfully permitted acts to further the prosecution and issuance of letters patent, copyright and other analogous protection thereon with the same legal force and effect as if executed by Consultant.

8. Confidentiality.

(a) Consultant recognizes that Consultant's engagement with the Company will give Consultant access to Confidential Information (as defined below), the disclosure of which to competitors of the Company would cause the Company to suffer substantial and irreparable damage. Consultant recognizes, therefore, that it is in the Company's legitimate business interest to restrict Consultant's use of Confidential Information for any purposes other than the performance of the Services, and to limit any potential appropriation of Confidential Information by Consultant for the benefit of the Company's competitors and/or to the detriment of the Company. Accordingly, Consultant agrees as follows:

(i) Consultant shall not at any time, whether during or after the Consultancy Term, reveal to any person or entity any of the trade secrets or confidential information of the Company, or the trade secrets or confidential information of any third party which the Company is under an obligation to keep confidential, including but not limited to trade secrets or confidential information respecting inventions, research, developments, products, product plans, designs, methods, know-how, techniques, systems, processes, software programs, works of authorship, processes, formulas, technology, drawings, assays, raw data, scientific pre-clinical or clinical data, records, databases, formulations, clinical protocols, equipment designs, customer or vendor lists, projects, plans, proposals, strategies, market plans, forecasts, financials, and other business information ("Confidential Information"), except as may be required in the ordinary course of performing the Services, and Consultant shall keep secret all Confidential Information entrusted to Consultant and shall not use or attempt to use any such Confidential Information for personal gain or in any manner that may injure or cause loss, or could reasonably be expected to injure or cause loss, whether directly or indirectly, to the Company.

(ii) The above restrictions shall not apply to: (a) information that at the time of disclosure is in the public domain through no fault of Consultant; (b) information received from a third party outside of the Company that was disclosed without a breach of any confidentiality obligation; (c) information approved for release by written authorization of the Company; or (d) information that may be required by law or an order of any court, agency or proceeding to be disclosed; provided that Consultant shall provide the Company prior written notice of any such required disclosure once Consultant has knowledge of it and will help

the Company to the extent reasonable to obtain an appropriate protective order. The foregoing shall not limit Consultant's ability to (x) engage in an employment relationship with Jazz and discuss the terms of his consulting engagement by the Company with Jazz (without disclosing Confidential Information), or to discuss the terms of Consultant's engagement as a contractor to the extent expressly protected by applicable law, (y) to report possible violations of federal securities laws to the appropriate government enforcing agency and make such other disclosures that are expressly protected under federal or state "whistleblower" laws, or (z) to respond to inquiries from, or otherwise cooperate with, any governmental or regulatory investigation.

(iii) Consultant agrees that during the Consultancy Term he shall not take, use or permit to be used any notes, memoranda, reports, lists, records, drawings, sketches, specifications, software programs, data, documentation or other materials of any nature constituting Confidential Information or Developments otherwise than for the benefit of the Company. Consultant further agrees that Consultant shall not, following the Consultancy Term, use or permit to be used any such notes, memoranda, reports, lists, records, drawings, sketches, specifications, software programs, data, documentation or other materials, it being agreed that all of the foregoing shall be and remain the sole and exclusive property of the Company and that, immediately upon the cessation of the Consultancy Term, Consultant shall deliver all of the foregoing, and all copies thereof, to the Company, at its main office.

(iv) Consultant agrees that upon the cessation of the Consultancy Term, Consultant shall not take or retain without written authorization any documents, files or other property of the Company, and Consultant shall return promptly to the Company any such documents, files or property in Consultant's possession or custody, including any copies thereof maintained in any medium or format. Consultant recognizes that all documents, files and property that Consultant has received and will receive from the Company, including but not limited to scientific research, customer lists, handbooks, memoranda, product specifications, and other materials, are for the exclusive use of the Company, and that Consultant has no claim or right to the continued use, possession or custody of such documents, files or property following the cessation of the Consultancy Term.

(v) Pursuant to the Defend Trade Secrets Act of 2016, Consultant acknowledges that Consultant will not have criminal or civil liability under any federal or state trade secret law for the disclosure of a trade secret that (i) is made (A) in confidence to a federal, state, or local government official, either directly or indirectly, or to an attorney and (B) solely for the purpose of reporting or investigating a suspected violation of law; or (ii) is made in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal.

9. Non-Disparagement. The parties agree not to disparage or make any disparaging remark or send any disparaging communications concerning, the other party, its reputation, its business and/or its directors, officers, managers, employees, agents or attorneys. Consultant further agrees not to communicate with, give interviews and.or provide statements to any member of the media, including without limitation any print, broadcast or electronic media, concerning any aspect of Consultant's relationship or experiences with the Company or of the Company's business.

10. Post-Employment Obligations. Inconsideration of the Consulting Fee and other benefits to be provided to Consultant under this Agreement, Consultant hereby agrees and affirms that the post-employment obligations set forth in Section 5 (Confidentiality), Section 6 (Intellectual Property), Section 7 (Non-Competition) and Section 8 (Non-Solicitation) of the Employment Agreement, and any and all other post-employment obligations entered into by Consultant during or in connection his prior employment with the Company (collectively, the "Post-Employment Obligations"), shall survive and continue in full force and effect and such Post-Employment Obligations shall begin to run on May 29, 2019.

11. No Actions. Consultant, on behalf of Consultant and Consultant's issue, heirs, representatives, successors, agents, executors, administrators and assigns, hereby covenants and represents that Consultant has not instituted, and will not institute, to the fullest extent permitted by law, any complaints, claims, charges or lawsuits, with any governmental agency or any court or other tribunal, against the Company, by reason of any claim present or future,

known or unknown, arising from or related in any way to Consultant's membership in and/or relationship with the Company or the termination of such membership and/or relationship, or any other association or transaction to date between the parties hereto or any of their predecessors or their respective agents, employees or officers. This covenant shall not apply to actions for breach of this Agreement, or any other actions which cannot be prohibited or limited as a matter of law.

12. Severability; Validity. It is the desire and intent of the parties that the provisions of this Consulting Agreement shall be enforced to the fullest extent permissible under the laws and public policies applied in each jurisdiction in which enforcement is sought. In the event that any provision of this Consulting Agreement is held to be invalid, illegal or unenforceable, the validity, legality and enforceability of the remainder of this Consulting Agreement shall not in any way be affected or impaired thereby. Moreover, if any one or more of the provisions contained in this Consulting Agreement hereto is held to be excessively broad as to duration, scope, activity or subject, such provision shall be construed by limiting and reducing it so as to be enforceable to the maximum extent compatible with applicable law.

13. Governing Law; Forum. This Agreement shall be governed by and interpreted under the laws of the State of New Jersey without giving effect to any conflicts-of-law provisions or canons of construction that construe agreements against the draftsperson. Each Party hereby irrevocably submits to the exclusive jurisdiction of the United States District Court located in New Jersey or any state court located within such state, in respect of any claim arising out of or relating to this Agreement or Consultant's engagement by the Company, and hereby waives, and agrees not to assert, as a defense in any action, suit or proceeding in which any such claim is made that it is not subject thereto or that such action, suit or proceeding may not be brought or is not maintainable in such courts or that the venue thereof may not be appropriate or that this Agreement may not be enforced in or by such courts. Any appellate proceedings shall take place in the appropriate courts having appellate jurisdiction over the courts set forth in this Section.

14. Successors; Binding Agreement. The Company may assign this Consulting Agreement hereto to any corporation that may succeed to the business and assets of the Company, and any such successor corporation may similarly assign this Consulting Agreement. This Consulting Agreement hereto shall be binding upon the Company's successors and assigns. The Consultant's rights and duties under this Consulting Agreement hereto shall not be subject to alienation, assignment or transfer, whether voluntarily or involuntarily.

15. Entire Agreement; Modification. This Consulting Agreement hereto constitute the entire agreement between the parties, and fully supersede any and all agreements, promises, covenants, arrangements, communications, representations or warranties, whether oral or written, by any officer, employee or representative of any party hereto respecting this subject matter. In addition, no amendment or modification to this Consulting Agreement hereto shall be valid unless set forth in writing and signed by each of the parties.

16. No Wavier. Any waiver by the Company of a breach of any provision of this Consulting Agreement hereto shall not operate or be construed as a waiver of any subsequent breach.

17. Headings. The headings used in this Agreement are intended for convenience or reference only and shall not in any manner amplify, limit, modify or otherwise be used in the construction or interpretation of any provision of this Agreement.

18. Counterparts. This Agreement may be executed simultaneously in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

19. Acknowledgments/Time to Consider. This Agreement is intended to satisfy the requirements of the Older Workers Benefit Protection Act, 29 U.S.C. § 626(f), and the Age Discrimination in Employment Act ("ADEA"). Consultant, by this Agreement, is advised to consult with an attorney before executing this Agreement. Consultant Acknowledges and agrees that: (a) Consultant has read this Agreement in its entirety and understands all of the terms of this Agreement and understands that Consultant is releasing all claims against the Releases, including claims under the ADEA; (b) Consultant has been advised in writing to consult with an attorney before executing this Agreement; (c) Consultant knowingly, freely, and voluntarily assents to all of the terms and conditions set out in this Agreement, including, without limitation, the waiver, release and covenants contained herein; (d) Consultant is executing this Agreement, including the waiver and release, in exchange for good and valuable consideration in addition to anything of value to which he is otherwise entitled; (e) Consultant has been given twenty-one (21) days to consider whether or not to enter into this Agreement and consult with an attorney of Consultant's choice (although Consultant may elect not to use the full twenty-one (21) day period at Consultant's option); (f) any changes to this Agreement, whether material or immaterial, do not restart the running of the twenty-one (21) day period; and (g) by signing this Agreement, Consultant acknowledges that Consultant does so freely, knowingly, and voluntarily.

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first written above.

IMMUNOMEDICS, INC.

By: /s/Jared Freedberg

Name: Jared Freedberg

Title: General Counsel

ROBERT IANNONE

By: /s/Robert Iannone

Name: Robert Iannone

Title: CMO, Head of R&D

SCHEDULE A

SERVICES & CONSULTING FEE

Services: "Services," as that term is used in the Consulting Agreement, shall include the following:

Provision of transition and advisory services with respect to the Consultant's prior role of Chief Medical Officer on an as-needed basis to Company for up to eight (8) hours per week during the Consultancy Period.

Consultant agrees to attend in-person the planning meeting between Company and Everest Medicines currently scheduled for June 2, 2019 at the American Society of Clinical Oncology in Chicago, IL.

Consulting Fee: $400.00 per hour.

Exhibit 31.1

CERTIFICATION

I, Usama Malik, Principal Executive Officer of Immunomedics, Inc., certify that:

1. I have reviewed this quarterly report of Immunomedics, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 7, 2019



/s/ Usama Malik
Usama Malik
Principal Executive Officer

Exhibit 32.1

Certification

Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (Subsections (a) and (b) of Section 1350, Chapter 63 of Title 18, United States Code)

Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (Subsections (a) and (b) of Section 1350, Chapter 63 of Title 18, United States Code), the undersigned officer of Immunomedics, Inc., a Delaware corporation (the “Company”), does hereby certify, to such officer’s knowledge, that:

The Form 10-Q for the quarter ended June 30, 2019, (the “Form 10-Q”) of the Company fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, and the information contained in the Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of the Company.





Dated: August 7, 2019	/s/ Usama Malik
	Usama Malik
	Principal Executive Officer and Principal Financial Officer
	Principal Executive Officer and Principal Financial Officer

A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.