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Table of Contents
Index to Financial Statements

As filed with the Securities and Exchange Commission on May 11, 2015

Registration No. 333-               

 

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549



FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933



Axovant Sciences Ltd.
(Exact name of registrant as specified in its charter)

Bermuda
(State or other jurisdiction of
incorporation or organization)
  2834
(Primary Standard Industrial
Classification Code Number)
  Not Applicable
(I.R.S. Employer
Identification Number)

Clarendon House
2 Church Street
Hamilton HM 11, Bermuda
+1 (441) 295-5950
(Address, including zip code, and telephone number, including
area code, of registrant's principal executive offices)



Corporate Services Company
2711 Centerville Road
Wilmington, DE 19808
(866) 846-8765

(Name, address, including zip code, and telephone number, including
area code, of agent for service)



Copies to:

Frank F. Rahmani
John T. McKenna
Divakar Gupta
Cooley LLP
3175 Hanover Street
Palo Alto, CA 94304
(650) 843-5000

 

Marc D. Jaffe
Nathan Ajiashvili
Latham & Watkins LLP
885 Third Avenue
New York, NY 10022
(212) 906-1200



Approximate date of commencement of proposed sale to the public:
As soon as practicable after the effective date of this registration statement.



If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box.  o

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  o

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  o

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration number of the earlier effective registration statement for the same offering.  o



Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 under the Securities Exchange Act of 1934. (Check one):

Large accelerated filer  o   Accelerated filer  o   Non-accelerated filer  ý
(Do not check if a
smaller reporting company)
  Smaller reporting company  o



CALCULATION OF REGISTRATION FEE

             
   
Title of Securities being Registered
  Proposed Maximum
Aggregate Offering
Price (1)(2)

  Amount of
Registration Fee

 
   

Common shares, $0.00001 par value per common share

  $ 172,500,000   $ 20,045  

 

 
(1)
In accordance with Rule 457(o) under the Securities Act of 1933, as amended, the number of shares being registered and the proposed maximum offering price per common share are not included in this table.

(2)
Estimated solely for purposes of computing the amount of the registration fee pursuant to Rule 457(o) under the Securities Act. Includes the offering price of shares that the underwriters have the option to purchase.



The registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment that specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933, as amended, or until the registration statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine.

   


Table of Contents

The information in this preliminary prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This preliminary prospectus is not an offer to sell these securities and we are not soliciting offers to buy these securities in any state where the offer or sale is not permitted.

SUBJECT TO COMPLETION, DATED MAY 11, 2015

PRELIMINARY PROSPECTUS

                             Shares

LOGO

Common Shares

We are offering                             common shares. This is our initial public offering and no public market currently exists for our common shares. We expect the initial public offering price to be between $               and $               per common share.

We intend to apply to list our common shares on the New York Stock Exchange under the symbol "AXON." Upon the closing of this offering, we expect to be a "controlled company" within the meaning of applicable New York Stock Exchange rules.

We are an emerging growth company, as defined in the Jumpstart Our Business Startups Act of 2012, and, as such, will be subject to reduced public company reporting requirements.

Investing in our common shares involves risks. See the section titled "Risk Factors" beginning on page 9.

Neither the Securities and Exchange Commission in the United States nor any other regulatory body has approved or disapproved of these securities or passed upon the adequacy or accuracy of this prospectus. Any representation to the contrary is a criminal offense.

Consent under the Exchange Control Act 1972 (and its related regulations) has been obtained from the Bermuda Monetary Authority for the issue and transfer of our common shares to and between residents and non-residents of Bermuda for exchange control purposes provided our common shares remain listed on an appointed stock exchange, which includes the New York Stock Exchange. In granting such consent, neither the Bermuda Monetary Authority nor the Registrar of Companies in Bermuda accepts any responsibility for our financial soundness or the correctness of any of the statements made or opinions expressed in this prospectus.


 
  PER SHARE   TOTAL  

Public offering price

  $     $    

Underwriting discounts and commissions (1)

  $     $    

Proceeds to us, before expenses

  $     $    

    (1)
    We refer you to the section titled "Underwriting" for additional information regarding underwriter compensation.

Delivery of the common shares is expected to be made on or about                             , 2015. We have granted the underwriters an option for a period of 30 days from the date of this prospectus to purchase an additional                        common shares. If the underwriters exercise the option in full, the total underwriting discounts and commissions payable by us will be $               and the total proceeds to us, before expenses, will be $               .

Jefferies   Evercore ISI   RBC Capital Markets

JMP Securities

Baird

   

Prospectus dated                    , 2015


Table of Contents


Table of Contents

 
  Page

Prospectus Summary

  1

Risk Factors

  9

Special Note Regarding Forward-Looking Statements

  43

Industry and Market Data

  44

Use of Proceeds

  45

Dividend Policy

  46

Capitalization

  47

Dilution

  48

Selected Financial Data

  50

Management's Discussion and Analysis of Financial Condition and Results of Operations

  51

Business

  58

Management

  86

Executive Compensation

  93

Certain Relationships and Related Party Transactions

  99

Principal Shareholders

  102

Description of Share Capital

  104

Shares Eligible for Future Sale

  111

Bermuda Company Considerations

  113

Material Bermuda and U.S. Federal Income Tax Considerations

  118

Underwriting

  124

Legal Matters

  132

Experts

  132

Where You Can Find Additional Information

  132

Exchange Controls

  133

Enforcement of Civil Liabilities Under United States Federal Securities Laws

  134

Index to Financial Statements

  F-1

You should rely only on the information contained in this prospectus and any free writing prospectus prepared by or on behalf of us or to which we have referred you. We have not authorized anyone to provide you with information that is different from that contained in such prospectuses. We are offering to sell our common shares, and seeking offers to buy our common shares, only in jurisdictions where such offers and sales are permitted. The information in this prospectus is accurate only as of the date of this prospectus, regardless of the time of delivery of this prospectus or any sale of our common shares.


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PROSPECTUS SUMMARY

This summary highlights information contained elsewhere in this prospectus and does not contain all of the information that you should consider in making your investment decision. Before investing in our common shares, you should carefully read this entire prospectus, including our financial statements and the related notes thereto and the information set forth in the sections titled "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations." Unless the context otherwise requires, we use the terms "company," "we," "us" and "our" in this prospectus to refer to Axovant Sciences Ltd. and our wholly-owned subsidiary, Axovant Sciences, Inc.

Company Overview

We are a clinical-stage biopharmaceutical company focused on the acquisition, development and commercialization of novel therapeutics for the treatment of neurodegenerative disorders. Our goal is to be the leading biopharmaceutical company focused on the treatment of dementia, a condition characterized by a significant decline in mental capacity and impaired daily function. Our near-term focus is to develop our product candidate, which we refer to as RVT-101, for the treatment of Alzheimer's disease and other forms of dementia. We acquired worldwide rights to RVT-101 from Glaxo Group Limited and GlaxoSmithKline Intellectual Property Development Limited, collectively GSK, in December 2014. We plan to commence a Phase 3 pivotal program of RVT-101 for the treatment of mild-to-moderate Alzheimer's disease in the fourth quarter of 2015. If our Phase 3 program is successful, we plan to seek regulatory approval and commercialize RVT-101 in the United States and the European Union. In the long-term, we intend to develop a pipeline of product candidates to comprehensively address the cognitive, behavioral and functional components of dementia.

Alzheimer's disease, a form of dementia, is a progressive neurodegenerative disorder that results in significant impairments in cognition and day-to-day functioning. According to the Alzheimer's Association, Alzheimer's disease affects approximately 5.3 million people in the United States. It is estimated that between 70% and 90% of Alzheimer's disease patients age 65 and older are classified as having mild-to-moderate Alzheimer's disease. No new chemical entity has been approved by the U.S. Food and Drug Administration, or the FDA, for the treatment of Alzheimer's disease since 2003.

RVT-101 is an orally administered, potent antagonist of the 5-hydroxytryptamine 6, or 5-HT6, serotonin receptors in the brain. Antagonism of the 5-HT6 receptor is a novel mechanism that promotes the release of acetylcholine, glutamate and other neurotransmitters. These neurotransmitters are believed to be critical for alertness, memory, thought and judgment, key components of cognition and function that are impaired in patients with Alzheimer's disease. We plan to develop RVT-101 for use in combination with donepezil and potentially other cholinesterase inhibitors. Donepezil, a generic drug also marketed under the trade name Aricept by Eisai Co., Ltd. and Pfizer, Inc., is one of the most commonly used cholinesterase inhibitors. Cholinesterase inhibitors are the current standard of care for the treatment of mild-to-moderate Alzheimer's disease, and the only class of drugs approved by the FDA for the treatment of patients with mild Alzheimer's disease. Based on preclinical and clinical data collected to date, we believe RVT-101, when used in combination with donepezil, works additively to increase the concentration of acetylcholine and other neurotransmitters and thereby synergistically improve cognition and function in patients with Alzheimer's disease.

We believe RVT-101 has the potential to be a best-in-class 5-HT6 receptor antagonist for the treatment of Alzheimer's disease based on its safety, tolerability and efficacy for up to 48 weeks, as demonstrated in a 684-subject, randomized, placebo-controlled Phase 2b trial conducted by GSK. We believe this is meaningful, in part, because currently marketed Alzheimer's disease drugs were approved on efficacy data of 28 weeks or less. In this Phase 2b trial, subjects that received 35 mg RVT-101 in combination with donepezil achieved a statistically significant improvement in cognition and function, as compared to those receiving donepezil alone. Cognition and function are the two endpoints that have historically been the basis

 

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for FDA approval for drugs to treat Alzheimer's disease. To determine whether an outcome is statistically significant, a "p-value" is calculated. Historically, the FDA and European Medicines Agency, or the EMA, have generally required newly approved drugs to demonstrate an effect with a p-value of less than 0.05, which suggests there is a less than 5.0% probability that the observed effect is due to chance alone. When the p-value is less than 0.05, the result is generally considered "statistically significant." We intend to conduct a Phase 3 pivotal program in subjects with mild-to-moderate Alzheimer's disease designed to confirm the results of the Phase 2b clinical trial conducted by GSK, and we plan to commence this program in the fourth quarter of 2015.

We have assembled a team with substantial experience in developing and obtaining approval for drugs for central nervous system disorders, including Dr. Lawrence Friedhoff, the Chief Development Officer of Axovant Sciences, Inc., who previously led the development of Aricept at Eisai Co., Ltd.

Alzheimer's Disease: Overview and Market Opportunity

According to Alzheimer's Disease International, more than 44 million individuals worldwide suffer from dementia, and based on scientific literature, approximately 34 million individuals are affected by Alzheimer's disease. In addition, the prevalence of Alzheimer's disease is expected to increase over time, with 13.8 million people age 65 and older projected to have the disease by 2050 in the United States, up from 5.0 million in 2014. This projection does not include Alzheimer's disease patients under the age of 65, who currently account for approximately 4% of the overall Alzheimer's disease population.

In addition to its debilitating effect on patients' cognition and day-to-day functioning, Alzheimer's disease places a significant burden on the healthcare system. According to the Alzheimer's Association, the aggregate cost of care in 2014 for patients with Alzheimer's disease and other types of dementia in the United States was estimated to be $214 billion, over half of which is borne by the Medicare system.

Alzheimer's disease is often grouped into three categories based on severity: mild, moderate and severe. Although the relative prevalence of each of these categories is not well-defined in the literature, a report published by the Alzheimer's Society, a leading care and research charity in the United Kingdom for individuals and families that suffer from dementia, estimates that between 70% and 90% of all Alzheimer's disease patients age 65 and older have mild-to-moderate Alzheimer's disease.

The current standard of care for the treatment of patients with mild-to-moderate Alzheimer's disease includes the use of cholinesterase inhibitors initiated at the time of diagnosis. Currently marketed cholinesterase inhibitors include donepezil (marketed by Eisai Co., Ltd. and Pfizer, Inc. as Aricept), rivastigmine (marketed by Novartis AG as Exelon) and galantamine (marketed by Janssen Pharmaceuticals, Inc. as Razadyne). Cholinesterase inhibitors continue to be used widely for the treatment of patients with Alzheimer's disease and can lead to clinically significant improvements in cognition. However, most patients require additional therapy due to progression of their disease.

Our Product Candidate: RVT-101

We acquired worldwide rights to RVT-101 from GSK in December 2014. RVT-101 is an orally administered, potent antagonist of the 5-HT6 serotonin receptor. By antagonizing the 5-HT6 receptor, RVT-101 helps enhance the release of acetylcholine, glutamate and other neurotransmitters that are essential to cognition.

5-HT6 receptors are primarily localized to the central nervous system, or CNS, particularly in regions of the brain that modulate cognition. Because 5-HT6 receptor antagonists do not significantly increase levels of acetylcholine outside of the CNS, it is believed that 5-HT6 receptor antagonists have limited peripheral side effects, including many that are commonly associated with cholinesterase inhibitors. In addition, we believe that RVT-101's action as a 5-HT6 receptor antagonist provides a strong mechanistic rationale to support its use in combination with cholinesterase inhibitors. While cholinesterase inhibitors help prevent the breakdown of acetylcholine, 5-HT6 receptor antagonists promote the release of acetylcholine. Therefore, when used in combination with one another, we believe that 5-HT6 receptor antagonists and cholinesterase

 

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inhibitors increase the concentration of acetylcholine through complementary mechanisms without exacerbating the toxicities associated with cholinesterase inhibitors.

Clinical Development

Prior to our acquisition of RVT-101 in December 2014, GSK conducted 13 clinical trials for RVT-101 involving over 1,250 individuals, which included healthy subjects as well as subjects with mild-to-moderate Alzheimer's disease. In a Phase 2b clinical trial of 684 subjects with mild-to-moderate Alzheimer's disease, subjects that received 35 mg RVT-101 in combination with donepezil achieved a statistically significant improvement in cognition at 12, 24 and 48 weeks following initiation of treatment, compared to subjects that received donepezil alone, as measured by the Alzheimer's Disease Assessment Scale-cognitive, or ADAS-cog, subscale. We believe this is a meaningful result because currently marketed Alzheimer's disease drugs were approved on efficacy data of 28 weeks or less. In addition to RVT-101's effect on cognition, subjects that received 35 mg RVT-101 in combination with donepezil achieved a statistically significant improvement in function at 12, 24 and 36 weeks following the initiation of treatment, compared to subjects that received donepezil alone, as measured by the Alzheimer's Disease Cooperative Study Activities of Daily Living, or ADCS-ADL, a commonly used scale evaluating function in which a subject's ability to perform a list of daily activities is evaluated based on information obtained from the subject and his or her caregiver. We believe these ADCS-ADL results are particularly noteworthy in light of the fact that the decline in the ability of Alzheimer's disease patients to perform activities essential to daily living places a significant burden on caregivers and the healthcare system.

The graphs below present the results from the Phase 2b clinical trial described above on ADAS-cog and ADCS-ADL.


ADAS-cog Change Over 48 Weeks

CHART

 

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ADCS-ADL Change Over 48 Weeks

CHART

Phase 3 Development Plan

We intend to conduct a Phase 3 pivotal program in subjects with mild-to-moderate Alzheimer's disease designed to confirm the results of the Phase 2b clinical trial conducted by GSK. We met with the FDA at the end of March 2015 to discuss our development plan for RVT-101. We believe that this meeting confirmed the results of the prior end-of-Phase 2 meeting between the FDA and GSK and that our proposed Phase 3 trial, if successful, would, in conjunction with GSK's Phase 2b clinical trial, be sufficient to support the filing of a new drug application, or NDA. The proposed trial would randomize patients already on a stable background of donepezil therapy to receive adjunctive treatment with either 35 mg RVT-101 or placebo once daily for a period of at least six months. We intend to begin this pivotal trial in the fourth quarter of 2015, and if the results of this trial are positive, our goal is to submit an NDA to the FDA and a marketing authorization application, or MAA, to the EMA by the end of 2017. We may conduct additional clinical trials to further support the commercial potential of RVT-101 in the United States, the European Union, Japan and other major markets.

Other Potential Indications for RVT-101

Beginning in the second half of 2015, we plan to evaluate RVT-101 as a potential treatment for forms of dementia other than mild-to-moderate Alzheimer's disease, such as severe Alzheimer's disease, dementia with Lewy bodies, Parkinson's disease dementia and vascular dementia. We also intend to augment our current pipeline through the acquisition or in-license of additional late-stage product candidates for the treatment of other aspects of dementia that we believe can be developed and commercialized in a capital-efficient manner.

 

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Our Strategy

Our goal is to be the leading biopharmaceutical company focused on the treatment of dementia. The key elements of our strategy to achieve this goal include the following:

    §
    Rapidly advance RVT-101 for the treatment of mild-to-moderate Alzheimer's disease.

    §
    Develop RVT-101 for severe Alzheimer's disease and other forms of dementia.

    §
    Acquire or in-license late-stage product candidates for the treatment of other aspects of dementia in a capital-efficient manner.

    §
    Maximize the commercial potential of our product candidates.

Risks Associated with Our Business

Our business is subject to a number of risks of which you should be aware before making a decision to invest in our common shares. These risks are discussed more fully in the section titled "Risk Factors" and include, among others:

    §
    We have a limited operating history and have never generated any product revenues.

    §
    We expect to incur significant losses for the foreseeable future and may never achieve or maintain profitability. Our independent registered public accounting firm has expressed substantial doubt about our ability to continue as a going concern.

    §
    We are heavily dependent on the success of RVT-101, our only product candidate, and if RVT-101 does not receive regulatory approval or is not successfully commercialized, our business may be harmed.

    §
    We will require additional capital to fund our operations, and if we fail to obtain necessary financing, we may not be able to complete the development and commercialization of RVT-101.

    §
    We may be required to make significant payments in connection with our acquisition of RVT-101 from GSK.

    §
    Clinical trials are very expensive, time-consuming, difficult to design and implement and involve an uncertain outcome.

    §
    We intend to rely on third parties to conduct, supervise and monitor our clinical trials, and if those third parties perform in an unsatisfactory manner, it may harm our business.

    §
    If we are unable to obtain and maintain patent protection for our technology and products or if the scope of the patent protection obtained is not sufficiently broad, we may not be able to compete effectively in our markets.

    §
    We do not have our own manufacturing capabilities and will rely on third parties to produce clinical and commercial supplies of RVT-101 and any future product candidate.

    §
    We face significant competition from other biotechnology and pharmaceutical companies and our operating results will suffer if we fail to compete effectively.

    §
    We currently have a limited number of employees who are employed by our wholly-owned subsidiary, Axovant Sciences, Inc., and we rely on Roivant Sciences, Inc. to provide various administrative, research and development and other services.

If we are unable to adequately address these and other risks we face, our business, financial condition, operating results and prospects may be adversely affected.

In addition, we are an "emerging growth company" as defined in the Jumpstart Our Business Startups Act, or the JOBS Act, enacted in April 2012, and therefore we intend to take advantage of certain exemptions from various public company reporting requirements, including not being required to have our internal control over financial reporting audited by our independent registered public accounting firm pursuant to Section 404(b) of the Sarbanes-Oxley Act of 2002, reduced disclosure obligations regarding executive compensation in this prospectus, our periodic reports and our proxy statements and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and any golden parachute

 

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payments not previously approved. We may take advantage of these exemptions for up to five years or until we are no longer an "emerging growth company."

Relationship with Roivant Sciences Ltd., Roivant Sciences, Inc. and Axovant Sciences, Inc.

Roivant Sciences Ltd. will be our controlling shareholder.     We are a wholly-owned subsidiary of Roivant Sciences Ltd., a company focused on the acquisition, development and commercialization of late-stage product candidates that are non-strategic, deprioritized or under-resourced at other biopharmaceutical companies. After the closing of this offering, we expect to be a "controlled company" within the meaning of the corporate governance rules of the New York Stock Exchange, or the NYSE. Assuming we sell the number of the shares set forth on the cover page of this prospectus, Roivant Sciences Ltd. will own, in the aggregate, approximately          % of our outstanding common shares, or approximately          % if the underwriters exercise their option to purchase additional common shares in full. Roivant Sciences Ltd. will be able to exercise control over all matters requiring shareholder approval, including the election of our directors and approval of significant corporate transactions. We have entered into an information sharing and cooperation agreement with Roivant Sciences Ltd. For a description of this agreement, see the section titled "Certain Relationships and Related Party Transactions—Information Sharing and Cooperation Agreement."

Services Agreement with Roivant Sciences, Inc.     We and our wholly-owned subsidiary, Axovant Sciences, Inc., have received, and will continue to receive, various services provided by our affiliate, Roivant Sciences, Inc., which is also a wholly-owned subsidiary of Roivant Sciences Ltd. These services include, but are not limited to, the identification of potential product candidates, project management of clinical trials and other development, administrative and financial activities. Following the completion of this offering, we expect that our reliance on Roivant Sciences, Inc. will decrease over time as we, Axovant Sciences, Inc. and any other future subsidiary of ours continue to hire the necessary personnel to manage the development and potential commercialization of RVT-101. We and Axovant Sciences, Inc. have entered into a services agreement with Roivant Sciences, Inc. in connection with the provision of these services. For a description of this agreement, see the section titled "Certain Relationships and Related Party Transactions—Services Agreement with Roivant Sciences, Inc."

Corporate Information

We are an exempted limited company incorporated under the laws of Bermuda on October 31, 2014. Our principal executive offices are located in Bermuda at Clarendon House, 2 Church Street, Hamilton HM 11, Bermuda, and we also have business operations at 14 Par-La-Ville Road, Hamilton HM08, Bermuda. The telephone number of our registered office is +1 (441) 295 5950. Our website address is www.axovant.com. The information contained on our website is not incorporated by reference into this prospectus, and you should not consider any information contained on, or that can be accessed through, our website as part of this prospectus or in deciding whether to purchase our common shares.

Solely for convenience, the trademarks and trade names in this prospectus are referred to without the ® and TM symbols, but such references should not be construed as any indicator that their respective owners will not assert, to the fullest extent under applicable law, their rights thereto. All other trademarks, trade names and service marks appearing in this prospectus are the property of their respective owners.

 

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THE OFFERING

Common shares offered by us

                      common shares

Option to purchase additional shares

 

We have granted the underwriters an option for a period of 30 days from the date of this prospectus to purchase an additional                    common shares.

Common shares to be outstanding immediately after this offering

 

                    common shares (or                    common shares if the underwriters exercise their option to purchase additional common shares in full)

Use of proceeds

 

We estimate that the net proceeds to us from this offering, after deducting underwriting discounts and commissions and estimated offering expenses payable by us, will be approximately $                million, assuming the shares are offered at $               per common share, which is the midpoint of the price range set forth on the cover page of this prospectus.

 

We intend to use the net proceeds from this offering primarily for the clinical development of our product candidate, RVT-101. The remaining proceeds, if any, will be used for working capital and general corporate purposes. See the section titled "Use of Proceeds" for additional information.

Controlled company

 

Upon the closing of this offering, Roivant Sciences Ltd. will beneficially own a controlling interest in us and we expect to be a "controlled company" under NYSE rules. As a controlled company, we may elect to avail ourselves of the controlled company exemption under the corporate governence requirements of the NYSE.

Risk factors

 

You should read the section titled "Risk Factors" for a discussion of factors to consider carefully before deciding to invest in our common shares.

Dividend policy

 

We have never declared or paid any dividends on our common shares. We anticipate that we will retain all of our future earnings, if any, for use in the operation and expansion of our business and do not anticipate paying cash dividends in the foreseeable future.

Proposed New York Stock Exchange symbol

 

"AXON"

The number of our common shares that will be outstanding after this offering is based on 10,000,000 common shares outstanding as of December 31, 2014 and excludes:

    §
                        common shares reserved for future issuance under our 2015 Equity Incentive Plan following this offering, as well as any automatic increases in the number of common shares reserved for future issuance under this plan.

Except as otherwise indicated herein, all information in this prospectus, including the number of common shares that will be outstanding after this offering, assumes or gives effect to:

    §
    a 100,000-for-1 stock split effected on March 18, 2015;

    §
    no exercise by the underwriters of their option to purchase an additional                     common shares; and

    §
    the effectiveness of our amended and restated bye-laws.

 

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SUMMARY FINANCIAL DATA

The following tables set forth our summary statement of operations data for the period from October 31, 2014 (date of inception) through December 31, 2014 and the balance sheet data as of December 31, 2014 from our audited financial statements appearing elsewhere in this prospectus. Our historical results are not necessarily indicative of the results to be expected in the future, and our operating results for the period ended December 31, 2014 are not indicative of the results that may be expected for a full fiscal year or any other future period. You should read this summary financial data below, together with our financial statements and related notes thereto appearing elsewhere in this prospectus, as well as the sections titled "Selected Financial Data" and "Management's Discussion and Analysis of Financial Condition and Results of Operations." Our fiscal year ends on March 31.


 
  Period from October 31,
2014 (Date of Inception)
to December 31, 2014
 
 
  (in thousands, except
share and per share data)

 

Statement of Operations Data:

       

Operating expenses:

       

Research and development

  $ 10,538  

General and administrative

    224  

Total operating expenses

    10,762  

Net loss and comprehensive loss

  $ (10,762 )

Net loss per common share—basic and diluted (1)

  $ (1.08 )

Weighted average common shares outstanding—basic and diluted (1)

    10,000,000  

(1)
See Note B[5] to our financial statements for an explanation of the method used to compute basic and diluted net loss per common share.

 
  As of December 31, 2014  
 
  Actual   As Adjusted (1)(2)  
 
  (in thousands)
 

Balance Sheet Data:

             

Cash

  $   $    

Total assets

    2        

Total liabilities

    5,764        

Accumulated deficit

    (10,762 )      

Total shareholders' (deficit) equity

    (5,762 )      

(1)
The as adjusted balance sheet data gives effect to our sale of               common shares in this offering at an assumed initial public offering price of $               per common share, which is the midpoint of the price range set forth on the cover page of this prospectus, after deducting underwriting discounts and commissions and estimated offering expenses payable by us.

(2)
Each $1.00 increase or decrease in the assumed initial public offering price of $               per common share, which is the midpoint of the price range set forth on the cover page of this prospectus, after deducting underwriting discounts and commissions and estimated offering expenses payable by us, would increase or decrease each of cash, total assets and total shareholders' (deficit) equity on an as adjusted basis by approximately $                million, assuming that the number of shares offered by us, as set forth on the cover page of this prospectus, remains the same. Similarly, each increase or decrease of 1.0 million common shares offered by us at the assumed initial public offering price $               per common share, which is the midpoint of the price range set forth on the cover page of this prospectus, after deducting underwriting discounts and commissions and estimated offering expenses payable by us, would increase or decrease each of cash, total assets and total shareholders' (deficit) equity on an as adjusted basis by approximately $                million. The as adjusted information is illustrative only, and will be adjusted based on the actual initial public offering price and other terms of this offering determined at pricing.

 

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RISK FACTORS

Investing in our common shares involves a high degree of risk. You should carefully consider the risks described below, together with the other information contained in this prospectus, including our financial statements and the related notes appearing at the end of this prospectus, before making your decision to invest in our common shares. We cannot assure you that any of the events discussed in the risk factors below will not occur. These risks could have a material and adverse impact on our business, results of operations, financial condition and cash flows and if so our future prospects would likely be materially and adversely affected. If any of such events were to happen, the trading price of our common shares could decline, and you could lose all or part of your investment.

Risks Related to Our Business, Financial Position and Capital Requirements

We have a limited operating history and have never generated any product revenues.

We are a clinical-stage biopharmaceutical company with a limited operating history. We were formed in October 2014, and our operations to date have been limited to organizing and staffing our company and acquiring worldwide rights to RVT-101. We have not yet demonstrated an ability to successfully complete a large-scale, pivotal clinical trial, obtain marketing approval, manufacture a commercial scale product, or arrange for a third-party to do so on our behalf, or conduct sales and marketing activities necessary for successful product commercialization. Consequently, we have no meaningful operations upon which to evaluate our business and predictions about our future success or viability may not be as accurate as they could be if we had a longer operating history or a history of successfully developing and commercializing pharmaceutical products.

Our ability to generate revenue and become profitable depends upon our ability to successfully complete the development of our product candidate, RVT-101, for the treatment of Alzheimer's disease and other forms of dementia and obtain the necessary regulatory approvals for its commercialization. We have never been profitable, have no products approved for commercial sale and to date have not generated any revenue from product sales.

Even if we receive regulatory approval for the sale of RVT-101, we do not know when RVT-101 will generate revenue, if at all. Our ability to generate product revenue depends on a number of factors, including our ability to:

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Because of the numerous risks and uncertainties associated with product development, we are unable to predict the timing or amount of increased expenses, or when, or if, we will be able to achieve or maintain profitability. Our expenses could increase beyond expectations if we are required by the U.S. Food and Drug Administration, or the FDA, and comparable non-U.S. regulatory authorities, to perform studies or clinical trials in addition to those that we currently anticipate. Even if RVT-101 is approved for commercial sale, we anticipate incurring significant costs associated with the commercial launch of this product. If we cannot successfully execute any one of the foregoing, our business may not succeed and your investment will be adversely affected.

We expect to incur significant losses for the foreseeable future and may never achieve or maintain profitability. Our independent registered public accounting firm has expressed substantial doubt about our ability to continue as a going concern.

Investment in pharmaceutical product development is highly speculative because it entails substantial upfront capital expenditures and significant risk that a product candidate will fail to gain regulatory approval or become commercially viable. We have never generated any revenues, and we cannot estimate with precision the extent of our future losses. We do not currently have any products that are available for commercial sale and we may never generate revenue from selling products or achieve profitability. We expect to continue to incur substantial and increasing losses through the projected commercialization of RVT-101. RVT-101 has not been approved for marketing in the United States and may never receive such approval. As a result, we are uncertain when or if we will achieve profitability and, if so, whether we will be able to sustain it. Our ability to produce revenue and achieve profitability is dependent on our ability to complete the development of RVT-101, obtain necessary regulatory approvals, and have RVT-101 manufactured and successfully marketed. We cannot assure you that we will be profitable even if we successfully commercialize RVT-101. If we do successfully obtain regulatory approval to market RVT-101, our revenues will be dependent, in part, upon, among other things, the size of the markets in the territories for which we gain regulatory approval, the number of competitors in such markets, the accepted price for RVT-101 and whether we own the commercial rights for that territory. If the indication approved by regulatory authorities is narrower than we expect, or the treatment population is narrowed by competition, physician choice or treatment guidelines, we may not generate significant revenue from sales of RVT-101, even if approved. Even if we do achieve profitability, we may not be able to sustain or increase profitability on a quarterly or annual basis. Failure to become and remain profitable may adversely affect the market price of our common shares and our ability to raise capital and continue operations. As of December 31, 2014, we had an accumulated deficit of $10.8 million.

We expect our research and development expenses to be significant in connection with our planned Phase 3 pivotal program for RVT-101 for the treatment of Alzheimer's disease. In addition, if we obtain regulatory approval for RVT-101, we expect to incur increased sales and marketing expenses. As a result, we expect to continue to incur significant and increasing operating losses and negative cash flows for the foreseeable future. These losses have had and will continue to have an adverse effect on our financial position and working capital.

Our auditors have issued a going concern opinion on our financial statements as of December 31, 2014 and for the period from October 31, 2014 (date of inception) to December 31, 2014, expressing substantial doubt that we can continue as an ongoing business due to insufficient capital for us to fund our operations. Our financial statements do not include any adjustments that may result from the outcome of this uncertainty. If we are unable to successfully complete this offering, we will need to create alternate financing or operational plans to continue as a going concern.

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We are heavily dependent on the success of RVT-101, our only product candidate, which is still under clinical development, and if RVT-101 does not receive regulatory approval or is not successfully commercialized, our business may be harmed.

We currently have no products that are approved for commercial sale and may never be able to develop marketable drug products. We expect that a substantial portion of our efforts and expenditures over the next few years will be devoted to RVT-101. Accordingly, our business currently depends heavily on the successful development, regulatory approval and commercialization of RVT-101. We cannot be certain that RVT-101 will receive regulatory approval or be successfully commercialized even if we receive regulatory approval. The research, testing, manufacturing, labeling, approval, sale, marketing and distribution of drug products are and will remain subject to extensive regulation by the FDA and other regulatory authorities in the United States and other countries that each have differing regulations. We are not permitted to market RVT-101 in the United States until it receives approval of a new drug application, or NDA, from the FDA, or in any foreign countries until it receives the requisite approval from such countries. We have not submitted an NDA to the FDA or comparable applications to other regulatory authorities and do not expect to be in a position to do so for the foreseeable future. Obtaining approval of an NDA is an extensive, lengthy, expensive and inherently uncertain process, and the FDA may delay, limit or deny approval of RVT-101 for many reasons, including:

We will require additional capital to fund our operations, and if we fail to obtain necessary financing, we may not be able to complete the development and commercialization of RVT-101.

We expect to spend substantial amounts to complete the development of, seek regulatory approvals for and commercialize RVT-101. These expenditures will include costs associated with our asset purchase

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agreement with Glaxo Group Limited and GlaxoSmithKline Intellectual Property Development Limited, collectively GSK. Under the terms of this agreement, we are obligated to make significant cash payments upon the achievement of specified development, regulatory and sales performance milestones, as well as royalty payments in connection with the sale of resulting products.

Even with the net proceeds of this offering, we may require additional capital to complete the development and potential commercialization of RVT-101 for mild-to-moderate Alzheimer's disease and the development of RVT-101 for other potential indications. If we are unable to raise capital when needed or on acceptable terms, we could be forced to delay, reduce or eliminate our development program or any future commercialization efforts. In addition, attempting to secure additional financing may divert the time and attention of our management from day-to-day activities and harm our product candidate development efforts.

Based upon our current operating plan, we believe that the net proceeds from this offering will enable us to fund our operating expenses and capital expenditure requirements through 2017 and the completion of our Phase 3 pivotal program for RVT-101 and the submission of our NDA to the FDA for the approval of RVT-101 in the United States. This estimate is based on assumptions that may prove to be wrong, and we could use our available capital resources sooner than we currently expect. Because the length of time and activities associated with successful development of RVT-101 is highly uncertain, we are unable to estimate the actual funds we will require for development and any approved marketing and commercialization activities. Our future funding requirements, both near and long-term, will depend on many factors, including, but not limited to:

We cannot be certain that additional funding will be available on acceptable terms, or at all. If we are unable to raise additional capital in sufficient amounts or on terms acceptable to us, we may have to significantly delay, scale back or discontinue the development or commercialization of RVT-101 or potentially discontinue operations.

We may be required to make significant payments in connection with our acquisition of RVT-101 from GSK.

In December 2014, we acquired rights to RVT-101 pursuant to an asset purchase agreement with GSK, or the GSK Agreement. Under the GSK Agreement, we are subject to significant obligations, including payment obligations upon achievement of specified milestones and royalties on product sales, as well as other material obligations. Unless the FDA requires us to complete additional clinical work prior to starting a Phase 3 trial for RVT-101, we will be obligated to pay GSK an additional $5 million upon the earliest to occur of specified events that indicate a single Phase 3 trial may be sufficient to obtain FDA approval for RVT-101 for Alzheimer's disease. We are also obligated to pay GSK $35 million, $25 million and $10 million upon approval of RVT-101 in the United States, the European Union and Japan, respectively, as well as an additional one-time payment of $85 million for the first calendar year in which we achieve

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global net sales of $1.2 billion for RVT-101. Under the GSK Agreement we are also obligated to pay a fixed 12.5% royalty based on net sales of RVT-101. If these payments become due under the terms of the GSK Agreement, we may not have sufficient funds available to meet our obligations and our development efforts may be materially harmed.

Raising additional funds by issuing securities may cause dilution to existing shareholders, and raising funds through lending and licensing arrangements may restrict our operations or require us to relinquish proprietary rights.

We expect that significant additional capital will be needed in the future to continue our planned operations. Until such time, if ever, as we can generate substantial product revenues, we expect to finance our cash needs through a combination of equity offerings, debt financings, strategic alliances and license and development agreements in connection with any collaborations. We do not have any committed external source of funds. To the extent that we raise additional capital by issuing equity securities, our existing shareholders' ownership may experience substantial dilution, and the terms of these securities may include liquidation or other preferences that adversely affect your rights as a common shareholder. Debt financing and preferred equity financing, if available, may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends.

If we raise additional funds through collaborations, strategic alliances or marketing, distribution or licensing arrangements with third parties, we may have to relinquish valuable rights to our technologies, future revenue streams, research programs or product candidates or grant licenses on terms that may not be favorable to us. Any debt financing we enter into may involve covenants that restrict our operations. These restrictive covenants may include limitations on additional borrowing and specific restrictions on the use of our assets as well as prohibitions on our ability to create liens, pay dividends, redeem our shares or make investments. If we are unable to raise additional funds through equity or debt financings when needed, we may be required to delay, limit, reduce or terminate our product development or future commercialization efforts or grant rights to develop and market product candidates that we would otherwise develop and market ourselves.

We currently have a limited number of employees who are employed by our wholly-owned subsidiary, Axovant Sciences, Inc., and we rely on Roivant Sciences, Inc. to provide various administrative, research and development and other services.

We currently have seven employees who are employed by our wholly-owned subsidiary, Axovant Sciences, Inc. We rely on the administrative and support and research and development services provided by our affiliate, Roivant Sciences, Inc., a wholly-owned subsidiary of Roivant Sciences Ltd. We and Axovant Sciences, Inc., have entered into a services agreement with Roivant Sciences, Inc. Personnel and support staff that provide services to us under this services agreement are not required to, and we do not expect that they will, have as their primary responsibility the management and administration of our business or act exclusively for us. Under this services agreement, Roivant Sciences, Inc. has the discretion to determine which of its employees will perform services under the agreement. For a description of the terms of the services agreement, see the section titled "Certain Relationships and Related Party Transactions—Services Agreement with Roivant Sciences, Inc."

Roivant Sciences, Inc. has limited financing and accounting and other resources. If Roivant Sciences, Inc. fails to perform its obligations in accordance with the terms of the services agreement, it could be difficult for us to operate our business. In addition, the termination of our relationship with Roivant Sciences, Inc. and any delay in appointing or finding a suitable replacement provider (if one exists) could make it difficult for us to operate our business. Any failure by Roivant Sciences, Inc. to effectively manage our administrative, research and development or other services could harm our business, financial condition and results of operations.

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We will need to expand our organization, and we may experience difficulties in managing this growth, which could disrupt our operations.

As of December 31, 2014, we did not have any employees. Since that time, our wholly-owned subsidiary, Axovant Sciences, Inc., has hired seven employees, and we expect to hire additional employees for our managerial, clinical, scientific and engineering, operational, sales and marketing teams through Axovant Sciences, Inc. We may have operational difficulties in connection with identifying, hiring and integrating new personnel. Future growth would impose significant additional responsibilities on our management, including the need to identify, recruit, maintain, motivate and integrate additional employees, consultants and contractors. Also, our management may need to divert a disproportionate amount of its attention away from our day-to-day activities and devote a substantial amount of time to managing these growth activities. We may not be able to effectively manage the expansion of our operations, which may result in weaknesses in our infrastructure, give rise to operational mistakes, loss of business opportunities, loss of employees and reduced productivity among remaining employees. Our expected growth could require significant capital expenditures and may divert financial resources from other projects, such as the development of product candidates. If our management is unable to effectively manage our growth, our expenses may increase more than expected, our ability to generate and/or grow revenues could be reduced, and we may not be able to implement our business strategy. Our future financial performance and our ability to commercialize RVT-101 and compete effectively will depend, in part, on our ability to effectively manage any future growth.

Many of the other pharmaceutical companies that we compete against for qualified personnel and consultants have greater financial and other resources, different risk profiles and a longer history in the industry than we do. They also may provide more diverse opportunities and better chances for career advancement. Some of these characteristics may be more appealing to high-quality candidates and consultants than what we have to offer. If we are unable to continue to attract and retain high-quality personnel and consultants, the rate and success at which we can discover and develop product candidates and our business will be limited.

Our employees, independent contractors, principal investigators, consultants, commercial collaborators, service providers and other vendors may engage in misconduct or other improper activities, including noncompliance with regulatory standards and requirements, which could have an adverse effect on our results of operations.

We are exposed to the risk that our employees and contractors, including principal investigators, consultants, commercial collaborators, service providers and other vendors may engage in fraudulent or other illegal activity. Misconduct by these parties could include intentional, reckless and/or negligent conduct or other unauthorized activities that violate the laws and regulations of the FDA and other similar regulatory bodies, including those laws that require the reporting of true, complete and accurate information to such regulatory bodies; manufacturing standards; federal and state healthcare fraud and abuse and health regulatory laws and other similar foreign fraudulent misconduct laws; or laws that require the true, complete and accurate reporting of financial information or data. Activities subject to these laws also involve the improper use or misrepresentation of information obtained in the course of clinical trials, which could result in regulatory sanctions and serious harm to our reputation. It is not always possible to identify and deter third-party misconduct, and the precautions we take to detect and prevent this activity may not be effective in controlling unknown or unmanaged risks or losses or in protecting us from governmental investigations or other actions or lawsuits stemming from a failure to be in compliance with such laws or regulations. If any such actions are instituted against us, and we are not successful in defending ourselves or asserting our rights, those actions could have a significant impact on our business and financial results, including the imposition of significant civil, criminal and administrative penalties, damages, monetary fines, possible exclusion from participation in Medicare, Medicaid and other federal healthcare programs, reputational harm, diminished profits and future earnings, and curtailment of our operations, any of which could adversely affect our ability to operate our business and our results of operations.

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Our business and operations would suffer in the event of system failures.

Our computer systems, as well as those of Axovant Sciences, Inc., Roivant Sciences, Inc. and our CROs and other contractors and consultants, are vulnerable to damage from computer viruses, unauthorized access, natural disasters (including hurricanes), terrorism, war and telecommunication and electrical failures. If such an event were to occur and cause interruptions in our operations, it could result in a material disruption of our drug development programs. For example, the loss of preclinical or clinical trial data from completed, ongoing or planned trials could result in delays in our regulatory approval efforts and significantly increase our costs to recover or reproduce the data. To the extent that any disruption or security breach were to result in a loss of or damage to our data or applications, or inappropriate disclosure of personal, confidential or proprietary information, we could incur liability and the further development of RVT-101 or any future product candidate could be delayed.

Potential product liability lawsuits against us could cause us to incur substantial liabilities and limit commercialization of any products that we may develop.

The use of RVT-101 in clinical trials and the sale of any products for which we obtain marketing approval exposes us to the risk of product liability claims. Product liability claims might be brought against us by consumers, health care providers, pharmaceutical companies or others selling or otherwise coming into contact with our products. On occasion, large judgments have been awarded in class action lawsuits based on drugs that had unanticipated adverse effects. If we cannot successfully defend against product liability claims, we could incur substantial liability and costs. In addition, regardless of merit or eventual outcome, product liability claims may result in:

The product liability insurance we currently carry, and any additional product liability insurance coverage we acquire in the future, may not be sufficient to reimburse us for any expenses or losses we may suffer. Moreover, insurance coverage is becoming increasingly expensive and in the future we may not be able to maintain insurance coverage at a reasonable cost or in sufficient amounts to protect us against losses due to liability. If we obtain marketing approval for RVT-101, we intend to acquire insurance coverage to include the sale of commercial products; however, we may be unable to obtain product liability insurance on commercially reasonable terms or in adequate amounts. A successful product liability claim or series of claims brought against us could cause our share price to decline and, if judgments exceed our insurance coverage, could adversely affect our results of operations and business, including preventing or limiting the commercialization of any product candidates we develop.

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Risks Related to Clinical Development, Regulatory Approval and Commercialization

Clinical trials are very expensive, time-consuming, difficult to design and implement and involve an uncertain outcome.

Our only product candidate, RVT-101, is still in development and will require extensive clinical testing before we are prepared to submit an NDA for regulatory approval. We cannot predict with any certainty if or when we might submit an NDA for regulatory approval for RVT-101 or whether any such NDA will be approved by the FDA. Human clinical trials are very expensive and difficult to design and implement, in part because they are subject to rigorous regulatory requirements. For instance, the FDA may not agree with our proposed endpoints for any clinical trial of RVT-101, which may delay the commencement of our clinical trials. The clinical trial process is also time-consuming. We estimate that clinical trials of RVT-101 will take at least several years to complete. Furthermore, failure can occur at any stage of the trials, and we could encounter problems that cause us to abandon or repeat clinical trials. Product candidates in later stages of clinical trials may fail to show the desired safety and efficacy traits despite having progressed through preclinical studies and initial clinical trials, and the results of early clinical trials of RVT-101 therefore may not be predictive of the results of our planned Phase 3 pivotal program. A number of companies in the biopharmaceutical industry have suffered significant setbacks in advanced clinical trials due to lack of efficacy or adverse safety profiles, notwithstanding promising results in earlier trials.

The commencement and completion of clinical trials may be delayed by several factors, including:

Further, we, the FDA or an institutional review board, or IRB, at a clinical trial site may suspend our clinical trials at any time if it appears that we or our collaborators are failing to conduct a trial in accordance with regulatory requirements, including the FDA's current Good Clinical Practice, or GCP, regulations, that we are exposing participants to unacceptable health risks, or if the FDA finds deficiencies in our investigational new drug, or IND, submissions or the conduct of these trials. Therefore, we cannot predict with any certainty the schedule for commencement and completion of future clinical trials. If we experience delays in the commencement or completion of our clinical trials, or if we terminate a clinical trial prior to completion, the commercial prospects of RVT-101 could be harmed, and our ability to generate revenues from RVT-101 may be delayed. In addition, any delays in our clinical trials could increase our costs, slow down the approval process and jeopardize our ability to commence product sales and generate revenues. Any of these occurrences may harm our business, financial condition and results of operations.

Moreover, principal investigators for our clinical trials may serve as scientific advisors or consultants to us from time to time and receive compensation in connection with such services. Under certain circumstances, we may be required to report some of these relationships to the FDA. The FDA may conclude that a financial relationship between us and a principal investigator has created a conflict of interest or otherwise affected interpretation of the study. 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

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a delay in approval, or rejection, of our marketing applications by the FDA and may ultimately lead to the denial of marketing approval of one or more of our product candidates.

In addition, we recently acquired worldwide rights to RVT-101 and were not involved in the development of RVT-101 prior to December 2014. We may experience difficulties in the transition of this product candidate from GSK to us, which may result in delays in clinical trials as well as problems in our development efforts and regulatory filings, particularly if we do not receive all of the necessary products, information, reports and data from GSK in a timely manner. Further, we have had no involvement with or control over the preclinical and clinical development of RVT-101 to date. We are dependent on GSK having conducted such research and development in accordance with the applicable protocol, legal, regulatory and scientific standards, having accurately reported the results of all clinical trials conducted prior to our acquisition of RVT-101 and having correctly collected and interpreted the data from these trials. These problems could result in increased costs and delays in the development of RVT-101 which could adversely affect any future revenues from this product candidate.

The results of our clinical trials may not support our RVT-101 claims.

Even if our clinical trials are completed as planned, we cannot be certain that their results will support the safety and effectiveness of RVT-101 for Alzheimer's disease or any other potential indication. Success in preclinical testing and early clinical trials does not ensure that later clinical trials will be successful, and we cannot be sure that the results of later clinical trials will replicate the results of prior clinical trials and preclinical testing. A failure of a clinical trial to meet its predetermined endpoints would likely cause us to abandon a product candidate and may delay development of any other product candidates. Any delay in, or termination of, our clinical trials will delay the submission of our NDAs with the FDA and, ultimately, our ability to commercialize RVT-101 and generate product revenues.

Enrollment and retention of patients in clinical trials is an expensive and time-consuming process and could be made more difficult or rendered impossible by multiple factors outside our control.

We may encounter delays in enrolling, or be unable to enroll, a sufficient number of patients to complete any of our clinical trials, and even once enrolled we may be unable to retain a sufficient number of patients to complete any of our trials. Patient enrollment and retention in clinical trials depends on many factors, including the size of the patient population, the nature of the trial protocol, the existing body of safety and efficacy data with respect to the study drug, the number and nature of competing treatments and ongoing clinical trials of competing drugs for the same indication, the proximity of patients to clinical sites and the eligibility criteria for the study. Furthermore, any negative results we may report in clinical trials of our product candidate may make it difficult or impossible to recruit and retain patients in other clinical trials of that same product candidate. Delays or failures in planned patient enrollment or retention may result in increased costs, program delays or both, which could have a harmful effect on our ability to develop RVT-101, or could render further development impossible. In addition, we expect to rely on CROs and clinical trial sites to ensure proper and timely conduct of our future clinical trials and, while we intend to enter into agreements governing their services, we will be limited in our ability to compel their actual performance.

We face significant competition from other biotechnology and pharmaceutical companies, and our operating results will suffer if we fail to compete effectively.

Drug development is highly competitive and subject to rapid and significant technological advancements. As a significant unmet medical need exists for the treatment of Alzheimer's disease, there are several large and small pharmaceutical companies focused on delivering therapeutics for the treatment of Alzheimer's disease. Further, it is likely that additional drugs will become available in the future for the treatment of Alzheimer's disease.

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We are aware of several companies that are working to develop drugs that would compete against RVT-101 for Alzheimer's disease treatment. Many of our existing or potential competitors have substantially greater financial, technical and human resources than we do and significantly greater experience in the discovery and development of product candidates, as well as in obtaining regulatory approvals of those product candidates in the United States and in foreign countries. Our current and potential future competitors also have significantly more experience commercializing drugs that have been approved for marketing. Mergers and acquisitions in the pharmaceutical and biotechnology industries could result in even more resources being concentrated among a small number of our competitors.

Competition may increase further as a result of advances in the commercial applicability of technologies and greater availability of capital for investment in these industries. Our competitors may succeed in developing, acquiring or licensing, on an exclusive basis, drugs that are more effective or less costly than any product candidate that we may develop.

We will face competition from other drugs currently approved or that will be approved in the future for the treatment of Alzheimer's disease. Therefore, our ability to compete successfully will depend largely on our ability to:

The availability of our competitors' products could limit the demand, and the price we are able to charge, for any product candidate we develop. The inability to compete with existing or subsequently introduced drugs would have an adverse impact on our business, financial condition and prospects.

Established pharmaceutical companies may invest heavily to accelerate discovery and development of novel compounds or to in-license novel compounds that could make RVT-101 less competitive. In addition, any new product that competes with an approved product must demonstrate compelling advantages in efficacy, convenience, tolerability and safety in order to overcome price competition and to be commercially successful. Accordingly, our competitors may succeed in obtaining patent protection, discovering, developing, receiving FDA approval for or commercializing medicines before we do, which would have an adverse impact on our business and results of operations.

If we are not able to obtain required regulatory approvals, we will not be able to commercialize RVT-101, and our ability to generate revenue will be materially impaired.

RVT-101 and the activities associated with its development and commercialization, including its design, research, testing, manufacture, safety, efficacy, recordkeeping, labeling, packaging, storage, approval, advertising, promotion, sale and distribution, are subject to comprehensive regulation by the FDA and other regulatory agencies in the United States and by the EMA and similar regulatory authorities outside the United States. Failure to obtain marketing approval for RVT-101 will prevent us from commercializing it.

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We have not received approval from regulatory authorities to market any product candidate in any jurisdiction, and it is possible that neither RVT-101 nor any product candidates we may seek to develop in the future will ever obtain the appropriate regulatory approvals necessary for us to commence product sales. Prior to submitting an NDA to the FDA, a marketing authorization application, or MAA, to the EMA, or an equivalent application to other foreign regulatory authorities for approval of RVT-101, we will need to complete our planned Phase 3 pivotal program.

We expect to rely on third-party CROs and consultants to assist us in filing and supporting the applications necessary to gain marketing approvals. Securing marketing approval requires the submission of extensive preclinical and clinical data and supporting information to regulatory authorities for each therapeutic indication to establish RVT-101's safety and efficacy for that indication. Securing marketing approval also requires the submission of information about the product manufacturing process to, and inspection of manufacturing facilities by, the regulatory authorities.

RVT-101 may cause adverse effects or have other properties that could delay or prevent its regulatory approval or limit the scope of any approved label or market acceptance.

Adverse events caused by RVT-101 could cause us, other reviewing entities, clinical trial sites or regulatory authorities to interrupt, delay or halt clinical trials and could result in the denial of regulatory approval. If an unacceptable frequency or severity of adverse events are reported in our clinical trials for RVT-101 or any future product candidates, our ability to obtain regulatory approval for such product candidates may be negatively impacted.

Furthermore, if any of our products are approved and then cause serious or unexpected side effects, a number of potentially significant negative consequences could result, including:

Any of these events could prevent us from achieving or maintaining market acceptance of the affected product candidate and could substantially increase the costs of commercializing RVT-101.

Even if we obtain FDA approval for RVT-101 in the United States, we may never obtain approval for or commercialize it in any other jurisdiction, which would limit our ability to realize its full market potential.

In order to market any products in any particular jurisdiction, we must establish and comply with numerous and varying regulatory requirements on a country-by-country basis regarding safety and efficacy. Approval by FDA in the United States does not ensure approval by regulatory authorities in other countries or jurisdictions. In addition, clinical trials conducted in one country may not be accepted by regulatory authorities in other countries, and regulatory approval in one country does not guarantee regulatory approval in any other country. Approval processes vary among countries and can involve additional product testing and validation and additional administrative review periods. Seeking foreign regulatory approval could result in difficulties and costs for us and require additional preclinical studies or clinical trials which could be costly and time consuming. Regulatory requirements can vary widely from country to country and could

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delay or prevent the introduction of our products in those countries. We do not have any product candidates approved for sale in any jurisdiction, including in international markets, and we do not have experience in obtaining regulatory approval in international markets. If we fail to comply with regulatory requirements in international markets or to obtain and maintain required approvals, or if regulatory approvals in international markets are delayed, our target market will be reduced and our ability to realize the full market potential of any product we develop will be unrealized.

Even if we obtain regulatory approval for RVT-101, we will still face extensive regulatory requirements and our products may face future development and regulatory difficulties.

Any product candidate for which we obtain marketing approval, along with the manufacturing processes, post-approval clinical data, labeling, packaging, distribution, adverse event reporting, storage, recordkeeping, export, import, advertising and promotional activities for such product, among other things, will be subject to extensive and ongoing requirements of and review by the FDA and other regulatory authorities. These requirements include submissions of safety and other post-marketing information and reports, establishment registration and drug listing requirements, continued compliance with current Good Manufacturing Practice, or cGMP, requirements relating to manufacturing, quality control, quality assurance and corresponding maintenance of records and documents, requirements regarding the distribution of samples to physicians and recordkeeping and current GCP requirements for any clinical trials that we conduct post-approval. Even if marketing approval of a product candidate is granted, the approval may be subject to limitations on the indicated uses for which the product may be marketed or to the conditions of approval, including any requirement to implement a REMS. If RVT-101 receives marketing approval, the accompanying label may limit the approved use of our drug, which could limit sales of the product.

The FDA may also impose requirements for costly post-marketing studies or clinical trials and surveillance to monitor the safety or efficacy of the product. The FDA closely regulates the post-approval marketing and promotion of drugs to ensure drugs are marketed only for the approved indications and in accordance with the provisions of the approved labeling. The FDA imposes stringent restrictions on manufacturers' communications regarding off-label use and if we do not market our products for their approved indications, we may be subject to enforcement action for off-label marketing. Violations of the Federal Food, Drug, and Cosmetic Act relating to the promotion of prescription drugs may lead to FDA enforcement actions and investigations alleging violations of federal and state health care fraud and abuse laws, as well as state consumer protection laws.

In addition, later discovery of previously unknown adverse events or other problems with our products, manufacturers or manufacturing processes, or failure to comply with regulatory requirements, may yield various results, including:

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The FDA's policies may change and additional government regulations may be enacted that could prevent, limit or delay regulatory approval of RVT-101 or any future product candidate. 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.

Even if RVT-101 receives marketing approval, it may fail to achieve market acceptance by physicians, patients, third-party payors or others in the medical community necessary for commercial success.

If RVT-101 receives marketing approval, it may nonetheless fail to gain sufficient market acceptance by physicians, patients, third-party payors and others in the medical community. If it does not achieve an adequate level of acceptance, we may not generate significant product revenues and become profitable. The degree of market acceptance of RVT-101, if approved for commercial sale, will depend on a number of factors, including but not limited to:

Because we expect sales of RVT-101, if approved, to generate substantially all of our product revenues for the foreseeable future, the failure of this product to find market acceptance would harm our business and could require us to seek additional financing.

If we are unable to establish sales, marketing and distribution capabilities either on our own or in collaboration with third-parties, we may not be successful in commercializing RVT-101, if approved.

We do not have any infrastructure for the sales, marketing or distribution of our products, and the cost of establishing and maintaining such an organization may exceed the cost-effectiveness of doing so. In order to market any product that may be approved, we must build our sales, distribution, marketing, managerial and other non-technical capabilities or make arrangements with third parties to perform these services. To achieve commercial success for any product for which we have obtained marketing approval, we will need a sales and marketing organization.

We expect to build a focused sales, distribution and marketing infrastructure to market RVT-101 in the United States and European Union, if approved. There are significant expenses and risks involved with establishing our own sales, marketing and distribution capabilities, including our ability to hire, retain and appropriately incentivize qualified individuals, generate sufficient sales leads, provide adequate training to sales and marketing personnel, and effectively manage a geographically dispersed sales and marketing team. Any failure or delay in the development of our internal sales, marketing and distribution capabilities could delay any product launch, which would adversely impact the commercialization of RVT-101. For

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example, if the commercial launch of RVT-101 for which we recruit a sales force and establish marketing capabilities is delayed or does not occur for any reason, we would have prematurely or unnecessarily incurred these commercialization expenses. This may be costly, and our investment would be lost if we cannot retain or reposition our sales and marketing personnel.

Factors that may inhibit our efforts to commercialize our products on our own include:

We do not anticipate having the resources in the foreseeable future to allocate to the sales and marketing of RVT-101 in certain markets overseas. Therefore, our future success will depend, in part, on our ability to enter into and maintain collaborative relationships for such capabilities, the collaborator's strategic interest in the product and such collaborator's ability to successfully market and sell the product. We intend to pursue collaborative arrangements regarding the sale and marketing of RVT-101, if approved, for certain markets overseas; however, we cannot assure you that we will be able to establish or maintain such collaborative arrangements, or if able to do so, that they will have effective sales forces. To the extent that we depend on third parties for marketing and distribution, any revenues we receive will depend upon the efforts of such third parties, and there can be no assurance that such efforts will be successful.

If we are unable to build our own sales force or negotiate a collaborative relationship for the commercialization of RVT-101 we may be forced to delay the potential commercialization of RVT-101 or reduce the scope of our sales or marketing activities for RVT-101. If we elect to increase our expenditures to fund commercialization activities ourselves, we will need to obtain additional capital, which may not be available to us on acceptable terms, or at all. If we do not have sufficient funds, we will not be able to bring RVT-101 to market or generate product revenue. We could enter into arrangements with collaborative partners or otherwise at an earlier stage than otherwise would be ideal and we may be required to relinquish rights to RVT-101 or otherwise agree to terms unfavorable to us, any of which may have an adverse effect on our business, operating results and prospects.

If we are unable to establish adequate sales, marketing and distribution capabilities, either on our own or in collaboration with third parties, we will not be successful in commercializing RVT-101 and may not become profitable. We will be competing with many companies that currently have extensive and well-funded marketing and sales operations. Without an internal team or the support of a third party to perform marketing and sales functions, we may be unable to compete successfully against these more established companies.

If we obtain approval to commercialize any products outside of the United States, a variety of risks associated with international operations could materially adversely affect our business.

If RVT-101 is approved for commercialization, we intend to enter into agreements with third parties to market it in certain jurisdictions outside the United States. We expect that we will be subject to additional risks related to international operations or entering into international business relationships, including:

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We have no prior experience in these areas. In addition, there are complex regulatory, tax, labor and other legal requirements imposed by both the European Union and many of the individual countries in Europe with which we will need to comply. Many U.S.-based biopharmaceutical companies have found the process of marketing their own products in Europe to be very challenging.

Our current and future relationships with investigators, health care professionals, consultants, third-party payors, and customers will be subject to applicable healthcare regulatory laws, which could expose us to penalties.

Our business operations and current and future arrangements with investigators, healthcare professionals, consultants, third-party payors and customers, may expose us to broadly applicable fraud and abuse and other healthcare laws and regulations. These laws may constrain the business or financial arrangements and relationships through which we conduct our operations, including how we research, market, sell and distribute our products for which we obtain marketing approval. Such laws include:

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Efforts to ensure that our current and future business arrangements with third parties will comply with applicable healthcare laws and regulations will involve substantial costs. It is possible that governmental authorities will conclude that our business practices do not comply with current or future statutes, regulations, agency guidance or case law involving applicable healthcare laws. If our operations are found to be in violation of any of these or any other health regulatory laws that may apply to us, we may be subject to significant penalties, including the imposition of significant civil, criminal and administrative penalties, damages, monetary fines, disgorgement, individual imprisonment, possible exclusion from participation in Medicare, Medicaid and other federal healthcare programs, contractual damages, reputational harm, diminished profits and future earnings, and curtailment of our operations, any of which could adversely affect our ability to operate our business and our results of operations. Defending against any such actions can be costly, time-consuming and may require significant financial and personnel resources. Therefore, even if we are successful in defending against any such actions that may be brought against us, our business may be impaired.

Recently enacted and future legislation may increase the difficulty and cost for us to obtain marketing approval of and commercialize RVT-101 and affect the prices we may obtain.

In the United States and some foreign jurisdictions, there have been a number of legislative and regulatory changes and proposed changes regarding the healthcare system that could, among other things, prevent or delay marketing approval of RVT-101, restrict or regulate post-approval activities and affect our ability to profitably sell any products for which we obtain marketing approval.

For example, in March 2010, the Patient Protection and Affordable Care Act, as amended by the Health Care Education Reconciliation Act, collectively the Affordable Care Act, was enacted to broaden access to health insurance, reduce or constrain the growth of healthcare spending, enhance remedies against fraud and abuse, add new transparency requirements for health care and health insurance industries, impose new taxes and fees on the health industry and impose additional health policy reforms. Although it is too early to

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determine the full effect of the Affordable Care Act, the law has continued the downward pressure on pharmaceutical pricing, especially under the Medicare program, and increased the industry's regulatory burdens and operating costs. Among the provisions of the Affordable Care Act of importance to our potential drug candidates are the following:

In addition, other legislative changes have been proposed and adopted since the Affordable Care Act was enacted. For example, in August 2011, the President signed into law the Budget Control Act of 2011, which, among other things, created the Joint Select Committee on Deficit Reduction to recommend to Congress proposals in spending reductions. The Joint Select Committee did not achieve a targeted deficit reduction of at least $1.2 trillion for the years 2013 through 2021, triggering the legislation's automatic reduction to several government programs. This included further reductions to Medicare payments to providers of 2% per fiscal year, which went into effect in April 2013 and, due to subsequent legislative amendments to the statute, will stay in effect through 2024 unless additional Congressional action is taken. Additionally, in January 2013, the American Taxpayer Relief Act of 2012 was signed into law, which, among other things, reduced Medicare payments to several providers.

Moreover, the Drug Supply Chain Security Act, which was enacted in 2012 as part of the Food and Drug Administration Safety and Innovation Act, imposes new obligations on manufacturers of pharmaceutical products related to product tracking and tracing. Legislative and regulatory proposals have been made to expand post-approval requirements and restrict sales and promotional activities for pharmaceutical products. We are not sure whether additional legislative changes will be enacted, or whether the current regulations, guidance or interpretations will be changed, or what the impact of such changes on our business, if any, may be.

We expect that additional state and federal healthcare reform measures will be adopted in the future, any of which could limit the amounts that federal and state governments will pay for healthcare products and services, which could result in reduced demand for our product candidates or additional pricing pressures.

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Coverage and adequate reimbursement may not be available for RVT-101, which could make it difficult for us to sell our products profitably.

Market acceptance and sales of any product candidates that we develop, will depend in part on the extent to which reimbursement for these products and related treatments will be available from third-party payors, including government health administration authorities and private health insurers. Third-party payors decide which drugs they will pay for and establish reimbursement levels. Third-party payors often rely upon Medicare coverage policy and payment limitations in setting their own coverage and reimbursement policies. However, decisions regarding the extent of coverage and amount of reimbursement to be provided for any product candidates that we develop will be made on a plan-by-plan basis. One payor's determination to provide coverage for a product does not assure that other payors will also provide coverage, and adequate reimbursement, for the product. Additionally, a third-party payor's decision to provide coverage for a drug does not imply that an adequate reimbursement rate will be approved. Each plan determines whether or not it will provide coverage for a drug, what amount it will pay the manufacturer for the drug, and on what tier of its formulary the drug will be placed. The position of a drug on a formulary generally determines the co-payment that a patient will need to make to obtain the drug and can strongly influence the adoption of a drug by patients and physicians. Patients who are prescribed treatments for their conditions and providers prescribing such services generally rely on third-party payors to reimburse all or part of the associated healthcare costs. Patients are unlikely to use our products unless coverage is provided and reimbursement is adequate to cover a significant portion of the cost of our products.

A primary trend in the U.S. healthcare industry and elsewhere is cost containment. Third-party payors have attempted to control costs by limiting coverage and the amount of reimbursement for particular medications. We cannot be sure that coverage and reimbursement will be available for any product that we commercialize and, if reimbursement is available, what the level of reimbursement will be. Inadequate coverage and reimbursement may impact the demand for, or the price of, any product for which we obtain marketing approval. If coverage and adequate reimbursement are not available, or are available only to limited levels, we may not be able to successfully commercialize any product candidates that we develop.

Additionally, there have been a number of legislative and regulatory proposals to change the healthcare system in the United States and in some foreign jurisdictions that could affect our ability to sell any future drugs profitably. These legislative and regulatory changes may negatively impact the reimbursement for any future drugs, following approval.

Risks Related to Our Dependence on Third Parties

We do not have our own manufacturing capabilities and will rely on third parties to produce clinical and commercial supplies of RVT-101 and any future product candidate.

We have no experience in drug formulation or manufacturing and do not own or operate, and we do not expect to own or operate, facilities for product manufacturing, storage and distribution, or testing. While RVT-101 was being developed by GSK, it was also being manufactured by GSK. We expect that the drug substance transferred from GSK under the GSK Agreement will be sufficient for us to complete our planned Phase 3 pivotal program, and we have contracted with a third-party to fill, finish, supply, store and distribute RVT-101 for this program. We also will rely on third-party manufacturers to supply us with sufficient quantities of RVT-101 to be used, if approved, for the commercialization of RVT-101. If we are unable to initiate or continue our relationship with one or more of these third-party contractors, we could experience delays in our development efforts as we locate and qualify new manufacturers.

Further, our reliance on third-party manufacturers entails risks to which we would not be subject if we manufactured product candidates ourselves, including:

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Any of these events could lead to clinical trial delays, failure to obtain regulatory approval or impact our ability to successfully commercialize our products. Some of these events could be the basis for FDA action, including injunction, recall, seizure, or total or partial suspension of production.

We intend to rely on third parties to conduct, supervise and monitor our clinical trials, and if those third parties perform in an unsatisfactory manner, it may harm our business.

We intend to rely on CROs and clinical trial sites to ensure the proper and timely conduct of our clinical trials, and we expect to have limited influence over their actual performance.

We intend to rely upon CROs to monitor and manage data for our clinical programs, as well as the execution of future nonclinical studies. We expect to control only certain aspects of our CROs' activities. Nevertheless, we will be responsible for ensuring that each of our studies is conducted in accordance with the applicable protocol, legal, regulatory and scientific standards and our reliance on the CROs does not relieve us of our regulatory responsibilities.

We and our CROs will be required to comply with the Good Laboratory Practices and GCPs, which are regulations and guidelines enforced by the FDA and are also required by the Competent Authorities of the Member States of the European Economic Area and comparable foreign regulatory authorities in the form of International Conference on Harmonization guidelines for any of our product candidates that are in preclinical and clinical development. The Regulatory authorities enforce GCPs through periodic inspections of trial sponsors, principal investigators and clinical trial sites. If we or our CROs fail to comply with GCPs, the clinical data generated in our clinical trials may be deemed unreliable and the FDA or comparable foreign regulatory authorities may require us to perform additional clinical trials before approving our marketing applications. Accordingly, if our CROs fail to comply with these regulations or fail to recruit a sufficient number of subjects, we may be required to repeat clinical trials, which would delay the regulatory approval process.

Our CROs will not be our employees, and we will not control whether or not they devote sufficient time and resources to our future clinical and nonclinical programs. These CROs may also have relationships with other commercial entities, including our competitors, for whom they may also be conducting clinical trials, or other drug development activities which could harm our competitive position. We face the risk of potential unauthorized disclosure or misappropriation of our intellectual property by CROs, which may reduce our trade secret protection and allow our potential competitors to access and exploit our proprietary technology. If our CROs do not successfully carry out their contractual duties or obligations, fail to meet

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expected deadlines, or if the quality or accuracy of the clinical data they obtain is compromised due to the failure to adhere to our clinical protocols or regulatory requirements or for any other reasons, our clinical trials may be extended, delayed or terminated, and we may not be able to obtain regulatory approval for, or successfully commercialize any product candidate that we develop. As a result, our financial results and the commercial prospects for any product candidate that we develop would be harmed, our costs could increase, and our ability to generate revenues could be delayed.

If our relationship with these CROs terminate, we may not be able to enter into arrangements with alternative CROs or do so on commercially reasonable terms. Switching or adding additional CROs involves substantial cost and requires management time and focus. In addition, there is a natural transition period when a new CRO commences work. As a result, delays occur, which can materially impact our ability to meet our desired clinical development timelines. Though we intend to carefully manage our relationships with our CROs, there can be no assurance that we will not encounter challenges or delays in the future or that these delays or challenges will not have an adverse impact on our business, financial condition and prospects.

Risks Related to Our Intellectual Property

If we are unable to obtain and maintain patent protection for our technology and products or if the scope of the patent protection obtained is not sufficiently broad, we may not be able to compete effectively in our markets.

We rely upon a combination of patents, trade secret protection and confidentiality agreements to protect the intellectual property related to our drug development programs and product candidates. Our success depends in large part on our ability to obtain and maintain patent protection in the United States and other countries with respect to RVT-101 and any future product candidates. We seek to protect our proprietary position by filing patent applications in the United States and abroad related to our development programs and product candidates. The patent prosecution process is expensive and time-consuming, and we may not be able to file and prosecute all necessary or desirable patent applications at a reasonable cost or in a timely manner.

It is also possible that we will fail to identify patentable aspects of our research and development output before it is too late to obtain patent protection. The patent applications that we own or in-license may fail to result in issued patents with claims that cover RVT-101 or any future product candidate in the United States or in other foreign countries. There is no assurance that all of the potentially relevant prior art relating to our patents and patent applications has been found, which can invalidate a patent or prevent a patent from issuing from a pending patent application. Even if patents do successfully issue and even if such patents cover RVT-101 or any future product candidate, third parties may challenge their validity, enforceability or scope, which may result in such patents being narrowed, invalidated, or held unenforceable. Any successful opposition to these patents or any other patents owned by or licensed to us could deprive us of rights necessary for the successful commercialization of any product candidates or companion diagnostic that we may develop. Further, if we encounter delays in regulatory approvals, the period of time during which we could market a product candidate and companion diagnostic under patent protection could be reduced.

If the patent applications we hold or have in-licensed with respect to our development programs and product candidates fail to issue, if their breadth or strength of protection is threatened, or if they fail to provide meaningful exclusivity for RVT-101 or any future product candidate, it could dissuade companies from collaborating with us to develop product candidates, and threaten our ability to commercialize, future drugs. Any such outcome could have a materially adverse effect on our business.

The patent position of biotechnology and pharmaceutical companies generally is highly uncertain, involves complex legal and factual questions and has in recent years been the subject of much litigation. In addition, the laws of foreign countries may not protect our rights to the same extent as the laws of the

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United States. For example, European patent law restricts the patentability of methods of treatment of the human body more than United States law does. Publications of discoveries in scientific literature often lag behind the actual discoveries, and patent applications in the United States and other jurisdictions are typically not published until 18 months after filing, or in some cases not at all. Therefore, we cannot know with certainty whether we were the first to make the inventions claimed in our owned or licensed patents or pending patent applications, or that we were the first to file for patent protection of such inventions. As a result, the issuance, scope, validity, enforceability and commercial value of our patent rights are highly uncertain. Our pending and future patent applications may not result in patents being issued which protect our technology or products, in whole or in part, or which effectively prevent others from commercializing competitive technologies and products. Changes in either the patent laws or interpretation of the patent laws in the United States and other countries may diminish the value of our patents or narrow the scope of our patent protection.

Recent patent reform legislation could increase the uncertainties and costs surrounding the prosecution of our patent applications and the enforcement or defense of our issued patents. On September 16, 2011, the Leahy-Smith America Invents Act, or the Leahy-Smith Act, was signed into law. The Leahy-Smith Act includes a number of significant changes to United States patent law. These include provisions that affect the way patent applications are prosecuted and may also affect patent litigation. The United States Patent Office recently developed new regulations and procedures to govern administration of the Leahy-Smith Act, and many of the substantive changes to patent law associated with the Leahy-Smith Act, and in particular, the first to file provisions, only became effective on March 16, 2013. Accordingly, it is not clear what, if any, impact the Leahy-Smith Act will have on the operation of our business. However, the Leahy-Smith Act and its implementation could increase the uncertainties and costs surrounding the prosecution of our patent applications and the enforcement or defense of our issued patents, all of which could have an adverse effect on our business and financial condition.

Moreover, we may be subject to a third party pre-issuance submission of prior art to the U.S. Patent and Trademark Office, or USPTO, or become involved in opposition, derivation, reexamination, inter partes review, post-grant review or interference proceedings challenging our patent rights or the patent rights of others. An adverse determination in any such submission, proceeding or litigation could reduce the scope of, or invalidate, our patent rights, allow third parties to commercialize our technology or products and compete directly with us, without payment to us, or result in our inability to manufacture or commercialize products without infringing third party patent rights. In addition, if the breadth or strength of protection provided by our patents and patent applications is threatened, it could dissuade companies from collaborating with us to license, develop or commercialize current or future product candidates.

The issuance of a patent is not conclusive as to its inventorship, scope, validity or enforceability, and our owned and licensed patents may be challenged in the courts or patent offices in the United States and abroad. Such challenges may result in loss of exclusivity or freedom to operate or in patent claims being narrowed, invalidated or held unenforceable, in whole or in part, which could limit our ability to stop others from using or commercializing similar or identical technology and products, or limit the duration of the patent protection of our technology and products. Moreover, patents have a limited lifespan. In the United States, the natural expiration of a patent is generally 20 years after it is filed. Various extensions may be available; however the life of a patent, and the protection it affords, is limited. Without patent protection for our current or future product candidates, we may be open to competition from generic versions of such products. Given the amount of time required for the development, testing and regulatory review of new product candidates, patents protecting such candidates might expire before or shortly after such candidates are commercialized. As a result, our owned and licensed patent portfolio may not provide us with sufficient rights to exclude others from commercializing products similar or identical to ours.

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Obtaining and maintaining our patent protection depends on compliance with various procedural, document submission, fee payment and other requirements imposed by governmental patent agencies, and our patent protection could be reduced or eliminated for non-compliance with these requirements.

Periodic maintenance fees on any issued patent are due to be paid to the USPTO and other foreign patent agencies in several stages over the lifetime of the patent. The USPTO and various foreign national or international patent agencies require compliance with a number of procedural, documentary, fee payment and other similar provisions during the patent application process. While an inadvertent lapse can in many cases be cured by payment of a late fee or by other means in accordance with the applicable rules, there are situations in which noncompliance can result in abandonment or lapse of the patent or patent application, resulting in partial or complete loss of patent rights in the relevant jurisdiction. Non-compliance events that could result in abandonment or lapse of patent rights include, but are not limited to, failure to timely file national and regional stage patent applications based on our international patent application, failure to respond to official actions within prescribed time limits, non-payment of fees and failure to properly legalize and submit formal documents. If we or our licensors fail to maintain the patents and patent applications covering RVT-101 or any future product candidate, our competitors might be able to enter the market, which would have an adverse effect on our business.

Third party claims or litigation alleging infringement of patents or other proprietary rights or seeking to invalidate patents or other proprietary rights, may delay or prevent the development and commercialization of RVT-101 and any future product candidate.

Our commercial success depends in part on our avoiding infringement and other violations of the patents and proprietary rights of third parties. There is a substantial amount of litigation, both within and outside the United States, involving patent and other intellectual property rights in the biotechnology and pharmaceutical industries, including patent infringement lawsuits, interferences, derivation and administrative law proceedings, inter party review, and post-grant review before the USPTO, as well as oppositions and similar processes in foreign jurisdictions. Numerous U.S. and foreign issued patents and pending patent applications, which are owned by third parties, exist in the fields in which we and our collaborators are developing product candidates. As the biotechnology and pharmaceutical industries expand and more patents are issued, and as we gain greater visibility and market exposure as a public company, the risk increases that our product candidates or other business activities may be subject to claims of infringement of the patent and other proprietary rights of third parties. Third parties may assert that we are infringing their patents or employing their proprietary technology without authorization. We have conducted searches for information in support of patent protection and otherwise evaluating the patent landscape for RVT-101, and, based on these searches and evaluations to date, we do not believe that there are valid patents which contain granted claims that could be asserted with respect to RVT-101, however, we may be incorrect.

There may be third-party patents or patent applications with claims to materials, formulations, methods of manufacture or methods for treatment related to the use or manufacture of our product candidates. Because patent applications can take many years to issue, there may be currently pending patent applications which may later result in issued patents that our product candidates may infringe. In addition, third parties may obtain patents in the future and claim that use of our technologies infringes upon these patents. If any third-party patents were held by a court of competent jurisdiction to cover the manufacturing process of any of our product candidates, any molecules formed during the manufacturing process or any final product itself, the holders of any such patents may be able to block our ability to commercialize such product candidate unless we obtained a license under the applicable patents, or until such patents expire. Similarly, if any third-party patent were held by a court of competent jurisdiction to cover aspects of our formulations, processes for manufacture or methods of use, including combination therapy, the holders of any such patent may be able to block our ability to develop and commercialize the applicable product candidate unless we obtained a license or until such patent expires. In either case, such a license may not be available on commercially reasonable terms or at all. In addition, we may be subject to claims that we are infringing

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other intellectual property rights, such as trademarks or copyrights, or misappropriating the trade secrets of others, and to the extent that our employees, consultants or contractors use intellectual property or proprietary information owned by others in their work for us, disputes may arise as to the rights in related or resulting know-how and inventions.

Parties making claims against us may obtain injunctive or other equitable relief, which could effectively block our ability to further develop and commercialize one or more of our product candidates. Defense of these claims, regardless of their merit, would involve substantial litigation expense and would be a substantial diversion of employee resources from our business. In the event of a successful infringement or other intellectual property claim against us, we may have to pay substantial damages, including treble damages and attorneys' fees for willful infringement, obtain one or more licenses from third parties, pay royalties or redesign our affected products, which may be impossible or require substantial time and monetary expenditure. We cannot predict whether any such license would be available at all or whether it would be available on commercially reasonable terms. Furthermore, even in the absence of litigation, we may need to obtain licenses from third parties to advance our research or allow commercialization of our product candidates, and we have done so from time to time. We may fail to obtain any of these licenses at a reasonable cost or on reasonable terms, if at all. In that event, we would be unable to further develop and commercialize one or more of our product candidates, which could harm our business significantly. We cannot provide any assurances that third-party patents do not exist which might be enforced against our drugs or product candidates, resulting in either an injunction prohibiting our sales, or, with respect to our sales, an obligation on our part to pay royalties and/or other forms of compensation to third parties.

We may be involved in lawsuits to protect or enforce our patents, the patents of our licensors or our other intellectual property rights, which could be expensive, time consuming and unsuccessful.

Competitors may infringe or otherwise violate our patents, the patents of our licensors or our other intellectual property rights. To counter infringement or unauthorized use, we may be required to file legal claims, which can be expensive and time-consuming. In addition, in an infringement proceeding, a court may decide that a patent of ours or our licensors is not valid or is unenforceable, or may refuse to stop the other party from using the technology at issue on the grounds that our patents do not cover the technology in question. An adverse result in any litigation or defense proceedings could put one or more of our patents at risk of being invalidated or interpreted narrowly and could put our patent applications at risk of not issuing. The initiation of a claim against a third party may also cause the third party to bring counter claims against us such as claims asserting that our patents are invalid or unenforceable. In patent litigation in the United States, defendant counterclaims alleging invalidity or unenforceability are commonplace. Grounds for a validity challenge could be an alleged failure to meet any of several statutory requirements, including lack of novelty, obviousness, non-enablement or lack of statutory subject matter. Grounds for an unenforceability assertion could be an allegation that someone connected with prosecution of the patent withheld relevant material information from the USPTO, or made a materially misleading statement, during prosecution. Third parties may also raise similar validity claims before the USPTO in post-grant proceedings such as ex parte reexaminations, inter partes review, or post-grant review, or oppositions or similar proceedings outside the United States, in parallel with litigation or even outside the context of litigation. The outcome following legal assertions of invalidity and unenforceability is unpredictable. We cannot be certain that there is no invalidating prior art, of which we and the patent examiner were unaware during prosecution. For the patents and patent applications that we have licensed, we may have limited or no right to participate in the defense of any licensed patents against challenge by a third party. If a defendant were to prevail on a legal assertion of invalidity or unenforceability, we would lose at least part, and perhaps all, of any future patent protection on our current or future product candidates. Such a loss of patent protection could harm our business.

We may not be able to prevent, alone or with our licensors, misappropriation of our intellectual property rights, particularly in countries where the laws may not protect those rights as fully as in the United States. Our business could be harmed if in litigation the prevailing party does not offer us a license on

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commercially reasonable terms. Any litigation or other proceedings to enforce our intellectual property rights may fail, and even if successful, may result in substantial costs and distract our management and other employees.

Furthermore, because of the substantial amount of discovery required in connection with intellectual property litigation, there is a risk that some of our confidential information could be compromised by disclosure during this type of litigation. There could also be public announcements of the results of hearings, motions or other interim proceedings or developments. If securities analysts or investors perceive these results to be negative, it could have an adverse effect on the price of our common shares.

Changes in U.S. patent law could diminish the value of patents in general, thereby impairing our ability to protect our products.

The United States has recently enacted and implemented wide-ranging patent reform legislation. The U.S. Supreme Court has ruled on several patent cases in recent years, either narrowing the scope of patent protection available in certain circumstances or weakening the rights of patent owners in certain situations. In addition to increasing uncertainty with regard to our ability to obtain patents in the future, this combination of events has created uncertainty with respect to the value of patents, once obtained. Depending on actions by the U.S. Congress, the federal courts, and the USPTO, the laws and regulations governing patents could change in unpredictable ways that would weaken our ability to obtain new patents or to enforce patents that we have licensed or that we might obtain in the future.

We may not be able to protect our intellectual property rights throughout the world, which could impair our business.

Filing, prosecuting and defending patents covering RVT-101 and any future product candidate throughout the world would be prohibitively expensive. Competitors may use our technologies in jurisdictions where we have not obtained patent protection to develop their own products and, further, may export otherwise infringing products to territories where we may obtain patent protection, but where patent enforcement is not as strong as that in the United States. These products may compete with our products in jurisdictions where we do not have any issued or licensed patents and any future patent claims or other intellectual property rights may not be effective or sufficient to prevent them from so competing.

Our reliance on third parties requires us to share our trade secrets, which increases the possibility that a competitor will discover them or that our trade secrets will be misappropriated or disclosed.

Because we expect to rely on third parties to manufacture RVT-101 and any future product candidates, and we expect to collaborate with third parties on the development of RVT-101 and any future product candidates, we must, at times, share trade secrets with them. We also conduct joint research and development programs that may require us to share trade secrets under the terms of our research and development partnerships or similar agreements. We seek to protect our proprietary technology in part by entering into confidentiality agreements and, if applicable, material transfer agreements, consulting agreements or other similar agreements with our advisors, employees, third-party contractors and consultants prior to beginning research or disclosing proprietary information. These agreements typically limit the rights of the third parties to use or disclose our confidential information, including our trade secrets. Despite the contractual provisions employed when working with third parties, the need to share trade secrets and other confidential information increases the risk that such trade secrets become known by our competitors, are inadvertently incorporated into the technology of others, or are disclosed or used in violation of these agreements. Given that our proprietary position is based, in part, on our know-how and trade secrets, a competitor's discovery of our trade secrets or other unauthorized use or disclosure would impair our competitive position and may have an adverse effect on our business and results of operations.

In addition, these agreements typically restrict the ability of our advisors, employees, third-party contractors and consultants to publish data potentially relating to our trade secrets, although our agreements may contain certain limited publication rights. Despite our efforts to protect our trade secrets, our competitors

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may discover our trade secrets, either through breach of our agreements with third parties, independent development or publication of information by any of our third-party collaborators. A competitor's discovery of our trade secrets would impair our competitive position and have an adverse impact on our business.

We may be subject to claims that our employees, consultants or independent contractors have wrongfully used or disclosed confidential information of their former employers or other third parties.

We employ individuals who were previously employed at other biotechnology or pharmaceutical companies. Although we seek to protect our ownership of intellectual property rights by ensuring that our agreements with our employees, collaborators and other third parties with whom we do business include provisions requiring such parties to assign rights in inventions to us, we may be subject to claims that we or our employees, consultants or independent contractors have inadvertently or otherwise used or disclosed confidential information of our employees' former employers or other third parties. We may also be subject to claims that former employers or other third parties have an ownership interest in our patents. Litigation may be necessary to defend against these claims. There is no guarantee of success in defending these claims, and if we fail in defending any such claims, in addition to paying monetary damages, we may lose valuable intellectual property rights, such as exclusive ownership of, or right to use, valuable intellectual property. Even if we are successful, litigation could result in substantial cost and be a distraction to our management and other employees.

Risks Related to this Offering and Our Common Shares

No public market for our common shares currently exists, and a public market may not develop or be liquid enough for you to sell your shares quickly or at market price.

Prior to this offering, there has not been a public market for our common shares. If an active trading market for our common shares does not develop following this offering, you may not be able to sell your shares quickly or at the market price. An inactive market may also impair our ability to raise capital to continue to fund operations by selling common shares and may impair our ability to acquire other companies or technologies by using our common shares as consideration. The initial public offering price of our common shares will be determined by negotiations between us and representatives of the underwriters, and may not be indicative of the market prices of our common shares that will prevail in the trading market.

The market price of our common shares is likely to be highly volatile, and you may lose some or all of your investment.

The market price of our common shares is likely to be highly volatile and may be subject to wide fluctuations in response to a variety of factors, including the following:

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In addition, the stock markets have experienced extreme price and volume fluctuations that have affected and continue to affect the market prices of equity securities of many companies. These fluctuations have often been unrelated or disproportionate to the operating performance of those companies. Broad market and industry factors, as well as general economic, political, regulatory and market conditions, may negatively affect the market price of our common shares, regardless of our actual operating performance. The market price of our common shares may decline below the initial public offering price, and you may lose some or all of your investment.

Volatility in our share price could subject us to securities class action litigation.

In the past, securities class action litigation has often been brought against a company following a decline in the market price of its securities. This risk is especially relevant for us because pharmaceutical companies have experienced significant share price volatility in recent years. If we face such litigation, it could result in substantial costs and a diversion of management's attention and resources, which could harm our business.

We expect to be a "controlled company" within the meaning of the applicable rules of the New York Stock Exchange and, as a result, will qualify for exemptions from certain corporate governance requirements. If we rely on these exemptions, you will not have the same protections afforded to shareholders of companies that are subject to such requirements.

Upon the closing of this offering, Roivant Sciences Ltd. will continue to control a majority of the voting power of our outstanding common shares. As a result, we expect to be a "controlled company" within the meaning of the New York Stock Exchange, or NYSE, corporate governance requirements. Under these rules, a company of which more than 50% of the voting power for the election of directors is held by an individual, group or another company is a "controlled company" and may elect not to comply with certain corporate governance requirements, including the requirements:

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We intend to use these exemptions upon the closing of this offering and we may continue to use all or some of these exemptions in the future. As a result, you may not have the same protections afforded to shareholders of companies that are subject to all of the NYSE corporate governance requirements.

Roivant Sciences Ltd. will continue to own a significant percentage of our common shares and will be able to exert significant control over matters subject to shareholder approval.

Roivant Sciences Ltd. is currently our only shareholder, and after this offering is completed we will continue to be controlled by Roivant Sciences Ltd. Upon the closing of this offering, Roivant Sciences Ltd. will beneficially own approximately          % of the voting power of our outstanding common shares, or          % if the underwriters exercise their option to purchase additional common shares from us in full. Therefore, even after this offering, they will have the ability to substantially influence us through this ownership position. For example, they may be able to control elections of directors, amendments of our organizational documents, or approval of any merger, sale of assets, or other major corporate transaction. Roivant Sciences Ltd.'s interests may not always coincide with our corporate interests or the interests of other shareholders, and they may act in a manner with which you may not agree or that may not be in the best interests of our other shareholders. So long as they continue to own a significant amount of our equity, Roivant Sciences Ltd. will continue to be able to strongly influence or effectively control our decisions.

If securities or industry analysts do not publish research or reports about our business, or publish negative reports about our business, our share price and trading volume could decline.

The trading market for our common shares will depend, in part, on the research and reports that securities or industry analysts publish about us or our business. We do not have any control over these analysts. If our financial performance fails to meet analyst estimates or one or more of the analysts who cover us downgrade our common shares or change their opinion of our common shares, our share price would likely decline. If one or more of these analysts cease coverage of our company or fail to regularly publish reports on us, we could lose visibility in the financial markets, which could cause our share price or trading volume to decline.

Because we do not anticipate paying any cash dividends on our common shares in the foreseeable future, capital appreciation, if any, would be your sole source of gain.

We have never declared or paid any cash dividends on our common shares. We currently anticipate that we will retain future earnings for the development, operation and expansion of our business and do not anticipate declaring or paying any cash dividends for the foreseeable future. As a result, capital appreciation, if any, of our common shares would be your sole source of gain on an investment in our common shares for the foreseeable future. Additionally, we are subject to Bermuda legal constraints that may affect our ability to pay dividends on our common shares and make other payments. See "Dividend Policy" for additional information.

Our management will have broad discretion in the use of the net proceeds from this offering and may not use them effectively.

Our management will have broad discretion in the application of the net proceeds from this offering and our shareholders will not have the opportunity as part of their investment decision to assess whether the net proceeds are being used appropriately. You may not agree with our decisions, and our use of the proceeds may not yield any return on your investment. Because of the number and variability of factors that will

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determine our use of the net proceeds from this offering, their ultimate use may vary substantially from their currently intended use. Our failure to apply the net proceeds of this offering effectively could compromise our ability to pursue our growth strategy and we might not be able to yield a significant return, if any, on our investment of these net proceeds. You will not have the opportunity to influence our decisions on how to use our net proceeds from this offering. For a period of six months after the closing of this offering, we have agreed to invest any cash and cash equivalents in a non-interest bearing account, and as a result, such investment will not yield a return.

Future sales of our common shares may depress our share price.

After this offering, based on the 10,000,000 common shares outstanding as of December 31, 2014, there will be                        common shares outstanding, assuming no exercise by the underwriters of their option to purchase additional common shares from us. Sales of a substantial number of our common shares in the public market after this offering, or the perception that these sales might occur, could depress the market price of our common shares and could impair our ability to raise capital through the sale of additional equity securities. Of our issued and outstanding our common shares, all of the shares sold in this offering will be freely transferable without restrictions or further registration under the Securities Act of 1933, as amended, or the Securities Act, except for any shares acquired by our affiliates, as defined in Rule 144 under the Securities Act. The remaining                             shares outstanding after this offering will be restricted as a result of securities laws, lock-up agreements or other contractual restrictions that restrict transfers for 180 days after the date of this prospectus. See the section titled "Shares Eligible for Future Sale—Lock-Up Agreements" for a more detailed description of the lock-up period.

We intend to file a registration statement on Form S-8 under the Securities Act to register the total number of our common shares that may be issued under our equity incentive plans. See the information in the section titled "Shares Eligible for Future Sale—Form S-8 Registration Statements" for a more detailed description of the common shares that will be available for future sale upon the registration and issuance of such shares, subject to any applicable vesting or lock-up period or other restrictions provided under the terms of the applicable plan or the option agreements entered into with the option holders. Sales of these shares have an adverse effect on the trading price of our common shares. In addition, in the future we may issue common shares or other securities if we need to raise additional capital. The number of our new common shares issued in connection with raising additional capital could constitute a material portion of our then outstanding common shares.

If you purchase our common shares in this offering, you will incur immediate and substantial dilution in the book value of your shares.

The initial public offering price of our common shares will be substantially higher than the as adjusted net tangible book value per common share of our common shares. Therefore, if you purchase our common shares in this offering, you will pay a price per common share that substantially exceeds the book value of our tangible assets after subtracting our liabilities. Based on an assumed initial public offering price of $               per common share, which is the midpoint of the price range set forth on the cover page of this prospectus, you will experience immediate dilution of $               per common share, representing the difference between our as adjusted net tangible book value per common share, after giving effect to this offering, and the assumed initial public offering price. Further, the future exercise of any outstanding options to purchase our common shares will cause you to experience additional dilution. See the section titled "Dilution" for additional information.

We will incur increased costs as a result of operating as a public company, and our management will be required to devote substantial time to compliance with our public company responsibilities and corporate governance practices.

As a public company, and particularly after we are no longer an "emerging growth company," we will incur significant legal, accounting and other expenses that we did not incur as a private company. The Sarbanes-

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Oxley Act of 2002, the Dodd-Frank Wall Street Reform and Consumer Protection Act, the listing requirements of the NYSE and other applicable securities rules and regulations impose various requirements on public companies. Our management and other personnel will need to devote a substantial amount of time to compliance with these requirements. Moreover, these rules and regulations will increase our legal and financial compliance costs and will make some activities more time-consuming and costly. For example, we expect that these rules and regulations may make it more difficult and more expensive for us to obtain directors' and officers' liability insurance, which could make it more difficult for us to attract and retain qualified members of our board of directors. We cannot predict or estimate the amount of additional costs we will incur as a public company or the timing of such costs.

We have identified a material weakness in our internal control over financial reporting and may identify additional material weaknesses in the future or otherwise fail to maintain an effective system of internal controls, which may result in material misstatements of our financial statements or cause us to fail to meet our reporting obligations; in which case, our shareholders and other investors could lose confidence in our financial reporting, which would harm our business and could negatively impact the price of our common shares.

Prior to this offering we were a private company and had limited accounting and financial reporting personnel and other resources with which to address our internal controls and procedures. In connection with the preparation of our financial statements as of and for the period from October 31, 2014 (date of inception) to December 31, 2014, we and our independent registered public accounting firm identified a material weakness in our internal control over financial reporting, as defined in the standards established by the Public Company Accounting Oversight Board of the United States. A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis.

We did not design or maintain an effective control environment because we did not maintain a sufficient complement of personnel with an appropriate level of knowledge of accounting, experience and training commensurate with our financial reporting requirements. This material weakness resulted in a material audit adjustment related to the affiliate charge for stock compensation. Our limited personnel also resulted in our inability to consistently establish appropriate authorities and responsibilities in pursuit of our financial reporting objectives, as demonstrated by, among other things, our insufficient segregation of duties in our finance and accounting functions. We rely on Roivant Sciences, Inc. for information systems and financial and accounting support. Roivant Sciences, Inc. has limited staff and performed nearly all aspects of our financial reporting process, including, but not limited to, accessing the underlying accounting records and systems, posting and recording journal entries and taking responsibility for the preparation of the financial statements. This material weakness could result in a material misstatement of our interim or annual financial statements that would not be prevented or detected.

As the adoption of the appropriate resources becomes economically feasible, we intend to take appropriate and reasonable steps to remediate this material weakness through the hiring of additional resources and implementation of more robust review, supervision and monitoring of the financial reporting process. Due to our size, segregation of conflicting duties has not always been possible and may not be economically feasible. We are just beginning the process of implementing processes and procedures intended to mitigate the identified material weakness and the measures we have taken to date, or any measures we may take in the future, may not be sufficient to remediate these material weaknesses or to avoid potential future material weaknesses.

The Sarbanes-Oxley Act of 2002 requires, among other things, that we assess the effectiveness of our internal control over financial reporting annually and disclosure controls and procedures quarterly. In particular, beginning with the fiscal year ending on March 31, 2017, we must perform system and process evaluation and testing of our internal control over financial reporting to allow management to report on the effectiveness of our internal control over financial reporting, as required by Section 404 of the Sarbanes-

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Oxley Act, or Section 404. If other material weaknesses are identified in the future or we are not able to comply with the requirements of Section 404 in a timely manner, our reported financial results could be materially misstated or could be restated, we could receive an adverse opinion regarding our controls from our accounting firm, we could be subject to investigations or sanctions by regulatory authorities (which would require additional financial and management resources) and the market price of our common shares could decline.

As a result of becoming a public company, we will be obligated to develop and maintain proper and effective internal controls over financial reporting and any failure to maintain the adequacy of these internal controls may adversely affect investor confidence in our company and, as a result, the value of our common shares.

We will be required, pursuant to Section 404, to furnish a report by management on, among other things, the effectiveness of our internal control over financial reporting for the first fiscal year beginning after the effective date of this offering. This assessment will need to include disclosure of any material weaknesses identified by our management in our internal control over financial reporting. Our independent registered public accounting firm will not be required to attest to the effectiveness of our internal control over financial reporting until our first annual report required to be filed with the SEC following the date we are no longer an "emerging growth company," as defined in the JOBS Act. We will be required to disclose significant changes made in our internal control procedures on a quarterly basis.

We are beginning the costly and challenging process of compiling the system and processing documentation necessary to perform the evaluation needed to comply with Section 404, and we may not be able to complete our evaluation, testing and any required remediation in a timely fashion. Our compliance with Section 404 will require that we incur substantial accounting expense and expend significant management efforts. We currently do not have an internal audit group, and we will need to hire additional accounting and financial staff with appropriate public company experience and technical accounting knowledge and compile the system and process documentation necessary to perform the evaluation needed to comply with Section 404.

During the evaluation and testing process of our internal control, if we identify one or more material weaknesses in our internal control over financial reporting, we will be unable to assert that our internal control over financial reporting is effective. We cannot assure you that there will not be material weaknesses or significant deficiencies in our internal control over financial reporting in the future. Any failure to maintain internal control over financial reporting could severely inhibit our ability to accurately report our financial condition or results of operations. If we are unable to conclude that our internal control over financial reporting is effective, or if our independent registered public accounting firm determines we have a material weakness or significant deficiency in our internal control over financial reporting, we could lose investor confidence in the accuracy and completeness of our financial reports, the market price of our common shares could decline, and we could be subject to sanctions or investigations by the NYSE, the SEC or other regulatory authorities. Failure to remedy any material weakness in our internal control over financial reporting, or to implement or maintain other effective control systems required of public companies, could also restrict our future access to the capital markets.

We are an "emerging growth company," and we cannot be certain if the reduced reporting requirements applicable to emerging growth companies will make our common shares less attractive to investors.

We are an "emerging growth company," as defined in the JOBS Act. For as long as we continue to be an emerging growth company, we may take advantage of exemptions from various reporting requirements that are applicable to other public companies that are not "emerging growth companies," including exemption from compliance with the auditor attestation requirements of Section 404, reduced disclosure obligations regarding executive compensation and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved. We will remain an emerging growth company until the earlier of (1) the last day of the fiscal year

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(a) following the fifth anniversary of the closing of this offering, (b) in which we have total annual gross revenue of at least $1.0 billion or (c) in which we are deemed to be a large accelerated filer, which means the market value of our common shares that is held by non-affiliates exceeds $700.0 million as of the prior June 30th, and (2) the date on which we have issued more than $1.0 billion in non-convertible debt during the prior three-year period.

In addition, under the JOBS Act, emerging growth companies can delay adopting new or revised accounting standards until such time as those standards apply to private companies. We have irrevocably elected not to avail ourselves of this exemption from new or revised accounting standards and, therefore, we will be subject to the same new or revised accounting standards as other public companies that are not emerging growth companies.

Even after we no longer qualify as an emerging growth company, we may still qualify as a "smaller reporting company" which would allow us to take advantage of many of the same exemptions from disclosure requirements including exemption from compliance with the auditor attestation requirements of Section 404 and reduced disclosure obligations regarding executive compensation in this prospectus and our periodic reports and proxy statements.

We cannot predict if investors will find our common shares less attractive because we may rely on these exemptions. If some investors find our common shares less attractive as a result, there may be a less active trading market for our common shares and our share price may be more volatile.

We are a Bermuda company and it may be difficult for you to enforce judgments against us or our directors and executive officers.

We are a Bermuda exempted company. As a result, the rights of our shareholders will be governed by Bermuda law and our memorandum of association and bye-laws. The rights of shareholders under Bermuda law may differ from the rights of shareholders of companies incorporated in another jurisdiction. It may be difficult for investors to enforce in the United States judgments obtained in U.S. courts against us based on the civil liability provisions of the U.S. securities laws. It is doubtful whether courts in Bermuda will enforce judgments obtained in other jurisdictions, including the United States, against us or our directors or officers under the securities laws of those jurisdictions or entertain actions in Bermuda against us or our directors or officers under the securities laws of other jurisdictions. See "Enforcement of Civil Liabilities under United States Federal Securities Laws" for additional information.

Bermuda law differs from the laws in effect in the United States and may afford less protection to our shareholders.

We are organized under the laws of Bermuda. As a result, our corporate affairs are governed by the Bermuda Companies Act 1981, as amended, or the Companies Act, which differs in some material respects from laws typically applicable to U.S. corporations and shareholders, including the provisions relating to interested directors, amalgamations, mergers and acquisitions, takeovers, shareholder lawsuits and indemnification of directors. Generally, the duties of directors and officers of a Bermuda company are owed to the company only. Shareholders of Bermuda companies typically do not have rights to take action against directors or officers of the company and may only do so in limited circumstances. Shareholder class actions are not available under Bermuda law. The circumstances in which shareholder derivative actions may be available under Bermuda law are substantially more proscribed and less clear than they would be to shareholders of U.S. corporations. The Bermuda courts, however, would ordinarily be expected to permit a shareholder to commence an action in the name of a company to remedy a wrong to the company where the act complained of is alleged to be beyond the corporate power of the company or illegal, or would result in the violation of the company's memorandum of association or bye-laws. Furthermore, consideration would be given by a Bermuda court to acts that are alleged to constitute a fraud against the minority shareholders or, for instance, where an act requires the approval of a greater percentage of the company's shareholders than those who actually approved it.

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When the affairs of a company are being conducted in a manner that is oppressive or prejudicial to the interests of some shareholders, one or more shareholders may apply to the Supreme Court of Bermuda, which may make such order as it sees fit, including an order regulating the conduct of the company's affairs in the future or ordering the purchase of the shares of any shareholders by other shareholders or by the company. Additionally, under our bye-laws and as permitted by Bermuda law, each shareholder has waived any claim or right of action against our directors or officers for any action taken by directors or officers in the performance of their duties, except for actions involving fraud or dishonesty. In addition, the rights of our shareholders and the fiduciary responsibilities of our directors under Bermuda law are not as clearly established as under statutes or judicial precedent in existence in jurisdictions in the United States, particularly the State of Delaware. Therefore, our shareholders may have more difficulty protecting their interests than would shareholders of a corporation incorporated in a jurisdiction within the United States.

There are regulatory limitations on the ownership and transfer of our common shares.

Common shares may be offered or sold in Bermuda only in compliance with the provisions of the Companies Act and the Bermuda Investment Business Act 2003, which regulates the sale of securities in Bermuda. In addition, the Bermuda Monetary Authority must approve all issues and transfers of shares of a Bermuda exempted company. However, the Bermuda Monetary Authority has, pursuant to its statement of June 1, 2005, given its general permission under the Exchange Control Act 1972 and related regulations for the issue and free transfer of our common shares to and among persons who are non-residents of Bermuda for exchange control purposes as long as the shares are listed on an appointed stock exchange, which includes the NYSE. This general permission would cease to apply if we were to cease to be listed on the NYSE.

We have anti-takeover provisions in our bye-laws that may discourage a change of control.

Our bye-laws contain provisions that could make it more difficult for a third party to acquire us without the consent of our board of directors. These provisions provide for:

These anti-takeover defenses could discourage, delay or prevent a transaction involving a change in control of our company and may prevent our shareholders from receiving the benefit from any premium to the market price of our common shares offered by a bidder in a takeover context. Even in the absence of a takeover attempt, the existence of these provisions may adversely affect the prevailing market price of our common shares if the provisions are viewed as discouraging takeover attempts in the future. These provisions could also discourage proxy contests, make it more difficult for you and other shareholders to elect directors of your choosing and cause us to take corporate actions other than those you desire. See "Description of Share Capital."

We may become subject to unanticipated tax liabilities.

We are incorporated under the laws of, and managed and controlled from, Bermuda. We may, however, become subject to income, withholding or other taxes in certain jurisdictions by reason of our activities and operations, and it is also possible that taxing authorities in any such jurisdictions could assert that we are subject to greater taxation than we currently anticipate. Any such non-Bermudan tax liability could materially adversely affect our results of operations.

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Taxing authorities could reallocate our taxable income among our subsidiaries, which could increase our overall tax liability.

We and Roivant Sciences Ltd., our principal shareholder, are based in Bermuda, and we currently have a subsidiary in the United States. If we succeed in growing our business, we expect to conduct increased operations through our subsidiaries in various tax jurisdictions pursuant to transfer pricing arrangements between us, our parent company and our subsidiaries. If two or more affiliated companies are located in different countries, the tax laws or regulations of each country generally will require that transfer prices be the same as those between unrelated companies dealing at arms' length and that appropriate documentation is maintained to support the transfer prices. While we believe that we operate in compliance with applicable transfer pricing laws and intend to continue to do so, our transfer pricing procedures are not binding on applicable tax authorities.

If tax authorities in any of these countries were to successfully challenge our transfer prices as not reflecting arms' length transactions, they could require us to adjust our transfer prices and thereby reallocate our income to reflect these revised transfer prices, which could result in a higher tax liability to us. In addition, if the country from which the income is reallocated does not agree with the reallocation, both countries could tax the same income, resulting in double taxation. If tax authorities were to allocate income to a higher tax jurisdiction, subject our income to double taxation or assess interest and penalties, it would increase our consolidated tax liability, which could adversely affect our financial condition, results of operations and cash flows.

Changes in our effective tax rate may reduce our net income in future periods.

Our tax position could be adversely impacted by changes in tax rates, tax laws, tax practice, tax treaties or tax regulations or changes in the interpretation thereof by the tax authorities in Europe, the United States, Bermuda and other jurisdictions as well as being affected by certain changes currently proposed by the OECD and their action plan on Base Erosion and Profit Shifting . Such changes may become more likely as a result of recent economic trends in the jurisdictions in which we operate, particularly if such trends continue. If such a situation was to arise, it could adversely impact our tax position and our effective tax rate. Failure to manage the risks associated with such changes, or misinterpretation of the laws providing such changes, could result in costly audits, interest, penalties and reputational damage, which could adversely affect our business, results of our operations and our financial condition.

Our actual effective tax rate may vary from our expectation and that variance may be material. A number of factors may increase our future effective tax rates, including: (1) the jurisdictions in which profits are determined to be earned and taxed; (2) the resolution of issues arising from any future tax audits with various tax authorities; (3) changes in the valuation of our deferred tax assets and liabilities; (4) increases in expenses not deductible for tax purposes, including transaction costs and impairments of goodwill in connection with acquisitions; (5) changes in the taxation of share-based compensation; (6) changes in tax laws or the interpretation of such tax laws, and changes in generally accepted accounting principles; and (7) challenges to the transfer pricing policies related to our structure.

U.S. holders of our common shares may suffer adverse tax consequences if we are characterized as a passive foreign investment company.

Generally, if, for any taxable year, at least 75% of our gross income is passive income, or at least 50% of the value of our assets is attributable to assets that produce passive income or are held for the production of passive income, including cash, we would be characterized as a passive foreign investment company, or PFIC, for U.S. federal income tax purposes. For purposes of these tests, passive income includes dividends, interest, and gains from the sale or exchange of investment property and rents and royalties other than rents and royalties which are received from unrelated parties in connection with the active conduct of a trade or business. If we are characterized as a PFIC, U.S. holders of our common shares may suffer adverse tax consequences, including having gains realized on the sale of our common shares treated as ordinary

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income, rather than capital gain, the loss of the preferential rate applicable to dividends received on our common shares by individuals who are U.S. holders, and having interest charges apply to distributions by us and the proceeds of sales of our common shares. See the section titled "Material Bermuda and U.S. Federal Income Tax Considerations—U.S. Federal Income Tax Considerations—Passive Foreign Investment Company Rules."

Our status as a PFIC will depend on the composition of our income and the composition and value of our assets (which, assuming we are not a "controlled foreign corporation" under Section 957(a) of the Code for the year being tested, may be determined in large part by reference to the market value of our common shares, which may be volatile) from time to time. Our status may also depend, in part, on how quickly we utilize the cash proceeds from this offering in our business. With respect to the taxable year beginning in 2014 and foreseeable future taxable years, we presently do not anticipate that we will be a PFIC based upon the expected value of our assets, including any goodwill, and the expected composition of our income and assets. However, our status as a PFIC is a fact-intensive determination made on an annual basis and we cannot provide any assurances regarding our PFIC status for the current or future taxable years.

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SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This prospectus contains forward-looking statements that involve substantial risks and uncertainties. The forward-looking statements are contained principally in the sections titled "Prospectus Summary," "Risk Factors," "Management's Discussion and Analysis of Financial Condition and Results of Operations" and "Business," but are also contained elsewhere in this prospectus. In some cases, you can identify forward-looking statements by the words "may," "might," "will," "could," "would," "should," "expect," "intend," "plan," "objective," "anticipate," "believe," "estimate," "predict," "project," "potential," "continue" and "ongoing," or the negative of these terms, or other comparable terminology intended to identify statements about the future. These statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance or achievements to be materially different from the information expressed or implied by these forward-looking statements. Although we believe that we have a reasonable basis for each forward-looking statement contained in this prospectus, we caution you that these statements are based on a combination of facts and factors currently known by us and our expectations of the future, about which we cannot be certain. Forward-looking statements include statements about:

You should refer to the section titled "Risk Factors" for a discussion of important factors that may cause our actual results to differ materially from those expressed or implied by our forward-looking statements. As a result of these factors, we cannot assure you that the forward-looking statements in this prospectus will prove to be accurate. Furthermore, if our forward-looking statements prove to be inaccurate, the inaccuracy may be material. In light of the significant uncertainties in these forward-looking statements, you should not regard these statements as a representation or warranty by us or any other person that we will achieve our objectives and plans in any specified time frame, or at all. We undertake no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

You should read this prospectus and the documents that we reference in this prospectus and have filed as exhibits to the registration statement, of which this prospectus is a part, completely and with the understanding that our actual future results may be materially different from what we expect. We qualify all of our forward-looking statements by these cautionary statements.

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INDUSTRY AND MARKET DATA

Certain industry data and market data included in this prospectus were obtained from independent third-party surveys, market research, publicly available information, reports of governmental agencies and industry publications and surveys. All of management's estimates presented herein are based upon management's review of independent third-party surveys and industry publications prepared by a number of sources and other publicly available information. All of the market data used in this prospectus involves a number of assumptions and limitations, and you are cautioned not to give undue weight to such estimates. We believe that the information from these industry publications and surveys included in this prospectus is reliable. The industry in which we operate is subject to a high degree of uncertainty and risk due to a variety of factors, including those described in the section titled "Risk Factors." These and other factors could cause results to differ materially from those expressed in the estimates made by the independent parties and by us.

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USE OF PROCEEDS

We estimate that the net proceeds from our issuance and sale of                    common shares in this offering will be approximately $                million, or approximately $                million if the underwriters exercise their option to purchase additional common shares in full, based upon an assumed initial public offering price of $               per common share, which is the midpoint of the price range set forth on the cover page of this prospectus, after deducting underwriting discounts and commissions and estimated offering expenses payable by us.

Each $1.00 increase or decrease in the assumed initial public offering price of $               per common share, which is the midpoint of the price range set forth on the cover page of this prospectus, after deducting underwriting discounts and commissions and estimated offering expenses payable by us, would increase or decrease the net proceeds to us from this offering by approximately $                million, assuming that the number of shares offered by us, as set forth on the cover page of this prospectus, remains the same. We may also increase or decrease the number of shares we are offering. Each increase or decrease of 1.0 million in the number of shares we are offering at the assumed initial public offering price of $               per common share, which is the midpoint of the price range set forth on the cover page of this prospectus, after deducting underwriting discounts and commissions would increase or decrease the net proceeds to us from this offering by approximately $                million, assuming the assumed initial public offering price stays the same.

We intend to use the net proceeds from this offering for the following purposes:

This expected use of the net proceeds from this offering represents our intentions based upon our current plans and business conditions, which could change in the future as our plans and business conditions evolve. The amounts and timing of our actual expenditures may vary significantly depending on numerous factors, including the progress of our development, the status of and results from preclinical studies and clinical trials, as well as any collaborations that we may enter into with third parties, and any unforeseen cash needs.

We believe opportunities may exist from time to time to expand our current business through the acquisition or in-license of complementary product candidates. While we have no current agreements or commitments for any specific acquisitions or in-licenses at this time, we may use a portion of the net proceeds for these purposes.

Our management will have broad discretion in the application of the net proceeds from this offering, and investors will be relying on the judgment of our management regarding the application of the net proceeds of this offering. The timing and amount of our actual expenditures will be based on many factors, including cash flows from operations and the anticipated growth of our business. Pending these uses, for a period of six months after the closing of this offering, we plan to invest these net proceeds in a non-interest bearing account. Thereafter, we may choose to invest these net proceeds in short-term, interest bearing obligations, investment-grade instruments, certificates of deposit or direct or guaranteed obligations of the United States. The goal with respect to the investment of these net proceeds is capital preservation and liquidity so that such funds are readily available to fund our operations.

We believe that the net proceeds from this offering will be sufficient to enable us to fund our operating expenses and capital expenditure requirements through 2017 and the completion of our Phase 3 pivotal program for RVT-101 and the submission of our NDA with the FDA for the approval of RVT-101 in the United States. We have based this estimate on assumptions that may prove to be incorrect, and we could use our available capital resources sooner than we currently expect.

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DIVIDEND POLICY

We have never declared or paid any dividends on our common shares. We anticipate that we will retain all of our future earnings, if any, for use in the operation and expansion of our business and do not anticipate paying cash dividends in the foreseeable future. Any decision to declare and pay dividends in the future will be made at the sole discretion of our board of directors and will depend on, among other things, our results of operations, cash requirements, financial condition, contractual restrictions and other factors that our board of directors may deem relevant. In addition, pursuant to Bermuda law, a company may not declare or pay dividends if there are reasonable grounds for believing that (1) the company is, or would after the payment be, unable to pay its liabilities as they become due or (2) that the realizable value of its assets would thereby be less than its liabilities. Under our bye-laws, each common share is entitled to dividends if, as and when dividends are declared by our board of directors, subject to any preferred dividend right of the holders of any preference shares.

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CAPITALIZATION

The following table sets forth our cash and capitalization as of December 31, 2014:

The following information is illustrative only of our capitalization following the closing of this offering and will change based on the actual initial public offering price and other terms of this offering determined at pricing. You should read this table together with the sections titled "Selected Financial Data" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" and our financial statements and the related notes appearing elsewhere in this prospectus.


 
 
As of December 31, 2014
 
 
  Actual   As Adjusted (1)  

Cash

  $   $    

Shareholders' (deficit) equity:

             

Common shares, $0.00001 par value; 1,000,000,000 shares authorized, 10,000,000 shares issued and outstanding, actual;                       shares authorized,                        shares issued and outstanding, as adjusted

  $ 100   $    

Common shares subscribed

    (100 )      

Additional paid-in-capital

    5,000,000        

Accumulated deficit

    (10,762,444 )      

Total shareholders' (deficit) equity

    (5,762,444 )      

Total capitalization

  $ (5,762,444 ) $    

(1)
Each $1.00 increase or decrease in the assumed initial public offering price of $               per common share, which is the midpoint of the price range set forth on the cover page of this prospectus, after deducting underwriting discounts and commissions and estimated offering expenses payable by us, would increase or decrease the as adjusted amount of each of cash, additional paid-in capital, total shareholders' (deficit) equity and total capitalization by approximately $                million, assuming that the number of shares offered by us, as set forth on the cover page of this prospectus, remains the same. Each increase or decrease of 1.0 million in the number of common shares we are offering at the assumed initial public offering price of $               per common share, which is the midpoint of the price range set forth on the cover page of this prospectus, after deducting underwriting discounts and commissions and estimated offering expenses payable by us, would increase or decrease the as adjusted amount of each of cash, additional paid-in capital, total shareholders' (deficit) equity and total capitalization by approximately $                million, assuming that the assumed initial public offering price stays the same, after deducting underwriting discounts and commissions.

The number of common shares outstanding in the table above excludes:

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DILUTION

If you invest in our common shares in this offering, your interest will be diluted to the extent of the difference between the initial public offering price per common share and the as adjusted net tangible book value per common share of our common shares immediately after this offering. Net tangible book value per common share is determined by dividing our total tangible assets less total liabilities by the number of outstanding common shares.

As of December 31, 2014, we had a net tangible book deficit of $(5,762,444), or $(0.58) per common share.

After giving effect to the issuance and sale of                                             common shares in this offering at an assumed initial public offering price of $               per common share, which is the midpoint of the price range set forth on the cover page of this prospectus, after deducting underwriting discounts and commissions and estimated offering expenses payable by us, our as adjusted net tangible book value as of December 31, 2014 would have been $               , or $               per common share. This represents an immediate increase in the as adjusted net tangible book value of $               per common share to our sole shareholder, and an immediate dilution in the as adjusted net tangible book value of $               per common share to investors purchasing our common shares in this offering. The following table illustrates this per common share dilution:


Assumed initial public offering price per common share

       
$
 

Net tangible book deficit per common share as of December 31, 2014

  $ (0.58 )      

Increase in net tangible book value per common share attributable to new investors participating in this offering

             

As adjusted net tangible book value per common share after this offering

             

Dilution per common share to investors participating in this offering

        $    

Each $1.00 increase (decrease) in the assumed initial public offering price of $               per common share, which is the midpoint of the price range set forth on the cover page of this prospectus, would increase (decrease) our as adjusted net tangible book value as of December 31, 2014 by approximately $                million, or approximately $               per common share, and would increase (decrease) dilution to investors in this offering by approximately $               per common share, assuming that the number of common shares offered by us, as set forth on the cover page of this prospectus, remains the same, and after deducting underwriting discounts and commissions.

Similarly, each increase (decrease) of 1.0 million shares in the number of common shares we are offering would increase (decrease) our as adjusted net tangible book value as of December 31, 2014 by approximately $               and $               per common share, respectively, and would increase (decrease) dilution to investors in this offering by approximately $               and $               per common share, respectively, assuming the assumed initial public offering price remains the same, and after deducting underwriting discounts and commissions. The as adjusted information is illustrative only, and we will adjust this information based on the actual initial public offering price and other terms of this offering determined at pricing.

If the underwriters exercise their option in full to purchase an additional               common shares in this offering, the as adjusted net tangible book value per common share after the offering would be $               per common share, the increase in the as adjusted net tangible book value per common share to our sole

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shareholder would be $               per common share and the dilution to new investors purchasing common shares in this offering would be $               per common share.

The following table sets forth as of December 31, 2014, on the as adjusted basis described above, the differences between the number of common shares purchased from us, the total consideration paid and the weighted average price per common share paid by our sole shareholder and by investors purchasing our common shares in this offering at an assumed initial public offering price of $               per common share, which is the midpoint of the price range set forth on the cover page on this prospectus, before deducting underwriting discounts and commissions and estimated offering expenses payable by us:


 
  Shares Purchased   Total Consideration  
Weighted Average
Price Per
Common Share
 
 
  Number   Percent   Amount   Percent  

Sole shareholder

    10,000,000     100 % $ 5,000,100     100 % $ 0.50  

New investors

                               

Total

          100 % $       100 %      

Each $1.00 increase or decrease in the assumed initial public offering price of $               per common share, which is the midpoint of the price range set forth on the cover page of this prospectus, would increase or decrease the total consideration paid by new investors by $                million, and increase or decrease the percent of total consideration paid by new investors by approximately                              percentage points, assuming that the number of shares offered by us, as set forth on the cover page of this prospectus, remains the same.

The table and discussion above exclude:

To the extent any options are issued under our equity incentive plans, or we issue additional common shares in the future, there will be further dilution to investors participating in this offering. In addition, we may choose to raise additional capital because of market conditions or strategic considerations, even if we believe that we have sufficient funds for our current or future operating plans. If we raise additional capital through the sale of equity or convertible debt securities, the issuance of these securities could result in further dilution to our shareholders.

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SELECTED FINANCIAL DATA

The following tables set forth our selected financial data for the period indicated. We derived the summary statement of operations data for the period from October 31, 2014 (date of inception) through December 31, 2014 and the balance sheet data as of December 31, 2014 from our audited financial statements appearing elsewhere in this prospectus. The data should be read together with the section titled "Management's Discussion and Analysis of Financial Condition and Results of Operations" and our financial statements and related notes included elsewhere in this prospectus. Our historical results are not necessarily indicative of the results to be expected in the future, and our operating results for the period ended December 31, 2014 are not indicative of the results that may be expected for a full fiscal year or any other future period. Our fiscal year ends on March 31.


 
 
Period from October 31,
2014 (Date of Inception)
to December 31, 2014
 
 
  (in thousands, except share
and per share data)

 

Statement of Operations Data:

       

Operating expenses:

       

Research and development

  $ 10,538  

General and administrative

    224  

Total operating expenses

    10,762  

Net loss and comprehensive loss

  $ (10,762 )

Net loss per common share—basic and diluted (1)

  $ (1.08 )

Weighted average shares outstanding—basic and diluted (1)

    10,000,000  

(1)
See Note B[5] to our financial statements for an explanation of the method used to compute basic and diluted net loss per common share.


 
 
As of December 31, 2014
 
 
  (in thousands)
 

Balance Sheet Data:

       

Cash

  $  

Total assets

    2  

Total liabilities

    5,764  

Accumulated deficit

    (10,762 )

Total shareholders' deficit

    (5,762 )

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MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

You should read the following discussion and analysis of our financial condition and results of operations together with our financial statements and the related notes thereto included elsewhere in this prospectus. Some of the information contained in this discussion and analysis or set forth elsewhere in this prospectus, including information with respect to our plans and strategy for our business, includes forward-looking statements that involve risks and uncertainties. You should review the section titled "Risk Factors" for a discussion of important factors that could cause actual results to differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis. Our fiscal year ends on March 31.

Overview

We are a clinical-stage biopharmaceutical company focused on the acquisition, development and commercialization of novel therapeutics for the treatment of neurodegenerative disorders. We are a wholly-owned subsidiary of Roivant Sciences Ltd., a company focused on the acquisition, development and commercialization of late-stage product candidates that are non-strategic, deprioritized or under-resourced at other biopharmaceutical companies.

Our near-term focus is to develop RVT-101 for the treatment of Alzheimer's disease and other forms of dementia. We acquired the worldwide rights to RVT-101 from Glaxo Group Limited and GlaxoSmithKline Intellectual Property Development Limited, collectively GSK, in December 2014. We plan to commence a Phase 3 pivotal program of RVT-101 for the treatment of mild-to-moderate Alzheimer's disease in the fourth quarter of 2015. Should our Phase 3 program be successful, we plan to rapidly seek regulatory approval and commercialization of RVT-101 in the United States and the European Union. In the long-term, we intend to develop a pipeline of product candidates to comprehensively address the cognitive, behavioral and functional components of dementia.

We were founded in October 2014 and our operations to date have been limited to organizing and staffing our company, raising capital from Roivant Sciences Ltd. and acquiring RVT-101. To date, we have not generated any revenue and have financed our operations exclusively through capital contributions from Roivant Sciences Ltd. As of December 31, 2014, we had an accumulated deficit of $10.8 million. We recorded a net loss of $10.8 million for the period from inception to December 31, 2014.

Asset Purchase Agreement with GlaxoSmithKline

In December 2014, we entered into an asset purchase agreement with GSK, or the GSK Agreement, pursuant to which GSK assigned to us all of their rights to certain patents, regulatory documentation, data records and materials related to SB-742457, which we now refer to as RVT-101, and other related compounds claimed by a specific patent application.

Under the GSK Agreement, GSK received an upfront payment of $5 million and, unless the FDA requires us to complete additional clinical work prior to starting a Phase 3 trial for RVT-101, we are obligated to pay GSK an additional $5 million upon the earliest to occur of specified events that indicate a single Phase 3 trial may be sufficient to obtain FDA approval for RVT-101 for the treatment of Alzheimer's disease. We are also obligated to pay GSK $35 million, $25 million and $10 million upon approval of RVT-101 in the United States, the European Union and Japan, respectively, as well as an additional one-time payment of $85 million for the first calendar year in which we achieve global net sales of $1.2 billion for RVT-101.

Under the GSK Agreement we are also obligated to pay a fixed 12.5% royalty based on net sales of RVT-101, subject to reduction on account of expiration of patent and regulatory exclusivity or upon generic entry. See the section titled "Business—Asset Purchase Agreement with GlaxoSmithKline" for additional information.

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Services Agreement with Roivant Sciences, Inc.

We and our wholly-owned subsidiary, Axovant Sciences, Inc., have entered into a services agreement with Roivant Sciences, Inc., a wholly-owned subsidiary of Roivant Sciences Ltd., pursuant to which Roivant Sciences, Inc. provides us with services in relation to the identification of potential product candidates, project management of clinical trials and other development, administrative and financial activities. Under the terms of our services agreement with Roivant Sciences, Inc., we are obligated to pay or reimburse Roivant Sciences, Inc. for the costs it, or third parties acting on its behalf, incurs in providing services to us, including administrative and support services as well as research and development services. In addition, we are obligated to pay to Roivant Sciences, Inc. an amount equal to 10% of the costs incurred in connection with research and development service. Following the completion of this offering, we expect that our reliance on Roivant Sciences, Inc. will decrease over time as we, Axovant Sciences, Inc. and any other future subsidiary of ours continue to hire the necessary personnel to manage the development and potential commercialization of RVT-101. See the section titled "Certain Relationships and Related Party Transactions—Services Agreement with Roivant Sciences, Inc." for additional information.

Financial Operations Overview

Revenue

We have not generated any revenue from the sale of any products, and we do not expect to generate any revenue unless or until we obtain regulatory approval of and commercialize RVT-101.

Research and Development Expense

Since our inception, our only operations have been to acquire the rights to RVT-101. Our research and development expenses to date consist of an upfront payment of $5.0 million made, and a contingent payment of $5.0 million to be made, to GSK in connection with our asset purchase and the related professional fees associated with such asset purchase, as well as costs allocated under our services agreement with Roivant Sciences, Inc. Such payments to acquire RVT-101 did not meet the definition for capitalization under accounting principles generally accepted in the United States of America, or U.S. GAAP, and were therefore expensed. Following the closing of this offering, we expect to significantly increase our research and development efforts as we initiate our Phase 3 pivotal program for RVT-101. Research and development expenses will include:

Research and development activities will continue to be central to our business model. Product candidates in later stages of clinical development, such as RVT-101, generally have higher development costs than those in earlier stages of clinical development, primarily due to the increased size and duration of later-stage clinical trials. We expect our research and development expenses to be significant over the next several years as we increase personnel and compensation costs and commence a potential Phase 3 pivotal program. It is difficult to determine with certainty the duration and completion costs of any clinical trial we may conduct.

The duration, costs and timing of clinical trials of RVT-101 and any other product candidates will depend on a variety of factors that include, but are not limited to, the following:

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In addition, the probability of success for RVT-101 and any other product candidate will depend on numerous factors, including competition, manufacturing capability and commercial viability.

General and Administrative Expense

General and administrative expenses consist primarily of legal fees relating to our formation and corporate matters, consulting services and services provided under our services agreement with Roivant Sciences, Inc. As of December 31, 2014, we had not paid any compensation or issued any share-based compensation to any employee, director, consultant or Roivant Sciences, Inc. employee. We began making equity awards to new employees, directors, consultants, and Roivant Sciences, Inc. employees in the quarter ended March 31, 2015.

We expect that our general and administrative expenses will increase in the quarter ending March 31, 2015 as we incur legal and accounting fees in connection with preparing the registration statement for this offering and recognize share-based compensation expense from equity awards granted in such quarter.

We anticipate that our general and administrative expenses will also increase in the future to support our continued research and development activities and increased costs of operating as a public company. These increases will likely include increased costs related to the hiring of additional personnel and fees to outside consultants, lawyers and accountants, among other expenses. Additionally, we anticipate increased costs associated with being a public company including expenses related to services associated with maintaining compliance with NYSE rules and SEC requirements, insurance, and investor relations costs. In addition, if RVT-101 obtains regulatory approval for marketing, we expect that we would incur expenses associated with building a sales and marketing team.

Results of Operations from October 31, 2014 (Date of Inception) to December 31, 2014

The following table sets forth our results of operations for the period from October 31, 2014 (date of inception) to December 31, 2014.


 
 
Period from October 31, 2014 (Date
of Inception) to December 31, 2014
 
 
  (in thousands)
 

Operating expenses:

       

Research and development

  $ 10,538  

General and administrative

    224  

Total operating expenses

    10,762  

Net loss and comprehensive loss

  $ (10,762 )

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Research and Development Expenses

Research and development expenses were $10.5 million for the period from October 31, 2014 (date of inception) to December 31, 2014, and were primarily attributable to the $5.0 million upfront payment made, and the $5.0 million contingent payment to be made, to GSK in connection with the GSK Agreement, and $0.5 million of professional costs related thereto, as well as costs allocated under our services agreement with Roivant Sciences, Inc.

General and Administrative Expenses

General and administrative expenses were $0.2 million for the period from October 31, 2014 (date of inception) to December 31, 2014, and were primarily attributable to legal fees and consulting services associated with the formation of our company and certain direct and indirect costs associated with services performed by Roivant Sciences, Inc.

Liquidity and Capital Resources

Overview

For the period from October 31, 2014 (date of inception) to December 31, 2014, we had cumulative net losses of $10.8 million. As of December 31, 2014, we had no cash and no long-term debt. All operations to date have been financed through capital contributions, short-term advances from Roivant Sciences Ltd. or its affiliates paying expenses related to our operations, which we will be required to reimburse. These factors raise substantial doubt about our ability to continue as a going concern.

We expect to continue to incur significant and increasing operating losses at least for the next several years. We do not expect to generate revenue unless and until we successfully complete development and obtain regulatory approval for RVT-101. Our net losses may fluctuate significantly from quarter-to-quarter and year-to-year, depending on the timing of our planned clinical trials and our expenditures on other research and development activities. We anticipate that our expenses will increase substantially as we:

    §
    commence our Phase 3 pivotal program of RVT-101 for the treatment of mild-to-moderate Alzheimer's disease;

    §
    commence the research and development of RVT-101 for the treatment of severe Alzheimer's disease and other forms of dementia, such as dementia with Lewy bodies, Parkinson's disease dementia and vascular dementia;

    §
    seek to identify, acquire, develop and commercialize additional product candidates;

    §
    integrate acquired technologies into a comprehensive regulatory and product development strategy;

    §
    achieve milestones under our agreements with third parties that will require us to make substantial payments to those parties;

    §
    maintain, expand and protect our intellectual property portfolio;

    §
    hire scientific, clinical, quality control and administrative personnel;

    §
    add operational, financial and management information systems and personnel, including personnel to support our drug development efforts;

    §
    seek regulatory approvals for any product candidates that successfully complete clinical trials;

    §
    ultimately establish a sales, marketing and distribution infrastructure and scale up external manufacturing capabilities to commercialize any drug candidates for which we may obtain regulatory approval; and

    §
    begin to operate as a public company.

We intend to use the proceeds of this offering primarily to fund the research and development of RVT-101 for the treatment of mild-to-moderate Alzheimer's disease and other potential indications. These funds may not be sufficient to enable us to complete all necessary development and commercially launch RVT-101. Accordingly, we may be required to obtain further funding through other public or private offerings of our capital stock, debt financing, collaboration and licensing arrangements or other sources. Adequate additional funding may not be available to us on acceptable terms, or at all. If we are unable to raise

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capital in sufficient amounts or on terms acceptable to us, we may have to significantly delay, scale back or discontinue the development or commercialization of RVT-101 or potentially discontinue operations.

Until such time, if ever, as we can generate substantial revenue from sales of RVT-101, we expect to finance our cash needs through a combination of equity offerings, debt financings and potential collaboration, license or development agreements. We do not currently have any committed external source of funds. To the extent that we raise additional capital through the sale of equity or convertible debt securities, your ownership interest will be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect your rights as a common shareholder. Debt financing and preferred equity financing, if available, may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends.

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

Outlook

Based on the expected net proceeds from this offering, our research and development plans and our timing expectations related to the commencement of our Phase 3 pivotal program for RVT-101, we expect that the net proceeds from this offering will enable us to fund our operating expenses and capital expenditure requirements through 2017 and the completion of our Phase 3 pivotal program for RVT-101 and the submission of our NDA with the FDA for the approval of RVT-101 in the United States. However, we have based this estimate on assumptions that may prove to be wrong, and we could use our capital resources sooner than we expect.

Contractual Obligations

As of December 31, 2014 we did not have any ongoing material financial commitments, other than pursuant to the GSK Agreement, such as lines of credit or guarantees that we expect to affect our liquidity over the next several years.

Off-Balance Sheet Arrangements

We did not have during the period presented, and we do not currently have, any off-balance sheet arrangements, as defined under SEC rules.

Critical Accounting Policies and Significant Judgments and Estimates

Our management's discussion and analysis of our financial condition and results of operations is based on our financial statements, which have been prepared in accordance with U.S. GAAP. The preparation of these financial statements requires us to make estimates, judgments and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities as of the dates of the balance sheets and the reported amounts of expenses during the reporting periods. In accordance with U.S. GAAP, we evaluate our estimates and judgments on an ongoing basis. Significant estimates include assumptions used in the determination of some of our costs incurred under our services agreement with Roivant Sciences, Inc., which costs are charged to research and development and general and administrative expense. We base our estimates on historical experience and on various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

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We define our critical accounting policies as those accounting principles generally accepted in the United States of America that require us to make subjective estimates and judgments about matters that are uncertain and are likely to have a material impact on our financial condition and results of operations, as well as the specific manner in which we apply those principles. While our significant accounting policies are more fully described in Note B to our financial statements appearing elsewhere in this prospectus, we believe the following are the critical accounting policies used in the preparation of our financial statements that require significant estimates and judgments.

Contingent Payment Liability

One significant estimate relates to the probability and timing of the contingent payment liability recorded in the balance sheet. Such liability relates to our asset purchase agreement with GSK (see Note C to our financial statements). We believe it is probable that we will be obligated to pay $5.0 million to GSK in early 2016 (see Note G to our financial statements). Should the specified criteria for payment not be met, or be met in a period different from our expectation, there could be significant fluctuation in the financial results of the Company in future periods.

Valuation of Share-Based Compensation under our Services Agreement

Another significant estimate affecting our financial results relates to the compensation expenses charged to us under our services agreement with Roivant Sciences, Inc. In accordance with our services agreement with Roivant Sciences, Inc., total compensation, inclusive of base salary, fringe benefits and share-based compensation is charged back to us at actual cost plus a pre-determined mark-up for any research and development activities performed by Roivant Sciences, Inc. on our behalf. The actual costs are determined based upon the relative percentage of time utilized on our matters. The most significant component of total compensation relates to the share-based awards that Roivant Sciences, Inc. has issued to its employees.

Such awards are for in the form of restricted shares of BVC Ltd., or BVC, granted to Roivant Sciences, Inc. employees. BVC is a non-public entity, which holds a non-controlling ownership interest in Roivant Sciences Ltd., our parent. BVC's ownership interest and board rights in Roivant Sciences Ltd. allow it to exercise significant influence over Roivant Sciences Ltd. As such, because the awards are not based on our or Roivant Sciences Ltd.'s shares, they are remeasured at fair value at each reporting period until the awards vest. Significant judgment and estimates were used to estimate the fair value of these awards, as the underlying shares in BVC are not publicly traded. Roivant Sciences, Inc.'s estimation of fair value of the awards considered recent transactions entered into by Roivant Sciences Ltd., relevant industry and comparable public company data, as well as discounted cash flow analyses. As BVC is a non-public entity, the majority of the inputs used to estimate the fair value of the restricted share awards are considered level 3 due to their unobservable nature. Each award is subject to specified vesting schedules and requirements (a mix of time-based, performance-based and corporate event-based, including post-IPO market capitalization target and financing events). Compensation expense will be charged to us by Roivant Sciences, Inc. over the required service period to earn the award. For the period from October 31, 2014 (inception) to December 31, 2014, we have incurred expenses of approximately $604,000, inclusive of the mark-up, under the services agreement, which we have recorded as research and development and general and administrative expense in the statement of operations. Due to the significance of the estimates in the calculation of fair value of the instruments, the related compensation expense charged to us by Roivant Sciences, Inc. could fluctuate significantly period to period.

Income Taxes

We account for income taxes in accordance with ASC 740, Income Taxes . Under the assets-and-liability method of ASC 740, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and the respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Under ASC 740, the effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.

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We account for uncertain tax positions in accordance with the provisions of ASC 740. When uncertain tax positions exist, we recognize the tax benefit of tax positions to the extent that the benefit will more likely than not be realized. The determination as to whether the tax benefit will more likely than not be realized is based upon the technical merits of the tax position as well as consideration of the available facts and circumstances. As of December 31, 2014, we do not have any significant uncertain tax positions.

Recent Accounting Pronouncements

In June 2014, the Financial Accounting Standards Board, or FASB, issued Accounting Standards Update, or ASU, No. 2014-10, Development Stage Entities (Topic 915): Elimination of Certain Financial Reporting Requirements, Including an Amendment to Variable Interest Entities Guidance in Topic 810, Consolidation. This ASU removes the definition of a development stage entity and all incremental financial reporting requirements from U.S. GAAP for development stage entities. The elimination of the development stage entity financial reporting requirements is effective for annual reporting periods beginning after December 15, 2014. A public business entity may adopt this guidance early for any annual reporting period or interim period for which financial statements have not been issued. All other entities may adopt this guidance early for financial statements that have not yet been made available for issue. We have adopted this guidance.

In August 2014, the FASB issued ASU No. 2014-15, "Presentation of Financial Statements—Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity's Ability to Continue as a Going Concern" , or ASU 2014-15. ASU 2014-15 is intended to define management's responsibility to evaluate whether there is substantial doubt about an entity's ability to continue as a going concern and to provide related footnote disclosures. Specifically, ASU 2014-15 provides a definition of the term substantial doubt and requires an assessment for a period of one year after the date that the financial statements are issued (or available to be issued). It also requires certain disclosures when substantial doubt is alleviated as a result of consideration of management's plans and requires an express statement and other disclosures when substantial doubt is not alleviated. The new standard will be effective for reporting periods beginning after December 15, 2016, with early adoption permitted. We are currently evaluating the impact of the adoption of ASU 2014-14 on our financial statements and disclosures.

In February 2015, the FASB issued ASU No. 2015-02, " Consolidation (Topic 810), Amendments to the Consolidation Analysis". ASU 2015-02 changes the analysis that a reporting entity must perform to determine whether it should consolidate certain types of legal entities. All legal entities are subject to reevaluation under the revised consolidation model. ASU 2015-02 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015. ASU 2015-02 may be applied retrospectively to all prior periods presented in the financial statements or by using a modified retrospective approach by recording a cumulative-effect adjustment to equity as of the beginning of the fiscal year of adoption. Early adoption is permitted provided that the guidance is applied from the beginning of the fiscal year of adoption. We are currently assessing the impacts of adopting ASU 2015-02.

JOBS Act

In April 2012, the Jumpstart Our Business Startups Act of 2012, or the JOBS Act, was enacted. Section 107(b) of the JOBS Act provides that an emerging growth company can take advantage of an extended transition period for complying with new or revised accounting standards. Thus, an emerging growth company can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have irrevocably elected not to avail ourselves of this extended transition period, and, as a result, we will adopt new or revised accounting standards on the relevant dates on which adoption of such standards is required for other public companies.

Quantitative and Qualitative Disclosures about Market Risk

We did not have any cash or other financial instruments as of December 31, 2014.

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BUSINESS

Overview

We are a clinical-stage biopharmaceutical company focused on the acquisition, development and commercialization of novel therapeutics for the treatment of neurodegenerative disorders. Our goal is to be the leading biopharmaceutical company focused on the treatment of dementia, a condition characterized by a significant decline in mental capacity and impaired daily function. Our near-term focus is to develop our product candidate, which we refer to as RVT-101, for the treatment of Alzheimer's disease and other forms of dementia. In the long-term, we intend to develop a pipeline of product candidates to comprehensively address the cognitive, behavioral and functional components of dementia.

In December 2014, we acquired the worldwide rights to RVT-101 from Glaxo Group Limited and GlaxoSmithKline Intellectual Property Development Limited, collectively GSK. We plan to commence a Phase 3 pivotal program of RVT-101 for the treatment of mild-to-moderate Alzheimer's disease in the fourth quarter of 2015. If our Phase 3 program is successful, we plan to seek regulatory approval and commercialize RVT-101 in the United States and the European Union.

Alzheimer's disease is a progressive neurodegenerative disorder. According to the Alzheimer's Association, a leading voluntary health organization in Alzheimer's disease care, support and research, Alzheimer's disease affects approximately 5.3 million people in the United States. It is estimated that between 70% and 90% of Alzheimer's disease patients age 65 and older are classified as having mild-to-moderate Alzheimer's disease. No new chemical entity has been approved by the U.S. Food and Drug Administration, or the FDA, for the treatment of Alzheimer's disease since 2003, with multiple drugs aimed at modifying the course of the disease having failed at various stages of development. Key opinion leaders in Alzheimer's disease have called into question the field's historical focus on developing "disease-modifying" drugs, and more generally, the distinction between "disease-modifying" and "symptomatic" therapies for Alzheimer's disease.

RVT-101 is an orally administered, potent antagonist of the 5-hydroxytryptamine 6, or 5-HT6, serotonin receptors in the brain. Antagonism of the 5-HT6 receptor is a novel mechanism of action that promotes the release of acetylcholine, glutamate and other neurotransmitters. These neurotransmitters are believed to be critical for alertness, memory, thought and judgment, key components of cognition and function that are impaired in patients with Alzheimer's disease. We plan to develop RVT-101 for use in combination with donepezil and potentially other cholinesterase inhibitors. Donepezil, a generic drug also marketed under the trade name Aricept by Eisai Co., Ltd. and Pfizer, lnc., is one of the most commonly used cholinesterase inhibitors. Cholinesterase inhibitors are designed to help prevent the breakdown of acetylcholine. Cholinesterase inhibitors are the current standard of care for the treatment of mild-to-moderate Alzheimer's disease, and the only class of drugs approved by the FDA for the treatment of patients with mild Alzheimer's disease. Based on preclinical and clinical data collected to date, we believe RVT-101, when used in combination with donepezil, works additively to increase the concentration of acetylcholine and other neurotransmitters and thereby synergistically improve cognition and function in patients with Alzheimer's disease.

We believe RVT-101 has the potential to be a best-in-class 5-HT6 receptor antagonist for the treatment of Alzheimer's disease based on its safety, tolerability and efficacy profile for up to 48 weeks, as demonstrated in a 684-subject, randomized, placebo-controlled Phase 2b trial conducted by GSK. We believe this is significant, in part, because currently marketed Alzheimer's disease drugs were approved on efficacy data of 28 weeks or less. Furthermore, we believe RVT-101 has a number of favorable properties as a product candidate for Alzheimer's disease, including once daily dosing, a low potential for drug interactions, and an ability to be administered with or without food.

RVT-101 was originally developed by GSK. Prior to our acquisition of RVT-101 in December 2014, GSK conducted 13 clinical trials for RVT-101 involving over 1,250 individuals, which included healthy subjects

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as well as subjects with mild-to-moderate Alzheimer's disease. In a Phase 2b clinical trial of 684 subjects with mild-to-moderate Alzheimer's disease, subjects that received 35 mg RVT-101 in combination with donepezil achieved a statistically significant improvement in cognition at 12, 24 and 48 weeks following initiation of treatment, compared to subjects that received donepezil alone, as measured by the Alzheimer's Disease Assessment Scale-cognitive, or ADAS-cog, subscale. In addition to RVT-101's effect on cognition, subjects that received 35 mg RVT-101 in combination with donepezil achieved a statistically significant improvement in function at 12, 24 and 36 weeks following the initiation of treatment, compared to subjects that received donepezil alone, as measured by the Alzheimer's Disease Cooperative Study Activities of Daily Living, or ADCS-ADL, a commonly used scale evaluating function in which a subject's ability to perform a list of daily activities is evaluated based on information obtained from the subject and his or her caregiver. We believe these ADCS-ADL results are particularly noteworthy in light of the fact that the decline in the ability of Alzheimer's disease patients to perform activities essential to daily living places a significant burden on caregivers and the healthcare system. We plan to confirm the results of the Phase 2b clinical trial conducted by GSK in our planned Phase 3 pivotal program and further assess the safety and efficacy of RVT-101 in combination with donepezil.

To determine whether an outcome is statistically significant, a "p-value" is calculated. Historically, the FDA and European Medicines Agency, or the EMA, have generally required newly approved drugs to demonstrate an effect with a p-value of less than 0.05, which suggests there is a less than 5.0% probability that the observed difference between the control group and the treatment group is due to chance alone rather than the efficacy of the treatment. When the p-value is less than 0.05, the result is generally considered "statistically significant," and may support a finding of efficacy by regulatory authorities. However, regulatory authorities, including the FDA and EMA, do not rely on strict statistical significance thresholds as criteria for market approval and maintain the flexibility to evaluate the overall risks and benefits of a treatment. Accordingly, treatments may receive market approval from the FDA or EMA even if the p-value of the primary endpoint is greater than 0.05, or may fail to receive market approval from the FDA or EMA even if the p-value of the primary endpoint is less than 0.05.

According to Alzheimer's Disease International, the international federation of Alzheimer's disease associations, more than 44 million people worldwide suffer from some form of dementia. Beginning in the second half of 2015, we plan to evaluate RVT-101 as a potential treatment for forms of dementia other than mild-to-moderate Alzheimer's disease, such as severe Alzheimer's disease, dementia with Lewy bodies, Parkinson's disease dementia and vascular dementia. We also intend to augment our current pipeline through the acquisition or in-license of additional late-stage product candidates that complement RVT-101 and that we believe can be developed and commercialized in a capital-efficient manner.

We are a wholly-owned subsidiary of Roivant Sciences Ltd., a company focused on the acquisition, development and commercialization of late-stage product candidates that are non-strategic, deprioritized or under-resourced at other biopharmaceutical companies. We have assembled a team with substantial experience in developing and obtaining approval for drugs for central nervous system disorders, including Dr. Lawrence Friedhoff, the Chief Development Officer of Axovant Sciences, Inc., who previously led the development of Aricept at Eisai Co., Ltd. Aricept achieved peak annual global sales of $4.2 billion in 2010.

Our Strategy

Our goal is to be the leading biopharmaceutical company focused on the treatment of dementia.

The key elements of our strategy to achieve this goal include the following:

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Market Opportunity for the Treatment of Alzheimer's Disease

Dementia is a term that describes a wide range of symptoms associated with a decline in memory or other cognitive abilities severe enough to interfere with daily activities. Alzheimer's disease, a progressive neurodegenerative disorder that results in significant impairments in cognition and function, is one form of dementia. According to Alzheimer's Disease International, more than 44 million individuals worldwide suffer from dementia, and based on scientific literature, approximately 34 million individuals are affected by Alzheimer's disease. It is estimated that 11% of adults age 65 and older have Alzheimer's disease. In addition, the prevalence of Alzheimer's disease is expected to increase over time, with 13.8 million people age 65 and older projected to have the disease by 2050 in the United States. This projection does not include Alzheimer's disease patients under the age of 65, who currently account for approximately 4% of the overall Alzheimer's disease population.

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Projected Number of People Age 65 and Older
with Alzheimer's Disease in U.S. (Millions)

GRAPHIC

                                                 Source: Alzheimer's Association.

In addition to its debilitating effect on patients' cognition and day-to-day functioning, Alzheimer's disease places a significant burden on the healthcare system. According to the Alzheimer's Association, the aggregate cost of care in 2014 for patients with Alzheimer's disease and other types of dementia in the United States was estimated to be $214 billion, over half of which is borne by the Medicare system.

Alzheimer's disease is often grouped into three categories based on severity: mild, moderate and severe. Although the relative prevalence of each of these categories is not well-defined in the literature, a report published by the Alzheimer's Society, a leading care and research charity in the United Kingdom for individuals and families that suffer from dementia, estimates that between 70% and 90% of all Alzheimer's disease patients age 65 and older have mild-to-moderate Alzheimer's disease.

The following figure illustrates the estimated proportion of Alzheimer's disease patients with mild, moderate and severe Alzheimer's disease by age group.

GRAPHIC

                                                                Source: Alzheimer's Society: Dementia UK, 2007.

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While the pathophysiology of Alzheimer's disease is not completely known, it is understood that cognitive and behavioral disturbances are the result of dysfunctional neurotransmitter systems, including those associated with acetylcholine, glutamate, dopamine and norepinephrine. The FDA has approved two classes of drugs for the treatment of Alzheimer's disease: cholinesterase inhibitors and N -methyl-D-aspartate, or NMDA, receptor antagonists. The current standard of care for the treatment of patients with mild-to-moderate Alzheimer's disease includes the use of cholinesterase inhibitors initiated at the time of diagnosis. Cholinesterase inhibitors are designed to help prevent the breakdown of acetylcholine. Acetylcholine is a chemical messenger believed to be critical for alertness, memory, thought and judgment. Currently marketed cholinesterase inhibitors include donepezil (marketed by Eisai and Pfizer as Aricept), rivastigmine (marketed by Novartis AG as Exelon) and galantamine (marketed by Janssen Pharmaceuticals as Razadyne). Prior to the availability of generic forms of donepezil in 2010, Aricept was the most widely prescribed cholinesterase inhibitor, achieving peak annual global sales of $4.2 billion. Other cholinesterase inhibitors include Exelon and Razadyne, which achieved peak annual global sales of $1.1 billion in 2011 and $575 million in 2008, respectively. Cholinesterase inhibitors continue to be used widely for the treatment of patients with Alzheimer's disease and can improve cognition. However, most patients require additional therapy due to progression of their disease.

There is no therapy currently approved by the FDA or the EMA for use in conjunction with cholinesterase inhibitors for the treatment of mild-to-moderate Alzheimer's disease. In moderate-to-severe Alzheimer's disease, memantine, an NMDA receptor antagonist marketed by Forest Laboratories as Namenda, is commonly administered in combination with cholinesterase inhibitors. Namenda achieved peak annual global sales of $2.3 billion in 2013. Namenda, however, is only approved for moderate-to-severe Alzheimer's disease and is not approved by the FDA for mild Alzheimer's disease. Other than cholinesterase inhibitors, no other drugs are currently approved for the treatment of mild Alzheimer's disease. Accordingly, we believe there is a significant opportunity to improve the clinical outcomes of patients with mild-to-moderate Alzheimer's disease, particularly in the development of drugs to be used in combination with cholinesterase inhibitors.

According to a report by the Alzheimer's Society in 2007, the population of patients with mild-to-moderate Alzheimer's disease is estimated to be significantly larger than the population with severe disease, accounting for an estimated 70% to 90% of all Alzheimer's disease patients age 65 and older. We believe that our product candidate, RVT-101, if approved, would represent a compelling option for use in combination with cholinesterase inhibitors for the treatment of mild-to-moderate Alzheimer's disease, as has been the case for Namenda in patients with moderate-to-severe Alzheimer's disease.

RVT-101

Overview

We acquired worldwide rights to RVT-101 from GSK in December 2014. RVT-101 is an orally administered, potent antagonist of the 5-HT6 serotonin receptor. By antagonizing the 5-HT6 receptor, RVT-101 helps enhance the release of acetylcholine, glutamate and other neurotransmitters that are essential to cognition.

5-HT6 receptors are primarily localized to the central nervous system, or CNS, particularly in regions of the brain that modulate cognition. Because 5-HT6 receptor antagonists do not significantly increase levels of acetylcholine outside of the CNS, it is believed that 5-HT6 receptor antagonists have limited peripheral side effects, including many that are commonly associated with cholinesterase inhibitors. In addition, we believe that RVT-101's action as a 5-HT6 receptor antagonist provides a strong mechanistic rationale to support its use in combination with cholinesterase inhibitors. While cholinesterase inhibitors help prevent the breakdown of acetylcholine, 5-HT6 receptor antagonists promote the release of acetylcholine. Therefore, when used in combination with one another, we believe that 5-HT6 receptor antagonists and cholinesterase inhibitors increase the concentration of acetylcholine through complementary mechanisms without exacerbating the toxicities associated with cholinesterase inhibitors.

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The following graphic depicts RVT-101's potential mechanistic additivity or synergy with donepezil.

GRAPHIC

In addition to the role of 5-HT6 receptor antagonists in promoting the central release of neurotransmitters important to cognition and function, scientific literature suggests that 5-HT6 receptor antagonists may also improve neural structural plasticity. Plasticity refers to the physical flexibility of neuronal synapses, which are structures that enable communication between different nerve cells in the brain. Neural structural plasticity enables the brain to adapt and process complex information, which is impaired in patients with Alzheimer's disease. In preclinical studies in rats, 5-HT6 receptor antagonists have been observed to augment the expression level of polysialic acid neural cell adhesion molecule, or PSA-NCAM, which is an essential mediator of plasticity and cognition. According to published literature, antagonism of the 5-HT6 receptor decreases gamma aminobutyric acid, or GABA, which in turn increases the release of glutamate. This is believed to promote the increased expression of PSA-NCAM by young neurons, which enables the brain to adapt and process complex information and may provide another reason to believe that RVT-101 may impact the progression of dementia.

Preclinical and Clinical Development

Preclinical and Phase 1 Clinical Development

In preclinical studies conducted by GSK, RVT-101 was observed to be a potent, selective, orally bioavailable 5-HT6 receptor antagonist that penetrates the CNS, with activity in multiple models of cognitive enhancement. In in vitro studies, RVT-101 was observed to have a high affinity for the human recombinant 5-HT6 receptor, with a negative log of the dissociation constant (pK i ) value of 9.63. The pKi value is a standard metric for comparing the relative strength with which different compounds bind to a biologic receptor, particularly those with the same mechanism of action or within the same class. A higher pKi value suggests stronger binding of a drug for a given target. In addition, RVT-101 was observed to have high selectivity for the 5-HT6 receptor, with greater than 100 times selectivity for the 5-HT6 receptor over all other receptors screened, other than the 5-HT2a receptor, for which RVT-101 was observed to have a pKi value of 7.99, suggesting approximately 44 times greater selectivity for the 5-HT6 receptor over the 5-HT2a receptor. In studies in male Sprague Dawley rats, the co-administration of RVT-101 with donepezil resulted in increased levels of acetylcholine in the brain as compared to those induced by either drug alone. This

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provides neurochemical evidence of a potential additive or synergistic effect associated with co-administration of a 5-HT6 receptor antagonist with a cholinesterase inhibitor.

Furthermore, the combination of RVT-101 and donepezil demonstrated potentially synergistic activity in task recall, or memory, in a rat model of age dependent effects using a water maze. No significant synergistic activity was observed on the rate of task acquisition, or learning.

In 2007, GSK submitted to the FDA an investigational new drug application, or IND, for SB742457 (now known as RVT-101), for the treatment of mild-to-moderate Alzheimer's disease. In December 2014, this IND was transferred to us, and is the IND under which our Phase 3 pivotal program will be conducted. GSK completed nine Phase 1 clinical trials for RVT-101 in a total of 225 healthy adults. Single doses of up to 175 mg and repeat doses of up to 50 mg of RVT-101 were administered to young and elderly subjects. In these studies, no safety signals or trends in adverse events, electrocardiogram, vital signs or laboratory parameters were identified that would have precluded further studies of RVT-101. These studies demonstrated a number of favorable properties of RVT-101, including once daily dosing, a low potential for drug interactions and an ability to be taken with or without food. In addition, imaging studies using positive emission tomography, or PET, scanning demonstrated that RVT-101 has near to full occupancy of the 5-HT6 receptors in the caudate and putamen regions of the brain, even at doses as low as 3 mg. Based on a pharmacokinetic and pharmacodynamic model using PET imaging data, repeat dosing with the daily 35 mg dose of RVT-101 is predicted to occupy greater than 90% of 5-HT6 receptors in 97.5% of subjects and approximately 65% of 5-HT2a receptors in the brain.

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Phase 2 Clinical Development

GSK completed four Phase 2 clinical trials for RVT-101 in subjects with mild-to-moderate Alzheimer's disease, including three that evaluated RVT-101 as monotherapy and one that evaluated RVT-101 as adjunctive therapy in subjects who were already receiving a stable dose of donepezil. The designs of these trials, beginning with the most recently conducted, are summarized in the table below.

Phase/Trial Number
  Trial Design   Treatments/Dose   Sample Size   Outcome Measures
Phase IIb
AZ3110866
  48-week, double-blind, parallel group, placebo-controlled adjunct trial in mild-to-moderate Alzheimer's disease; adjunct to donepezil (5-10 mg)   Placebo (donepezil alone)
RVT-101 15 mg (on top of donepezil)
RVT-101 35 mg (on top of donepezil)
1:1:1 ratio
  684
Subjects stratified by baseline MMSE
  Primary: ADAS-cog, CDR-SB
Secondary: ADCS-ADL, MMSE, RBANS

Phase IIb
AZ3110865

 

24-week, double-dummy, parallel group, placebo-controlled monotherapy trial in mild-to-moderate Alzheimer's disease

 

Placebo
RVT-101 15 mg RVT-101 35 mg Donepezil 5-10 mg
1:1:1:1 ratio

 

576
Subjects stratified by baseline MMSE score

 

Primary: ADAS-cog, CIBIC plus
Secondary: RBANS, ADCS-ADL, MMSE, CSDD

Phase IIa
AZ3106242

 

24-week, double-blind, parallel group, placebo-controlled monotherapy trial in mild-to-moderate Alzheimer's disease

 

Placebo
RVT-101 15-35 mg
Donepezil 5-10 mg
1:1:1 ratio

 

198

 

Primary: ADAS-cog, CIBIC plus
Secondary: NPI, DAD, MMSE, CPTB, CTT, DVT, ACQLI

Phase IIa
AZ3100603

 

24-week, double-blind, parallel group, placebo-controlled monotherapy trial in mild-to-moderate Alzheimer's disease

 

Placebo
RVT-101 5 mg RVT-101 15 mg RVT-101 35 mg
2:1:1:2 ratio

 

371

 

Primary: ADAS-cog, CIBIC plus
Secondary: NPI, DAD, MMSE, CPTB, ACQLI

MMSE—Mini mental status examination score
ADAS-cog—Alzheimer's disease assessment scale
CDR-SB—Clinical dementia rating—scale sum of boxes
ADCS-ADL—Alzheimer's disease cooperative study—Activities of Daily Living Inventory scale
RBANS—Repeatable battery for the assessment of neuropsychological status scale
CIBIC-plus—Clinicians global impression of change plus caregiver input scale
CSDD—Cornell scale for depression in dementia
NPI—Neuropsychiatric inventory scale
DAD—Disability assessment for dementia scale
CPTB—Cognitive psychometric test battery
CTT—Color trails test
DVT—Digit vigilance test
ACQLI—Alzheimer's care quality of life instrument scale

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In all of the Phase 2 clinical trials conducted by GSK, RVT-101 was well-tolerated with no clinically meaningful trends in adverse events or serious adverse events. As monotherapy, treatment with RVT-101 did not result in a statistically significant improvement in cognition or function when compared to placebo. In the largest of these monotherapy trials (Study AZ3110865), donepezil, which was chosen as an active comparator, also failed to demonstrate a statistically significant benefit over placebo on the cognitive primary endpoint (ADAS-cog).

We view the results of the AZ3110866 trial, or the 0866 trial, in which RVT-101 was administered as an adjunctive therapy with donepezil, to be most directly relevant to our future development plans for RVT-101. This trial was designed as a large randomized placebo-controlled study in subjects with mild-to-moderate Alzheimer's disease, in which 684 subjects on a stable background of donepezil treatment were randomized to receive either 35 mg RVT-101, 15 mg RVT-101 or placebo once daily. The trial was originally planned to run for 24 weeks but was later extended to 48 weeks. The completion rate at week 24 was greater than 85% in each arm of the study, and the withdrawal rate at week 24 was lower in the 35 mg RVT-101 group (11%) than in the placebo group (12%). Median MMSE was the same in the placebo and the 15 mg and 35 mg RVT-101 groups (19.0). Baseline demographics were similar across the placebo groups and treatment groups. The design of this adjunctive therapy trial is shown in the following diagram:

GRAPHIC

In the group that received 35 mg RVT-101 in the 0866 trial, statistically significant improvements in cognition, as measured by the ADAS-cog scale, were observed at multiple time points, including at 12, 24 and 48 weeks following initiation of treatment. We believe this is a meaningful result because currently marketed Alzheimer's disease drugs were approved on data of 28 weeks or less. In addition to improvement in cognition, subjects in the 35 mg RVT-101 group demonstrated statistically significant improvement in function at 12, 24 and 36 weeks as measured by the ADCS-ADL. We believe these results on ADCS-ADL are particularly noteworthy in light of the fact that the decline in the ability of Alzheimer's disease patients to perform activities essential to daily living places a significant burden on caregivers and the healthcare system. The FDA has historically approved investigational Alzheimer's drugs based on efficacy in improving both cognition and function.

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The ADAS-cog, or the Alzheimer's Disease Assessment Scale—cognitive subscale, is a widely-used general cognitive measure in clinical trials of Alzheimer's disease. The scale assesses multiple cognitive domains ( e.g. , language and memory) by asking subjects to complete a set of defined tasks. Changes in the ADAS-cog score are often used to evaluate improvement or worsening of cognition, with higher scores suggesting greater dysfunction. The ADCS-ADL, or the Alzheimer's Disease Cooperative Study—Activities of Daily Living, is a commonly used scale that evaluates a patient's ability to perform tasks of everyday living ( e.g. , household chores, toileting and dressing) based on information obtained from the subject and his or her caregiver. Changes in the ADCS-ADL score are often used to evaluate improvement or worsening of functional ability, with lower scores suggesting greater dysfunction.

The results of the 0866 trial on ADAS-cog and ADCS-ADL, as analyzed by our statistician based on data files provided by GSK, are summarized below. We present these analyses, conducted using two different statistical methods and two different sets of covariates, to demonstrate the robust nature of our data irrespective of method of analysis. The first of these methods is the Mixed Model Repeated Measure, or MMRM, analysis, which is a commonly used method to account for incomplete data. This was the primary intent-to-treat, or ITT, statistical method of analysis as pre-specified by GSK. The second method is the Analysis of Covariance, or ANCOVA, based on observed data (also referred to as a completer analysis). This analytical method includes data only from subjects that completed the study at each of the time points at which data was collected.

Both of these statistical methods control for covariates, which are unrelated variables that may independently impact the effect of one variable on another. It is common to account for covariates when analyzing data to determine the true effect of a drug on a given outcome. We have presented two sets of results, based on two sets of covariates, for both the MMRM and completer analyses on ADAS-cog and ADCS-ADL. The first set of covariates were pre-specified by GSK for consideration in the primary analysis and the second set of covariates (or closest available comparable covariates) were those used in the LADDER trial, a published Phase 2 study evaluating the effects of idalopirdine, a 5-HT6 antagonist in development by H. Lundbeck A/S, a Danish pharmaceutical company, or Lundbeck, in patients with moderate Alzheimer's disease. Each set of covariates is described in the footnotes to the tables below.

The results presented below include the covariates that were pre-specified by GSK for consideration in the primary analysis.

ADAS-cog—Change from Baseline

Visit
  Treatment   Number of
subjects
  Difference vs.
donepezil alone:
MMRM ITT Analysis (1)(2)
  P-value   Difference vs. donepezil
alone: Completer
Analysis (1)(3)
  P-value  

Week 12

  Placebo (donepezil alone)     206                          

  15 mg RVT-101     203     –0.24     0.631     –0.23     0.645  

  35 mg RVT-101     219     –1.30     0.006 **   –1.29     0.008 **

Week 24

  Placebo (donepezil alone)     194                          

  15 mg RVT-101     185     –0.67     0.281     –0.75     0.231  

  35 mg RVT-101     207     –1.50     0.013 *   –1.63     0.007 **

Week 36

  Placebo (donepezil alone)     164                          

  15 mg RVT-101     156     –0.04     0.947     –0.06     0.925  

  35 mg RVT-101     181     –1.21     0.057     –1.35     0.039 *

Week 48

  Placebo (donepezil alone)     145                          

  15 mg RVT-101     142     –0.07     0.925     –0.18     0.824  

  35 mg RVT-101     170     –1.64     0.024 *   –1.82     0.018 *
(1)
Higher score indicates greater dysfunction, lower score indicates relative improvement

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(2)
MMRM ITT analysis includes the following covariates: baseline ADAS-cog total score, baseline MMSE, country group, visit, time since diagnosis, baseline BMI, treatment, baseline ADAS-cog total score by visit, baseline MMSE by visit and treatment by visit.

(3)
Completer Analysis includes the following covariates: baseline ADAS-cog total score, baseline MMSE, country group, time since diagnosis, baseline BMI and treatment.

P-value is a conventional statistical method for measuring the statistical significance of clinical results. A p-value of 0.05 or less represents statistical significance, meaning that there is a less than 1-in-20 likelihood that the observed results occurred by chance.

*
p < 0.05

**
p < 0.01

ADCS-ADL—Change from Baseline

Visit
  Treatment   Number of
subjects
  Difference vs.
donepezil alone:
MMRM ITT Analysis (1)(2)
  P-value   Difference vs. donepezil
alone: Completer
Analysis (1)(3)
  P-value  

Week 12

  Placebo (donepezil alone)     202                          

  15 mg RVT-101     201     0.63     0.396     0.64     0.381  

  35 mg RVT-101     222     1.72     0.019 *   1.72     0.016 *

Week 24

  Placebo (donepezil alone)     192                          

  15 mg RVT-101     186     1.43     0.110     1.42     0.116  

  35 mg RVT-101     209     2.00     0.024 *   2.11     0.016 *

Week 36

  Placebo (donepezil alone)     164                          

  15 mg RVT-101     160     –0.07     0.944     –0.08     0.942  

  35 mg RVT-101     183     1.93     0.038 *   2.20     0.029 *

Week 48

  Placebo (donepezil alone)     147                          

  15 mg RVT-101     145     0.46     0.705     1.22     0.325  

  35 mg RVT-101     171     1.94     0.088     2.34     0.048 *
(1)
Lower score indicates greater dysfunction, higher score indicates relative improvement

(2)
MMRM ITT analysis includes the following covariates: baseline ADCS-ADL total score, baseline MMSE, country group, visit, time since diagnosis, baseline BMI, treatment, baseline ADCS-ADL total score by visit, baseline MMSE by visit and treatment by visit.

(3)
Completer analysis includes the following covariates: baseline ADCS-ADL total score, baseline MMSE, country group, time since diagnosis, baseline BMI and treatment.

*
p < 0.05

The data tables below present the results of analyses that account for the same covariates (or closest available comparable covariates) as those included in the LADDER trial.

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ADAS-cog—Change from Baseline

Visit
  Treatment   Number of
subjects
  Difference vs.
donepezil alone:
MMRM ITT Analysis (1)(2)
  P-value   Difference vs. donepezil
alone: Completer
Analysis (1)(3)
  P-value  

Week 12

  Placebo (donepezil alone)     206                          

  15 mg RVT-101     203     –0.32     0.524     –0.32     0.529  

  35 mg RVT-101     219     –1.42     0.003 **   –1.41     0.005 **

Week 24

  Placebo (donepezil alone)     194                          

  15 mg RVT-101     185     –0.77     0.227     –0.80     0.212  

  35 mg RVT-101     207     –1.66     0.007 **   –1.82     0.004 **

Week 36

  Placebo (donepezil alone)     164                          

  15 mg RVT-101     156     –0.15     0.818     –0.16     0.820  

  35 mg RVT-101     181     –1.40     0.035 *   –1.58     0.020 *

Week 48

  Placebo (donepezil alone)     145                          

  15 mg RVT-101     142     –0.23     0.779     –0.46     0.579  

  35 mg RVT-101     170     –1.90     0.012 *   –2.12     0.008 **
(1)
Higher score indicates greater dysfunction, lower score indicates relative improvement

(2)
MMRM ITT analysis includes the following covariates: baseline ADAS-cog total score, country group, visit, treatment, baseline ADAS-cog total score by visit and treatment by visit.

(3)
Completer analysis includes the following covariates: baseline ADAS-cog total score, country group and treatment.

*
p < 0.05

**
p < 0.01


ADCS-ADL—Change from Baseline

Visit
  Treatment   Number of
subjects
  Difference vs.
donepezil alone:
MMRM ITT Analysis (1)(2)
  P-value   Difference vs. donepezil
alone: Completer
Analysis (1)(3)
  P-value  

Week 12

  Placebo (donepezil alone)     202                          

  15 mg RVT-101     201     0.78     0.292     0.77     0.290  

  35 mg RVT-101     222     1.79     0.015 *   1.78     0.013 *

Week 24

  Placebo (donepezil alone)     192                          

  15 mg RVT-101     186     1.69     0.061     1.60     0.080  

  35 mg RVT-101     209     2.18     0.016 *   2.28     0.011 *

Week 36

  Placebo (donepezil alone)     164                          

  15 mg RVT-101     160     0.18     0.863     0.16     0.876  

  35 mg RVT-101     183     2.16     0.026 *   2.42     0.018 *

Week 48

  Placebo (donepezil alone)     147                          

  15 mg RVT-101     145     0.85     0.495     1.57     0.216  

  35 mg RVT-101     171     2.27     0.059     2.62     0.032 *
(1)
Lower score indicates greater dysfunction, higher score indicates relative improvement

(2)
MMRM ITT analysis includes the following covariates: baseline ADCS-ADL total score, country group, visit, treatment, baseline ADCS-ADL total score by visit and treatment by visit.

(3)
Completer analysis includes the following covariates: baseline ADCS-ADL total score, country group and treatment.

*
p < 0.05

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The graphs below present the results on ADAS-cog and ADCS-ADL.


ADAS-cog Change over 48 Weeks

GRAPHIC

ADCS-ADL Change over 48 Weeks

GRAPHIC

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GSK's pre-specified co-primary endpoints in the 0866 trial were the ADAS-cog and Clinical Dementia Rating Sum of Boxes, or CDR-SB, a composite scale with certain components that evaluate cognition and others that assess function, at 24 weeks following treatment. While the 35 mg RVT-101 dose group demonstrated a statistically significant improvement in the CDR-SB at 12 weeks and a trend suggesting a benefit at 24 weeks and further time points, the benefit at 24 weeks was not statistically significant. No Alzheimer's disease drugs have ever been approved on the basis of CDR-SB as a primary endpoint. We believe that the ADAS-cog and ADCS-ADL represents a more appropriate set of co-primary endpoints in patients with mild-to-moderate Alzheimer's disease given the precedence of other Alzheimer's disease drugs having been approved on the basis of each of these endpoints. GSK also measured the Mini Mental Status Exam, or MMSE, and Repeatable Battery for the Assessment of Neurophsychological Status, or RBANS, as secondary endpoints. RVT-101 did not show a statistically significant benefit as measured by MMSE or RBANS.

The following table presents the results of GSK's analysis on CDR-SB.


CDR-SB—Change from Baseline

Visit
  Treatment   Number of
subjects
  Difference vs. placebo
donepezil alone:
MMRM ITT Analysis (1)(2)
  P-value  

Week 12

  Placebo (donepezil alone)     205              

  15 mg RVT-101     200     –0.12     0.387  

  35 mg RVT-101     221     –0.30     0.018 *

Week 24

  Placebo (donepezil alone)     194              

  15 mg RVT-101     186     –0.11     0.563  

  35 mg RVT-101     207     –0.14     0.418  

Week 36

  Placebo (donepezil alone)     165              

  15 mg RVT-101     155     0.18     0.439  

  35 mg RVT-101     179     –0.19     0.336  

Week 48

  Placebo (donepezil alone)     149              

  15 mg RVT-101     143     0.34     0.190  

  35 mg RVT-101     170     –0.06     0.787  
(1)
Higher score indicates greater dysfunction, lower score indicates relative improvement

(2)
The following covariates are included in this analysis: baseline score, baseline MMSE, country group, visit, time since diagnosis, baseline BMI, treatment, baseline score by visit, baseline MMSE by visit and treatment by visit.

*
p < 0.05

Safety and Tolerability

RVT-101 was observed to be well-tolerated by subjects in all 13 clinical trials conducted by GSK. In the 0866 trial, which was a large randomized trial in which subjects received RVT-101 or placebo added to a stable dose of donepezil, the proportion of subjects that experienced drug-related adverse events was lower in the group that received 35 mg RVT-101 with donepezil than in the group that received placebo with donepezil, at 24 weeks (6% versus 9%) and 48 weeks (7% versus 13%). The proportion of subjects that had adverse events leading to withdrawal from the trial was comparable across the 35 mg RVT-101 group and the placebo group, with 5% and 3% having an adverse event leading to withdrawal at 24 weeks, and 7% and 5% at 48 weeks, in each of the groups respectively. At week 24, a total of nine subjects (1.3%) across all three groups had drug-related adverse events that led to withdrawal from the study. In the placebo group, two subjects (0.9%) withdrew from the study due to at least one drug-related adverse event (worsening Alzheimer's disease, insomnia and/or seizure). In the 15 mg RVT-101 group, three subjects (1.4%) withdrew from the study due to at least one drug-related adverse event (lichenoid keratosis, pruritus and/or pustular rash). In the 35 mg RVT-101 group, four subjects (1.7%) withdrew from the study due to at least one drug-related adverse event (rash, drug eruption, hepatic enzyme elevation, agitation and/or increased libido). The incidence of serious adverse events was similar across treatment groups at 24 weeks

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(4% to 7%). There were no drug-related serious adverse events in the RVT-101 groups at 24 or 48 weeks, and there was one drug-related serious adverse event in the placebo group (aphasia) at 24 weeks. No subjects in either the 35 mg or 15 mg RVT-101 groups experienced a fall-related serious adverse event, as compared to two subjects in the placebo group, and falls were less frequent in both the 35 mg RVT-101 group (2%) and the 15 mg RVT-101 group (2%) compared to the placebo group (6%). There were no notable differences between the RVT-101 and placebo groups in vital sign changes, electrocardiogram changes or significant changes in laboratory parameters, and there was no evidence of significant liver toxicity (e.g. at week 24, one subject (< 1%) in the 35 mg RVT-101 group had elevated levels of liver enzymes, alanine aminotransferase, or ALT, and aspartate aminotransferase, or AST, that were greater than three times the upper limit of normal and led to withdrawal from the study). We believe RVT-101's favorable liver toxicity profile is particularly noteworthy in light of the liver toxicity issues observed with other Alzheimer's disease drugs that are in development today or have been approved in the past.

The tolerability profile of RVT-101 in the 0866 trial, with the relevant comparisons to placebo when added to a stable dose of donepezil, is shown in the table below.

 
  35 mg RVT-101 plus
Donepezil
  Placebo plus
Donepezil
 

Withdrawals from trial—24 weeks

    11 %   12 %

Withdrawals from trial—48 weeks

    20 %   22 %

Drug-related serious adverse events—24 weeks

    0 %   < 1 %

Drug-related serious adverse events—48 weeks

    0 %   < 1 %

Drug-related adverse events—24 weeks

    6 %   9 %

Drug-related adverse events—48 weeks

    7 %   13 %

Other Clinical Trials of 5-HT6 Receptor Antagonists

Lundbeck, in conjunction with Otsuka Pharmaceutical, is also developing a 5-HT6 receptor antagonist that is currently in Phase 3, idalopirdine (Lu AE58054).

In the LADDER trial referenced above, idalopirdine demonstrated statistically significant benefits in cognition at 24 weeks in patients receiving a stable dose of donepezil. We believe that the observed efficacy of idalopirdine in improving cognition validates the mechanism of action of 5-HT6 receptor antagonists. Idalopirdine did not show statistically significant benefits on any functional endpoints or other secondary endpoints, though it did demonstrate a positive trend. In the trial, 12% of patients in the idalopirdine group discontinued due to adverse events (compared to 5% of patients in the placebo group), and 8% discontinued due to elevations in liver enzymes, with 9% and 6% experiencing AST or ALT elevations greater than twice and three times the upper limit of normal respectively. We believe that liver toxicity is a particularly sensitive adverse event in Alzheimer's disease drug development given the history of liver toxicity associated with tacrine, the first cholinesterase inhibitor approved for Alzheimer's disease, which was withdrawn from the U.S. market in 2012. In addition, 6% of patients in the idalopirdine group experienced serious adverse events that were judged to be drug-related at week 24 (compared to 4% of patients in the placebo group), and 21% of patients in the idalopirdine group withdrew from the study (compared to 11% of patients in the placebo group).

According to Clinical Trials.gov, in its current Phase 3 program, Lundbeck is evaluating idalopirdine at multiple different doses, all of which are lower than the daily dose at which efficacy was observed in the LADDER trial, and at a different dosing frequency (once daily) than that which was evaluated in the LADDER trial (three times daily). In addition, according to ClinicalTrials.gov, Lundbeck has not specified a co-primary function endpoint for its Phase 3 program.

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Phase 3 Clinical Development Plan

We intend to conduct a Phase 3 pivotal program in subjects with mild-to-moderate Alzheimer's disease designed to confirm the results of the 0866 trial. We met with the FDA at the end of March 2015 to confirm that there are no additional clinical or non-clinical studies required to support the initiation of our Phase 3 pivotal program. We believe that our meeting with the FDA confirms the results of the prior end-of-Phase 2 meeting between the FDA and GSK, and further reinforces our view that no additional clinical or non-clinical studies will be required prior to the initiation of our planned Phase 3 pivotal program. As a result, based on our meeting with the FDA, we intend to conduct a Phase 3 trial to confirm the results of the 0866 trial and believe that this trial, if successful, would, in conjunction with the 0866 trial, be sufficient to support the filing of a NDA. Our proposed Phase 3 trial would randomize patients already on a stable background of donepezil therapy to receive adjunctive treatment with either 35 mg RVT-101 or placebo once daily for a period of at least six months. We intend to begin this pivotal trial in the fourth quarter of 2015, and if the results of this trial are positive, our goal is to submit an NDA to the FDA and an MAA to the EMA by the end of 2017. We may conduct additional clinical trials to further support the commercial potential of RVT-101 in the United States, the European Union, Japan and other major markets. For example, we may consider conducting additional studies to support approval of a fixed dose combination of RVT-101 and donepezil. We do not intend to develop RVT-101 as a monotherapy.

Other Potential Indications for RVT-101

In addition to our plan to develop and commercialize RVT-101 for the treatment of mild-to-moderate Alzheimer's disease, we intend to evaluate RVT-101 in trials for the potential treatment of other forms of dementia, such as severe Alzheimer's disease, dementia with Lewy bodies, Parkinson's disease dementia and vascular dementia, beginning in the second half of 2015. Our goal is to have preliminary results from the first of these potential trials in the second half of 2016.

Severe Alzheimer's Disease

We believe the efficacy of RVT-101 in treating patients with mild-to-moderate Alzheimer's disease supports its investigation in patients with severe Alzheimer's disease. Moreover, we believe the favorable tolerability profile of RVT-101 supports its use in combination with other classes of drugs currently used to treat patients with severe Alzheimer's disease, including cholinesterase inhibitors and NMDA antagonists.

Dementia with Lewy Bodies

Dementia with Lewy bodies is a condition characterized by abnormal clusters of proteins known as Lewy bodies that accumulate within nerve cells. According to the Alzheimer's Association, dementia with Lewy bodies affects between 600,000 and 900,000 individuals in the United States. While dementia with Lewy bodies is estimated to account for between 10% and 25% of all dementia cases, there are no drugs approved by the FDA for its treatment. In addition to suffering from impaired cognition and cognitive fluctuations, patients with dementia with Lewy bodies often suffer from visual hallucinations, muscular rigidity and tremors.

Patients with dementia with Lewy bodies are often treated off-label with cholinesterase inhibitors. Cholinergic neurotransmission is thought to be even more dysfunctional in dementia with Lewy bodies than in Alzheimer's disease. This suggests that neurotransmitter-targeted therapies that work by increasing the inter-synaptic concentration of acetylcholine, much like RVT-101 in Alzheimer's disease, may also be effective in improving cognition in patients with dementia with Lewy bodies. While cholinesterase inhibitors are not approved by the FDA for dementia with Lewy bodies, donepezil was approved in September 2014 in Japan for this indication on the basis of two randomized placebo-controlled trials in fewer than 150 subjects conducted by Eisai Co., Ltd. In one of these trials, subjects receiving 5 mg of Aricept achieved a 3.4 point improvement in mini mental status examination, or MMSE, score, a test used to measure cognitive impairment, compared to patients receiving placebo (p<0.001). We believe that the addition of a 5-HT6 receptor antagonist, such as RVT-101, may augment the efficacy of cholinesterase

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inhibitors in patients with dementia with Lewy bodies by promoting the synaptic release of acetylcholine and other neurotransmitters essential to cognition. We are not aware of any drugs in late-stage clinical development for the treatment of dementia with Lewy bodies. As such, we believe that RVT-101 has the potential to be the first drug approved by the FDA for dementia with Lewy bodies. Based on the number of patients affected by dementia with Lewy bodies in the United States, our internal estimates suggest that the potential market opportunity is $2 billion to $4 billion in the United States. We believe we can complete a Phase 2 clinical trial for the treatment of dementia with Lewy bodies for between $5 million and $15 million. This estimate is based on assumptions that may prove to be wrong, and the cost of this trial may be greater than expected.

Parkinson's Disease Dementia

Parkinson's disease is a neurodegenerative disorder associated with motor and neuropsychiatric symptoms that is estimated to affect approximately one million individuals in the United States. The Alzheimer's Association estimates that up to 80% of individuals with Parkinson's disease may experience dementia. These patients experience changes in memory, judgment and concentration, as well as visual hallucinations, delusions, and sleep disturbances. Rivastigmine, a cholinesterase inhibitor, is the only drug approved by the FDA for the treatment of Parkinson's disease dementia. We believe the efficacy of rivastigmine in Parkinson's disease dementia suggests that other classes of drugs that increase the synaptic level of acetylcholine, such as 5-HT6 receptor antagonists, may also be effective in treating patients with this disease.

Vascular Dementia

Vascular dementia is caused by impaired blood flow to the brain and is often associated with strokes, which deprive brain cells of oxygen and nutrients. Symptoms are most obvious in the period following a stroke, and include confusion, disorientation, and speech and visual abnormalities. In a randomized-placebo controlled clinical trial sponsored by Eisai Medical Research Inc., patients with vascular dementia treated with donepezil achieved a statistically significant benefit in cognition relative to placebo. We believe this suggests that other classes of drugs that increase the concentration of acetylcholine, such as 5-HT6 receptor antagonists, may also be effective in treating the disease.

Asset Purchase Agreement with GlaxoSmithKline

In December 2014, we entered into an asset purchase agreement with GSK, or the GSK Agreement, pursuant to which GSK assigned to us all of their rights to certain patents, regulatory documentation, data records and materials related to SB-742457, which we now refer to as RVT-101, and other related compounds claimed by a specific patent application.

Under the GSK Agreement, we are obligated to use commercially reasonable efforts to develop, manufacture, commercialize and seek and maintain regulatory approval for RVT-101. GSK retains the right to use the assigned compounds for internal research purposes, but GSK is not allowed to conduct clinical development or commercialize any assigned compound in any field of use during the royalty term for any products containing RVT-101, which we refer to as the RVT-101 Products.

Under the GSK Agreement, GSK received an upfront payment of $5 million and, unless the FDA requires us to complete additional clinical work prior to starting a Phase 3 trial for RVT-101, we are obligated to pay GSK an additional $5 million upon the earliest to occur of specified events that indicate a single Phase 3 trial may be sufficient to obtain FDA approval for RVT-101 Products for Alzheimer's disease. We are also obligated to pay GSK $35 million, $25 million and $10 million upon approval of RVT-101 in the United States, the European Union and Japan, respectively, as well as an additional one-time payment of $85 million for the first calendar year in which we achieve global net sales of $1.2 billion for RVT-101.

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Under the GSK Agreement we are also obligated to pay a fixed 12.5% royalty based on net sales of RVT-101 Products, subject to reduction on a product-by-product and country-by-country basis, on account of expiration of patent and regulatory exclusivity or upon generic entry. Our royalty obligations with respect to RVT-101 Products will end, on a product-by-product and country-by-country basis, on the latest of (1) expiration of the last valid claim of the assigned patents covering the manufacture, use or composition of such product in such country, (2) expiration of regulatory exclusivity for such product in such country, or (3) 12 years from the first commercial sale of such product in such country, or if such country is one of the five major European countries listed in the GSK Agreement, then 12 years from the first commercial sale of such product in at least three such major European countries.

Our royalty payment obligations and our milestone payment obligations for RVT-101 Products may be reduced by a portion of royalty payments, and in some cases other payments, made to third parties for rights to certain U.S. patents, in each case subject to a maximum reduction.

Sales and Marketing

We do not have our own marketing, sales or distribution capabilities. In order to commercialize our product candidate if approved for commercial sale, we must either develop a sales and marketing infrastructure or collaborate with third-parties that have sales and marketing experience. We plan to directly commercialize our product candidates in the United States and the European Union. In other markets for which commercialization may be less capital efficient for us, we may selectively pursue strategic collaborations with third parties in order to maximize the commercial potential of our product candidates.

Manufacturing

We have no experience in drug formulation or manufacturing and do not own or operate, and we do not expect to own or operate, facilities for product manufacturing, storage and distribution, or testing. While RVT-101 was being developed by GSK, it was also being manufactured by GSK. We expect that the drug substance transferred from GSK under the GSK Agreement will be sufficient for us to complete our planned Phase 3 pivotal program, and we have contracted with a third-party to fill, finish, supply, store and distribute the drug product for this program. We also will rely on third-party manufacturers to supply us with sufficient quantities of RVT-101 to be used, if approved, for the commercialization of RVT-101. If we are unable to initiate or continue our relationship with one or more of these third-party contractors, we could experience delays in our development efforts as we locate and qualify new manufacturers.

RVT-101 is a small molecule that can be manufactured using commercially available technologies. We acquired data from GSK related to the chemical synthesis and manufacturing of RVT-101, and we expect that we will be able to contract with third-party manufacturers for commercial supplies of RVT-101 on a cost-efficient basis based on our understanding of the simple structure and synthesis of the compound.

Manufacturing of any product candidate is subject to extensive regulations that impose various procedural and documentation requirements, which govern recordkeeping, manufacturing processes and controls, personnel, quality control and quality assurance, among others. We expect that all of our contract manufacturing organizations will manufacture RVT-101 under current Good Manufacturing Practice, or cGMP, conditions. cGMP is a regulatory standard for the production of pharmaceuticals to be used in humans.

Competition

We consider RVT-101's most direct competitor to be idalopirdine (Lu AE58054), a 5-HT6 receptor antagonist being developed by Lundbeck that is currently in Phase 3. Based on the publicly available information, other companies developing 5-HT6 receptor antagonists include Biotie Therapies, Pfizer, Avineuro and Suven Life Sciences. These other 5-HT6 receptor antagonists are all in Phase 2 or earlier stages of development for cognitive and other neurodegenerative disorders, and it is unknown to us whether

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any of these compounds remain in active development. We believe the development of multiple 5-HT6 receptor antagonists by other biopharmaceutical firms adds further validation to the therapeutic relevance of 5-HT6 as a target for the treatment of neurodegenerative disorders.

In addition to other 5-HT6 receptor antagonists in active development, we are aware of many biotechnology and pharmaceutical companies as well as academic institutions, government agencies and private and public research institutions that are developing, and may in the future develop and commercialize, products for Alzheimer's disease and other cognitive disorders.

Drug development is highly competitive and subject to rapid and significant technological advancements. Our ability to compete will significantly depend upon our ability to complete necessary clinical trials and regulatory approval processes, and effectively market any drug that we may successfully develop. Our current and potential future competitors include pharmaceutical and biotechnology companies, academic institutions and government agencies. The primary competitive factors that will affect the commercial success of any product candidate for which we may receive marketing approval include efficacy, safety and tolerability profile, dosing convenience, price, coverage and reimbursement. Many of our existing or potential competitors have substantially greater financial, technical and human resources than we do and significantly greater experience in the discovery and development of product candidates, as well as in obtaining regulatory approvals of those product candidates in the United States and in foreign countries. Our current and potential future competitors also have significantly more experience commercializing drugs that have been approved for marketing. Mergers and acquisitions in the pharmaceutical and biotechnology industries could result in even more resources being concentrated among a small number of our competitors.

Accordingly, our competitors may be more successful than us in obtaining regulatory approval for therapies and in achieving widespread market acceptance of their drugs. It is also possible that the development of a cure or more effective treatment method for Alzheimer's disease by a competitor could render our product candidate non-competitive or obsolete or reduce the demand for our product candidate before we can recover our development and commercialization expenses.

Intellectual Property

Our commercial success depends in part on our ability to obtain and maintain proprietary protection for RVT-101, any of our future product candidates, novel discoveries, product development technologies and other know-how, to operate without infringing on the proprietary rights of others and to prevent others from infringing our proprietary rights. Our policy is to seek to protect our proprietary position by, among other methods, filing or in-licensing U.S. and foreign patents and patent applications related to our proprietary technology, inventions and improvements that are important to the development and implementation of our business. We also rely on trademarks, trade secrets, know-how, continuing technological innovation and potential in-licensing opportunities to develop and maintain our proprietary position.

While we seek broad coverage under our existing patent applications, there is always a risk that an alteration to the process may provide sufficient basis for a competitor to avoid infringement claims. In addition, patents, if granted, expire and we cannot provide any assurance that any patents will be issued from our pending or any future applications or that any potentially issued patents will adequately protect our intellectual property.

Following our execution of the GSK Agreement, as of December 31, 2014, by virtue of assignment of the patent rights under the GSK Agreement, we were the exclusive owner of five granted U.S. patents, one pending, allowed U.S. patent application and 100 ex-U.S. patents or patent applications in numerous foreign jurisdictions. These patents and patent applications cover the RVT-101 molecule as a composition of matter, as well as its use alone or in combination with other pharmaceutical agents. The allowed U.S. application covers the use of specific doses of RVT-101 in combination with donepezil to treat vascular

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dementia, Lewy Body dementia and Huntington's disease dementia and naturally expires in December 2028. Since December 2014, we have filed two provisional patent applications directed to uses of the RVT-101 molecule alone or in combination with other pharmaceutical agents. The issued U.S. composition of matter patent for RVT-101 naturally expires in 2024. We expect the term of this patent will be extended up to five years to 2029 under the provisions of the Hatch-Waxman Act. The provisional patent application on RVT-101, if granted, would extend the patent life for RVT-101 and uses thereof through 2035.

Individual patents extend for varying periods depending on the date of filing of the patent application or the date of patent issuance and the legal term of patents in the countries in which they are obtained. Generally, patents issued for regularly filed applications in the United States are granted a term of 20 years from the earliest effective filing date. In addition, in certain instances, a patent term can be extended to recapture a portion of the U.S. Patent and Trademark Office, or the USPTO, delay in issuing the patent as well as a portion of the term effectively lost as a result of the FDA regulatory review period. However, as to the FDA component, the restoration period cannot be longer than five years and the total patent term including the restoration period must not exceed 14 years following FDA approval. The duration of foreign patents varies in accordance with provisions of applicable local law, but typically is also 20 years from the earliest effective filing date. However, the actual protection afforded by a patent varies on a product by product basis, from country to country and depends upon many factors, including the type of patent, the scope of its coverage, the availability of regulatory-related extensions, the availability of legal remedies in a particular country and the validity and enforceability of the patent.

Furthermore, we rely upon trade secrets and know-how and continuing technological innovation to develop and maintain our competitive position. We seek to protect our proprietary information, in part, using confidentiality agreements with our commercial partners, collaborators, employees and consultants and invention assignment agreements with our employees. We also have confidentiality agreements or invention assignment agreements with our commercial partners and selected consultants. These agreements are designed to protect our proprietary information and, in the case of the invention assignment agreements, to grant us ownership of technologies that are developed through a relationship with a third party. These agreements may be breached, and we may not have adequate remedies for any breach. In addition, our trade secrets may otherwise become known or be independently discovered by competitors. To the extent that our commercial partners, collaborators, employees and consultants use intellectual property owned by others in their work for us, disputes may arise as to the rights in related or resulting know-how and inventions.

Our commercial success will also depend in part on not infringing upon the proprietary rights of third parties. It is uncertain whether the issuance of any third-party patent would require us to alter our development or commercial strategies, or our drugs or processes, obtain licenses or cease certain activities. Our breach of any license agreements or failure to obtain a license to proprietary rights that we may require to develop or commercialize our future drugs may have an adverse impact on us. If third parties prepare and file patent applications in the United States that also claim technology to which we have rights, we may have to participate in interference proceedings in the USPTO, to determine priority of invention.

Government Regulation

FDA Drug Approval Process

In the United States, pharmaceutical products are subject to extensive regulation by the FDA. The Federal Food, Drug, and Cosmetic Act, and other federal and state statutes and regulations, govern, among other things, the research, development, testing, manufacture, storage, recordkeeping, approval, labeling, promotion and marketing, distribution, post-approval monitoring and reporting, sampling and import and export of pharmaceutical products. Failure to comply with applicable U.S. requirements may subject a company to a variety of administrative or judicial sanctions, such as FDA refusal to approve pending NDAs

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warning or untitled letters, product recalls, product seizures, total or partial suspension of production or distribution, injunctions, fines, civil penalties and criminal prosecution.

We cannot market a drug product candidate in the United States until the drug has received FDA approval. The steps required before a drug may be marketed in the United States generally include the following:

    §
    completion of extensive pre-clinical laboratory tests, animal studies, and formulation studies in accordance with the FDA's GLP regulations;

    §
    submission to the FDA of an IND for human clinical testing, which must become effective before human clinical trials may begin;

    §
    performance of adequate and well-controlled human clinical trials in accordance with GCP requirements to establish the safety and efficacy of the drug for each proposed indication;

    §
    submission to the FDA of an NDA after completion of all pivotal clinical trials;

    §
    satisfactory completion of an FDA pre-approval inspection of the manufacturing facility or facilities at which the active pharmaceutical ingredient, or API, and finished drug product are produced and tested to assess compliance with cGMPs; and

    §
    FDA review and approval of the NDA prior to any commercial marketing or sale of the drug in the United States.

Satisfaction of FDA pre-market approval requirements typically takes many years and the actual time required may vary substantially based upon the type, complexity and novelty of the product or disease.

Preclinical tests include laboratory evaluation of product chemistry, formulation and toxicity, as well as animal trials to assess the characteristics and potential safety and efficacy of the product. The conduct of the preclinical tests must comply with federal regulations and requirements, including good laboratory practices. The results of preclinical testing are submitted to the FDA as part of an IND along with other information, including information about product chemistry, manufacturing and controls and a proposed clinical trial protocol. Long term preclinical tests, such as animal tests of reproductive toxicity and carcinogenicity, may continue after the IND is submitted.

A 30-day waiting period after the submission of each IND is required prior to the commencement of clinical testing in humans. If the FDA has neither commented on nor questioned the IND within this 30-day period, the clinical trial proposed in the IND may begin. If the FDA raises concerns or questions about the conduct of the trial, such as whether human research subjects will be exposed to an unreasonable health risk, the IND sponsor and the FDA must resolve any outstanding FDA concerns or questions before clinical trials can proceed.

Clinical trials involve the administration of the investigational new drug to healthy volunteers or patients under the supervision of a qualified investigator. Clinical trials must be conducted in compliance with federal regulations, including GCP requirements, as well as under protocols detailing the objectives of the trial, the parameters to be used in monitoring safety and the effectiveness criteria to be evaluated. Each protocol and subsequent protocol amendments must be submitted to the FDA as part of the IND.

The FDA may order the temporary, or permanent, discontinuation of a clinical trial at any time, or impose other sanctions, if it believes that the clinical trial either is not being conducted in accordance with FDA requirements or presents an unacceptable risk to the clinical trial patients. The study protocol and informed consent information for patients in clinical trials must also be submitted to an institutional review board, or IRB, for approval at each site at which the clinical trial will be conducted. An IRB may also require the clinical trial at the site to be halted, either temporarily or permanently, for failure to comply with the IRB's requirements, or may impose other conditions.

Clinical trials to support NDAs for marketing approval are typically conducted in three sequential phases, but the phases may overlap. In Phase 1, the initial introduction of the drug into healthy human subjects or

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patients, the drug is tested to assess pharmacological actions, side effects associated with increasing doses and, if possible, early evidence on effectiveness. Phase 2 usually involves trials in a limited patient population to determine metabolism, pharmacokinetics, the effectiveness of the drug for a particular indication, dosage tolerance and optimum dosage, and to identify common adverse effects and safety risks. If a compound demonstrates evidence of effectiveness and an acceptable safety profile in Phase 2 evaluations, Phase 3 clinical trials, also called pivotal trials, are undertaken to obtain the additional information about clinical efficacy and safety in a larger number of patients, typically at geographically dispersed clinical trial sites, to permit the FDA to evaluate the overall benefit-risk relationship of the drug and to provide adequate information for the labeling of the drug. In most cases the FDA requires two adequate and well controlled Phase 3 clinical trials to demonstrate the efficacy of the drug. A single Phase 3 clinical trial with other confirmatory evidence may be sufficient in rare instances where the study is a large multicenter trial demonstrating internal consistency and a statistically very persuasive finding of a clinically meaningful effect on mortality, irreversible morbidity or prevention of a disease with a potentially serious outcome and confirmation of the result in a second trial would be practically or ethically impossible.

After completion of the required clinical testing, an NDA is prepared and submitted to the FDA. FDA approval of the NDA is required before marketing of the product may begin in the United States. The NDA must include the results of all preclinical, clinical and other testing and a compilation of data relating to the product's pharmacology, chemistry, manufacture and controls. The cost of preparing and submitting an NDA is substantial. The submission of most NDAs is additionally subject to a substantial application user fee, and the manufacturer and/or sponsor under an approved NDA are also subject to annual product and establishment user fees. These fees are typically increased annually.

The FDA has 60 days from its receipt of an NDA to determine whether the application will be accepted for filing based on the agency's threshold determination that it is sufficiently complete to permit substantive review. Once the submission is accepted for filing, the FDA begins an in-depth review. The FDA has agreed to certain performance goals in the review of NDAs. Most such applications for standard review drug products are reviewed within 10 to 12 months; most applications for priority review drugs are reviewed in six to eight months. Priority review can be applied to drugs to treat serious conditions that the FDA determines offer significant improvement in safety or effectiveness. The review process for both standard and priority review may be extended by the FDA for three additional months to consider certain late-submitted information, or information intended to clarify information already provided in the submission.

The FDA may also refer applications for novel drug products, or drug products that present difficult questions of safety or efficacy, to an advisory committee—typically a panel that includes clinicians and other experts—for review, evaluation and a recommendation as to whether the application should be approved. The FDA is not bound by the recommendation of an advisory committee, but it generally follows such recommendations. Before approving an NDA, the FDA will typically inspect one or more clinical sites to assure compliance with GCPs. Additionally, the FDA will inspect the facility or the facilities at which the drug is manufactured. The FDA will not approve the product unless compliance with cGMPs is satisfactory and the NDA contains data that provide substantial evidence that the drug is safe and effective in the indication studied.

After the FDA evaluates the NDA and the manufacturing facilities, it issues either an approval letter or a complete response letter. A complete response letter generally outlines the deficiencies in the submission and may require substantial additional testing, or information, in order for the FDA to reconsider the application. If, or when, those deficiencies have been addressed to the FDA's satisfaction in a resubmission of the NDA, the FDA will issue an approval letter. The FDA has committed to reviewing such resubmissions in two or six months depending on the type of information included.

An approval letter authorizes commercial marketing of the drug with specific prescribing information for specific indications. As a condition of NDA approval, the FDA may require a Risk Evaluation and Mitigation

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Strategy, or REMS, to ensure that the benefits of the drug outweigh the potential risks. A REMS can include a medication guide, a communication plan for healthcare professionals and elements to assure safe use, such as special training and certification requirements for individuals who prescribe or dispense the drug, requirements that patients enroll in a registry and other measures that the FDA deems necessary to assure the safe use of the drug. The requirement for a REMS can materially affect the potential market and profitability of the drug. Moreover, product approval may require substantial post-approval testing and surveillance to monitor the drug's safety or efficacy. Once granted, product approvals may be withdrawn if compliance with regulatory standards is not maintained or problems are identified following initial marketing.

Changes to some of the conditions established in an approved application, including changes in indications, labeling, or manufacturing processes or facilities, require submission and FDA approval of a new NDA or NDA supplement before the change can be implemented. An NDA supplement for a new indication typically requires clinical data similar to that in the original application, and the FDA uses the same procedures and actions in reviewing NDA supplements as it does in reviewing NDAs. Such supplements are typically reviewed within 10 months of receipt.

Post-Approval Requirements

Once an NDA is approved, a product may be subject to certain post-approval requirements. For instance, the FDA closely regulates the post-approval marketing and promotion of drugs, including standards and regulations for direct-to-consumer advertising, off-label promotion, industry-sponsored scientific and educational activities and promotional activities involving the internet and social media. Drugs may be marketed only for the approved indications and in accordance with the provisions of the approved labeling.

Adverse event reporting and submission of periodic reports is required following FDA approval of an NDA. The FDA also may require post-marketing testing, known as Phase 4 testing, REMS, surveillance to monitor the effects of an approved product, or restrictions on the distribution or use of the product. In addition, quality-control, drug manufacture, packaging and labeling procedures must continue to conform to cGMPs after approval. Drug manufacturers and certain of their subcontractors are required to register their establishments with the FDA and certain state agencies. Registration with the FDA subjects entities to periodic unannounced inspections by the FDA, during which the agency inspects manufacturing facilities to assess compliance with cGMPs. Accordingly, manufacturers must continue to expend time, money and effort in the areas of production and quality-control to maintain compliance with cGMPs. Later discovery of previously unknown problems with a product, including adverse events of unanticipated severity or frequency, or failure to comply with regulatory requirements, may result in, among other things:

    §
    restrictions on the marketing or manufacturing of the product, complete withdrawal of the product from the market or product recalls;

    §
    fines, warning letters or holds on post-approval clinical trials;

    §
    refusal of the FDA to approve pending applications or supplements to approved applications, or suspension or revocation of product approvals;

    §
    product seizure or detention, or refusal to permit the import or export of products; or

    §
    injunctions or the imposition of civil or criminal penalties.

Foreign Regulation

In order to market any product outside of the United States, we would need to comply with numerous and varying regulatory requirements of other countries and jurisdictions regarding quality, safety and efficacy and governing, among other things, clinical trials, marketing authorization, commercial sales and distribution of our products. Whether or not we obtain FDA approval for a product, we would need to obtain the necessary approvals by the comparable foreign regulatory authorities before we can commence clinical trials or marketing of the product in foreign countries and jurisdictions. Although many of the issues discussed above with respect to the United States apply similarly in the context of the European Union, the

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approval process varies between countries and jurisdictions and can involve additional product testing and additional administrative review periods. The time required to obtain approval in other countries and jurisdictions might differ from and be longer than that required to obtain FDA approval. Regulatory approval in one country or jurisdiction does not ensure regulatory approval in another, but a failure or delay in obtaining regulatory approval in one country or jurisdiction may negatively impact the regulatory process in others.

Other Healthcare Laws

Although we currently do not have any products on the market, our current and future business operations may be subject to additional healthcare regulation and enforcement by the federal government and by authorities in the states and foreign jurisdictions in which we conduct our business. Such laws include, without limitation, state and federal anti-kickback, fraud and abuse, false claims, privacy and security, price reporting and physician sunshine laws. Some of our pre-commercial activities are subject to some of these laws.

The federal Anti-Kickback Statute makes it illegal for any person or entity, including a prescription drug manufacturer or a party acting on its behalf to knowingly and willfully solicit, receive, offer, or pay any remuneration that is intended to induce the referral of business, including the purchase, order, lease of any good, facility, item or service for which payment may be made under a federal healthcare program, such as Medicare or Medicaid. The term "remuneration" has been broadly interpreted to include anything of value. The Anti-Kickback Statute has been interpreted to apply to arrangements between pharmaceutical manufacturers on one hand and prescribers, purchasers, formulary managers, and beneficiaries on the other. Although there are a number of statutory exceptions and regulatory safe harbors protecting some common activities from prosecution, the exceptions and safe harbors are drawn narrowly. Practices that involve remuneration that may be alleged to be intended to induce prescribing, purchases or recommendations may be subject to scrutiny if they do not qualify for an exception or safe harbor. 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 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 its facts and circumstances. Several courts have interpreted the statute's intent requirement to mean that if any one purpose of an arrangement involving remuneration is to induce referrals of federal healthcare covered business, the Anti-Kickback Statute has been violated. Violations of this law are punishable by up to five years in prison, and can also result in criminal fines, administrative civil money penalties and exclusion from participation in federal healthcare programs.

Additionally, the intent standard under the Anti-Kickback Statute was amended by the Patient Protection and Affordable Care Act of 2010, as amended by the Health Care and Education Reconciliation Act of 2010, collectively the Affordable Care Act, to a stricter standard such that a person or entity no longer needs to have actual knowledge of the statute or specific intent to violate it in order to have committed a violation. In addition, the Affordable Care Act codified case law 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 federal civil False Claims Act.

The federal civil False Claims Act prohibits, among other things, any person or entity from knowingly presenting, or causing to be presented, for payment to, or approval by, federal programs, including Medicare and Medicaid, claims for items or services, including drugs, that are false or fraudulent or not provided as claimed. Persons and entities 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 or promoting a product off-label. In addition, our future 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. Penalties for

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federal civil False Claims Act violations may include up to three times the actual damages sustained by the government, plus mandatory civil penalties of between $5,500 and $11,000 for each separate false claim, the potential for exclusion from participation in federal healthcare programs, and, although the federal False Claims Act is a civil statute, False Claims Act violations may also implicate various federal criminal statutes.

The federal Health Insurance Portability and Accountability Act of 1996, or HIPAA, created new federal criminal statutes that prohibit among other actions, knowingly and willfully executing, or attempting to execute, a scheme to defraud any healthcare benefit program, including private third-party payors, knowingly and willfully embezzling or stealing from a healthcare benefit program, willfully obstructing a criminal investigation of a healthcare offense, and knowingly and willfully falsifying, concealing or covering up 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. Like the federal Anti-Kickback Statute, the Affordable Care Act amended the intent standard for certain healthcare fraud statutes under HIPAA such that a person or entity no longer needs to have actual knowledge of the statute or specific intent to violate it in order to have committed a violation.

The civil monetary penalties statute imposes penalties against any person or entity that, among other things, is determined to have presented or caused to be presented a claim to a federal health program that the person knows or should know is for an item or service that was not provided as claimed or is false or fraudulent.

Also, many states have similar fraud and abuse statutes or regulations that may be broader in scope and may apply regardless of payor, in addition to items and services reimbursed under Medicaid and other state programs. Additionally, to the extent that any of our products are sold in a foreign country, we may be subject to similar foreign laws.

HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act, or HITECH, and their implementing regulations, including the final omnibus rule published on January 25, 2013, mandates, among other things, the adoption of uniform standards for the electronic exchange of information in common healthcare transactions, as well as standards relating to the privacy and security of individually identifiable health information, which require the adoption of administrative, physical and technical safeguards to protect such information. Among other things, HITECH makes HIPAA's security standards directly applicable to "business associates," defined as independent contractors or agents of covered entities that create, receive or obtain protected health information in connection with providing a service for or on behalf of a covered entity. At present, it is unclear if we would be considered a business associate subject to HIPAA based on our business activities and service offerings upon the commercialization of a product. HITECH also increased the civil and criminal penalties that may be imposed against covered entities and business associates, and gave state attorneys general new authority to file civil actions for damages or injunctions in federal courts to enforce the federal HIPAA laws and seek attorney's fees and costs associated with pursuing federal civil actions. In addition, certain state laws govern the privacy and security of health information in certain circumstances, some of which are more stringent than HIPAA and many of which differ from each other in significant ways and may not have the same effect, thus complicating compliance efforts. Failure to comply with these laws, where applicable, can result in the imposition of significant civil and/or criminal penalties.

The Affordable Care Act imposed, among other things, new annual reporting requirements for covered manufacturers for certain payments and other transfers of value provided to physicians and teaching hospitals, as well as certain ownership and investment interests held by physicians and their immediate family members. Failure to submit timely, accurately and completely the required information for all payments, transfers of value and ownership or investment interests may result in civil monetary penalties of up to an aggregate of $150,000 per year and up to an aggregate of $1 million per year for "knowing failures."

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Because we intend to commercialize products that could be reimbursed under a federal healthcare program and other governmental healthcare programs, we intend to develop a comprehensive compliance program that establishes internal control to facilitate adherence to the rules and program requirements to which we will or may become subject. Although the development and implantation of compliance programs designed to establish internal control and facilitate compliance can mitigate the risk of investigation, prosecution, and penalties assessed for violations of these laws, the risks cannot be entirely eliminated.

If our operations are found to be in violation of any of such laws or any other governmental regulations that apply to us, we may be subject to penalties, including, without limitation, administrative, civil and criminal penalties, damages, fines, disgorgement, contractual damages, reputational harm, diminished profits and future earnings, the curtailment or restructuring of our operations, exclusion from participation in federal and state healthcare programs and individual imprisonment, any of which could adversely affect our ability to operate our business and our financial results.

Health Reform

In the United States and foreign jurisdictions, there have been a number of legislative and regulatory changes to the healthcare system that could affect our future results of operations. There have been and continue to be a number of initiatives at the United States federal and state levels that seek to reduce healthcare costs.

In particular, the Affordable Care Act has had, and is expected to continue to have, a significant impact on the healthcare industry. The Affordable Care Act was designed to expand coverage for the uninsured while at the same time containing overall healthcare costs. With regard to pharmaceutical products, among other things, the Affordable Care Act revises the definition of "average manufacturer price" for calculating and reporting Medicaid drug rebates on outpatient prescription drug prices and imposes a significant annual fee on companies that manufacture or import certain branded prescription drug products. Substantial new provisions affecting compliance have also been enacted, which may require us to modify our business practices with healthcare providers and entities, and a significant number of provisions are not yet, or have only recently become, effective.

We cannot predict the full impact of the Affordable Care Act on pharmaceutical companies, as many of the reforms require the promulgation of detailed regulations implementing the statutory provisions, some of which has not yet fully occurred. In the coming years, additional legislative and regulatory changes could be made to governmental health programs that could significantly impact pharmaceutical companies and the success of our product candidate.

In addition, other legislative changes have been proposed and adopted since the Affordable Care Act was enacted. In August 2011, the President signed into law the Budget Control Act of 2011, which, among other things, created the Joint Select Committee on Deficit Reduction to recommend to Congress proposals in spending reductions. The Joint Select Committee did not achieve a targeted deficit reduction of at least $1.2 trillion for the years 2013 through 2021, triggering the legislation's automatic reduction to several government programs. These included reductions to Medicare payments to providers of 2% per fiscal year, which went into effect on April 1, 2013 and, due to subsequent legislative amendments to the statute, will stay in effect through 2024 unless additional Congressional action is taken. Additionally, in January 2013, the American Taxpayer Relief Act of 2012 was signed into law, which, among other things, further reduced Medicare payments to several providers and increased the statute of limitations period for the government to recover overpayments to providers from three to five years.

Moreover, the recently enacted Drug Supply Chain Security Act, imposes new obligations on manufacturers of pharmaceutical products, among others, related to product tracking and tracing, which will be phased in over several years beginning in 2015. Among the requirements of this new legislation, manufacturers will be required to provide certain information regarding the drug product to individuals and entities to which product ownership is transferred, label drug product with a product identifier, and keep certain records

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regarding the drug product. The transfer of information to subsequent product owners by manufacturers will eventually be required to be done electronically. Manufacturers will also be required to verify that purchasers of the manufacturers' products are appropriately licensed. Further, under this new legislation, manufacturers will have drug product investigation, quarantine, disposition, and notification responsibilities related to counterfeit, diverted, stolen, and intentionally adulterated products, as well as products that are the subject of fraudulent transactions or which are otherwise unfit for distribution such that they would be reasonably likely to result in serious health consequences or death.

Coverage and Reimbursement

Sales of our products, once approved, will depend, in part, on the extent to which the costs of our products will be covered by third-party payors, such as government health programs, private health insurers and managed care organizations. Third-party payors generally decide which drugs they will cover and establish certain reimbursement levels for such drugs. In particular, in the U.S., private health insurers and other third-party payors often provide reimbursement for products and services based on the level at which the government (through the Medicare or Medicaid programs) provides reimbursement for such treatments. Patients who are prescribed treatments for their conditions and providers performing the prescribed services generally rely on third-party payors to reimburse all or part of the associated healthcare costs. Patients are unlikely to use our products unless coverage is provided and reimbursement is adequate to cover a significant portion of the cost of our products. Sales of our product candidate, and any future product candidate, will therefore depend substantially on the extent to which the costs of our product candidate, and any future product candidate, will be paid by third-party payors. Additionally, the market for our product candidate, and any future product candidate, will depend significantly on access to third-party payors' formularies without prior authorization, step therapy, or other limitations such as approved lists of treatments for which third-party payors provide coverage and reimbursement. Additionally, coverage and reimbursement for therapeutic products can differ significantly from payor to payor. One third-party payor's decision to cover a particular medical product or service does not ensure that other payors will also provide coverage for the medical product or service, or will provide coverage at an adequate reimbursement rate. As a result, the coverage determination process will require us to provide scientific and clinical support for the use of our products to each payor separately and will be a time-consuming process.

Third-party payors are developing increasingly sophisticated methods of controlling healthcare costs and increasingly challenging the prices charged for medical products and services. Additionally, the containment of healthcare costs has become a priority of federal and state governments and the prices of drugs have been a focus in this effort. The U.S. government, state legislatures and foreign governments have shown significant interest in implementing cost-containment programs, including price controls, restrictions on reimbursement and requirements for substitution of generic products. Adoption of price controls and cost-containment measures, and adoption of more restrictive policies in jurisdictions with existing controls and measures, could limit our net revenue and results. If these third-party payors do not consider our products to be cost-effective compared to other therapies, they may not cover our products once approved as a benefit under their plans or, if they do, the level of reimbursement may not be sufficient to allow us to sell our products on a profitable basis. Decreases in third-party reimbursement for our products once approved or a decision by a third-party payor to not cover our products could reduce or eliminate utilization of our products and have an adverse effect on our sales, results of operations and financial condition. In addition, state and federal healthcare reform measures have been and will be adopted in the future, any of which could limit the amounts that federal and state governments will pay for healthcare products and services, which could result in reduced demand for our products once approved or additional pricing pressures.

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Employees

As of December 31, 2014, we had no employees. Since that time, our wholly-owned subsidiary, Axovant Sciences, Inc., has hired seven employees.

Facilities

Our principal executive offices are located in Bermuda at Clarendon House, 2 Church Street, Hamilton HM 11, Bermuda, and we also have business operations at 14 Par-La-Ville Road, Hamilton HM08, Bermuda. We intend to add new facilities or expand our existing facilities as we add employees, and we believe that suitable additional or substitute space will be available as needed to accommodate any such expansion of our operations.

Legal Proceedings

We are not currently a party to any material legal proceedings, and we are not aware of any pending or threatened legal proceeding against us that we believe could have an adverse effect on our business, operating results or financial condition.

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MANAGEMENT

Directors and Executive Officers

The following table sets forth information concerning our directors and executive officers, including their ages as of May 1, 2015:

Name
  Age   Position

Executive Officers

       

Vivek Ramaswamy*

  29   Principal Executive Officer and Director

Alan S. Roemer*

  45   Principal Financial and Accounting Officer

Marianne L. Romeo**

  47   Head, Global Transactions & Risk Management and Director

Lawrence T. Friedhoff, M.D., Ph.D.*

  66   Chief Development Officer

Mark Altmeyer*

  54   President and Chief Commercial Officer

Christine Mikail*

  37   Chief Administrative Officer and General Counsel

Non-Employee Directors

 

 

 

 

Berndt Modig (1)(2)(3)

  56   Director

Ilan Oren (2)(3)

  31   Director

Atul Pande, M.D. (1)(2)(3)

  60   Director

*
Employee of our wholly-owned subsidiary, Axovant Sciences, Inc. Such employee provides services to us pursuant to an inter-company services agreement between us and Axovant Sciences, Inc.

**
Employee of Axovant Sciences Ltd.

(1)
Member of the audit committee. Mr. Modig serves as the chair of this committee.

(2)
Member of the compensation committee. Mr. Oren serves as the chair of this committee.

(3)
Member of the nominating and corporate governance committee. Dr. Pande serves as the chair of this committee.

Vivek Ramaswamy has served as our principal executive officer, as a member of our board of directors and as the Chief Executive Officer of Axovant Sciences, Inc. since March 2015. Since May 2014, Mr. Ramaswamy has served as the President and Chief Executive Officer of Roivant Sciences, Inc., a drug development and commercialization services company that is wholly owned by our parent, Roivant Sciences Ltd. Mr. Ramaswamy is a director of Roivant Sciences Ltd. and is the Chairman of the board of directors of Tekmira Pharmaceuticals Corporation. From August 2007 to May 2014, Mr. Ramaswamy was a member of the investment team at QVT Financial LP. In 2007 Mr. Ramaswamy co-founded and served as the President of Campus Venture Network, a technology company that was acquired in 2009. Mr. Ramaswamy received his A.B. in Biology, summa cum laude , from Harvard College and a J.D. degree from Yale Law School. We believe Mr. Ramaswamy's experience as Chief Executive Officer of Roivant Sciences, Inc., Chairman of the board of directors of Tekmira Pharmaceuticals Corporation, and a life sciences investor qualify him to serve on our board of directors.

Alan S. Roemer has served as our principal financial and accounting officer and as the Chief Financial Officer of Axovant Sciences, Inc. since March 2015. Since May 2014, Mr. Roemer has served as the Senior Vice President, Finance & Operations of Roivant Sciences, Inc. From 2009 to 2014, Mr. Roemer was a Managing Director for the Trout Group and Trout Capital, where he provided financing, investor relations and strategic advisory services for life sciences company clients. He joined Trout in 2009 from Zelos Therapeutics, where he served as Chief Financial Officer & Treasurer. Prior to joining Zelos, Mr. Roemer was a Vice President at Pharmasset, Inc. (acquired by Gilead) from 1999 to 2008. Prior to Pharmasset, Mr. Roemer was a healthcare consultant for Booz-Allen & Hamilton and Deloitte Consulting, and he held

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various operational roles at Bank of America. Mr. Roemer currently serves as a member of the board of directors for SomPharmaceuticals SA, a Swiss company focused on the development of somatostatin analogs for rare diseases; a member of the Board of Trustees of the Helene Fuld College of Nursing; and an advisor to entrepreneurs of early stage life sciences companies. Mr. Roemer received his B.S. in Business Administration from Georgetown University and his M.B.A. and M.P.H. degrees from Emory University's Goizueta Business School and Rollins School of Public Health.

Marianne L. Romeo has served as our Head, Global Transactions & Risk Management and as a member of our board of directors since March 2015. Since December 2014 she has served as Head, Global Transactions & Risk Management of Roivant Sciences Ltd. Previously, Ms. Romeo had a 20 year career with Marsh Inc. in risk consulting and insurance brokerage, most recently serving as Managing Director and Head of Casualty from 2008 to 2014 and Senior Vice President and Healthcare Practice Leader from 2003 to 2008 for Bowring Marsh (Bermuda) Ltd., an international insurance placement broker and wholly owned subsidiary of Marsh Inc. During her time at Bowring Marsh, Ms. Romeo served in various functional roles, including excess casualty brokerage, risk management consulting, and business management. Ms. Romeo established the Healthcare Practice within Marsh's Bermuda operation in 2003 and continues to serve on the Board of the Bermuda Society for Healthcare Risk Management (BSHRM). Ms. Romeo received her B.Sc. in Manufacturing Engineering, cum laude , from Tufts University and her M.S. in Occupational Health and Environmental Science from the City University of New York, Hunter College. We believe Ms. Romeo's experience in healthcare and risk management qualifies her to serve on our board of directors.

Lawrence T. Friedhoff, M.D., Ph.D.  has served as the Chief Development Officer of Axovant Sciences, Inc. since March 2015. Since May 2014, Dr. Friedhoff has served as Senior Vice President, Research and Development of Roivant Sciences, Inc. From 2003 to 2014, Dr. Friedhoff served as Chief Executive Officer and President of Pharmaceutical Special Projects Group, LLC, a drug development consulting company where he provided drug development consulting services to international pharmaceutical companies. As part of his work for the Pharmaceutical Special Projects Group, Dr. Friedhoff served as Chief Development Officer of Mitotech S.A., a Pharmaceutical Special Projects Group client, from March 2014 to February 2015. From 2007 to 2014, Dr. Friedhoff served as Chief Executive Officer of Senex Biotechnology, Inc., a drug discovery and development company. He remains a Director of Senex. From 1998 to 2003, Dr. Friedhoff served as Executive Vice President, Research and Development of Andrx Corporation, a brand and generic pharmaceutical company, leading its Branded Drug Development efforts. From 1988 to 1998, Dr. Friedhoff worked for subsidiaries of Eisai, Co. Ltd., ultimately serving as Executive Vice President, Research and Development of Eisai, Inc., a subsidiary of Eisai Co. Ltd., where he lead the drug development team for Aricept, a branded drug used to treat Alzheimer's disease. Prior to Eisai, Dr. Friedhoff worked for ER Squibb, Inc. (eventually Bristol-Myers Squibb), including as a Clinical Pharmacology Director. Dr. Friedhoff received his M.D. from the New York University School of Medicine and his Ph.D. in Chemistry from Columbia University Graduate School.

Mark Altmeyer has served as the President and Chief Commercial Officer of Axovant Sciences, Inc. since March 2015. From February 2009 to December 2014, Mr. Altmeyer served as Chief Executive Officer and President of Otsuka America Pharmaceutical, Inc. Prior to his time at Otsuka, Mr. Altmeyer served in a number of executive leadership roles at Bristol-Myers Squibb, including Senior Vice President, Global Commercialization from 2006 to 2008 and Senior Vice President, Neuroscience Business Unit from 2002 to 2005 during the approval and launch of Abilify, a branded drug used to treat multiple psychiatric conditions, including schizophrenia, depression and bipolar disorder. Mr. Altmeyer currently serves as a director for Contact of Mercer County. Mr. Altmeyer received his B.A. from Middlebury College and his M.B.A. from Harvard Business School.

Christine Mikail has served as the Chief Administrative Officer and General Counsel of Axovant Sciences, Inc. since March 2015. Previously, she served as Senior Vice President, Legal Affairs, General Counsel and Secretary at NPS Pharmaceuticals from March 2014 to February 2015. From February 2012

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to February 2014, Ms. Mikail served as Executive Vice President, Corporate Development, General Counsel, Chief Compliance Officer and Corporate Secretary of Dendreon Corporation, a biotechnology company. Prior to Dendreon, Ms. Mikail held senior corporate development and legal positions with Savient Pharmaceuticals from February 2011 to February 2012 and ImClone Systems, a wholly-owned subsidiary of Eli Lilly, from March 2008 to February 2011. Ms. Mikail began her career at Hale and Dorr LLP, Lowenstein Sandler PC and Reed Smith LLP where she counseled on corporate and securities law, regulatory and licensing matters, as well as financings and mergers and acquisitions, on behalf of public and private companies. She received her B.A., cum laude , from Rutgers University and her J.D. from Fordham University School of Law.

Berndt Modig has served as a member of our board of directors since March 2015. Previously, he served as Chief Financial Officer of Prosensa Holding N.V. from March 2010 to January 2015, when Prosensa was acquired by BioMarin Pharmaceutical Inc. From October 2003 to November 2008, Mr. Modig was Chief Financial Officer at Jerini AG where he directed private financing rounds, its initial public offering in 2005, and its acquisition by Shire plc in 2008. Prior to his time at Jerini, Mr. Modig served as Chief Financial Officer at Surplex AG from 2001 to 2003 and as Finance Director Europe of U.S.-based Hayward Industrial Products Inc. from 1999 to 2001. In previous positions, Mr. Modig was a partner in the Brussels-based private equity firm Agra Industria from 1994 to 1999 and a Senior Manager in the Financial Services Industry Group of Price Waterhouse LLP in New York from 1991 to 1994. Mr. Modig currently serves as a director and member of the audit committee of Affimed N.V. (NASDAQ:AFMD) and as a director and the chair of the audit committee of Auris Medical Holding AG (NASDAQ:EARS). He also served as a director of Mobile Loyalty plc from 2012 to 2013. Mr. Modig received his bachelor's degree in business administration, economics and German from the University of Lund, Sweden and his M.B.A. from INSEAD, Fontainebleau, France and is a Certified Public Accountant. We believe Mr. Modig is qualified to serve on our board of directors because of his extensive international experience in finance and operations, private equity, and mergers and acquisitions.

Ilan Oren has served as a member of our board of directors since March 2015. He currently serves as Vice President, Business Development at Dexcel Pharma, a position he has held since September 2011. From September 2007 to July 2011, he was employed by L.E.K. Consulting, advising clients in the life science sector on corporate strategy, mergers and acquisitions, licensing and drug commercialization projects. Mr. Oren currently serves as a director of Cynapsus Therapeutics Inc., a publicly-traded specialty pharmaceutical company, and as a director of Roivant Sciences Ltd. Mr. Oren received his B.A. in Economics from Harvard University. We believe that Mr. Oren is qualified to serve on our board of directors because of his extensive leadership experience and knowledge of the life sciences industry.

Atul Pande, M.D.  has served as a member of our board of directors since March 2015. Dr. Pande is President of Verity BioConsulting, a drug development consulting firm, and Chief Medical Officer of Tal Medical, a clinical-stage medical device company. Dr. Pande is also a non-executive board member of Autifony Therapeutics and Heptares Therapeutics, and serves on the Scientific Advisory Boards of Cennerv Pharma and Centrexion Corporation. Previously, he was Senior Vice President and Senior Advisor, Pharmaceutical R&D at GlaxoSmithKline. He has also held senior roles at Pfizer R&D, Parke-Davis/Warner-Lambert and Lilly Research Laboratories. Dr. Pande completed his research fellowship training in psychiatry at the University of Michigan Medical School and his postgraduate specialty training and psychiatry residency program at Western University. We believe Dr. Pande is qualified to serve on our board of directors because of his medical background and significant knowledge of the life sciences industry.

Board of Directors

Our board of directors currently consists of five members. Each director is currently elected to the board for a one-year term, to serve until the election and qualification of successor directors at the general meeting of shareholders, or until the director's earlier removal, resignation or death.

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In accordance with our amended and restated bye-laws, which will become effective upon the closing of this offering, our board of directors will be divided into three classes, each of which will consist, as nearly as possible, of one-third of the total number of directors constituting our entire board and which will serve staggered three-year terms. At each general meeting of shareholders, the successors to directors whose terms then expire will be elected to serve from the time of election and qualification until the third annual meeting following election. Our directors will be divided among the three classes as follows:

    §
    Class I, which will consist of Ilan Oren and Marianne L. Romeo, and their term will expire at our first general meeting of shareholders to be held after the completion of this offering;

    §
    Class II, which will consist of Vivek Ramaswamy and Atul Pande, M.D., and their term will expire at our second general meeting of shareholders to be held after the completion of this offering; and

    §
    Class III, which will consist of Berndt Modig, and his term will expire at our third general meeting of shareholders to be held after the completion of this offering.

Our amended and restated bye-laws will provide that the authorized number of directors may be changed only by resolution approved by a majority of our board of directors. Any additional directorships resulting from an increase in the number of directors will be distributed among the three classes so that, as nearly as possible, each class will consist of one-third of the directors.

The division of our board of directors into three classes with staggered three-year terms may delay or prevent a change of our management or a change in control.

Director Independence

Our board of directors has undertaken a review of the independence of the directors and considered whether any director has a material relationship with us that could compromise his or her ability to exercise independent judgment in carrying out his or her responsibilities. As a result of this review, our board of directors has determined that Mr. Modig and Dr. Pande, representing two of the five members of our board of directors, are "independent" as that term is defined under the applicable rules and regulations of the SEC and NYSE rules. We plan to comply with the NYSE corporate governance requirement that independent directors comprise a majority of our board of directors within one year of our listing on the NYSE.

After the closing of this offering, we expect to be a "controlled company" within the meaning of applicable NYSE rules because more than 50% of the voting power for the election of directors will be held by Roivant Sciences Ltd. Under NYSE rules, as a "controlled company," we will be exempt from the NYSE corporate governance requirements that our nominating and corporate governance committee and compensation committee consist solely of independent directors. We may rely on these exemptions from the corporate governance requirements until we are no longer a "controlled company" or until our board determines to no longer rely on these exemptions. It is currently contemplated that neither our compensation committee nor our nominating and corporate governance committee will consist entirely of independent directors. Accordingly, you may not have the same protections afforded to shareholders of companies that are subject to all of the corporate governance requirements of the NYSE. We may continue to rely on these exemptions so long as we are allowed to as a "controlled company."

Committees of the Board of Directors

Our board of directors will establish an audit committee, a compensation committee and a nominating and corporate governance committee, each of which will have the composition and responsibilities described below. From time to time, the board may establish other committees to facilitate the management of our business.

Audit Committee

Our audit committee will review our internal accounting procedures and consult with and review the services provided by our independent registered public accountants. Upon the closing of this offering, our audit

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committee will consist of two directors, Berndt Modig and Atul Pande, M.D. Mr. Modig will be the chairman of the audit committee, and our board of directors has determined that Mr. Modig is an "audit committee financial expert" as defined by SEC rules and regulations.

The controlled company exemption does not modify the independence requirements for an audit committee, and we intend to comply with the requirements of Rule 10A-3 of the Securities Exchange Act of 1934, as amended, or the Exchange Act, and the applicable NYSE rules. Under Rule 10A-3 under the Exchange Act, we are permitted to phase in our compliance with the independent audit committee requirements set forth in Rule 10A-3 under the Exchange Act as follows: (1) one independent member at the time of listing, (2) a majority of independent members within 90 days of listing and (3) all independent members within one year of listing. Under NYSE rules, we are permitted to phase in our compliance with the requirement that our audit committee have three members as follows: (1) one member at the time of listing, (2) two members within 90 days of listing and (3) three members within one year of listing. We are relying on these phase in exceptions and plan to add a third independent member to our audit committee within one year of our listing on the NYSE. Our board of directors has determined that each of Mr. Modig and Dr. Pande is an independent director under NYSE rules and under Rule 10A-3 under the Exchange Act. We intend to continue to evaluate the requirements applicable to us and we intend to comply with future requirements to the extent that they become applicable to our audit committee.

The principal duties and responsibilities of our audit committee will include:

    §
    recommending and retaining an independent registered public accounting firm to serve as independent auditor to audit our financial statements, overseeing the independent auditor's work and determining the independent auditor's compensation;

    §
    approving in advance all audit services and non-audit services to be provided to us by our independent auditor;

    §
    establishing procedures for the receipt, retention and treatment of complaints received by us regarding accounting, internal accounting controls, auditing or compliance matters, as well as for the confidential, anonymous submission by our employees of concerns regarding questionable accounting or auditing matters;

    §
    reviewing and discussing with management and our independent auditor the results of the annual audit and the independent auditor's review of our quarterly financial statements; and

    §
    conferring with management and our independent auditor about the scope, adequacy and effectiveness of our internal accounting controls, the objectivity of our financial reporting and our accounting policies and practices.

Compensation Committee

Our compensation committee will review and determine the compensation of all our executive officers. Upon the closing of this offering, our compensation committee will consist of three directors, Ilan Oren, Berndt Modig and Atul Pande, M.D., each of whom will be a non-employee member of our board of directors as defined in Rule 16b-3 under the Exchange Act. Mr. Oren will be the chairman of the compensation committee. As a controlled company, we intend to rely upon the exemption from the requirement that we have a compensation committee composed entirely of independent directors. The principal duties and responsibilities of our compensation committee will include:

    §
    establishing and approving, and making recommendations to the board of directors regarding, performance goals and objectives relevant to the compensation of our chief executive officer, evaluating the performance of our chief executive officer in light of those goals and objectives and setting, or recommending to the full board of directors for approval, the chief executive officer's compensation, including incentive-based and equity-based compensation, based on that evaluation;

    §
    setting the compensation of our other executive officers, based in part on recommendations of the chief executive officer;

    §
    exercising administrative authority under our equity incentive plan and employee benefit plans;

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    §
    establishing policies and making recommendations to our board of directors regarding director compensation;

    §
    reviewing and discussing with management the compensation discussion and analysis that we may be required from time to time to include in SEC filings; and

    §
    preparing a compensation committee report on executive compensation as may be required from time to time to be included in our annual proxy statements or annual reports on Form 10-K filed with the SEC.

Nominating and Corporate Governance Committee

Upon the closing of this offering, our nominating and corporate governance committee will consist of three directors, Ilan Oren, Berndt Modig and Atul Pande, M.D. Dr. Pande will be the chairman of the nominating and corporate governance committee. As a controlled company, we intend to rely upon the exemption from the requirement that we have a nominating and corporate governance committee composed entirely of independent directors. The nominating and corporate governance committee's responsibilities will include:

    §
    assessing the need for new directors and identifying individuals qualified to become directors;

    §
    recommending to the board of directors the persons to be nominated for election as directors and to each of the board's committees;

    §
    assessing individual director performance, participation and qualifications;

    §
    developing and recommending to the board corporate governance principles;

    §
    monitoring the effectiveness of the board and the quality of the relationship between management and the board; and

    §
    overseeing an annual evaluation of the board's performance.

Code of Business Conduct and Ethics for Employees, Executive Officers and Directors

Effective upon the closing of this offering, we will adopt a Code of Business Conduct and Ethics, or the Code of Conduct, applicable to all of our employees, executive officers and directors. Following the closing of this offering, the Code of Conduct will be available on our website at www.axovant.com. The nominating and corporate governance committee of our board of directors will be responsible for overseeing the Code of Conduct and must approve any waivers of the Code of Conduct for employees, executive officers and directors. We expect that any amendments to the Code of Conduct, or any waivers of its requirements, will be disclosed on our website.

Compensation Committee Interlocks and Insider Participation

None of our directors who we expect to serve as a member of our compensation committee is, or has at any time during the past year been, one of our officers or employees. None of our executive officers currently serves, or in the past year has served, as a member of the board of directors or compensation committee of any other entity that has one or more executive officers serving on our board of directors or compensation committee.

Director Compensation

We have provided equity-based compensation to our directors for the time and effort necessary to serve as a member of our board of directors. On March 18, 2015, we granted options to each of Marianne L. Romeo, Berndt Modig and Atul Pande, M.D. upon joining our board of directors. Each option granted in connection with such director's service as a member of our board vests over a period of three years, with one third of the common shares underlying the option vesting on the first anniversary of the option grant date and the remainder vesting in eight equal quarterly installments thereafter. Each such option allows for early exercise, subject to our repurchase option with respect to any unvested common shares, in accordance with the terms our standard form of early exercise stock purchase agreement. All common shares underlying such option will become fully vested upon a change of control, as defined in our 2015 Equity Incentive Plan.

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We expect that our board of directors will adopt a director compensation policy for non-employee directors to be effective following the closing of this offering. Pursuant to this policy, we expect that any director who is also an employee of ours or our subsidiary will not receive any additional compensation for his or her service as a director.

2015 Director Compensation Table

The following table sets forth information regarding the compensation earned for service on our board of directors during the fiscal year ended March 31, 2015 by our directors.

Name
  Fees
Earned or
Paid in
Cash
($)
  Option
Awards
($) (1)(2)
  Total
($)
 

Marianne L. Romeo

    1,534              

Berndt Modig

    2,301              

Ilan Oren

             

Atul Pande, M.D. 

    1,534              

(1)
This column reflects the full grant date fair value for options granted during the year as measured pursuant to Accounting Standards Codification, or ASC, Topic 718 as stock-based compensation in our financial statements. Unlike the calculations contained in our financial statements, this calculation does not give effect to any estimate of forfeitures related to service-based vesting, but assumes that the director will perform the requisite service for the award to vest in full. The assumptions we used in valuing options are described in Note      to our financial statements included in this prospectus.

(2)
The table below shows the aggregate number of option awards outstanding for each of our directors as of March 31, 2015:

Name
  Options Awards (#)  

Marianne L. Romeo

    150,000 (a)

Berndt Modig

    85,000  

Ilan Oren

     

Atul Pande, M.D. 

    75,000  

(a)
Includes 75,000 common shares underlying an incentive stock option granted to Ms. Romeo in her capacity as an employee of ours on March 18, 2015. This option vests over a period of four years, with one quarter of the common shares underlying the option vesting on the first anniversary of the option grant date and the remainder vesting in twelve equal quarterly installments thereafter. Such option allows for early exercise, subject to our repurchase option with respect to any unvested common shares in accordance with the terms our standard form of early exercise stock purchase agreement. All common shares underlying such option will become fully vested upon a change of control, as defined in our 2015 Equity Incentive Plan.

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EXECUTIVE COMPENSATION

2015 Summary Compensation Table

The following table sets forth information regarding compensation earned during the fiscal year ended March 31, 2015 by our named executive officers, which include our principal executive officer and the next two most highly compensated executive officers for fiscal 2015.


Name and Principal Position
  Salary ($) (2)   Option
Awards ($) (3)
  Total ($)  

Vivek Ramaswamy (1)

    9,423                      

Principal Executive Officer

                   

Mark Altmeyer (1)

    11,538                      

President and Chief Commercial Officer

                   

Christine Mikail (1)

    11,538                      

Chief Administrative Officer and General Counsel

                   

(1)
Employee of our wholly-owned subsidiary, Axovant Sciences, Inc. Such employee provides services to us pursuant to an inter-company services agreement between us and Axovant Sciences, Inc.

(2)
Represents salary earned since each employee entered into are employment offer letter with Axovant Sciences, Inc. in March 2015.

(3)
This column reflects the full grant date fair value for options granted during the year as measured pursuant to ASC Topic 718 as stock-based compensation in our consolidated financial statements. Unlike the calculations contained in our financial statements, this calculation does not give effect to any estimate of forfeitures related to service-based vesting, but assumes that the named executive officer will perform the requisite service for the award to vest in full. The assumptions we used in valuing options are described in Note      to our financial statements included in this prospectus.

Outstanding Equity Awards at March 31, 2015

The following table provides information about outstanding equity held by each of our named executive officers at March 31, 2015. There were no stock awards outstanding at March 31, 2015, and all awards were granted under our 2015 Equity Incentive Plan.


 
   
  Number of Securities Underlying
Unexercised Options (#)
   
   
 
 
  Option
Grant Date
  Option
Exercise
Price ($)
  Option
Expiration
Date
 
Name
  Exercisable (1)   Unexercisable  

Vivek Ramaswamy

                     

Mark Altmeyer

    03/18/15     1,125,000         0.90     03/17/25  

Christine Mikail

    03/18/15     937,500         0.90     03/17/25  

(1)
These incentive stock options vest over a four-year period: 25% of the common shares underlying the options vest on the first anniversary of the option grant date, and the remainder vest in twelve equal quarterly installments thereafter. Each such option allows for early exercise, subject to our repurchase option with respect to any unvested common shares, in accordance with the terms our standard form of early exercise stock purchase agreement. All common shares underlying these options will become fully vested upon a change of control, as defined in our 2015 Equity Incentive Plan.

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Employment Arrangements

Each of our executive officers, other than Marianne L. Romeo, is employed by our wholly-owned subsidiary, Axovant Sciences, Inc., and provides services to us pursuant to an inter-company services agreement between us and Axovant Sciences, Inc. In March 2015, Axovant Sciences, Inc. entered into employment offer letters with each of our named executive officers that set forth the initial terms and conditions of employment. These offer letters provide for at-will employment and set forth the executive officer's annual base salary, performance bonus target opportunity, initial equity incentive grant, terms of severance and eligibility for employee benefits. The key terms of these offer letters are set forth in the table below and, for the purposes of this discussion, references to "we," "us" and "our" shall be deemed to refer to Axovant Sciences, Inc. as context requires.

The amount and terms of these benefits reflect the negotiations of each of our named executive officers with us. We consider the severance and change of control benefits critical to attracting and retaining high caliber executives. We believe that appropriately structured severance and change of control benefits, including accelerated vesting provisions, minimize the distractions and reduce the risk that an executive voluntarily terminates his or her employment with us during times of uncertainty, such as before an acquisition is completed. We believe that our existing arrangements allow each named executive officer to focus on continuing normal business operations and, in the event of a change of control, on the success of a potential business combination, rather than on how business decisions that may be in the best interest of our stockholders will impact his or her own financial security.

The following table sets forth the current base salaries, bonus targets and summaries of the material severance and change of control arrangements with our named executive officers. The definitions of "cause," "good reason" and "change of control" referenced in the table below are defined in the individual offer letters with each of the named executive officers or the applicable Option Grant Notice and Agreement.


Named Executive Officer
  Base Salary and
Bonus Target Opportunity
  Severance and Change of Control
Vivek Ramaswamy   Base Salary: $350,000

Bonus Target: $175,000
  If we terminate Mr. Ramaswamy's employment for any reason other than for cause or he terminates his employment for good reason, then we will pay him a one-time cash payment equal to the sum of his current annual base salary and bonus target opportunity, as well as one year of continued medical and dental benefits.

If Mr. Ramaswamy is employed by us immediately prior to a change of control, then all remaining common shares underlying his outstanding options will vest.

If Mr. Ramaswamy is employed by us immediately prior to a change of control and, within one year, Mr. Ramaswamy's employment is terminated without cause then he will receive a one-time cash payment equal to 1.5 times the sum of his current annual base salary and bonus target opportunity, as well as continued medical and dental benefits for 18 months following the termination.

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Named Executive Officer
  Base Salary and
Bonus Target Opportunity
  Severance and Change of Control
Mark Altmeyer   Base Salary: $300,000

Bonus Target: $150,000
  If we terminate Mr. Altmeyer's employment for any reason other than for cause or he terminates his employment for good reason, then we will pay him a one-time cash payment equal to the sum of his current annual base salary and bonus target opportunity, as well as one year of continued medical and dental benefits. Further, subject to certain additional conditions set forth in his offer letter, if Mr. Altmeyer terminates his employment for good reason, then 50% of the common shares underlying his outstanding options will vest.

If Mr. Altmeyer is employed by us immediately prior to a change of control, then all remaining common shares underlying his outstanding options will vest.

If Mr. Altmeyer is employed by us immediately prior to a change of control and, within one year, Mr. Altmeyer's employment is terminated without cause then he will receive a one-time cash payment equal to 1.5 times the sum of his current annual base salary and bonus target opportunity, as well as continued medical and dental benefits for 18 months following the termination.


Christine Mikail

 

Base Salary: $300,000

Bonus Target: $150,000

 

If we terminate Ms. Mikail's employment for any reason other than for cause or she terminates her employment for good reason, then we will pay her a one-time cash payment equal to the sum of her current annual base salary and bonus target opportunity, as well as one year of continued medical and dental benefits. Further, subject to certain additional conditions set forth in her offer letter, if Ms. Mikail terminates her employment for good reason, then 50% of the common shares underlying her outstanding options will vest.

If Ms. Mikail is employed by us immediately prior to a change of control, then all remaining common shares underlying her outstanding options will vest.

If Ms. Mikail is employed by us immediately prior to a change of control and, within one year, Ms. Mikail's employment is terminated without cause then she will receive a one-time cash payment equal to 1.5 times the sum of her current annual base salary and bonus target opportunity, as well as continued medical and dental benefits for 18 months following the termination.

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2015 Equity Incentive Plan

Our board of directors and our sole shareholder adopted our 2015 Equity Incentive Plan in March 2015. We expect that our board of directors and our shareholders will amend our plan prior to the closing of this offering. We refer to our 2015 Equity Incentive Plan, as amended, as our 2015 plan. Our 2015 plan provides for the grant of incentive options within the meaning of Section 422 of the Internal Revenue Code, or the Code, to our employees and our parent and subsidiary corporations' employees, and for the grant of nonstatutory options, restricted stock awards, restricted stock unit awards, stock appreciation rights, performance stock awards and other forms of stock compensation to our employees, including officers, consultants and directors. Our 2015 plan also provides for the grant of performance cash awards to our employees, consultants and directors.

Authorized Shares

The maximum number of our common shares that may be issued under our 2015 plan is 7,500,000 shares. The number of our common shares reserved for issuance under our 2015 plan will automatically increase on January 1 of each year, for a period of ten years, from April 1, 2016 continuing through April 1, 2025, by           % of the total number of our common shares outstanding on March 31 of the preceding calendar year, or a lesser number of shares as may be determined by our board of directors. The maximum number of shares that may be issued pursuant to the exercise of incentive options under our 2015 plan is                                              .

Shares issued under our 2015 plan may be authorized but unissued or reacquired common shares. Shares subject to stock awards granted under our 2015 plan that expire or terminate without being exercised in full, or that are paid out in cash rather than in shares, will not reduce the number of shares available for issuance under our 2015 plan. Additionally, shares issued pursuant to stock awards under our 2015 plan that we repurchase or that are forfeited, as well as shares reacquired by us as consideration for the exercise or purchase price of a stock award or to satisfy tax withholding obligations related to a stock award, will become available for future grant under our 2015 plan.

Administration

Our board of directors, or a duly authorized committee thereof, will have the authority to administer our 2015 plan. Our board of directors will delegate its authority to administer our 2015 plan to our compensation committee under the terms of the compensation committee's charter. Our board of directors may also delegate to one or more of our officers the authority to (i) designate employees other than officers to receive specified stock awards and (ii) determine the number of our common shares to be subject to such stock awards. Subject to the terms of our 2015 plan, the administrator has the authority to determine the terms of awards, including recipients, the exercise price or strike price of stock awards, if any, the number of shares subject to each stock award, the fair market value of a common share, the vesting schedule applicable to the awards, together with any vesting acceleration, the form of consideration, if any, payable upon exercise or settlement of the stock award and the terms and conditions of the award agreements for use under our 2015 plan.

The administrator has the power to modify outstanding awards under our 2015 plan. Subject to the terms of our 2015 plan, the administrator has the authority to reprice any outstanding option or stock appreciation right, cancel and re-grant any outstanding option or stock appreciation right in exchange for new stock awards, cash or other consideration, or take any other action that is treated as a repricing under generally accepted accounting principles, with the consent of any adversely affected participant.

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Section 162(m) Limits

At such time as necessary for compliance with Section 162(m) of the Code, no participant may be granted stock awards covering more than                      common shares under our 2015 plan during any calendar year pursuant to options, stock appreciation rights and other stock awards whose value is determined by reference to an increase over an exercise price or strike price of at least 100% of the fair market value of our common shares on the date of grant. Additionally, no participant may be granted in a calendar year a performance stock award covering more than                     common shares or a performance cash award having a maximum value in excess of $               under our 2015 plan. These limitations enable us to grant awards that will be exempt from the $1.0 million limitation on the income tax deductibility of compensation paid per covered executive officer imposed by Section 162(m) of the Code.

Performance Awards

Our 2015 plan permits the grant of performance-based stock and cash awards that may qualify as performance-based compensation that is not subject to the $1.0 million limitation on the income tax deductibility of compensation paid per covered executive officer imposed by Section 162(m) of the Code. To enable us to grant performance-based awards that will qualify, our compensation committee can structure such awards so that the stock or cash will be issued or paid pursuant to such award only following the achievement of specified pre-established performance goals during a designated performance period.

Changes to Capital Structure

In the event there is a specified type of change in our capital structure, such as a split, reverse split or recapitalization, appropriate adjustments will be made to (1) the class and maximum number of shares reserved for issuance under our 2015 plan, (2) the class and maximum number of shares by which the share reserve may increase automatically each year, (3) the class and maximum number of shares that may be issued upon the exercise of incentive stock options, (4) the class and maximum number of shares subject to stock awards that can be granted in a calendar year (as established under our 2015 plan pursuant to Section 162(m) of the Code), and (5) the class and number of shares and exercise price, strike price or purchase price, if applicable, of all outstanding stock awards.

Corporate Transactions

Our 2015 plan provides that in the event of a specified corporate transaction, including without limitation a consolidation, merger, or similar transaction involving our company, the sale of all or substantially all of the assets of our company, the direct or indirect acquisition by an person or persons acting as a group of ownership of shares representing a majority of the then outstanding share capital of our company, the administrator will determine how to treat each outstanding stock award. The administrator may:

    §
    arrange for the assumption, continuation or substitution of a stock award by a successor corporation;

    §
    arrange for the assignment of any reacquisition or repurchase rights held by us to a successor corporation;

    §
    accelerate the vesting of the stock award and provide for its termination prior to the effective time of the corporate transaction;

    §
    arrange for the lapse, in whole or in part, of any reacquisition or repurchase right held by us; or

    §
    cancel the stock award prior to the transaction in exchange for a cash payment, which may be reduced by the exercise price payable in connection with the stock award.

The administrator is not obligated to treat all stock awards or portions of stock awards, even those that are of the same type, in the same manner. The administrator may take different actions with respect to the vested and unvested portions of a stock award.

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Change in Control

The administrator may provide, in an individual award agreement or in any other written agreement between us and the participant, that the stock award will be subject to additional acceleration of vesting and exercisability in the event of a change in control. In the absence of such a provision, no such acceleration of the stock award will occur.

Plan Amendment or Termination

Our board has the authority to amend, suspend, or terminate our 2015 plan, provided that such action does not materially impair the existing rights of any participant without such participant's written consent. No incentive options may be granted after the tenth anniversary of the date our board of directors adopted our 2015 plan.

Rule 10b5-1 Sales Plans

Our directors and executive officers may adopt written plans, known as Rule 10b5-1 plans, in which they will contract with a broker to buy or sell our common shares on a periodic basis. Under a Rule 10b5-1 plan, a broker executes trades pursuant to parameters established by the director or officer when entering into the plan, without further direction from them. The director or officer may amend a Rule 10b5-1 plan in some circumstances and may terminate a plan at any time. Our directors and executive officers also may buy or sell additional shares outside of a Rule 10b5-1 plan when they are not in possession of material nonpublic information subject to compliance with the terms of our insider trading policy. Prior to 180 days after the date of this offering, subject to early termination, the sale of any shares under such plan would be prohibited by the lock-up agreement that the director or officer has entered into with the underwriters.

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CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS

The following is a description of transactions since our inception on October 31, 2014 to which we have been a participant in which the amount involved exceeded or will exceed $120,000, and in which any of our directors, executive officers or holders of more than 5% of our share capital, or any members of their immediate family, had or will have a direct or indirect material interest.

Information Sharing and Cooperation Agreement

We have entered into into an information sharing and cooperation agreement with Roivant Sciences Ltd. The information sharing and cooperation agreement, among other things:

Subject to specified exceptions, the information sharing and cooperation agreement will terminate upon the earlier of the mutual written consent of the parties or when Roivant Sciences Ltd. is no longer required by U.S. GAAP to consolidate our results of operations and financial position or account for its investment in us under the equity method of accounting or by any rule of the Securities and Exchange Commission to include our separate financial statements in its filings with the Securities and Exchange Commission.

Services Agreement with Roivant Sciences, Inc.

We and our wholly-owned subsidiary, Axovant Sciences, Inc., have entered into a services agreement with Roivant Sciences, Inc., a wholly-owned subsidiary of Roivant Sciences Ltd., pursuant to which Roivant Sciences, Inc. provides us with services in relation to the identification of potential product candidates, project management of clinical trials and other development, administrative and financial activities. Following the completion of this offering, we expect that our reliance on Roivant Sciences, Inc. will decrease over time as we, Axovant Sciences, Inc. and any other future subsidiary of ours continue to hire the necessary personnel to manage the development and potential commercialization of RVT-101. The services agreement will continue in perpetuity until terminated by either party upon 60 days' written notice.

Under the terms of the services agreement with Roivant Sciences, Inc., we are obligated to pay or reimburse Roivant Sciences, Inc. for the costs it, or third parties acting on its behalf, incurs in providing services to us, including administrative and support services as well as research and development services. In addition, we are obligated to pay to Roivant Sciences, Inc. an amount equal to 10% of the costs incurred in connection with research and development services. We, Axovant Sciences, Inc. and Roivant Sciences, Inc. may agree to adjust this additional fee on an annual basis to between 8% and 12% of costs incurred in providing research and development services.

Administrative and support services include, but are not limited to, payroll, general administrative, corporate and public relations, investor relations, financial marketing, activities in connection with raising capital, accounting and auditing, tax, health, safety environmental and regulatory affairs, staffing and recruiting, benefits, information and technology services, purchasing and legal services. Research and development services include, but are not limited to, preparatory assistance in respect of the identification of product candidates, performance and oversight of due diligence to evaluate potential product candidates, management and oversight of external consultants in connection with potential product candidate investment opportunities, participation in meetings with regulatory authorities related to product candidates, development of plans for potential clinical trials, selection of manufacturers of product candidates, management and oversight of clinical trials and product manufacturing, analysis of clinical trial data and management of regulatory filings and approval process.

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Under the services agreement with Roivant Sciences, Inc., Roivant Sciences, Inc. has agreed to indemnify us and Axovant Sciences, Inc., and each our respective officers, employees and directors against all losses arising out of, due to or in connection with the provision of services (or the failure to provide services) under the services agreement, except to the extent such losses are the result of the gross negligence or willful misconduct of such indemnified parties. Such indemnification obligations will not exceed the payments made by us and by Axovant Sciences, Inc. under the services agreement for the specific service that allegedly caused or was related to the losses during the period in which such alleged losses were incurred.

Family Relationships

Geetha Ramaswamy, an employee of Axovant Sciences, Inc. and a former consultant to Roivant Sciences, Inc., is the mother of Vivek Ramaswamy, our principal executive officer, a member of our board of directors, the Chief Executive Officer of Axovant Sciences, Inc. and the President and Chief Executive Officer of Roivant Sciences, Inc. Shankar Ramaswamy, an employee of Axovant Sciences, Inc. and a former employee of Roivant Sciences, Inc., is the brother of Vivek Ramaswamy. On March 18, 2015, Geetha Ramaswamy was granted a stock option exercisable for 262,500 of our common shares and Shankar Ramaswamy was granted a stock option exercisable for 750,000 of our common shares, in each case, at an exercise price of $0.90 per share.

Indemnification Agreements

In connection with this offering, we will enter into indemnification agreements with each of our directors and executive officers. These indemnification agreements will provide the directors and executive officers with contractual rights to indemnification and expense advancement that are, in some cases, broader than the specific indemnification provisions contained under Bermuda law. See "Description of Share Capital—Indemnification of Directors and Officers" for additional information regarding indemnification under Bermuda law and our amended and restated bye-laws.

Related Person Transaction Policy

Prior to this offering, we have not had a formal policy regarding approval of transactions with related parties. We expect to adopt a related person transaction policy that sets forth our procedures for the identification, review, consideration and approval or ratification of related person transactions. The policy will become effective immediately upon the execution of the underwriting agreement for this offering. For purposes of our policy only, a related person transaction is a transaction, arrangement or relationship, or any series of similar transactions, arrangements or relationships, in which we and any related person are, were or will be participants in which the amount involved exceeds $120,000. Transactions involving compensation for services provided to us as an employee or director are not covered by this policy. A related person is any executive officer, director or beneficial owner of more than 5% of any class of our voting securities, including any of their immediate family members and any entity owned or controlled by such persons.

Under the policy, if a transaction has been identified as a related person transaction, including any transaction that was not a related person transaction when originally consummated or any transaction that was not initially identified as a related person transaction prior to consummation, our management must present information regarding the related person transaction to our audit committee, or, if audit committee approval would be inappropriate, to another independent body of our board of directors, for review, consideration and approval or ratification. The presentation must include a description of, among other things, the material facts, the interests, direct and indirect, of the related persons, the benefits to us of the transaction and whether the transaction is on terms that are comparable to the terms available to or from, as the case may be, an unrelated third party or to or from employees generally. Under the policy, we will collect information that we deem reasonably necessary from each director, executive officer and, to the extent feasible, significant shareholder to enable us to identify any existing or potential related-person transactions and to effectuate the terms of the policy. In addition, under our Code of Conduct that we

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expect to adopt prior to the closing of this offering, our employees and directors will have an affirmative responsibility to disclose any transaction or relationship that reasonably could be expected to give rise to a conflict of interest. In considering related person transactions, our audit committee, or other independent body of our board of directors, will take into account the relevant available facts and circumstances including, but not limited to:

The policy requires that, in determining whether to approve, ratify or reject a related person transaction, our audit committee, or other independent body of our board of directors, must consider, in light of known circumstances, whether the transaction is in, or is not inconsistent with, our best interests and those of our shareholders, as our audit committee, or other independent body of our board of directors, determines in the good faith exercise of its discretion.

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PRINCIPAL SHAREHOLDERS

The following table sets forth the beneficial ownership of our common shares as of March 31, 2015 by:

The percentage ownership information shown in the table is based upon 75,000,000 common shares outstanding as of March 31, 2015.

We have determined beneficial ownership in accordance with the rules of the SEC. These rules generally attribute beneficial ownership of securities to persons who possess sole or shared voting power or investment power with respect to those securities. In addition, the rules include common shares issuable pursuant to the exercise of options or warrants that are either immediately exercisable or exercisable on or before May 30, 2015, which is 60 days after March 31, 2015. These shares are deemed to be outstanding and beneficially owned by the person holding those options or warrants for the purpose of computing the percentage ownership of that person, but they are not treated as outstanding for the purpose of computing the percentage ownership of any other person. Unless otherwise indicated, the persons or entities identified in this table have sole voting and investment power with respect to all shares shown as beneficially owned by them, subject to applicable community property laws.

Except as otherwise noted below, the address for persons or entities listed in the table is c/o Axovant Sciences Inc., 1441 Broadway, 3rd Floor, New York, New York 10018.

 
   
  Percentage of Shares
Beneficially Owned
 
 
  Number of
Shares
Beneficially
Owned
 
Name of Beneficial Owner
  Before
Offering
  After
Offering
 

5% Shareholders:

                   

Roivant Sciences Ltd. (1)

    75,000,000     100.0 %     %

Named Executive Officers and Directors:

   
 
   
 
   
 
 

Vivek Ramaswamy

               

Mark Altmeyer (2)

    1,125,000     1.5        

Christine Mikail (3)

    937,500     1.2        

Marianne L. Romeo (4)

    150,000     *        

Berndt Modig (5)

    85,000     *        

Ilan Oren

               

Atul Pande, M.D. (6)

    75,000     *        

All current directors and executive officers as a group (9 persons) (7)

   
2,697,500
   
3.5
       

*
Represents beneficial ownership of less than 1%.

(1)
Voting and dispositive decisions of Roivant Sciences Ltd. require unanimous approval by the three directors of Roivant Sciences Ltd.: Vivek Ramaswamy, our principal executive officer and a member of our board of directors, Ilan Oren, a member of our board of directors, and Keith Manchester, M.D. As a result, each of Mr. Ramaswamy, Mr. Oren and Dr. Manchester may be deemed to share voting and dispositive power over the shares held of record by Roivant Sciences Ltd.

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(2)
Represents 1,125,000 common shares issuable pursuant to a stock option exercisable within 60 days of March 31, 2015.

(3)
Represents 937,500 common shares issuable pursuant to a stock option exercisable within 60 days of March 31, 2015.

(4)
Represents 150,000 common shares issuable pursuant to stock options exercisable within 60 days of March 31, 2015. The address for Ms. Romeo is c/o Axovant Sciences Ltd., Clarendon House, 2 Church Street, Hamilton HM 11, Bermuda.

(5)
Represents 85,000 common shares issuable pursuant to a stock option exercisable within 60 days of March 31, 2015.

(6)
Represents 75,000 common shares issuable pursuant to a stock option exercisable within 60 days of March 31, 2015.

(7)
Represents 2,697,500 common shares issuable pursuant to stock options exercisable within 60 days of March 31, 2015.

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DESCRIPTION OF SHARE CAPITAL

The following description of our share capital and provisions of our memorandum of association and amended and restated bye-laws are summaries. You should also refer to the memorandum of association and the amended and restated bye-laws, which are filed as exhibits to the registration statement of which this prospectus is part.

General

We are an exempted company incorporated under the laws of Bermuda. We are registered with the Registrar of Companies in Bermuda under registration number 49659. We were incorporated on October 31, 2014 under the name Roivant Neurosciences Ltd. We changed our name to Axovant Sciences Ltd. in March 2015. Our registered office is located at Clarendon House, 2 Church Street, Hamilton, Bermuda, HM 11.

The objects of our business are unrestricted, and Axovant Sciences Ltd. has the capacity of a natural person. We can therefore undertake activities without restriction on our capacity.

Prior to the closing of this offering our sole shareholder will approve certain amendments to our bye-laws that will become effective upon the closing of this offering. The following description assumes that such amendments have become effective.

Since our incorporation, other than a subdivision of our authorized and issued share capital, there have been no material changes to our share capital, mergers, amalgamations or consolidations of us or any of our subsidiaries, no material changes in the mode of conducting our business, no material changes in the types of products produced or services rendered. There have been no bankruptcy, receivership or similar proceedings with respect to us or our subsidiaries.

There have been no public takeover offers by third parties for our shares nor any public takeover offers by us for the shares of another company that have occurred during the last or current financial years.

Initial settlement of our common shares will take place on the closing date of this offering through The Depository Trust Company, or DTC") in accordance with its customary settlement procedures for equity securities registered through DTC's book-entry transfer system. Each person beneficially owning common shares registered through DTC must rely on the procedures thereof and on institutions that have accounts therewith to exercise any rights of a holder of the common shares.

Share Capital

Immediately following the closing of this offering, our authorized share capital will consist of                             issued common shares, $0.00001 par value per common share, and                             unissued and undesignated shares, par value $0.00001 per share, that our board of directors is authorized to designate from time to time as common shares or as preference shares. As of December 31, 2014, we had 10,000,000 common shares outstanding, all of which were held by Roivant Sciences Ltd. All of our issued and outstanding common shares prior to the closing of this offering will be fully paid. Pursuant to our amended and restated bye-laws, subject to the requirements of the New York Stock Exchange, or the NYSE, and to any resolution of the shareholders to the contrary, our board of directors is authorized to issue any of our authorized but unissued shares. There are no limitations on the right of non-Bermudians or non-residents of Bermuda to hold or vote our shares provided our common shares remain listed on an appointed stock exchange, which includes the NYSE.

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Common Shares

Holders of common shares have no pre-emptive, redemption, conversion or sinking fund rights. Holders of common shares are entitled to one vote per share on all matters submitted to a vote of holders of common shares. Unless a different majority is required by law or by our amended and restated bye-laws, resolutions to be approved by holders of common shares require approval by a simple majority of votes cast at a meeting at which a quorum is present.

In the event of our liquidation, dissolution or winding up, the holders of common shares are entitled to share equally and ratably in our assets, if any, remaining after the payment of all of our debts and liabilities, subject to any liquidation preference on any issued and outstanding preference shares.

Preference Shares

Pursuant to Bermuda law and our amended and restated bye-laws, our board of directors may, by resolution, establish one or more series of preference shares having such number of shares, designations, dividend rates, relative voting rights, conversion or exchange rights, redemption rights, liquidation rights and other relative participation, optional or other special rights, qualifications, limitations or restrictions as may be fixed by the board of directors without any further shareholder approval. Such rights, preferences, powers and limitations, as may be established, could have the effect of discouraging an attempt to obtain control of our company.

Dividend Rights

Under Bermuda law, a company may not declare or pay dividends if there are reasonable grounds for believing that (1) the company is, or would after the payment be, unable to pay its liabilities as they become due; or (2) that the realizable value of its assets would thereby be less than its liabilities. Under our amended and restated bye-laws, each common share is entitled to dividends if, as and when dividends are declared by our board of directors, subject to any preferred dividend right of the holders of any preference shares. We do not anticipate paying cash dividends in the foreseeable future.

Variation of Rights

If at any time we have more than one class of shares, the rights attaching to any class, unless otherwise provided for by the terms of issue of the relevant class, may be varied either: (1) with the consent in writing of the holders of 75% of the issued shares of that class; or (2) with the sanction of a resolution passed by a majority of the votes cast at a general meeting of the relevant class of shareholders at which a quorum consisting of at least two persons holding or representing one-third of the issued shares of the relevant class is present. Our amended and restated bye-laws specify that the creation or issue of shares ranking equally with existing shares will not, unless expressly provided by the terms of issue of existing shares, vary the rights attached to existing shares. In addition, the creation or issue of preference shares ranking prior to common shares will not be deemed to vary the rights attached to common shares or, subject to the terms of any other class or series of preference shares, to vary the rights attached to any other class or series of preference shares.

Transfer of Shares

Our board of directors may, in its absolute discretion and without assigning any reason, refuse to register the transfer of a share on the basis that it is not fully paid. Our board of directors may also refuse to recognize an instrument of transfer of a share unless it is accompanied by the relevant share certificate and such other evidence of the transferor's right to make the transfer as our board of directors shall reasonably require or unless all applicable consents, authorizations and permissions of any governmental agency or body in Bermuda have been obtained. Subject to these restrictions, a holder of common shares may transfer the title to all or any of his common shares by completing a form of transfer in the form set out in our amended and restated bye-laws (or as near thereto as circumstances admit) or in such other common form

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as our board of directors may accept. The instrument of transfer must be signed by the transferor and transferee, although in the case of a fully paid share our board of directors may accept the instrument signed only by the transferor.

Meetings of Shareholders

Under Bermuda law, a company is required to convene at least one general meeting of shareholders each calendar year, which we refer to as the annual general meeting. However, the shareholders may by resolution waive this requirement, either for a specific year or period of time, or indefinitely. When the requirement has been so waived, any shareholder may, on notice to the company, terminate the waiver, in which case an annual general meeting must be called. We have chosen not to waive the convening of an annual general meeting.

Bermuda law provides that a special general meeting of shareholders may be called by the board of directors of a company and must be called upon the request of shareholders holding not less than 10% of the paid-up capital of the company carrying the right to vote at general meetings. Bermuda law also requires that shareholders be given at least five days' advance notice of a general meeting, but the accidental omission to give notice to any person does not invalidate the proceedings at a meeting. Our amended and restated bye-laws provide that our board of directors may convene an annual general meeting and the chairman or a majority of our directors then in office may convene a special general meeting. Under our amended and restated bye-laws, at least 14 days' notice of an annual general meeting or ten days' notice of a special general meeting must be given to each shareholder entitled to vote at such meeting. This notice requirement is subject to the ability to hold such meetings on shorter notice if such notice is agreed: (1) in the case of an annual general meeting by all of the shareholders entitled to attend and vote at such meeting; or (2) in the case of a special general meeting by a majority in number of the shareholders entitled to attend and vote at the meeting holding not less than 95% in nominal value of the shares entitled to vote at such meeting. Subject to the rules of the NYSE, the quorum required for a general meeting of shareholders is two or more persons present in person at the start of the meeting and representing in person or by proxy in excess of 50% of all issued and outstanding common shares.

Access to Books and Records and Dissemination of Information

Members of the general public have a right to inspect the public documents of a company available at the office of the Registrar of Companies in Bermuda. These documents include a company's amended and restated memorandum of association, including its objects and powers, and certain alterations to the amended and restated memorandum of association. The shareholders have the additional right to inspect the bye-laws of the company, minutes of general meetings and the company's audited financial statements, which must be presented in the annual general meeting. The register of members of a company is also open to inspection by shareholders and by members of the general public without charge. The register of members is required to be open for inspection for not less than two hours in any business day (subject to the ability of a company to close the register of members for not more than thirty days in a year). A company is required to maintain its share register in Bermuda but may, subject to the provisions of the Companies Act establish a branch register outside of Bermuda. A company is required to keep at its registered office a register of directors and officers that is open for inspection for not less than two hours in any business day by members of the public without charge. Bermuda law does not, however, provide a general right for shareholders to inspect or obtain copies of any other corporate records.

Election and Removal of Directors

Our amended and restated bye-laws will provide that our board of directors shall consist of such number of directors as the board of directors may determine. Upon the closing of this offering, our board of directors will consist of five directors. Our board of directors will be divided into three classes that are, as nearly as possible, of equal size. Each class of directors will be elected for a three-year term of office, but the terms

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will be staggered so that the term of only one class of directors expires at each annual general meeting. The initial terms of the Class I, Class II and Class III directors will expire in 2016, 2017 and 2018, respectively. At each succeeding annual general meeting, successors to the class of directors whose term expires at the annual general meeting will be elected for a three-year term.

A shareholder holding any percentage of the common shares in issue may propose for election as a director someone who is not an existing director or is not proposed by our board of directors. Where a director is to be elected at an annual general meeting, notice of any such proposal for election must be given not less than 90 days nor more than 120 days before the anniversary of the last annual general meeting prior to the giving of the notice or, in the event the annual general meeting is called for a date that is not less than 30 days before or after such anniversary the notice must be given not later than ten days following the earlier of the date on which notice of the annual general meeting was posted to shareholders or the date on which public disclosure of the date of the annual general meeting was made. Where a director is to be elected at a special general meeting, that notice must be given not later than seven days following the earlier of the date on which notice of the special general meeting was posted to shareholders or the date on which public disclosure of the date of the special general meeting was made.

A director may be removed, only with cause, by the shareholders, provided notice of the shareholders meeting convened to remove the director is given to the director. The notice must contain a statement of the intention to remove the director and a summary of the facts justifying the removal and must be served on the director not less than 14 days before the meeting. The director is entitled to attend the meeting and be heard on the motion for his removal.

Proceedings of Board of Directors

Our amended and restated bye-laws provide that our business is to be managed and conducted by our board of directors. Bermuda law permits individual and corporate directors and there is no requirement in our bye-laws or Bermuda law that directors hold any of our shares. There is also no requirement in our amended and restated bye-laws or Bermuda law that our directors must retire at a certain age.

The compensation of our directors will be determined by the board of directors, and there is no requirement that a specified number or percentage of "independent" directors must approve any such determination. Our directors may also be paid all travel, hotel and other reasonable out-of-pocket expenses properly incurred by them in connection with our business or their duties as directors.

A director who discloses a direct or indirect interest in any contract or arrangement with us as required by Bermuda law will not be entitled to vote in respect of any such contract or arrangement in which he or she is interested unless the chairman of the relevant meeting of the Board of Directors determines that such director is not disqualified from voting.

Indemnification of Directors and Officers

Section 98 of the Companies Act provides generally that a Bermuda company may indemnify its directors, officers and auditors against any liability which by virtue of any rule of law would otherwise be imposed on them in respect of any negligence, default, breach of duty or breach of trust, except in cases where such liability arises from fraud or dishonesty of which such director, officer or auditor may be guilty in relation to the company. Section 98 further provides that a Bermuda company may indemnify its directors, officers and auditors against any liability incurred by them in defending any proceedings, whether civil or criminal, in which judgment is awarded in their favor or in which they are acquitted or granted relief by the Supreme Court of Bermuda pursuant to Section 281 of the Companies Act.

Our amended and restated bye-laws provide that we shall indemnify our officers and directors in respect of their actions and omissions, except in respect of their fraud or dishonesty, and that we shall advance funds to our officers and directors for expenses incurred in their defense upon receipt of an undertaking to repay

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the funds if any allegation of fraud or dishonesty is proved. Our amended and restated bye-laws provide that the shareholders waive all claims or rights of action that they might have, individually or in right of the company, against any of the company's directors or officers for any act or failure to act in the performance of such director's or officer's duties, except in respect of any fraud or dishonesty of such director or officer. Section 98A of the Companies Act permits us to purchase and maintain insurance for the benefit of any officer or director in respect of any loss or liability attaching to him in respect of any negligence, default, breach of duty or breach of trust, whether or not we may otherwise indemnify such officer or director. We have purchased and maintain a directors' and officers' liability policy for such purpose.

Amendment of Memorandum of Association and Bye-laws

Bermuda law provides that the memorandum of association of a company may be amended by a resolution passed at a general meeting of shareholders. Our amended and restated bye-laws provide that no bye-law shall be rescinded, altered or amended, and no new bye-law shall be made, unless it shall have been approved by a resolution of our board of directors and by a resolution of our shareholders including the affirmative vote of a majority of all votes entitled to be cast on the resolution.

Under Bermuda law, the holders of an aggregate of not less than 20% in par value of a company's issued share capital or any class thereof have the right to apply to the Supreme Court of Bermuda for an annulment of any amendment of the memorandum of association adopted by shareholders at any general meeting, other than an amendment that alters or reduces a company's share capital as provided in the Companies Act. Where such an application is made, the amendment becomes effective only to the extent that it is confirmed by the Supreme Court of Bermuda. An application for an annulment of an amendment of the memorandum of association must be made within 21 days after the date on which the resolution altering the company's memorandum of association is passed and may be made on behalf of persons entitled to make the application by one or more of their number as they may appoint in writing for the purpose. No application may be made by shareholders voting in favor of the amendment.

Amalgamations and Mergers

The amalgamation or merger of a Bermuda company with another company or corporation (other than certain affiliated companies) requires the amalgamation or merger agreement to be approved by the company's board of directors and by its shareholders. Unless the company's bye-laws provide otherwise, the approval of 75% of the shareholders voting at such meeting is required to approve the amalgamation or merger agreement, and the quorum for such meeting must be two or more persons holding or representing more than one-third of the issued shares of the company.

Under Bermuda law, in the event of an amalgamation or merger of a Bermuda company with another company or corporation, a shareholder of the Bermuda company who did not vote in favor of the amalgamation or merger and who is not satisfied that fair value has been offered for such shareholder's shares may, within one month of notice of the shareholders meeting, apply to the Supreme Court of Bermuda to appraise the fair value of those shares.

Shareholder Suits

Class actions and derivative actions are generally not available to shareholders under Bermuda law. The Bermuda courts, however, would ordinarily be expected to permit a shareholder to commence an action in the name of a company to remedy a wrong to the company where the act complained of is alleged to be beyond the corporate power of the company or illegal, or would result in the violation of the company's memorandum of association or bye-laws. Furthermore, consideration would be given by a Bermuda court to acts that are alleged to constitute a fraud against the minority shareholders or, for instance, where an act requires the approval of a greater percentage of the company's shareholders than that which actually approved it.

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When the affairs of a company are being conducted in a manner that is oppressive or prejudicial to the interests of some part of the shareholders, one or more shareholders may apply to the Supreme Court of Bermuda, which may make such order as it sees fit, including an order regulating the conduct of the company's affairs in the future or ordering the purchase of the shares of any shareholders by other shareholders or by the company.

Our amended and restated bye-laws contain a provision by virtue of which our shareholders waive any claim or right of action that they have, both individually and on our behalf, against any director or officer in relation to any action or failure to take action by such director or officer, except in respect of any fraud or dishonesty of such director or officer. We have been advised by the SEC that in the opinion of the SEC, the operation of this provision as a waiver of the right to sue for violations of federal securities laws would likely be unenforceable in U.S. courts.

Capitalization of Profits and Reserves

Pursuant to our amended and restated bye-laws, our board of directors may (1) capitalize any part of the amount of our share premium or other reserve accounts or any amount credited to our profit and loss account or otherwise available for distribution by applying such sum in paying up unissued shares to be allotted as fully paid bonus shares pro rata (except in connection with the conversion of shares) to the shareholders; or (2) capitalize any sum standing to the credit of a reserve account or sums otherwise available for dividend or distribution by paying up in full, partly paid or nil paid shares of those shareholders who would have been entitled to such sums if they were distributed by way of dividend or distribution.

Untraced Shareholders

Our amended and restated bye-laws provide that our board of directors may forfeit any dividend or other monies payable in respect of any shares that remain unclaimed for six years from the date when such monies became due for payment. In addition, we are entitled to cease sending dividend warrants and checks by post or otherwise to a shareholder if such instruments have been returned undelivered to, or left uncashed by, such shareholder on at least two consecutive occasions or, following one such occasion, reasonable enquires have failed to establish the shareholder's new address. This entitlement ceases if the shareholder claims a dividend or cashes a dividend check or a warrant.

Certain Provisions of Bermuda Law

We have been designated by the Bermuda Monetary Authority as a non-resident for Bermuda exchange control purposes. This designation allows us to engage in transactions in currencies other than the Bermudan dollar, and there are no restrictions on our ability to transfer funds (other than funds denominated in Bermudan dollars) in and out of Bermuda or to pay dividends to U.S. residents who are holders of our common shares.

The Bermuda Monetary Authority has given its consent for the issue and free transferability of all of the common shares that are the subject of this offering to and between residents and non-residents of Bermuda for exchange control purposes, provided our shares remain listed on an appointed stock exchange, which includes the NYSE. Approvals or permissions given by the Bermuda Monetary Authority do not constitute a guarantee by the Bermuda Monetary Authority as to our performance or our creditworthiness. Accordingly, in giving such consent or permissions, neither the Bermuda Monetary Authority nor the Registrar of Companies in Bermuda shall be liable for the financial soundness, performance or default of our business or for the correctness of any opinions or statements expressed in this prospectus. Certain issues and transfers of common shares involving persons deemed resident in Bermuda for exchange control purposes require the specific consent of the Bermuda Monetary Authority.

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In accordance with Bermuda law, share certificates are only issued in the names of companies, partnerships or individuals. In the case of a shareholder acting in a special capacity (for example as a trustee), certificates may, at the request of the shareholder, record the capacity in which the shareholder is acting. Notwithstanding such recording of any special capacity, we are not bound to investigate or see to the execution of any such trust.

Transfer Agent and Registrar

A register of holders of the common shares will be maintained by                                             in Bermuda, and a branch register will be maintained in the United States by                                             , which will also serve as transfer agent. The transfer agent's address is                                             .

Listing

We intend to apply for listing of our common shares on the NYSE under the trading symbol "AXON."

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SHARES ELIGIBLE FOR FUTURE SALE

Prior to this offering, no public market existed for our common shares. Future sales of our common shares in the public market after this offering, or the perception that these sales could occur, could adversely affect prevailing market prices for our common shares and could impair our future ability to raise equity capital.

Based on the number of shares outstanding as of December 31, 2014, upon the closing of this offering and assuming no exercise by the underwriters of their option to purchase additional common shares,                             common shares will be outstanding. All of the common shares sold in this offering will be freely tradable without restrictions or further registration under the Securities Act of 1933, as amended, or the Securities Act, except for any shares sold to our "affiliates," as that term is defined under Rule 144 under the Securities Act. The remaining                                             common shares held by existing shareholders are "restricted securities," as that term is defined in Rule 144 under the Securities Act. Restricted securities may be sold in the public market only if registered or if their resale qualifies for exemption from registration described below under Rule 144 promulgated under the Securities Act.

As a result of contractual restrictions described below and the provisions of Rules 144 and 701, the shares sold in this offering and the restricted securities will be available for sale in the public market as follows:

Rule 144

In general, persons who have beneficially owned our common shares for at least six months, and any affiliate of the company who owns our common shares, are entitled to sell their securities without registration with the SEC under an exemption from registration provided by Rule 144 under the Securities Act.

Non-Affiliates

Any person who is not deemed to have been one of our affiliates at the time of, or at any time during the three months preceding, a sale may sell an unlimited number of common shares under Rule 144 if:

Any person who is not deemed to have been an affiliate of ours at the time of, or at any time during the three months preceding, a sale and has held the common shares for at least one year, including the holding period of any prior owner other than one of our affiliates, will be entitled to sell an unlimited number of common shares without regard to the length of time we have been subject to Exchange Act periodic reporting or whether we are current in our Exchange Act reporting.

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Affiliates

Persons seeking to sell restricted securities who are our affiliates at the time of, or any time during the three months preceding, a sale, would be subject to the restrictions described above. They are also subject to additional restrictions, by which such person would be required to comply with the manner of sale and notice provisions of Rule 144 and would be entitled to sell within any three-month period only that number of securities that does not exceed the greater of either of the following:

Additionally, persons who are our affiliates at the time of, or any time during the three months preceding, a sale may sell unrestricted securities under the requirements of Rule 144 described above, without regard to the six-month holding period of Rule 144, which does not apply to sales of unrestricted securities.

Rule 701

Rule 701 under the Securities Act, as in effect on the date of this prospectus, permits resales of shares in reliance upon Rule 144 but without compliance with certain restrictions of Rule 144, including the holding period requirement. Our employees, executive officers or directors who purchase shares under a written compensatory plan or contract will be entitled to rely on the resale provisions of Rule 701, but any holders of Rule 701 shares will be required to wait until 90 days after the date of this prospectus before selling their shares. However, all our Rule 701 shares are subject to lock-up agreements as described below and in the section titled "Underwriting" and will become eligible for sale upon the expiration of the restrictions set forth in those agreements.

Form S-8 Registration Statements

As soon as practicable after the closing of this offering, we intend to file with the SEC one or more registration statements on Form S-8 under the Securities Act to register the our common shares that are issuable pursuant to our 2015 plan. These registration statements will become effective immediately upon filing. Shares covered by these registration statements will then be eligible for sale in the public markets, subject to vesting restrictions, any applicable lock-up agreements described below and Rule 144 limitations applicable to affiliates.

Lock-Up Agreements

We and the holders of all of our common shares outstanding on the date of this prospectus, including each of our executive officers and directors, have entered into lock-up agreements with the underwriters or otherwise agreed, subject to certain exceptions, that we and they will not, directly or indirectly, offer, sell, contract to sell, pledge, grant any option to purchase, make any short sale, or otherwise dispose of or hedge any of our common shares, any options or warrants to purchase our common shares, or any securities convertible into, or exchangeable for or that represent the right to receive our common shares, without the prior written consent of Jefferies LLC for a period of 180 days from the date of this prospectus.

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BERMUDA COMPANY CONSIDERATIONS

Our corporate affairs are governed by our memorandum of association and bye-laws and by the corporate law of Bermuda. The provisions of the Companies Act, which applies to us, differ in certain material respects from laws generally applicable to U.S. companies incorporated in the State of Delaware and their stockholders. The following is a summary of significant differences between the Companies Act (including modifications adopted pursuant to our bye-laws) and Bermuda common law applicable to us and our shareholders and the provisions of the Delaware General Corporation Law applicable to U.S. companies organized under the laws of Delaware and their stockholders.

Bermuda   Delaware
Shareholder meetings    

May be called by the board of directors and must be called upon the request of shareholders holding not less than 10% of the paid-up capital of the company carrying the right to vote at general meetings.

 

May be held at such time or place as designated in the certificate of incorporation or the bylaws, or if not so designated, as determined by the board of directors.

May be held in or outside Bermuda.

 

May be held in or outside of Delaware.

Notice:

 

Notice:

Shareholders must be given at least five days' advance notice of a general meeting, but the unintentional failure to give notice to any person does not invalidate the proceedings at a meeting.

 

Written notice shall be given not less than ten nor more than 60 days before the meeting.

Notice of general meetings must specify the place, the day and hour of the meeting and in the case of special general meetings, the general nature of the business to be considered.

 

Whenever stockholders are required to take any action at a meeting, a written notice of the meeting shall be given which shall state the place, if any, date and hour of the meeting, and the means of remote communication, if any.

Our bye-laws provide that at least 14 days' notice of an annual general meeting and 10 days' notice of a special general meeting must be given to each shareholder entitled to vote at such meeting.

 

 


Shareholders' voting rights

 

 

Shareholders may act by written consent to elect directors. Shareholders may not act by written consent to remove a director or auditor.

 

With limited exceptions, stockholders may act by written consent to elect directors unless prohibited by the certificate of incorporation.

Generally, except as otherwise provided in the bye-laws, or the Companies Act, any action or resolution requiring approval of the shareholders may be passed by a simple majority of votes cast. Any person authorized to vote may authorize another person or persons to act for him or her by proxy.

 

Any person authorized to vote may authorize another person or persons to act for him or her by proxy.

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Bermuda   Delaware

The voting rights of shareholders are regulated by a company's bye-laws and, in certain circumstances, by the Companies Act. The bye-laws may specify the number to constitute a quorum and if the bye-laws permit, a general meeting of the shareholders of a company may be held with only one individual present if the requirement for a quorum is satisfied. Subject to the rules of the NYSE, our bye-laws provide that the quorum required for a general meeting of shareholders is two or more persons present in person at the start of the meeting and representing in person or by proxy in excess of 50% of all issued and outstanding common shares.

 

For stock corporations, the certificate of incorporation or bylaws may specify the number to constitute a quorum, but in no event shall a quorum consist of less than one-third of shares entitled to vote at a meeting. In the absence of such specifications, a majority of shares entitled to vote shall constitute a quorum.

Our bye-laws provide that when a quorum is once present in general meeting it is not broken by the subsequent withdrawal of any shareholders.

 

When a quorum is once present to organize a meeting, it is not broken by the subsequent withdrawal of any stockholders.

The bye-laws may provide for cumulative voting, although our bye-laws do not.

 

The certificate of incorporation may provide for cumulative voting.

The amalgamation or merger of a Bermuda company with another company or corporation (other than certain affiliated companies) requires the amalgamation or merger agreement to be approved by the company's board of directors and by its shareholders. Unless the company's bye-laws provide otherwise, the approval of 75% of the shareholders voting at such meeting is required to approve the amalgamation or merger agreement, and the quorum for such meeting must be two or more persons holding or representing more than one-third of the issued shares of the company.

 

Any two or more corporations existing under the laws of the state may merge into a single corporation pursuant to a board resolution and upon the majority vote by stockholders of each constituent corporation at an annual or special meeting.

Every company may at any meeting of its board of directors sell, lease or exchange all or substantially all of its property and assets as its board of directors deems expedient and in the best interests of the company to do so when authorized by a resolution adopted by the holders of a majority of issued and outstanding shares of a company entitled to vote.

 

Every corporation may at any meeting of the board sell, lease or exchange all or substantially all of its property and assets as its board deems expedient and for the best interests of the corporation when so authorized by a resolution adopted by the holders of a majority of the outstanding stock of a corporation entitled to vote.

Any company that is the wholly owned subsidiary of a holding company, or one or more companies which are wholly owned subsidiaries of the same holding company, may amalgamate or merge without the vote or consent of shareholders provided that the approval of the board of directors is obtained and that a director or officer of each such company signs a statutory solvency declaration in respect of the relevant company.

 

Any corporation owning at least 90% of the outstanding shares of each class of another corporation may merge the other corporation into itself and assume all of its obligations without the vote or consent of stockholders; however, in case the parent corporation is not the surviving corporation, the proposed merger shall be approved by a majority of the outstanding stock of the parent corporation entitled to vote at a duly called stockholder meeting.

Any mortgage, charge or pledge of a company's property and assets may be authorized without the consent of shareholders subject to any restrictions under the bye-laws.

 

Any mortgage or pledge of a corporation's property and assets may be authorized without the vote or consent of stockholders, except to the extent that the certificate of incorporation otherwise provides.

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Bermuda   Delaware
Directors    

The board of directors must consist of at least one director.

The number of directors is fixed by the bye-laws, and any changes to such number must be approved by the board of directors and/or the shareholders in accordance with the company's bye-laws.

 

The board of directors must consist of at least one member.

Number of board members shall be fixed by the bylaws, unless the certificate of incorporation fixes the number of directors, in which case a change in the number shall be made only by amendment of the certificate of incorporation.

Removal:

 

Removal:

Under our bye-laws, any or all directors may be removed only with cause by the holders of a majority of the shares entitled to vote at a special meeting convened and held in accordance with the bye-laws for the purpose of such removal.

 

Any or all of the directors may be removed, with or without cause, by the holders of a majority of the shares entitled to vote unless the certificate of incorporation otherwise provides.

In the case of a classified board, stockholders may effect removal of any or all directors only for cause.


Duties of directors

 

 

The Companies Act authorizes the directors of a company, subject to its bye-laws, to exercise all powers of the company except those that are required by the Companies Act or the company's bye-laws to be exercised by the shareholders of the company. Our bye-laws provide that our business is to be managed and conducted by our Board of Directors. At common law, members of a board of directors owe a fiduciary duty to the company to act in good faith in their dealings with or on behalf of the company and exercise their powers and fulfill the duties of their office honestly. This duty includes the following essential elements:

a duty to act in good faith in the best interests of the company;

a duty not to make a personal profit from opportunities that arise from the office of director;

a duty to avoid conflicts of interest; and

a duty to exercise powers for the purpose for which such powers were intended.

 

Under Delaware law, the business and affairs of a corporation are managed by or under the direction of its board of directors. In exercising their powers, directors are charged with a fiduciary duty of care to protect the interests of the corporation and a fiduciary duty of loyalty to act in the best interests of its stockholders. The duty of care requires that a director act in good faith, with the care that an ordinarily prudent person would exercise under similar circumstances. Under this duty, a director must inform himself of, and disclose to stockholders, all material information reasonably available regarding a significant transaction. The duty of loyalty requires that a director act in a manner he reasonably believes to be in the best interests of the corporation. He must not use his corporate position for personal gain or advantage. This duty prohibits self-dealing by a director and mandates that the best interest of the corporation and its stockholders take precedence over any interest possessed by a director, officer or controlling shareholder and not shared by the stockholders generally.

The Companies Act imposes a duty on directors and officers of a Bermuda company:

to act honestly and in good faith with a view to the best interests of the company; and

to exercise the care, diligence and skill that a reasonably prudent person would exercise in comparable circumstances.

The Companies Act also imposes various duties on directors and officers of a company with respect to certain matters of management and administration of the company. Under Bermuda law, directors and officers generally owe fiduciary duties to the company itself, not to the company's individual shareholders, creditors or any class thereof. Our shareholders may not have a direct cause of action against our directors.

 

In general, actions of a director are presumed to have been made on an informed basis, in good faith and in the honest belief that the action taken was in the best interests of the corporation. However, this presumption may be rebutted by evidence of a breach of one of the fiduciary duties. Should such evidence be presented concerning a transaction by a director, a director must prove the procedural fairness of the transaction, and that the transaction was of fair value to the corporation.

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Bermuda   Delaware
Takeovers    

An acquiring party is generally able to acquire compulsorily the common shares of minority holders of a company in the following ways:

By a procedure under the Companies Act known as a "scheme of arrangement." A scheme of arrangement could be effected by obtaining the agreement of the company and of holders of common shares, representing in the aggregate a majority in number and at least 75% in value of the common shareholders present and voting at a court ordered meeting held to consider the scheme of arrangement. The scheme of arrangement must then be sanctioned by the Bermuda Supreme Court. If a scheme of arrangement receives all necessary agreements and sanctions, upon the filing of the court order with the Registrar of Companies in Bermuda, all holders of common shares could be compelled to sell their shares under the terms of the scheme of arrangement.

By acquiring pursuant to a tender offer 90% of the shares or class of shares not already owned by, or by a nominee for, the acquiring party (the offeror), or any of its subsidiaries. If an offeror has, within four months after the making of an offer for all the shares or class of shares not owned by, or by a nominee for, the offeror, or any of its subsidiaries, obtained the approval of the holders of 90% or more of all the shares to which the offer relates, the offeror may, at any time within two months beginning with the date on which the approval was obtained, by notice compulsorily acquire the shares of any nontendering shareholder on the same terms as the original offer unless the Supreme Court of Bermuda (on application made within a one-month period from the date of the offeror's notice of its intention to acquire such shares) orders otherwise.

Where the acquiring party or parties hold not less than 95% of the shares or a class of shares of the company, by acquiring, pursuant to a notice given to the remaining shareholders or class of shareholders, the shares of such remaining shareholders or class of shareholders. When this notice is given, the acquiring party is entitled and bound to acquire the shares of the remaining shareholders on the terms set out in the notice, unless a remaining shareholder, within one month of receiving such notice, applies to the Supreme Court of Bermuda for an appraisal of the value of their shares. This provision only applies where the acquiring party offers the same terms to all holders of shares whose shares are being acquired.

 

Delaware law provides that a parent corporation, by resolution of its board of directors and without any stockholder vote, may merge with any subsidiary of which it owns at least 90% of each class of its capital stock. Upon any such merger, and in the event the parent corporate does not own all of the stock of the subsidiary, dissenting stockholders of the subsidiary are entitled to certain appraisal rights.

Delaware law also provides, subject to certain exceptions, that if a person acquires 15% of voting stock of a company, the person is an "interested stockholder" and may not engage in "business combinations" with the company for a period of three years from the time the person acquired 15% or more of voting stock.

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Bermuda   Delaware
Dissenter's rights of appraisal    

A dissenting shareholder (that did not vote in favor of the amalgamation or merger) of a Bermuda exempted company is entitled to be paid the fair value of his or her shares in an amalgamation or merger.

 

With limited exceptions, appraisal rights shall be available for the shares of any class or series of stock of a corporation in a merger or consolidation.

The certificate of incorporation may provide that appraisal rights are available for shares as a result of an amendment to the certificate of incorporation, any merger or consolidation or the sale of all or substantially all of the assets.


Dissolution

 

 

Under Bermuda law, a solvent company may be wound up by way of a shareholders' voluntary liquidation. Prior to the company entering liquidation, a majority of the directors shall each make a statutory declaration, which states that the directors have made a full enquiry into the affairs of the company and have formed the opinion that the company will be able to pay its debts within a period of 12 months of the commencement of the winding up and must file the statutory declaration with the Registrar of Companies in Bermuda. The general meeting will be convened primarily for the purposes of passing a resolution that the company be wound up voluntarily and appointing a liquidator. The winding up of the company is deemed to commence at the time of the passing of the resolution.

 

Under Delaware law, a corporation may voluntarily dissolve (i) if a majority of the board of directors adopts a resolution to that effect and the holders of a majority of the issued and outstanding shares entitled to vote thereon vote for such dissolution; or (ii) if all stockholders entitled to vote thereon consent in writing to such dissolution.


Shareholders' derivative actions

 

 

Class actions and derivative actions are generally not available to shareholders under Bermuda law. Bermuda courts, however, would ordinarily be expected to permit a shareholder to commence an action in the name of a company to remedy a wrong to the company where the act complained of is alleged to be beyond the corporate power of the company or illegal, or would result in the violation of the company's memorandum of association or bye-laws. Furthermore, consideration would be given by a Bermuda court to acts that are alleged to constitute a fraud against the minority shareholders or, for instance, where an act requires the approval of a greater percentage of the company's shareholders than that which actually approved it.

 

In any derivative suit instituted by a stockholder of a corporation, it shall be averred in the complaint that the plaintiff was a stockholder of the corporation at the time of the transaction of which he complains or that such stockholder's stock thereafter devolved upon such stockholder by operation of law.

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MATERIAL BERMUDA AND U.S. FEDERAL INCOME TAX CONSIDERATIONS

The following is a discussion of the material Bermuda and U.S. federal income tax considerations that may be relevant to an investment decision by a potential investor with respect to our common shares.

Bermuda Tax Considerations

At the present time, there is no Bermuda income or profits tax, withholding tax, capital gains tax, capital transfer tax, estate duty or inheritance tax payable by us or by our shareholders in respect of our shares. We have obtained an assurance from the Minister of Finance of Bermuda under the Exempted Undertakings Tax Protection Act 1966 that, in the event that any legislation is enacted in Bermuda imposing any tax computed on profits or income, or computed on any capital asset, gain or appreciation or any tax in the nature of estate duty or inheritance tax, such tax shall not, until March 31, 2035, be applicable to us or to any of our operations or to our shares, debentures or other obligations except insofar as such tax applies to persons ordinarily resident in Bermuda or is payable by us in respect of real property owned or leased by us in Bermuda.

U.S. Federal Income Tax Considerations

The following are the material U.S. federal income tax consequences to U.S. Holders (as defined below) of owning and disposing of common shares acquired in this offering. This discussion does not address any aspects of U.S. taxation other than U.S. federal income taxation, does not address any U.S. state, local or non-U.S. tax considerations, and does not purport to be a comprehensive description of all tax considerations that may be relevant to a particular person's decision to acquire common shares. This discussion applies only to U.S. Holders that hold their common shares as capital assets for U.S. federal income tax purposes. In addition, it does not describe all of the tax consequences that may be relevant in light of a U.S. Holder's particular circumstances including alternative minimum, gift, and estate tax consequences, and does not address the tax consequences applicable to U.S. Holders subject to special rules, such as:

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If an entity that is classified as a partnership for U.S. federal income tax purposes holds common shares, the U.S. federal income tax treatment of a partner will generally depend on the status of the partner and the activities of the partnership. Partnerships holding common shares and partners in such partnerships should consult their tax advisers as to the particular U.S. federal income tax consequences of owning and disposing of common shares.

This discussion is based on the Code, administrative pronouncements, judicial decisions and final, temporary and proposed U.S. Treasury regulations all as of the date hereof, any of which is subject to change, possibly with retroactive effect, and to differing interpretations, all of which could affect the tax considerations described below. There can be no assurances that the Internal Revenue Service, or IRS, will not take a different position concerning the tax consequences of the acquisition, ownership and disposition of the common shares or that such a position would not be sustained.

A "U.S. Holder" is a beneficial owner of common shares that for U.S. federal income tax purposes is:

U.S. Holders should consult their tax advisers concerning the U.S. federal, state, local and foreign tax consequences of owning and disposing of common shares in their particular circumstances.

Subject to the discussion below under "Passive Foreign Investment Company Rules," this discussion assumes that we are a foreign corporation that is not, and will not become, a passive foreign investment company, or PFIC, as described below.

Taxation of Distributions

Although we do not currently plan to pay dividends, any future distributions paid on common shares (including the amount of any foreign taxes withheld therefrom) will be treated as taxable dividends to a U.S. Holder to the extent of such U.S. Holder's pro rata share of our current and/or accumulated earnings and profits (as determined under U.S. federal income tax principles). To the extent that a distribution paid to a U.S. Holder with respect to our common shares exceeds such U.S. Holder's pro rata share of our current and accumulated earnings and profits, it will be treated as a non-taxable return of capital to the extent of the U.S. Holder's basis in the common shares (determined on a share-by-share basis), will reduce (but not below zero) such basis, and thereafter generally will be treated as a capital gain. See "—Sale or Other Taxable Disposition of Common Shares" below. We may not maintain calculations of our earnings and profits under U.S. federal income tax principles. Accordingly, distributions, if any, generally will be reported to U.S. Holders as dividends. The amount of any dividend income paid in Bermudan dollars will be the U.S. dollar amount calculated by reference to the exchange rate in effect on the date of receipt, regardless of whether the payment is in fact converted into U.S. dollars. If the dividend is converted into U.S. dollars on the date of receipt (or deemed receipt), a U.S. Holder should not be required to recognize foreign currency gain or loss in respect of the dividend income. A U.S. Holder may have foreign currency gain or loss if the dividend is converted into U.S. dollars after the date of receipt. Such foreign currency gain or loss should be treated as ordinary income or loss from United States sources for United States foreign tax credit purposes.

Dividends received by a non-corporate U.S. Holder are eligible to be taxed at reduced rates, if we are a "qualified foreign corporation" and certain other applicable requirements, including holding period requirements, are met. The reduced rate applicable to dividends paid to non-corporate U.S. Holders is not

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available for dividends paid by a PFIC (described below) or in certain other situations, including if we are not a qualified foreign corporation. A non-United States corporation (other than a corporation that is classified as a PFIC for the taxable year in which the dividend is paid or the preceding taxable year) generally will be considered to be a qualified foreign corporation (a) if it is eligible for the benefits of a comprehensive tax treaty with the United States which the Secretary of Treasury of the United States determines is satisfactory for purposes of this provision and which includes an exchange of information provision, or (b) with respect to any dividend it pays on common shares which are readily tradable on an established securities market in the United States. The common shares are expected to be listed on the NYSE, which is an established securities market in the United States, and we expect the common shares to be readily tradable on the NYSE. However, there can be no assurance that the common shares will be considered readily tradable on an established securities market in the United States in later years. Subject to the discussion under "Passive Foreign Investment Company Rules," below, such dividends will generally be "qualified dividend income" in the hands of individual U.S. Holders, provided that the holding period requirement and certain other requirements are met. Dividends received by a corporate U.S. Holder will not be eligible for the dividends-received deduction generally available to U.S. corporate shareholders under the Code for dividends received from certain U.S. and non-U.S. corporations.

For foreign tax credit limitation purposes, distributions paid on the common shares that are treated as dividends will be treated as income from sources outside the United States and will generally constitute passive category income.

Sale or Other Taxable Disposition of Common Shares

For U.S. federal income tax purposes, gain or loss recognized on the sale or other taxable disposition of common shares generally will be capital gain or loss, and will be long-term capital gain or loss if the U.S. Holder held the shares for more than one year. The amount of the gain or loss will equal the difference between the U.S. Holder's adjusted tax basis in the common shares disposed of and the amount realized on the disposition, in each case as determined in U.S. dollars. Long-term capital gains recognized by non-corporate U.S. Holders are taxable at reduced rates. There are limitations on the deductibility of capital losses. Any such capital gain or loss will generally be U.S.-source gain or loss for foreign tax credit limitation purposes.

If the consideration received for the common shares is paid in foreign currency, the amount realized will be the U.S. dollar value of the payment received translated at the spot rate of exchange on the date of disposition. A U.S. Holder may realize additional gain or loss upon the subsequent sale or disposition of such currency, which will generally be treated as U.S. source ordinary income or loss. If the common shares are treated as traded on an established securities market and the relevant holder is either a cash basis taxpayer or an accrual basis taxpayer who has made a special election (which must be applied consistently from year to year and cannot be changed without the consent of the IRS), such holder will determine the U.S. dollar value of the amount realized in a foreign currency by translating the amount received at the spot rate of exchange on the settlement date of the disposition. If the common shares are not treated as traded on an established securities market, or the relevant U.S. Holder is an accrual basis taxpayer that is not eligible to or does not elect to determine the amount realized using the spot rate on the settlement date, such U.S. Holder will recognize foreign currency gain or loss to the extent of any difference between the U.S. dollar amount realized on the date of disposition (as determined above) and the U.S. dollar value of the currency received at the spot rate on the settlement date. Any such foreign currency gain or loss will generally be U.S. source ordinary income or loss.

Passive Foreign Investment Company Rules

In general, a corporation organized outside the United States will be a PFIC in any taxable year in which either (i) at least 75% of its gross income is "passive income" or (ii) on average at least 50% of the value of its assets is attributable to assets that produce passive income or are held for the production of passive income. Passive income for this purpose generally includes, among other things, dividends, interest, royalties, rents, and gains from commodities transactions and from the sale or exchange of property that

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gives rise to passive income. Assets that produce or are held for the production of passive income may include cash, even if held as working capital or raised in a public offering, marketable securities and other assets that may produce passive income. The average value of a corporation's assets for this purpose, in the case of a corporation whose shares are publicly traded for the taxable year, generally is the average of their fair market value at the end of each quarter. In determining whether a non-U.S. corporation is a PFIC, a proportionate share of the income and assets of each corporation in which it owns, directly or indirectly, at least a 25% interest (by value) is taken into account.

We do not believe we were a PFIC in the taxable year that began in 2014 and, based on the nature of our business, the projected composition of our income and the projected composition and estimated fair market values of our assets, we do not expect to be a PFIC in the taxable year commencing April 1, 2015. However, there can be no assurances in this regard, or that the IRS will agree with our conclusion, because we expect to hold following this offering a substantial amount of cash, and because the calculation of the value of our assets may be based in part on the value of our shares, which may fluctuate considerably after this offering. In addition, there can be no assurances regarding our PFIC status in one or more subsequent years to the extent that our activities change, and our United States counsel expresses no opinion with respect to our PFIC status in the taxable year that began in 2014 or the taxable year commencing April 1, 2015, and also expresses no opinion with respect to our predictions or past determinations regarding our PFIC status in the past or in the future.

If we are a PFIC in any taxable year during which a U.S. Holder owns our shares, such U.S. Holder could be liable for additional taxes and interest charges upon (1) a distribution paid during a taxable year that is greater than 125% of the average annual distributions paid in the three preceding taxable years, or, if shorter, the U.S. Holder's holding period for the shares, and (2) any gain recognized on a sale, exchange or other taxable disposition, including a pledge, of the shares, whether or not we continue to be a PFIC. In these circumstances, the tax will be determined by allocating such distribution or gain ratably over the U.S. Holder's holding period for the shares. The amount allocated to the current taxable year (i.e., the year in which the distribution occurs or the gain is recognized) and any year prior to the first taxable year in which we are a PFIC will be taxed as ordinary income earned in the current taxable year. The amount allocated to other taxable years will be taxed at the highest marginal rates in effect for individuals or corporations, as applicable, to ordinary income for each such taxable year, and an interest charge, generally applicable to underpayments of tax, will be added to the tax. If we are a PFIC for any year during which a U.S. Holder holds the shares, we must generally continue to be treated as a PFIC by that holder for all succeeding years during which the U.S. Holder holds the shares, unless we cease to meet the requirements for PFIC status and the U.S. Holder makes a "deemed sale" election with respect to the shares. If such election is made, the U.S. Holder will be deemed to have sold the shares it holds at their fair market value on the last day of the last taxable year in which we qualified as a PFIC, and any gain from such deemed sale would be subject to the consequences described above. After the deemed sale election, the U.S. Holder's shares with respect to which the deemed sale election was made will not be treated as shares in a PFIC unless we subsequently become a PFIC.

If we are a PFIC for any taxable year during which a U.S. Holder holds the shares and one of our non-United States subsidiaries is also a PFIC (i.e., a lower-tier PFIC), such U.S. Holder would be treated as owning a proportionate amount (by value) of the shares of the lower-tier PFIC and would be subject to the rules described above on certain distributions by the lower-tier PFIC and a disposition of shares of the lower-tier PFIC even though such U.S. Holder would not receive the proceeds of those distributions or dispositions. Each U.S. Holder is advised to consult its tax advisors regarding the application of the PFIC rules to any of our subsidiaries.

The tax consequences that would apply if we were a PFIC would be different from those described above if a timely and valid "mark-to-market" election is made by a U.S. Holder for the shares held by such U.S. Holder. An electing U.S. Holder generally would take into account as ordinary income each year, the

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excess of the fair market value of the shares held at the end of the taxable year over the adjusted tax basis of such shares. The U.S. Holder would also take into account, as an ordinary loss each year, the excess of the adjusted tax basis of such shares over their fair market value at the end of the taxable year, but only to the extent of the excess of amounts previously included in income over ordinary losses deducted as a result of the mark-to-market election. The U.S. Holder's tax basis in the shares would be adjusted to reflect any income or loss recognized as a result of the mark-to-market election. Any gain from a sale, exchange or other taxable disposition of the shares in any taxable year in which we are a PFIC would be treated as ordinary income and any loss from such sale, exchange or other taxable disposition would be treated first as ordinary loss (to the extent of any net mark-to-market gains previously included in income) and thereafter as capital loss. If, after having been a PFIC for a taxable year, we cease to be classified as a PFIC, the U.S. Holder would not be required to take into account any latent gain or loss in the manner described above and any gain or loss recognized on the sale or exchange of the shares would be classified as a capital gain or loss.

A mark-to-market election is available to a U.S. Holder only for "marketable stock." Generally, stock will be considered marketable stock if it is "regularly traded" on a "qualified exchange" within the meaning of applicable U.S. Treasury regulations. A class of stock is regularly traded during any calendar year during which such class of stock is traded, other than in de minimis quantities, on at least 15 days during each calendar quarter. The shares will be marketable stock as long as they remain listed on a qualified exchange, such as the NYSE, and are regularly traded. A mark-to-market election will not apply to the shares for any taxable year during which we are not a PFIC, but will remain in effect with respect to any subsequent taxable year in which we become a PFIC. Such election will not apply to any subsidiary that we own. Accordingly, a U.S. Holder may continue to be subject to the PFIC rules with respect to any lower-tier PFICs notwithstanding the U.S. Holder's mark-to-market election for our shares.

The tax consequences that would apply if we were a PFIC would also be different from those described above if a U.S. Holder were able to make a valid "qualified electing fund," or QEF, election. As we do not expect to provide U.S. Holders with the information required in order to permit a QEF election, prospective investors should assume that a QEF election will not be available.

Each U.S. Holder who is a shareholder of a PFIC must file an annual report containing certain information.

Medicare Tax

In general, a United states person that is an individual or estate, or a trust that does not fall into a special class of trusts that is exempt from such tax, is subject to a 3.8% tax on the lesser of (1) the United States person's "net investment income" for the relevant taxable year and (2) the excess of the United States person's modified adjusted gross income for the taxable year over a certain threshold (which in the case of individuals will be between US$125,000 and US$250,000, depending on the individual's circumstances). A U.S. holder's net investment income will include its gross dividend income and its net gains from the disposition of our common shares, unless such dividends or net gains are derived in the ordinary course of the conduct of a trade or business (other than a trade or business that consists of certain passive or trading activities). If you are a United States person that is an individual, estate or trust, you are encouraged to consult your tax advisors regarding the applicability of the Medicare tax to your income and gains in respect of your investment in our common shares.

Information Reporting and Backup Withholding

U.S. Holders may be required to file certain U.S. information reporting returns with the IRS with respect to an investment in our common shares, including, among others, IRS Form 8938 (Statement of Specified Foreign Financial Assets). U.S. Holders paying more than $100,000 for our common shares may be required to file IRS Form 926 (Return by a U.S. Transferor of Property to a Foreign Corporation) reporting this payment. Substantial penalties may be imposed upon a U.S. Holder that fails to comply with the required information reporting.

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Payments of dividends and sales proceeds that are made within the United States or through certain U.S.-related financial intermediaries generally are subject to information reporting, and may be subject to backup withholding, unless (i) the U.S. Holder is a corporation or other exempt recipient or (ii) in the case of backup withholding, the U.S. Holder provides a correct taxpayer identification number and certifies that it is not subject to backup withholding.

The amount of any backup withholding from a payment to a U.S. Holder will be allowed as a credit against the U.S. Holder's U.S. federal income tax liability and may entitle it to a refund, provided that the required information is timely furnished to the IRS.

Each U.S. Holder is urged to consult with its tax advisor concerning the United States federal income tax consequences of purchasing, holding, and disposing of our common shares if we are or become classified as a PFIC, including the procedure for, and the possibility and consequences of, making a purging or mark-to-market election. We cannot provide any assurances that the IRS will agree with our annual determinations of our PFIC status.

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UNDERWRITING

Subject to the terms and conditions set forth in the underwriting agreement, dated as of                    , 2015, between us and Jefferies LLC, as the representative of the underwriters named below, we have agreed to sell to the underwriters, and each of the underwriters has agreed, severally and not jointly, to purchase from us, the respective number of common shares shown opposite its name below:

Underwriter
  Number of
Common Shares

Jefferies LLC

   

Evercore Group, L.L.C. 

   

RBC Capital Markets, LLC

   

JMP Securities LLC

   

Robert W. Baird & Co. Incorporated

   

Total

   

The underwriting agreement provides that the obligations of the several underwriters are subject to certain conditions precedent such as the receipt by the underwriters of officers' certificates and legal opinions and approval of certain legal matters by their counsel. The underwriting agreement provides that the underwriters will purchase all of the common shares if any of them are purchased. If an underwriter defaults, the underwriting agreement provides that the purchase commitments of the nondefaulting underwriters may be increased or the underwriting agreement may be terminated. We have agreed to indemnify the underwriters and certain of their controlling persons against certain liabilities, including liabilities under the Securities Act, and to contribute to payments that the underwriters may be required to make in respect of those liabilities.

The underwriters have advised us that, following the pricing of this offering, they currently intend to make a market in our common shares as permitted by applicable laws and regulations. However, the underwriters are not obligated to do so, and the underwriters may discontinue any market-making activities at any time without notice in their sole discretion. Accordingly, no assurance can be given as to the liquidity of the trading market for our common shares, that you will be able to sell any of our common shares held by you at a particular time or that the prices that you receive when you sell will be favorable.

The underwriters are offering the common shares subject to their acceptance of the common shares from us and subject to prior sale. The underwriters reserve the right to withdraw, cancel or modify offers to the public and to reject orders in whole or in part. In addition, the underwriters have advised us that they do not intend to confirm sales to any account over which they exercise discretionary authority.

Commission and Expenses

The underwriters have advised us that they propose to offer the common shares to the public at the initial public offering price set forth on the cover page of this prospectus and to certain dealers, which may include the underwriters, at that price less a concession not in excess of $               per common share. After the offering, the initial public offering price, concession and reallowance to dealers may be reduced by the representative. No such reduction will change the amount of proceeds to be received by us as set forth on the cover page of this prospectus.

The following table shows the public offering price, the underwriting discounts and commissions that we are to pay the underwriters and the proceeds, before expenses, to us in connection with this offering. Such

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amounts are shown assuming both no exercise and full exercise of the underwriters' option to purchase additional shares.

 
  Per Share   Total  
 
  Without
Option to
Purchase
Additional
Shares
  With
Option to
Purchase
Additional
Shares
  Without
Option to
Purchase
Additional
Shares
  With
Option to
Purchase
Additional
Shares
 

Public offering price

  $     $     $     $    

Underwriting discounts and commissions paid by us

  $     $     $     $    

Proceeds to us, before expenses

  $     $     $     $    

We estimate expenses payable by us in connection with this offering, other than the underwriting discounts and commissions referred to above, will be approximately $               . We have also agreed to reimburse the underwriters for certain of their expenses incurred in connection with review by the Financial Industry Regulatory Authority, Inc. of the terms of this offering in an amount not to exceed $               .

Determination of Offering Price

Prior to this offering, there has not been a public market for our common shares. Consequently, the initial public offering price for our common shares will be determined by negotiations between us and the representative. Among the factors to be considered in these negotiations will be prevailing market conditions, our financial information, market valuations of other companies that we and the underwriters believe to be comparable to us, estimates of our business potential, the present state of our development and other factors deemed relevant.

We offer no assurances that the initial public offering price will correspond to the price at which our common shares will trade in the public market subsequent to the offering or that an active trading market for our common shares will develop and continue after the offering.

Listing

We intend to apply to have our common shares listed on the NYSE under the trading symbol "AXON."

Stamp Taxes

If you purchase common shares offered in this prospectus, you may be required to pay stamp taxes and other charges under the laws and practices of the country of purchase, in addition to the offering price listed on the cover page of this prospectus.

Option to Purchase Additional Shares

We have granted to the underwriters an option, exercisable for 30 days from the date of this prospectus, to purchase, from time to time, in whole or in part, up to an aggregate of                             common shares from us at the public offering price set forth on the cover page of this prospectus, less underwriting discounts and commissions. If the underwriters exercise this option, each underwriter will be obligated, subject to specified conditions, to purchase a number of additional shares proportionate to that underwriter's initial purchase commitment as indicated in the table above.

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No Sales of Similar Securities

We, our officers, directors and holders of all or substantially all our outstanding share capital and other securities have agreed, subject to specified exceptions, not to directly or indirectly:

This restriction terminates after the close of trading of our common shares on and including the 180th day after the date of this prospectus.

Jefferies LLC may in its sole discretion and at any time or from time to time before the termination of the 180-day period release all or any portion of the securities subject to lock-up agreements. There are no existing agreements between the underwriters and our shareholder who will execute a lock-up agreement, providing consent to the sale of shares prior to the expiration of the lock-up period.

Stabilization

The underwriters have advised us that, pursuant to Regulation M under the Securities Exchange Act of 1934, as amended, they may engage in short sale transactions, stabilizing transactions, syndicate covering transactions or the imposition of penalty bids in connection with this offering. These activities may have the effect of stabilizing or maintaining the market price of our common shares at a level above that which might otherwise prevail in the open market. Establishing short sales positions may involve either "covered" short sales or "naked" short sales.

"Covered" short sales are sales made in an amount not greater than the underwriters' option to purchase additional common shares in this offering. The underwriters may close out any covered short position by either exercising their option to purchase additional common shares or purchasing our common shares in the open market. In determining the source of shares to close out the covered short position, the underwriters will consider, among other things, the price of shares available for purchase in the open market as compared to the price at which they may purchase shares through the option to purchase additional shares.

"Naked" short sales are sales in excess of the option to purchase additional common shares. The underwriters must close out any naked short position by purchasing shares in the open market. A naked short position is more likely to be created if the underwriters are concerned that there may be downward pressure on the price of our common shares in the open market after pricing that could adversely affect investors who purchase in this offering.

A stabilizing bid is a bid for the purchase of common shares on behalf of the underwriters for the purpose of fixing or maintaining the price of our common shares. A syndicate covering transaction is the bid for or the purchase of common shares on behalf of the underwriters to reduce a short position incurred by the underwriters in connection with the offering. Similar to other purchase transactions, the underwriters' purchases to cover the syndicate short sales may have the effect of raising or maintaining the market price of our common shares or preventing or retarding a decline in the market price of our common shares. As a result, the price of our common shares may be higher than the price that might otherwise exist in the open market. A penalty bid is an arrangement permitting the underwriters to reclaim the selling concession otherwise accruing to a syndicate member in connection with the offering if our common shares originally

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sold by such syndicate member are purchased in a syndicate covering transaction and therefore have not been effectively placed by such syndicate member.

Neither we, nor any of the underwriters make any representation or prediction as to the direction or magnitude of any effect that the transactions described above may have on the price of our common shares. The underwriters are not obligated to engage in these activities and, if commenced, any of the activities may be discontinued at any time.

Electronic Distribution

A prospectus in electronic format may be made available by e-mail or on the web sites or through online services maintained by one or more of the underwriters or their affiliates. In those cases, prospective investors may view offering terms online and may be allowed to place orders online. The underwriters may agree with us to allocate a specific number of common shares for sale to online brokerage account holders. Any such allocation for online distributions will be made by the underwriters on the same basis as other allocations. Other than the prospectus in electronic format, the information on the underwriters' web sites and any information contained in any other web site maintained by any of the underwriters is not part of this prospectus, has not been approved and/or endorsed by us or the underwriters and should not be relied upon by investors.

Other Activities and Relationships

The underwriters and certain of their respective affiliates are full service financial institutions engaged in various activities, which may include securities trading, commercial and investment banking, financial advisory, investment management, investment research, principal investment, hedging, financing and brokerage activities. The underwriters and certain of its affiliates have, from time to time, performed, and may in the future perform, various commercial and investment banking and financial advisory services for us and our affiliates, for which they received or will receive customary fees and expenses.

In the ordinary course of their various business activities, the underwriters and certain of their respective affiliates may make or hold a broad array of investments and actively trade debt and equity securities (or related derivative securities) and financial instruments (including bank loans) for their own accounts and for the accounts of their customers, and such investment and securities activities may involve securities and/or instruments issued by us and our affiliates. If the underwriters or their respective affiliates have a lending relationship with us, they routinely hedge their credit exposure to us consistent with their customary risk management policies. The underwriters and their respective affiliates may hedge such exposure by entering into transactions which consist of either the purchase of credit default swaps or the creation of short positions in our securities or the securities of our affiliates, including potentially our common shares offered hereby. Any such short positions could adversely affect future trading prices of our common shares offered hereby. The underwriters and certain of their respective affiliates may also communicate independent investment recommendations, market color or trading ideas and/or publish or express independent research views in respect of such securities or instruments and may at any time hold, or recommend to clients that they acquire, long and/or short positions in such securities and instruments.

Selling Restrictions

This prospectus does not constitute an offer to sell to, or a solicitation of an offer to buy from, anyone in any country or jurisdiction (1) in which such an offer or solicitation is not authorized, (2) in which any person making such offer or solicitation is not qualified to do so or (3) in which any such offer or solicitation would otherwise be unlawful. No action has been taken that would, or is intended to, permit a public offer of the common shares or possession or distribution of this prospectus or any other offering or publicity material relating to the common shares in any country or jurisdiction (other than the United States) where any such action for that purpose is required. Accordingly, each underwriter has undertaken that it will not, directly or indirectly, offer or sell any common shares or have in its possession, distribute or

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publish any prospectus, form of application, advertisement or other document or information in any country or jurisdiction except under circumstances that will, to the best of its knowledge and belief, result in compliance with any applicable laws and regulations and all offers and sales of the common shares by it will be made on the same terms.

European Economic Area

In relation to each member state of the European Economic Area which has implemented the Prospectus Directive (each, a Relevant Member State), an offer to the public of any common shares which are the subject of the offering contemplated by this prospectus supplement and the accompanying prospectus may not be made in that Relevant Member State except that an offer to the public in that Relevant Member State of any common shares may be made at any time under the following exemptions under the Prospectus Directive, if they have been implemented in that Relevant Member State:

provided that no such offer of common shares shall require us or any of the underwriters to publish a prospectus pursuant to Article 3 of the Prospectus Directive or supplement a prospectus pursuant to Article 16 of the Prospectus Directive.

For the purposes of this provision, the expression an "offer common shares to the public" in relation to the common shares in any Relevant Member State means the communication in any form and by any means of sufficient information on the terms of the offer and the common shares to be offered so as to enable an investor to decide to purchase or subscribe to the common shares, as the same may be varied in that Relevant Member State by any measure implementing the Prospectus Directive in that Relevant Member State and the expression "Prospectus Directive" means Directive 2003/71/EC (and amendments thereto, including the 2010 PD Amending Directive, to the extent implemented in the Relevant Member State), and includes any relevant implementing measure in the Relevant Member State and the expression "2010 PD Amending Directive" means Directive 2010/73/EU.

United Kingdom

This prospectus is only being distributed to, and is only directed at, persons in the United Kingdom that are qualified investors within the meaning of Article 2(1)(e) of the Prospectus Directive that are also (i) investment professionals falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the "Order") and/or (ii) high net worth entities falling within Article 49(2)(a) to (d) of the Order and other persons to whom it may lawfully be communicated (each such person being referred to as a "relevant person").

This prospectus and its contents are confidential and should not be distributed, published or reproduced (in whole or in part) or disclosed by recipients to any other persons in the United Kingdom. Any person in the United Kingdom that is not a relevant person should not act or rely on this document or any of its contents.

Bermuda

Securities may be offered or sold in Bermuda only in compliance with the provisions of the Investment Business Act 2003 of Bermuda which regulates the sale of securities in Bermuda and it is not intended for any offer or sale of shares to the public to take place in Bermuda.

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Australia

This prospectus is not a disclosure document for the purposes of Australia's Corporations Act 2001 (Cth) of Australia, or Corporations Act, has not been lodged with the Australian Securities & Investments Commission and is only directed to the categories of exempt persons set out below. Accordingly, if you receive this prospectus in Australia:

You confirm and warrant that you are either:

To the extent that you are unable to confirm or warrant that you are an exempt sophisticated investor, associated person or professional investor under the Corporations Act any offer made to you under this prospectus is void and incapable of acceptance.

You warrant and agree that you will not offer any of the securities issued to you pursuant to this prospectus for resale in Australia within 12 months of those securities being issued unless any such resale offer is exempt from the requirement to issue a disclosure document under section 708 of the Corporations Act.

Hong Kong

No securities have been offered or sold, and no securities may be offered or sold, in Hong Kong, by means of any document, other than to persons whose ordinary business is to buy or sell shares or debentures, whether as principal or agent; or to "professional investors" as defined in the Securities and Futures Ordinance (Cap. 571) of Hong Kong ("SFO") and any rules made under that Ordinance; or in other circumstances which do not result in the document being a "prospectus" as defined in the Companies Ordinance (Cap. 32) of Hong Kong ("CO") or which do not constitute an offer or invitation to the public for the purpose of the CO or the SFO. No document, invitation or advertisement relating to the securities has been issued or may be issued or may be in the possession of any person for the purpose of issue (in each case whether in Hong Kong or elsewhere), which is directed at, or the contents of which are likely to be accessed or read by, the public of Hong Kong (except if permitted under the securities laws of Hong Kong) other than with respect to securities which are or are intended to be disposed of only to persons outside Hong Kong or only to "professional investors" as defined in the SFO and any rules made under that Ordinance.

This prospectus has not been registered with the Registrar of Companies in Hong Kong. Accordingly, this prospectus may not be issued, circulated or distributed in Hong Kong, and the securities may not be offered for subscription to members of the public in Hong Kong. Each person acquiring the securities will be required, and is deemed by the acquisition of the securities, to confirm that he is aware of the restriction on offers of the securities described in this prospectus and the relevant offering documents and that he is not acquiring, and has not been offered any securities in circumstances that contravene any such restrictions.

Japan

The offering has not been and will not be registered under the Financial Instruments and Exchange Law of Japan (Law No. 25 of 1948 of Japan, as amended), or FIEL, and the initial purchaser will not offer or sell any securities, directly or indirectly, in Japan or to, or for the benefit of, any resident of Japan (which term as used herein means any person resident in Japan, including any corporation or other entity organized under the laws of Japan), or to others for re-offering or resale, directly or indirectly, in Japan or to, or for the benefit of, any resident of Japan, except pursuant to an exemption from the registration requirements of,

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and otherwise in compliance with, the FIEL and any other applicable laws, regulations and ministerial guidelines of Japan.

Singapore

This prospectus has not been and will not be lodged or registered as a prospectus with the Monetary Authority of Singapore. Accordingly, this prospectus and any other document or material in connection with the offer or sale, or invitation for subscription or purchase, of the common shares may not be circulated or distributed, nor may the common shares be offered or sold, or be made the subject of an invitation for subscription or purchase, whether directly or indirectly, to persons in Singapore other than (i) to an institutional investor under Section 274 of the Securities and Futures Act, Chapter 289 of Singapore (the "SFA"), (ii) to a relevant person pursuant to Section 275(1), or any person pursuant to Section 275(1A), and in accordance with the conditions specified in Section 275, of the SFA, or (iii) otherwise pursuant to, and in accordance with the conditions of, any other applicable provision of the SFA.

Where the common shares are subscribed or purchased under Section 275 of the SFA by a relevant person which is:

Switzerland

The common shares may not be publicly offered in Switzerland and will not be listed on the SIX Swiss Exchange, or SIX, or on any other stock exchange or regulated trading facility in Switzerland. This document has been prepared without regard to the disclosure standards for issuance prospectuses under art. 652a of the CO or the disclosure standards for listing prospectuses under art. 27 ff. of the SIX Listing Rules or the listing rules of any other stock exchange or regulated trading facility in Switzerland. Neither this prospectus nor any other offering or marketing relating to the common shares or this offering may be publicly distributed or otherwise made publicly available in Switzerland.

Neither this document nor any other offering or marketing material relating to this offering, the Company or the common shares has been or will be filed with or approved by any Swiss regulatory authority.

Canada

The offering of our common shares in Canada is being made on a private placement basis in reliance on exemptions from the prospectus requirements under the securities laws of each applicable Canadian province and territory where the common shares may be offered and sold, and therein may only be made with investors that are purchasing as principal and that qualify as both an "accredited investor" as such term is defined in National Instrument 45-106 Prospectus and Registration Exemptions and as a "permitted client" as such term is defined in National Instrument 31-103 Registration Requirements, Exemptions and Ongoing Registrant Obligation. Any offer and sale of our common shares in any province or territory of

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Canada may only be made through a dealer that is properly registered under the securities legislation of the applicable province or territory wherein our common shares are offered and/or sold or, alternatively, by a dealer that qualifies under and is relying upon an exemption from the registration requirements therein.

Any resale of our common shares by an investor resident in Canada must be made in accordance with applicable Canadian securities laws, which may require resales to be made in accordance with prospectus and registration requirements, statutory exemptions from the prospectus and registration requirements or under a discretionary exemption from the prospectus and registration requirements granted by the applicable Canadian securities regulatory authority. These resale restrictions may under certain circumstances apply to resales of our common shares outside of Canada.

Upon receipt of this document, each Canadian investor hereby confirms that it has expressly requested that all documents evidencing or relating in any way to the sale of the securities described herein (including for greater certainty any purchase confirmation or any notice) be drawn up in the English language only. Par la réception de ce document, chaque investisseur canadien confirme par les présentes qu'il a expressément exigé que tous les documents faisant foi ou se rapportant de quelque manière que ce soit à la vente des valeurs mobilières décrites aux présentes (incluant, pour plus de certitude, toute confirmation d'achat ou tout avis) soient rédigés en anglais seulement.

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LEGAL MATTERS

The validity of the common shares and certain other matters of Bermuda law will be passed upon for us by Conyers Dill & Pearman Limited, our special Bermuda counsel. Certain other legal matters will be passed upon for us by Cooley LLP, Palo Alto, California, and for the underwriters by Latham & Watkins LLP, New York, New York.


EXPERTS

The financial statements as of December 31, 2014 and for the period from October 31, 2014 (date of inception) to December 31, 2014 included in this prospectus have been so included in reliance on the report (which contains an explanatory paragraph relating to our ability to continue as a going concern as described in Note A to the financial statements) of PricewaterhouseCoopers LLP, an independent registered public accounting firm, given on the authority of said firm as experts in auditing and accounting.


WHERE YOU CAN FIND ADDITIONAL INFORMATION

We have submitted to the SEC a draft registration statement on Form S-1 under the Securities Act, with respect to the common shares being offered by this prospectus. This prospectus, which constitutes part of the registration statement, does not contain all of the information in the registration statement and its exhibits. For further information with respect to our company and the common shares offered by this prospectus, we refer you to the registration statement and its exhibits. Statements contained in this prospectus as to the contents of any contract or any other document referred to are not necessarily complete, and in each instance, we refer you to the copy of the contract or other document filed as an exhibit to the registration statement. Each of these statements is qualified in all respects by this reference.

You can read our SEC filings, including the registration statement, over the internet at the SEC's website at www.sec.gov . You may also read and copy any document we file with the SEC at its public reference room at 100 F Street, N.E., Room 1580, Washington, D.C. 20549. You may also obtain copies of these documents at prescribed rates by writing to the Public Reference Section of the SEC at 100 F Street, N.E., Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for further information on the operation of the public reference facilities.

Upon the closing of this offering, we will be subject to the information reporting requirements of the Exchange Act, and we will file reports, proxy statements and other information with the SEC. These reports, proxy statements and other information will be available for inspection and copying at the public reference room and website of the SEC referred to above. We also maintain a website at www.axovant.com, at which you may access these materials free of charge as soon as reasonably practicable after they are electronically filed with, or furnished to, the SEC. The information contained in, or that can be accessed through, our website is not part of, and is not incorporated into, this prospectus.

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EXCHANGE CONTROLS

The permission of the Bermuda Monetary Authority is required, pursuant to the provisions of the Exchange Control Act 1972 and related regulations, for all issuances and transfers of shares (which includes our common shares) of Bermuda companies to or from a non-resident of Bermuda for exchange control purposes, other than in cases where the Bermuda Monetary Authority has granted a general permission. The Bermuda Monetary Authority, in its notice to the public dated June 1, 2005, has granted a general permission for the issue and subsequent transfer of any securities of a Bermuda company from and/or to a non-resident of Bermuda for exchange control purposes for so long as any "Equity Securities" of the company (which would include our common shares) are listed on an "Appointed Stock Exchange" (which would include the New York Stock Exchange). Certain issues and transfers of common shares involving persons deemed resident in Bermuda for exchange control purposes require the specific consent of the Bermuda Monetary Authority.

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ENFORCEMENT OF CIVIL LIABILITIES UNDER UNITED STATES FEDERAL SECURITIES LAWS

We are a Bermuda exempted company. As a result, the rights of holders of our common shares will be governed by Bermuda law and our memorandum of association and bye-laws. The rights of shareholders under Bermuda law may differ from the rights of shareholders of companies incorporated in other jurisdictions. It may be difficult for investors to enforce in the United States judgments obtained in U.S. courts against us based on the civil liability provisions of the U.S. securities laws. Our registered office address in Bermuda is Clarendon House, 2 Church Street, Hamilton HM 11, Bermuda.

We have been advised by our special Bermuda counsel that there is no treaty in force between the United States and Bermuda providing for the reciprocal recognition and enforcement of judgments in civil and commercial matters. As a result, whether a U.S. judgment would be enforceable in Bermuda against us or our directors and officers depends on whether the U.S. court that entered the judgment is recognized by a Bermuda court as having jurisdiction over us or our directors and officers, as determined by reference to Bermuda conflict of law rules. The courts of Bermuda would recognize as a valid judgment, a final and conclusive judgment in personam obtained in a U.S. court pursuant to which a sum of money is payable (other than a sum of money payable in respect of multiple damages, taxes or other charges of a like nature or in respect of a fine or other penalty). The courts of Bermuda would give a judgment based on such a U.S. judgment as long as (1) the U.S. court had proper jurisdiction over the parties subject to the judgment; (2) the U.S. court did not contravene the rules of natural justice of Bermuda; (3) the U.S. judgment was not obtained by fraud; (4) the enforcement of the U.S. judgment would not be contrary to the public policy of Bermuda; (5) no new admissible evidence relevant to the action is submitted prior to the rendering of the judgment by the courts of Bermuda; (6) there is due compliance with the correct procedures under the laws of Bermuda; and (7) the U.S. judgment is not inconsistent with any judgment of the courts of Bermuda in respect of the same matter.

In addition, and irrespective of jurisdictional issues, the Bermuda courts will not enforce a U.S. federal securities law that is either penal or contrary to Bermuda public policy. We have been advised that an action brought pursuant to a public or penal law, the purpose of which is the enforcement of a sanction, power or right at the instance of the state in its sovereign capacity, is unlikely to be entertained by a Bermuda court. Certain remedies available under the laws of U.S. jurisdictions, including certain remedies under U.S. federal securities laws, would not be available under Bermuda law or enforceable in a Bermuda court, as they are likely to be contrary to Bermuda public policy. Further, it may not be possible to pursue direct claims in Bermuda against us or our directors and officers for alleged violations of U.S. federal securities laws because these laws are unlikely to have extraterritorial effect and do not have force of law in Bermuda. A Bermuda court may, however, impose civil liability on us or our directors and officers if the facts alleged and proved in the Bermuda proceedings constitute or give rise to a cause of action under the applicable governing law, not being a foreign public, penal or revenue law.

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Index to Financial Statements

 
  Page

Report of Independent Registered Public Accounting Firm

  F-2

Balance Sheet at December 31, 2014

 
F-3

Statements of Operations and Comprehensive Loss for the Period from October 31, 2014 (Date of Inception) to December 31, 2014

 
F-4

Statements of Shareholders' Deficit for the Period from October 31, 2014 (Date of Inception) to December 31, 2014

 
F-5

Statements of Cash Flows for the Period from October 31, 2014 (Date of Inception) to December 31, 2014

 
F-6

Notes to Financial Statements

 
F-7

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Report of Independent Registered Public Accounting Firm

To the Board of Directors and Shareholder of Axovant Sciences Ltd.:

We have audited the accompanying balance sheet of Axovant Sciences Ltd. as of December 31, 2014 and the related statement of operations and comprehensive loss, shareholders' deficit and cash flows for the period from inception of October 31, 2014 through the period ended December 31, 2014. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Axovant Sciences Ltd. at December 31, 2014 and the results of its operations and its cash flows for the period from inception of October 31, 2014 through the period ended December 31, 2014 in conformity with accounting principles generally accepted in the United States of America.

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note A to the financial statements, the Company has insufficient capital to fund its operations which raises substantial doubt about its ability to continue as a going concern. Management's plans in regard to these matters are also described in Note A. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

/s/ PricewaterhouseCoopers LLP

Florham Park, NJ
March 24, 2015

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AXOVANT SCIENCES LTD.
BALANCE SHEET
DECEMBER 31, 2014

Assets

 

Current assets:

       

Prepaid expenses

  $ 1,995  

Total assets

  $ 1,995  

Liabilities and Shareholders' Deficit

 

Current liabilities:

       

Due to Roivant Sciences Ltd. and Roivant Sciences, Inc. 

  $ 758,419  

Accrued expenses

    6,020  

Total current liabilities

    764,439  

Contingent payment liability

    5,000,000  

Total liabilities

    5,764,439  

Commitments and contingencies (Note G)

       

Shareholders' deficit:

       

Common shares, par value $0.00001 per share, 1,000,000,000 shares authorized, 10,000,000 issued and outstanding

    100  

Common shares subscribed

    (100 )

Additional paid-capital

    5,000,000  

Accumulated deficit

    (10,762,444 )

Total shareholders' deficit

    (5,762,444 )

Total liabilities and shareholders' deficit

  $ 1,995  

   

The accompanying notes are an intregral part of these financial statements.

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AXOVANT SCIENCES LTD.
STATEMENT OF OPERATIONS AND COMPREHENSIVE LOSS
FOR THE PERIOD FROM OCTOBER 31, 2014 (DATE OF INCEPTION) TO DECEMBER 31, 2014

Operating expenses:

       

Research and development

    10,538,236  

General and administrative

    224,208  

Total operating expenses

    10,762,444  

Net loss and comprehensive loss

    (10,762,444 )

Net loss per common share—basic and diluted

  $ (1.08 )

Weighted average common shares outstanding—basic and diluted

    10,000,000  

   

The accompanying notes are an intregral part of these financial statements.

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AXOVANT SCIENCES LTD.
STATEMENT OF SHAREHOLDERS' DEFICIT

 
  Common Stock    
   
   
   
 
 
  Common Stock
Subscribed
  Additional
Paid in Capital
  Accumulated
Deficit
  Total
Shareholders'
Deficit
 
 
  Shares   Amount  

Balance at October 31, 2014

    10,000,000   $ 100   $ (100 ) $   $   $  

Capital contribution

                5,000,000         5,000,000  

Net loss

                    (10,762,444 )   (10,762,444 )

Balance at December 31, 2014

    10,000,000   $ 100   $ (100 ) $ 5,000,000   $ (10,762,444 ) $ (5,762,444 )

   

The accompanying notes are an intregral part of these financial statements.

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AXOVANT SCIENCES LTD.
STATEMENT OF CASH FLOWS

 
  Period from October 31,
2014 (date of inception)
to December 31, 2014
 

Cash flows from operating activities:

       

Net loss

  $ (10,762,444 )

Adjustments to reconcile net loss to net cash used in operating activities:

       

In-process research and development expenses

    10,000,000  

Changes in operating assets and liabilities:

       

Prepaid expenses

    (1,995 )

Due to Roivant Sciences Ltd. and Roivant Sciences, Inc. 

    758,419  

Accrued liabilities

    6,020  

Net cash provided by operating activities

     

Cash flows from investing activities:

   
 
 

Purchase of in-process research and development

    (5,000,000 )

Net cash used in investing activities

    (5,000,000 )

Cash flows from financing activities:

   
 
 

Proceeds from additional capital contributions

    5,000,000  

Net cash provided by financing activities

    5,000,000  

Net change in cash

   
 

Cash—beginning of period

     

Cash—end of period

  $  

   

The accompanying notes are an intregral part of these financial statements.

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AXOVANT SCIENCES LTD.

NOTES TO FINANCIAL STATEMENTS

Note A—Description of Business and Liquidity

[1] Description of Business:

Axovant Sciences Ltd. (the "Company") is a clinical-stage biopharmaceutical company focused on the acquisition, development and commercialization of novel therapeutics for the treatment of neurological disorders. The Company's initial focus is on developing products to treat the cognitive impairment and behavioral disturbances associated with dementia. The Company was founded on October 31, 2014 as a Bermuda Exempted Limited Company and a wholly-owned subsidiary of Roivant Sciences Ltd. ("RSL"), under the name Roivant Neurosciences, Ltd. The Company changed its name to Axovant Sciences Ltd. in March 2015. On February 24, 2015, Axovant Sciences, Inc. was formed, and on March 7, 2015, it became a wholly-owned subsidiary of the Company based in the United States of America. The Company's fiscal year ends on March 31.

From its inception, the Company has devoted substantially all of its efforts to organizing and staffing the Company, raising capital and acquiring drug development programs. The Company has determined that it has one operating and reporting segment. The Company has one product candidate (RVT-101) under development which was acquired from Glaxo Group Limited and GlaxoSmithKline Intellectual Property Development Limited (collectively "GSK") on December 17, 2014 (See Note C).

[2] Liquidity:

The Company has not been capitalized with sufficient funding to conduct its operations, other than receiving a $5 million capital contribution from RSL to acquire the product candidate from GSK. Certain other costs of conducting the Company's operations were paid by RSL or RSL's wholly-owned subsidiary Roivant Sciences, Inc. ("RSI") and will be reimbursed by the Company upon receipt of additional external funding pursuant to the services agreement with RSI and Axovant Sciences, Inc. The Company has not generated any revenues and does not anticipate generating any revenues in the foreseeable future. Since the Company has no available cash or credit facilities, the Company is dependent upon RSL or its affiliates to provide services and funding to support the operations of the Company until, at least, such time as external financing is completed.

The accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. The financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might result from the outcome of this uncertainty. The Company anticipates incurring additional losses until such time, if ever, that it can obtain marketing approval to sell, and then generate significant sales, of its product candidate that is currently in development. Substantial additional financing will be needed by the Company to fund its operations and to develop and commercialize its product candidate. These factors raise substantial doubt about the Company's ability to continue as a going concern.

The Company will seek to obtain additional capital through the sale of debt or equity financings or other arrangements to fund operations; however, there can be no assurance that the Company will be able to raise needed capital under acceptable terms, if at all. The sale of additional equity may dilute existing shareholders and newly issued shares may contain senior rights and preferences compared to currently outstanding common shares. Issued debt securities may contain covenants and limit the Company's ability to pay dividends or make other distributions to shareholders. If the Company is unable to obtain such additional financing, future operations would need to be scaled back or discontinued. The Company is

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AXOVANT SCIENCES LTD.

NOTES TO FINANCIAL STATEMENTS (Continued)

Note A—Description of Business and Liquidity (Continued)

currently exploring external financing alternatives which will be needed by the Company to fund its operations.

The Company's future operations are highly dependent on a combination of factors, including (i) the timely and successful completion of additional financing discussed above; (ii) the success of its research and development program; (iii) the development of competitive therapies by other biotechnology and pharmaceutical companies, (iv) the Company's ability to manage growth of the organization; (v) the Company's ability to protect its proprietary technology; and, ultimately; (vi) regulatory approval and market acceptance of the Company's product candidate.

Note B—Summary of Significant Accounting Policies

[1] Basis of Presentation:

The accompanying financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America ("U.S. GAAP"). Any reference in these notes to applicable guidance is meant to refer to the authoritative United States generally accepted accounting principles as found in the Accounting Standards Codification ("ASC") and Accounting Standards Update ("ASU") of the Financial Accounting Standards Board ("FASB").

[2] Use of estimates:

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates.

One significant estimate relates to the probability and timing of the contingent payment liability recorded in the balance sheet. Such liability relates to the GSK purchase agreement (See Note C). Management believes it is probable that the Company will be obligated to pay $5,000,000 to GSK in early 2016 (See Note G). Should the specified criteria for payment not be met, or be met in a period different from Management's expectation, there could be significant fluctuation in the financial results of the Company in future periods.

Another significant estimate relates to the compensation expenses charged to the Company under the services agreement with RSI and Axovant Sciences, Inc. Compensation expense under this agreement is significantly comprised of share-based compensation that is re-measured at fair value at the end of each reporting period and charged to the Company until the awards vest (See Note D). The inputs used to estimate the fair value of these instruments at the investor's level are considered level 3 as they reflect management's best estimate of what market participants would use in pricing the share award at the measurement date rather than observable data. Due to the significance of these estimates in the calculation of fair value by RSI, the related compensation expense charged to the Company by RSI could fluctuate significantly period to period.

Another significant estimate relates to accrued expenses for estimated costs of research and development activities conducted by third-party service providers, which primarily include the conduct of clinical trials and contract manufacturing activities. The estimated costs are recorded based upon the estimated amount of services provided but not yet invoiced, and are included in accrued liabilities in the balance sheet and within research and development expense in the statement of operation and comprehensive loss. The estimate of the amount of work completed is developed through discussions with internal personnel and

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AXOVANT SCIENCES LTD.

NOTES TO FINANCIAL STATEMENTS (Continued)

Note B—Summary of Significant Accounting Policies (Continued)

external services providers as to the progress of stage of completion of the services and the agreed-upon fee to be paid for such services. Significant judgments and estimates are required in determining the accrued balance in each reporting period. As actual costs become known, the accrued estimates are adjusted. Such estimates are not expected to be materially different from amounts actually incurred, however the Company's understanding of the status and timing of services performed, the number of subjects enrolled, and the rate of subject enrollment may vary from estimates and could result in reporting amounts that are too high or too low in any particular period. The estimate of accrued research and development expense in dependent, in part, upon the receipt of timely and accurate reporting from clinical research organizations and other third-party service providers. To date, the Company has not incurred significant third-party development costs.

[3] Research and Development Expense:

Research and development costs are charged to expense when incurred. The Company expenses in-process research and development projects acquired as asset acquisitions which have not reached technological feasibility and which have no alternative future use. Research and development expenses primarily consist of the intellectual property and research and development materials acquired from GSK (See Note C), certain costs charged by RSI under its services agreement with the Company and Axovant Sciences, Inc. (See Note D) and expenses from third parties who conduct research and development activities on behalf of the Company.

[4] Income Taxes:

The Company accounts for income taxes in accordance with ASC 740, Income Taxes . Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and the respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. A valuation allowance is recorded when, after consideration of all positive and negative evidence, it is not more likely than not that the Company's deferred tax assets will be realizable.

When uncertain tax positions exist, the Company recognizes the tax benefit of tax positions to the extent that the benefit will more likely than not be realized. The determination as to whether the tax benefit will more likely than not be realized is based upon the technical merits of the tax position as well as consideration of the available facts and circumstances. As of December 31, 2014, the Company does not have any significant uncertain tax positions.

[5] Net Loss per Common Share:

Basic net loss per common share is computed by dividing net loss applicable to common shareholders by the weighted-average number of common shares of outstanding during the period. Diluted net loss per common share is computed by dividing the net loss applicable to common shareholders by the diluted weighted-average number of common shares outstanding during the period calculated in accordance with the treasury stock method. For the period ended December 31, 2014, there are no instruments outstanding that would be anti-dilutive.

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AXOVANT SCIENCES LTD.

NOTES TO FINANCIAL STATEMENTS (Continued)

Note B—Summary of Significant Accounting Policies (Continued)

[6] Recently Issued Accounting Pronouncements:

In June 2014, the FASB issued ASU No. 2014-10, Development Stage Entities (Topic 915): Elimination of Certain Financial Reporting Requirements, Including an Amendment to Variable Interest Entities Guidance in Topic 810, Consolidation . This ASU removes the definition of a development stage entity and all incremental financial reporting requirements from U.S. GAAP for development stage entities. Topic 915 Development Stage Entities will be removed from the FASB ASC. The elimination of the development stage entity financial reporting requirements is effective for annual reporting periods beginning after December 15, 2014. A public business entity may adopt this guidance early for any annual reporting period or interim period for which financial statements have not been issued. All other entities may adopt this guidance early for financial statements that have not yet been made available for issue. The Company adopted this guidance.

In August 2014, the FASB issued ASU No. 2014-15, " Presentation of Financial Statements—Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity's Ability to Continue as a Going Concern " ("ASU 2014-15"). ASU 2014-15 is intended to define management's responsibility to evaluate whether there is substantial doubt about an entity's ability to continue as a going concern and to provide related footnote disclosures. Specifically, ASU 2014-15 provides a definition of the term substantial doubt and requires an assessment for a period of one year after the date that the financial statements are issued (or available to be issued). It also requires certain disclosures when substantial doubt is alleviated as a result of consideration of management's plans and requires an express statement and other disclosures when substantial doubt is not alleviated. The new standard will be effective for reporting periods beginning after December 15, 2016, with early adoption permitted. Management is currently evaluating the impact of the adoption of ASU 2014-14 on its financial statements and disclosures.

In February 2015, the FASB issued Accounting Standards Update (ASU) No. 2015-02, " Consolidation (Topic 810), Amendments to the Consolidation Analysis". ASU 2015-02 changes the analysis that a reporting entity must perform to determine whether it should consolidate certain types of legal entities. All legal entities are subject to reevaluation under the revised consolidation model. ASU 2015-02 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015. ASU 2015-02 may be applied retrospectively to all prior periods presented in the financial statements or by using a modified retrospective approach by recording a cumulative-effect adjustment to equity as of the beginning of the fiscal year of adoption. Early adoption is permitted provided that the guidance is applied from the beginning of the fiscal year of adoption. The Company is currently assessing the impacts of adopting ASU 2015-02.

Note C—Asset Purchase Agreement

On December 17, 2014 the Company entered into an asset purchase agreement to acquire certain intellectual property and research and development materials from GSK, which the Company renamed RVT-101, in exchange for the following consideration:

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AXOVANT SCIENCES LTD.

NOTES TO FINANCIAL STATEMENTS (Continued)

Note C—Asset Purchase Agreement (Continued)

For the consideration above, the Company also received a small quantity of inventory of RVT-101, and certain research and development historical records. The Company did not hire, or receive, any GSK workforce or employees working on RVT-101, or any research, clinical or manufacturing equipment. Additionally, the Company did not assume from GSK any contracts, licenses or agreements between GSK and any third party with respect to RVT-101. The Company will need to independently develop all clinical processes and procedures for the Phase 3 clinical trial through the use of internal and external resources once appropriate and acceptable resources have been identified and obtained.

As the intellectual property and inventory of RVT-101 acquired had no alternative future use on the date of acquisition, the Company recorded the payments made, and probable to be made (see Note G), to acquire such items as research and development expense at the date of the transaction.

Note D—Related Party Transactions

During 2015, the Company and its wholly owned subsidiary, Axovant Sciences, Inc., entered into a formal services agreement with RSI. RSI will provide certain administrative and research and development services on behalf of the Company during the formative period of the Company. Under the terms of the services agreement, the Company will pay or reimburse RSI for any expenses it, or third parties acting on its behalf, incurs for the Company. For any research and development activity performed by RSI employees, RSI will charge back the cost of the employee's time plus a pre-determined mark-up. All other costs will be billed back at cost. RSI also provided such services prior to the formalization of the services agreement, and such costs have been recognized by the Company in the period in which the services were rendered. The financial statements also include third-party expenses that have been paid by RSI and RSL since the inception of the Company.

In accordance with the services agreement, total compensation, inclusive of base salary, fringe benefits and share-based compensation at RSI is proportionately allocated to the Company on the basis of actual cost, plus a pre-determined mark-up for any research and development activities performed by RSI on behalf of the Company. The actual costs are determined based upon the relative percentage of time utilized on Company matters. The most significant component of RSI's total compensation charged back to the Company relates to the share-based awards RSI has issued to its employees.

Such awards are in the form of restricted shares of BVC Ltd ("BVC") granted to RSI's employees. BVC is a non-public entity, which holds a non-controlling ownership interest in RSL, the parent of the Company and RSI. BVC's ownership interest and board rights in RSL allow it to exercise significant influence over RSL. As

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AXOVANT SCIENCES LTD.

NOTES TO FINANCIAL STATEMENTS (Continued)

Note D—Related Party Transactions (Continued)

such, because the awards are not based on the Company's or RSL's shares, they are remeasured at fair value at each reporting period until the awards vest. Significant judgment and estimates were used to estimate the fair value of these awards as the underlying shares in BVC are not publicly traded. RSI's estimation of fair value of the awards considered recent transactions entered into by RSL, relevant industry and comparable public company data, as well as discounted cash flow analyses. As BVC is a non-public entity, the majority of the inputs used to estimate the fair value of the restricted share awards are considered level 3 due to their unobservable nature. Each award is subject to specified vesting schedules and requirements (a mix of time-based, performance-based and corporate event-based, including post-IPO market capitalization target and financing events). Compensation expense will be charged to the Company by RSI over the required service period to earn the award, which is expected to be four years, subject to the achievement of performance and event-based vesting requirements. At December 31, 2014, the remaining weighted average requisite service period over which the awards could be earned was 3.43 years. For the period from October 31, 2014 (inception) to December 31, 2014, the Company incurred expenses of approximately $604,000, inclusive of the mark-up, to the Company under the services agreement, which the Company has recorded as research and development and general and administrative expense in the statement of operations.

The Company entered into an information sharing and cooperation agreement with RSL. The information sharing and cooperation agreement, among other things, grants the Company a right of first review on any potential dementia-related product or investment opportunity that RSL may consider pursuing and obligates the Company to deliver periodic financial statements and other financial information to RSL and comply with other specified financial reporting requirements.

Note E—Shareholders' Deficit

[1] Overview:

The Company's Memorandum of Association, filed on October 31, 2014 in Bermuda, authorizes the issuance of one class of stock to be designated, respectively, "Share Capital." The total number of shares which the Company is authorized to issue is 10,000, each with a par value of $1.00 per share.

[2] Transactions:

Upon the Company's formation, RSL subscribed for 100 shares of the Company's share capital.

On December 17, 2014, RSL paid the initial $5,000,000 payment to GSK upon the closing of the transaction on behalf of the Company (see Note C) which is reflected in the financial statements as an additional capital contribution. There were no additional shares issued in connection with such contributions to additional paid-in-capital as RSL owns 100% of the share ownership.

On March 18, 2015, upon approval of the Board of Directors, the Company issued an additional 650 shares, increasing the total number of issued and outstanding shares to 750, prior to giving effect to the stock split described in [3] below.

[3] Stock Split:

Effective March 18, 2015, upon approval of the Board of Directors and the Company's sole member, RSL, the Company effected a stock split of the authorized, issued and outstanding shares of the Company at a ratio of 100,000-to-1. The stock split increased the total number of authorized shares from 10,000 to

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AXOVANT SCIENCES LTD.

NOTES TO FINANCIAL STATEMENTS (Continued)

Note E—Shareholders' Deficit (Continued)

1,000,000,000, increased the total number of shares issued and outstanding from 750 to 75,000,000, and decreased par value from $1.00 to $0.00001. All information in the accompanying financial statements and notes thereto regarding share amounts of the common stock and prices per share of the common stock has been adjusted to reflect the application of the stock split on a retroactive basis.

Note F—Income Taxes

The Company will not be subject to taxation under the laws of Bermuda since it is was organized as a Bermuda Exempted Limited Company, for which there is no tax regime. Axovant Sciences, Inc., the Company's wholly-owned subsidiary, will be subject to taxation under the laws of the United States of America.

The Company expects to incur losses from operations for the next few years and due to the uncertainty of future taxable income, a valuation allowance sufficient to fully offset deferred tax assets resulting from net operating losses is expected to be established. The valuation allowance will be maintained until sufficient positive evidence exists to support a conclusion that a valuation allowance is not necessary.

The Company's effective tax rate for the period October 31, 2014 (date of inception) to December 31, 2014 was 0% primarily due to the organization of the Company as a Bermuda Exempted Limited Company, for which there is no current tax regime and none expected as of the date of this report.

Note G—Commitments and Contingencies

The Company entered into commitments under the GSK purchase agreement (Note C), and a services agreement with RSI (Note D). In addition, on February 18, 2015, the Company entered into a three year formal services agreement with a third-party for pharmaceutical development, formulation and analytical services. The agreement can be terminated by the Company with thirty days written notice. The Company expects to enter into other commitments as the business further develops.

Under the terms of the GSK intellectual property purchase agreement (Note C) the Company believes it is probable that the Company will not have dosed the first patient in a second Phase 3 trial for RVT-101 within six months following the dosing of the first patient in the Company's first Phase 3 trial for RVT-101. As such, the Company deems it probable that the first contingent payment of $5 million under the GSK agreement will be made in early 2016. The Company has recorded the obligation as contingent payment liability in the accompanying balance sheet and as research and development expense in the statement of operations.

Note H—Subsequent Events

The Company has evaluated subsequent events through March 24, 2015, the date that the financial statements were available to be issued.

The board of directors approved the Company's 2015 Equity Incentive Plan on March 18, 2015. The plan provides for the grant of incentive options to employees of the Company, RSL's employees and Axovant Sciences, Inc.'s employees, and for the grant of nonstatutory options, restricted stock awards, restricted stock unit awards, stock appreciation rights, performance stock awards and other forms of stock compensation to the Company's employees, including officers, directors, consultants and employees of RSI. The maximum number of common shares that may be issued under the plan is 7,500,000 shares.

On March 18, 2015, the Company granted a total of 4,012,500 options, with an exercise price of $0.90, to employees, members of the board of directors of the Company and consultants of Axovant Sciences, Inc. under the 2015 Equity Incentive Plan. The options granted to members of the board of directors vest ratably over three years. Options granted to employees and consultants vest ratably over four years.

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                             Shares

LOGO

Axovant Sciences Ltd.

Common Shares


Preliminary Prospectus


Jefferies

Evercore ISI

RBC Capital Markets

JMP Securities

Baird

                             , 2015

Until                             , 2015 (25 days after the commencement of this offering), all dealers effecting transactions in these securities, whether or not participating in this offering, may be required to deliver a prospectus. This delivery requirement is in addition to the obligation of dealers to deliver a prospectus when acting as underwriters and with respect to their unsold allotments or subscriptions.


Table of Contents


PART II
INFORMATION NOT REQUIRED IN PROSPECTUS

Item 13.    Other Expenses of Issuance and Distribution.

The following table sets forth all costs and expenses, other than underwriting discounts and commissions, payable by us in connection with the sale of the common shares being registered. All amounts shown are estimates except for the SEC registration fee, the Financial Industry Regulatory Authority, or FINRA, filing fee and the New York Stock Exchange, or NYSE, initial listing fee.


 
  Amount to
be Paid
 

SEC registration fee

  $ 20,045  

FINRA filing fee

    26,375  

NYSE initial listing fee

    *  

Printing and engraving expenses

    *  

Legal fees and expenses

    *  

Accounting fees and expenses

    *  

Transfer agent and registrar fees and expenses

    *  

Miscellaneous fees and expenses

    *  

Total

  $ *  

*
To be filed by amendment.

Item 14.    Indemnification of Directors and Officers.

Section 98 of the Companies Act provides generally that a Bermuda company may indemnify its directors, officers and auditors against any liability which by virtue of any rule of law would otherwise be imposed on them in respect of any negligence, default, breach of duty or breach of trust, except in cases where such liability arises from fraud or dishonesty of which such director, officer or auditor may be guilty in relation to the company. Section 98 further provides that a Bermuda company may indemnify its directors, officers and auditors against any liability incurred by them in defending any proceedings, whether civil or criminal, in which judgment is awarded in their favor or in which they are acquitted or granted relief by the Supreme Court of Bermuda pursuant to section 281 of the Companies Act.

We have adopted provisions in our bye-laws that provide that we shall indemnify our officers and directors in respect of their actions and omissions, except in respect of their fraud or dishonesty. Our bye-laws provide that the shareholders waive all claims or rights of action that they might have, individually or in right of the company, against any of the company's directors or officers for any act or failure to act in the performance of such director's or officer's duties, except in respect of any fraud or dishonesty of such director or officer. Section 98A of the Companies Act permits us to purchase and maintain insurance for the benefit of any officer or director in respect of any loss or liability attaching to him in respect of any negligence, default, breach of duty or breach of trust, whether or not we may otherwise indemnify such officer or director. We have purchased and maintain a directors' and officers' liability policy for such a purpose.

In connection with this offering, we expect to enter into indemnification agreements with each of our directors and executive officers. These indemnification agreements will provide the directors and executive officers with contractual rights to indemnification and expense advancement that are, in some cases, broader than the specific indemnification provisions contained under Bermuda law.

In addition, the underwriting agreement filed as Exhibit 1.1 to this Registration Statement provides for indemnification by the underwriters of us and our officers and directors for certain liabilities arising under the Securities Act, or otherwise.

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Item 15.    Recent Sales of Unregistered Securities.

Issuances of Share Capital

On November 14, 2014, we issued 100 common shares to Roivant Sciences Ltd., our sole shareholder, for an aggregate price of $100, which does not give effect to the 100,000-to-1 stock split effected on March 18, 2015. This offer, sale and issuance was exempt from registration under Section 4(a)(2) of the Securities Act.

We granted stock options to purchase an aggregate of 4,012,500 of our common shares at an exercise price of $0.90 per share and an aggregate of 527,500 of our common shares at an exercise price of $1.04 on March 18, 2015 and April 13, 2015, respectively, to a total of 19 employees, consultants and directors under our 2015 Equity Incentive Plan. All of these options remain outstanding. The offers, sales and issuances of these securities were deemed to be exempt from registration under the Securities Act in reliance on Rule 701 thereunder as offers and sale of securities pursuant to certain compensatory benefit plans and contracts relating to compensation in compliance with Rule 701.

Item 16.    Exhibits and Financial Statement Schedules.

(a)
Exhibits.

The exhibits to the registration statement are listed in the Exhibit Index attached hereto and are incorporated by reference herein.

(b)
Financial Statement Schedules.

See Index to Financial Statements on Page F-1. All schedules have been omitted because they are not required or are not applicable.

Item 17.    Undertakings.

The undersigned Registrant hereby undertakes to provide to the underwriters at the closing specified in the underwriting agreement, certificates in such denominations and registered in such names as required by the underwriters to permit prompt delivery to each purchaser.

Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the Registrant pursuant to the foregoing provisions, or otherwise, the Registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act of 1933 and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a director, officer or controlling person of the Registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.

The undersigned Registrant hereby undertakes that:

(1)
For purposes of determining any liability under the Securities Act of 1933, the information omitted from the form of prospectus filed as part of this Registration Statement in reliance upon Rule 430A and contained in a form of prospectus filed by the Registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be part of this Registration Statement as of the time it was declared effective.

(2)
For the purpose of determining any liability under the Securities Act of 1933, each post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

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Table of Contents


SIGNATURES

Pursuant to the requirements of the Securities Act, the Registrant has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in New York, New York, on the 11th day of May, 2015.

    AXOVANT SCIENCES LTD.

 

 

By:

 

/s/ VIVEK RAMASWAMY

Vivek Ramaswamy
Principal Executive Officer


Power of Attorney

KNOW ALL BY THESE PRESENTS, that each person whose signature appears below hereby constitutes and appoints Vivek Ramaswamy and Alan S. Roemer, and each of them, his or her true and lawful agent, proxy and attorney-in-fact, with full power of substitution and resubstitution, for him or her and in his or her name, place and stead, in any and all capacities, to (i) act on, sign and file with the Securities and Exchange Commission any and all amendments (including post-effective amendments) to this registration statement together with all schedules and exhibits thereto and any subsequent registration statement filed pursuant to Rule 462(b) under the Securities Act of 1933, as amended, together with all schedules and exhibits thereto, (ii) act on, sign and file such certificates, instruments, agreements and other documents as may be necessary or appropriate in connection therewith, (iii) act on and file any supplement to any prospectus included in this registration statement or any such amendment or any subsequent registration statement filed pursuant to Rule 462(b) under the Securities Act of 1933, as amended, and (iv) take any and all actions which may be necessary or appropriate to be done, as fully for all intents and purposes as he or she might or could do in person, hereby approving, ratifying and confirming all that such agent, proxy and attorney-in-fact or any of his or her substitutes may lawfully do or cause to be done by virtue thereof.

Pursuant to the requirements of the Securities Act, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated.

Signature
 
Title
 
Date

 

 

 

 

 
/s/ VIVEK RAMASWAMY

Vivek Ramaswamy
  Principal Executive Officer and Director   May 11, 2015

/s/ ALAN S. ROEMER

Alan S. Roemer

 

Principal Financial and Accounting Officer

 

May 11, 2015

/s/ ILAN OREN

Ilan Oren

 

Director

 

May 11, 2015

/s/ BERNDT MODIG

Berndt Modig

 

Director

 

May 11, 2015

/s/ ATUL PANDE, M.D.

Atul Pande, M.D.

 

Director

 

May 11, 2015

/s/ MARIANNE ROMEO DINSMORE

Marianne Romeo Dinsmore

 

Director

 

May 11, 2015

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Table of Contents


EXHIBIT INDEX

Exhibit
Number
  Description of Exhibit
  1.1†   Form of Underwriting Agreement.

  2.1*

 

Asset Purchase Agreement, by and among the Registrant and Glaxo Group Limited and GlaxoSmithKline Intellectual Property Development Limited, dated as of December 17, 2014.

  3.1

 

Certificate of Incorporation.

  3.2

 

Memorandum of Association, as currently in effect.

  3.3

 

Bye-laws, as currently in effect.

  3.4†

 

Form of Amended and Restated Bye-laws to be effective upon the closing of this offering.

  4.1†

 

Specimen stock certificate evidencing common shares.

  5.1†

 

Opinion of Conyers Dill & Pearman Limited as to legality.

10.1+†

 

2015 Equity Incentive Plan.

10.2+†

 

Forms of Option Grant Notice and Option Agreement under 2015 Equity Incentive Plan.

10.3+†

 

Form of Restricted Stock Unit Grant Notice and Restricted Stock Unit Award Agreement under 2015 Equity Incentive Plan.

10.4+†

 

Form of Indemnification Agreement with directors and executive officers.

10.5+†

 

Non-Employee Director Compensation Policy.

10.6

 

Services Agreement, dated as of October 31, 2014, by and among Roivant Sciences, Inc., Axovant Sciences, Inc. and the Registrant.

10.7

 

Information Sharing and Cooperation Agreement, dated as of March 18, 2015, by and between Roivant Sciences Ltd. and the Registrant.

10.8+†

 

Form of Executive Officer Employment Agreement with Axovant Sciences, Inc.

21.1

 

Subsidiaries of the Registrant.

23.1

 

Consent of PricewaterhouseCoopers LLP, independent registered public accounting firm.

23.2†

 

Consent of Conyers Dill & Pearman Limited (included in Exhibit 5.1).

23.3

 

Powers of Attorney (included on the signature page to this registration statement).
To be submitted by amendment.

+
Indicates management contract or compensatory plan.

*
Portions of this exhibit (indicated by asterisks) have been omitted pursuant to a request for confidential treatment and have been separately filed with the Securities and Exchange Commission.

II-4




Exhibit 2.1

 

***Text Omitted and Filed Separately

with the Securities and Exchange Commission.

Confidential Treatment Requested

Under 17 C.F.R. Sections 200.80(b)(4) and 230.406

 

Execution Copy

 

ASSET PURCHASE AGREEMENT

 

Between

 

GLAXO GROUP LIMITED

 

and

 

GLAXOSMITHKLINE INTELLECTUAL PROPERTY DEVELOPMENT LIMITED

 

and

 

ROIVANT NEUROSCIENCES LTD.

 

Dated as of December 17, 2014

 



 

TABLE OF CONTENTS

 

 

 

Page

 

 

 

1.

DEFINITIONS

1

 

 

 

2.

SALE, TRANSFER, LICENSE AND PURCHASE OF ASSETS; LIABILITIES

11

 

 

 

3.

PATENT ASSIGNMENT

19

 

 

 

4.

REPRESENTATIONS AND WARRANTIES

19

 

 

 

5.

REGULATORY COVENANTS

30

 

 

 

6.

ADDITIONAL COVENANTS

30

 

 

 

7.

CONDITIONS TO CLOSING

35

 

 

 

8.

INDEMNIFICATION

36

 

 

 

9.

DISPUTE RESOLUTION

42

 

 

 

10.

MISCELLANEOUS

43

 


***Confidential Treatment Requested

 



 

SCHEDULES

 

Section 1.3

 

Schedule of Assets

Section 1.12

 

Documents

Section 1.19

 

Form of GSK FDA Letter

Section 1.22(a)

 

GSK Knowledge Individuals

Section 1.22(b)

 

Roivant Knowledge Individuals

Section 1.58

 

Form of Roivant FDA Letter

Section 2.5.1

 

Inventory

Section 4.1.3(c)

 

No Conflict or Breach of GSK

Section 4.1.4

 

GSK Consents and Approvals

Section 4.1.6

 

Sufficiency of Assets

Section 4.1.7(a)

 

Transferred Intellectual Property

Section 4.1.7(c)

 

Third Party Transfers and Agreements with Third Parties

Section 4.1.7(d)

 

IP Contracts relating to Transferred Intellectual Property

Section 4.1.7(f)

 

Third Party Infringement

Section 4.1.7(g)

 

Proceedings relating to Transferred Intellectual Property

Section 4.1.9

 

GSK Legal Proceedings

Section 4.1.10(a)

 

GSK Regulatory Filing

Section 4.1.10(b)

 

GSK Notices/Letters from FDA or Governmental Authority

Section 4.2.3(c)

 

No Conflict or Breach of Roivant

Section 4.2.4

 

Roivant Consents and Approvals

Section 4.2.5

 

Roivant Legal Proceedings

Section 6.2.2

 

Roivant Form of Press Release

 


***Confidential Treatment Requested

 



 

EXHIBITS

 

Exhibit A

 

Form of Patent Assignment Agreement

Exhibit B

 

Technology Transfer Plan

 


***Confidential Treatment Requested

 



 

ASSET PURCHASE AGREEMENT

 

This ASSET PURCHASE AGREEMENT (this “ Agreement ”) is made as of this 17 th  day of December 2014 between:

 

Roivant Neurosciences Ltd. , an exempted limited company incorporated under the laws of Bermuda, with offices at Clarendon House, 2 Church Street, Hamilton HM11, Bermuda (“ Roivant ”); and

 

Glaxo Group Limited , a company organized under the laws of England and Wales with its registered office address at GSK House, 980 Great West Road, Brentford, Middlesex, TW8 9GS, England; and

 

GlaxoSmithKline Intellectual Property Development Limited , a company organized under the laws of England and Wales with its registered office address at GSK House, 980 Great West Road, Brentford, Middlesex, TW8 9GS, England (together with Glaxo Group Limited, “ GSK ”).

 

RECITALS

 

WHEREAS, GSK or its Affiliates (as defined herein) own certain assets related to the Compound (as defined herein) and are engaged in the development of the Compound.

 

WHEREAS, GSK wishes to sell, transfer and assign to Roivant the Assets (as defined herein), which include the Patents listed in Section 1.3 of the Disclosure Schedule (as such terms are defined herein) and Roivant desires to purchase and take possession of such Assets (as defined herein) from GSK, upon the terms and conditions hereinafter set forth.

 

NOW, THEREFORE, in consideration of the mutual agreements and covenants contained herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, GSK and Roivant agree as follows:

 

1.                                      DEFINITIONS

 

For the purposes of this Agreement, the following terms are defined as follows:

 

1.1                                Affiliate ” means any Person who, directly or indirectly, through one or more intermediaries, Owns, is Owned by or is under common Ownership with, a Party, where “Own,” “Owned” or “Ownership” refers to (a) direct or indirect possession of at least fifty percent (50%) of the outstanding voting securities of a corporation or a comparable ownership in any other type of entity; or (b) the actual ability of a Person or group to control and direct the management of the Person, whether through direct or indirect ownership of voting equity, by contract or otherwise.

 

1.2                                Ancillary Transaction Agreements ” means the Patent Assignment Agreement, the Bill of Sale, the Technology Transfer Plan, the GSK FDA Letter and the Roivant FDA Letter.

 


***Confidential Treatment Requested

 



 

1.3                                Assets ” means those certain assets listed in Section 1.3 of the Disclosure Schedule and to the extent not listed therein, those documents listed in Section 1.10 of the Disclosure Schedule.

 

1.4                                Assumed Liabilities ” means (a) all Liabilities and obligations that Roivant has expressly assumed or agreed to assume or perform under this Agreement, including those obligations listed in Section 2.3.1 , and (b) all Liabilities arising out of Roivant’s use, consumption, or Exploitation of the Assets or Transferred Intellectual Property, or sale, marketing, distribution, purchase, consumption, development, or use of any Product in the Territory, from and after the Closing, except the Excluded Liabilities.

 

1.5                                Business Day ” (whether or not the word is capitalized) means any day other than a day which is a Saturday, Sunday or holiday recognized by GSK or Roivant.

 

1.6                                Clinical Studies Register ” means any publically available database provided or maintained by or on behalf of GSK or any Affiliate thereof, or provided or maintained by a Third Party and to which GSK or an Affiliate contributes or is required to contribute, summarizing clinical trial protocols and/or results for the Compound, including clinical trial protocols and/or data concerning the Compound, if any (e.g. clinicaltrials.gov).

 

1.7                                Compound ” means SB-742457, also known as 3-phenylsulfonyl-8-(1-piperazinyl)-quinoline, or any pharmaceutically acceptable salts or solvates thereof.

 

1.8                                Confidential Information ” means (a) any and all information, know-how and data, whether oral, written or graphical disclosed or provided by GSK or its Affiliates to Roivant or by Roivant to GSK or its Affiliates (including any analysis, materials, product or conclusions drawn or derived therefrom) or which are derived from any visits by personnel of GSK or its Affiliates or Roivant, respectively, to the location of Roivant or GSK, respectively, or are otherwise known to GSK or its Affiliates or Roivant through its visits or contacts with Roivant or GSK, respectively, (b) any other information with respect to or relating to the Assets, and (c) the intangible Assets, whether such information, know-how and/or data is disclosed, provided or derived before or after the Closing Date (as defined herein).

 

1.9                                Contracts ” means any loan or credit agreement, bond, debenture, note, mortgage, indenture, lease, supply agreement, license agreement, development agreement, distribution agreement or other legally binding contract, agreement, obligation, commitment, arrangement, understanding, instrument or license, whether oral or written.

 

1.10                         Data Room ” means, to the extent related to the Assets in the Territory, that certain FirmEx electronic data room created by or on behalf of GSK for prospective purchasers of the Assets and to which Roivant was provided access by GSK, including those documents that are listed in Section 1.12 of the Disclosure Schedule, but excluding any documents placed in the FirmEx electronic data room on or after November 10, 2014.

 

1.11                         Disclosure Schedule ” means the schedules to this Agreement delivered by GSK to Roivant and Roivant to GSK.

 


***Confidential Treatment Requested

 



 

1.12                         Documents ” means the documents and records relating to the Assets owned or held by GSK or any of its Affiliates that are listed in Section 1.12 of the Disclosure Schedule.

 

1.13                         EMA ” means the European Medicines Agency, or any successor agency thereto.

 

1.14                         Exchange Act ” means the Securities Exchange Act of 1934, as amended.

 

1.15                         Exploit ” or “ Exploitation ” means to import, export, use and develop as a part of the development program for the Compound and Primary Product undertaken by GSK prior to the Closing Date, but excludes to Manufacture or have Manufactured.

 

1.16                         FDA ” means the U.S. Food and Drug Administration or any successor agency thereto.

 

1.17                         FD&C Act ” means the United States Federal Food, Drug and Cosmetic Act, as amended from time to time, including all regulations, rules, binding guidelines, binding guidance documents and requirements promulgated thereunder, as may be in effect from time to time.

 

1.18                         Governmental Authority ” means any national, federal, regional, state, county, local or other government, or other court or tribunal of competent jurisdiction (including any arbitration or other alternative dispute forum), legislature, governmental, administrative or regulatory agency, self-regulatory association, department, body, bureau, council or commission or any other national, federal, regional, state, county, local or other governmental authority or instrumentality.

 

1.19                         GSK FDA Letter ” means the letter from GSK to the FDA, duly executed by GSK, to be filed with the FDA no later than three (3) Business Days following the Closing Date with regard to the IND(s), excluding foreign equivalents of U.S. INDs, included in the Assets, the form of which is attached hereto in Section 1.19 of the Disclosure Schedule.

 

1.20                         HSR Act ” means the Hart-Scott-Rodino Antitrust Improvements Act of 1976.

 

1.21                         IND(s) ” mean (a) any investigational new drug application relating to the Compound filed with the FDA pursuant to 21 C.F.R. Part 312 (a “ U.S. IND ”) and any foreign equivalent of the foregoing, and (b) all supplements, protocols and amendments that may be filed with respect to the foregoing.

 

1.22                         Knowledge ” means, when used in connection with (a) GSK with respect to any matter in question, the actual knowledge of any of the individuals that are identified in Section 1.22(a)  of the Disclosure Schedule, without any requirement of due and diligent inquiry, and (b) Roivant with respect to any matter in question, the actual knowledge of any of the individuals that are identified in Section 1.22(b)  of the Disclosure Schedule, without any requirement of due and diligent inquiry.

 

1.23                         Legal Requirement ” means any federal, state, local, or foreign constitution, law, statute, ordinance, rule, regulation, binding guidance document or directive of any Governmental Authority.

 


***Confidential Treatment Requested

 



 

1.24                         Liabilities ” means any claims, complaints, liabilities, obligations or commitments, whether accrued or fixed, absolute or contingent, known or unknown, determined or determinable, due or to become due, or otherwise (including all damages, losses, expenses, adverse reactions, recalls, product and packaging complaints and other liabilities).

 

1.25                         Lien ” means any lien (statutory or otherwise), security interest, pledge, hypothecation, mortgage, assessment, lease, claim, levy, defect in title, charge, or any other Third Party right, license or property interest of any kind, or any conditional sale or other title retention agreement, right of first option, right of first refusal or similar restriction, any covenant not to sue, or any contractual restriction on use, transfer, receipt of income or exercise of any other attribute of ownership or any other encumbrance.

 

1.26                         Litigation ” means any claim, action, cause of action, demand, lawsuit, arbitration, mediation, hearing, inquiry, audit, notice of violation, proceeding, litigation, citation, summons, subpoena or investigation of any nature, suit, warning letter, finding of deficiency or non-compliance, notice of violation or request for recall (whether civil, criminal, administrative, regulatory, investigative, appellate or informal or otherwise, whether at law or in equity).

 

1.27                         Loss ” or “ Losses ” means each and all of the following items:  claims, actions, causes of action, Liabilities, losses, damages, awards, judgments, fines, penalties, amounts paid in settlement and reasonable costs and expenses incurred in connection therewith, including interest which is imposed in connection therewith, costs of investigation, costs and expenses of suits and proceedings, and reasonable fees and disbursements of counsel.

 

1.28                         Manufacture ” means all activities related to the production, manufacture and processing of the Compound and Primary Product or any intermediate thereof, for pre-clinical and clinical manufacture of the Compound and Primary Product as a part of the development program for the Compound and Primary Product undertaken by GSK prior to the Closing Date.

 

1.29                         Material Adverse Effect ” means any change, effect, event, occurrence, state of facts or development that individually or in the aggregate would be expected to result in, or has resulted in, any change or effect, that is materially adverse to the Compound or the Assets; provided , that the term “Material Adverse Effect” specifically excludes any material adverse effect caused by, arising out of or related to:  (a) effects reasonably attributable to conditions affecting the pharmaceutical product market generally or the markets in which the Compound competes, so long as the effects do not disproportionately impact the Compound or the Assets, (b) effects relating to the general, national, regional or local economic or financial conditions in the Territory or in any other jurisdiction in which GSK or any of its Affiliates has operations or conducts business, so long as the effects do not disproportionately impact the Compound or the Assets, (c) changes in Legal Requirements, (d) the failure to achieve any financial or operational targets, projections or milestones set forth in any business plan or budget, (e)

 


***Confidential Treatment Requested

 



 

the execution or announcement of this Agreement or the consummation of the transactions contemplated hereby, or (f) any act of civil unrest, war or terrorism.

 

1.30                         NDA ” means New Drug Application.

 

1.31                         Net Sales ” means the gross amount billed or invoiced on sales of Products in the Territory by Roivant, its Affiliates or Third Party licensees (or any permitted assignee or transferee hereunder as contemplated by Section 10.2.2 ) under the Transferred Intellectual Property, less the following deductions from such gross amounts which are actually incurred or accrued by Roivant, its Affiliates or Third Party licensees under the Transferred Intellectual Property:  (a) credits or allowances actually granted for damaged products, returns or rejections of Products; (b) normal and customary trade, cash and quantity discounts, allowances and credits (including chargebacks); (c) excise taxes, sales taxes, duties, VAT taxes and other taxes to the extent imposed upon and paid directly with respect to the sales price (and excluding national or local taxes based on income); (d) freight, postage, shipping and shipping insurance expenses, collectively subject to a [***] cap; (e) rebates made with respect to sales paid for by any governmental or regulatory authority; (f) the portion of administrative fees paid during the relevant time period to group purchasing organizations or pharmaceutical benefit managers relating to a Product, subject to a [***] cap; and (g) any invoiced amounts that are not collected by Roivant, its Affiliates or Third Party licensees, including bad debts, subject to a [***] cap.

 

1.32                         Organizational Documents ” means:  (a) the articles or certificate of incorporation and the bylaws of a corporation; (b) any similar documents adopted or filed in connection with the creation, formation, or organization of a Person that is not a corporation; and (c) any amendment to any of the foregoing.

 

1.33                         Party ” means GSK or Roivant, individually, and “ Parties ” means GSK and Roivant, collectively.

 

1.34                         Patents ” means (a) all national, regional and international patents and patent applications, including provisional patent applications, (b) all patent applications filed either from such patents, patent applications or provisional applications or from an application claiming priority from either of these, including divisionals, continuations, continuations-in-part, substitutions, provisionals, converted provisionals, and continued prosecution applications, (c) any and all patents that have issued or in the future issue from the foregoing patent applications described in clauses (a) and (b), including utility models, petty patents and design patents and certificates of invention and (d) any and all extensions or restorations by existing or future extension or restoration mechanisms, including revalidations, reissues, re-examinations, supplemental examinations, inter partes reviews, post-grant reviews, oppositions and other existing or future post-issuance proceedings, and extensions (including future pending or issued unexpired patent term extension or supplemental protection certificate or equivalent extension right) of the foregoing patents or patent applications described in clauses (a), (b) and (c).

 


***Confidential Treatment Requested

 



 

1.35                         Permitted Lien ” means, with respect to any Asset, (a) any encumbrance for Taxes not yet due or delinquent or for those Taxes being contested in good faith by appropriate proceedings for which adequate reserves have been established, and (b) any minor imperfection of title or similar encumbrance that individually or in the aggregate does not materially impair the use of such Asset.

 

1.36                         Person ” means any individual, partnership, limited partnership, limited liability company, joint venture, syndicate, sole proprietorship, corporation, unincorporated association, trust, trustee, executor, administrator or other legal personal representative, or any other legal entity.

 

1.37                         Primary Product ” means any pharmaceutical composition for any indication containing the Compound whether as the sole active ingredient or in combination with one or more other active ingredients.

 

1.38                         Primary Product Royalty Term ” means the period of time for the payment of Royalties for Primary Products hereunder, which shall, on a country-by-country and Product-by-Product basis, continue until the later of:  (a) the expiration of the last Valid Patent Claim in a country covering the manufacture, method of use or composition of matter of a Primary Product sold in such country; (b) the expiration of Regulatory Exclusivity for a Primary Product in such country; and (c) 12 years from the first commercial sale of a Primary Product in such country or, if such country is a country in Europe, 12 years from the first commercial sale of a Primary Product in at least three (3) major countries in Europe. As used herein, “major countries in Europe” shall mean Germany, France, Italy, the United Kingdom and Spain.

 

1.39                         Product ” means any pharmaceutical composition for any indication containing (a) the Compound, or (b) any Secondary Compound, in each case of (a) and (b) whether as the sole active ingredient or in combination with one or more other active ingredients.

 

1.40                         Public Official ” means:  (a) any officer, employee or representative of any regional, federal, state, provincial, county or municipal government or government department, agency, or other division; (b) any officer, employee or representative of any commercial enterprise that is owned or controlled by a government, including any state-owned or controlled veterinary or medical facility; (c) any officer, employee or representative of any public international organization, such as the African Union, the International Monetary Fund, the United Nations or the World Bank; (d) any Person acting in an official capacity for any government or Governmental Authority, enterprise, or organization identified above; and (e) any political party, party official or candidate for political office.

 

1.41                         Purchase Price ” means, to the extent paid by Roivant in cash to GSK as of a particular date, an amount equal to the sum of (a) the Closing Payment (as defined herein), plus (b) the $5 million contingent payment paid or payable prior to or on such date, if applicable plus, (c) any Milestone Payment paid or payable prior to or on such date, if applicable, plus (d) any Royalties hereunder paid or payable prior to or on such date, if applicable.

 


***Confidential Treatment Requested

 


 

1.42                         Regulatory Exclusivity ” means, with respect to any country, a market protection, other than Patent protection (including any procedural rights in connection with the enforcement thereof, including a 30-month stay pursuant to 21 U.S.C. §§ 355(c)(3)(C) or 355(j)(5)(B)(iii) or any similar foreign procedures), granted by a Governmental Authority or law in such country which confers the exclusive right to market the applicable Product in such country or that prevents other parties from using or otherwise relying on any data supporting the approval of a marketing authorization for a specified period of time, such as new chemical entity exclusivity, new use or indication exclusivity, new formulation exclusivity, orphan drug exclusivity, pediatric exclusivity, or any other similar data exclusivity.

 

1.43                         Regulatory Filings ” means (i) applications, registrations, licenses, authorizations and approvals, and non-clinical and clinical study authorization applications or notifications (including all supporting files, writings, data, studies and reports) prepared for submission to a Governmental Authority with a view to the obtaining or maintaining of any regulatory approval, including any Investigational Medicinal Product Dossier, (ii) substantive correspondence to or with the FDA, EMA or any other Governmental Authority (including minutes and official contact reports relating to any communications with any Governmental Authority), (iii) pharmacovigilance databases, adverse drug experience reports and associated documents, and investigations of adverse drug experience reports, and (iv) non-clinical, clinical and other data contained or referenced in or supporting any of the foregoing.

 

1.44                         Representatives ” means, with respect to any Person, such Person’s directors, officers, managers, employees, counsel, accountants, financial advisors, lenders and other agents and representatives.

 

1.45                         Royalty Term ” means each of the Secondary Product Royalty Term and the Primary Product Royalty Term.

 

1.46                         Secondary Compound ” means any compound (other than the Compound) claimed in [***].

 

1.47                         Secondary Product ” means any pharmaceutical composition for any indication containing a Secondary Compound whether as the sole active ingredient or in combination with one or more other active ingredients.

 

1.48                         Secondary Product Royalty Term ” means the period of time for the payment of Royalties for Secondary Products hereunder, which shall, on a country-by-country and Product-by-Product basis, continue until the expiration of the last Valid Patent Claim in a country covering the manufacture, method of use or composition of matter of the Secondary Product sold in such country.

 

1.49                         Selected Compounds ” means (i) the Compound and/or (ii) any Secondary Compound.

 

1.50                         Selected Patents ” means only U.S. Patents controlled by a Third Party having valid claims covering (or, with respect to Patent applications, having claims that, if issued,

 


***Confidential Treatment Requested

 



 

would cover) the composition of matter or method of use of the Compound, Secondary Compound, or any Product, but expressly excluding valid claims to the extent they claim (a) the manufacture of the Compound, Secondary Compound or Products or (b) as a composition of matter of any compound or product other than the Compound, Secondary Compound or a Product comprising the Compound.

 

1.51                         Taxes ” means all taxes of any kind, and all charges, fees, customs, levies, duties, imposts, required deposits or other assessments, including all federal, state, local or foreign net income, capital gains, gross income, gross receipt, property, franchise, sales, use, excise, withholding, payroll, employment, social security, worker’s compensation, unemployment, occupation, capital stock, transfer, gains, windfall profits, net worth, asset, transaction, and other taxes, and any interest, penalties or additions to tax with respect thereto, imposed upon any person by any taxing authority or other Governmental Authority under applicable Legal Requirements.

 

1.52                         Technology Transfer Plan ” means the agreement providing for a limited technology transfer, dated as of the Closing Date, between GSK and Roivant, in substantially the form attached hereto as Exhibit B .

 

1.53                         Territory ” means Worldwide.

 

1.54                         Third Party ” means any Person other than GSK, Roivant, or any Affiliate of GSK or Roivant.

 

1.55                         Transaction ” means the sale and purchase of the Assets.

 

1.56                         Transferred Intellectual Property ” means and is limited to (a) those Patents listed in Section 1.3 of the Disclosure Schedule, including the Patents designated therein as lapsed patents (each lapsed patent, a “ Lapsed Patent ”, and collectively, the “ Lapsed Patents ”), (b) all patent applications filed either from such Patents or from an application claiming priority from them, including divisionals, continuations, continuations-in-part, substitutions, provisionals, converted provisionals, and continued prosecution applications, (c) any and all patents that have issued or in the future issue from the foregoing patent applications described in clauses (a) and (b), including utility models, petty patents and design patents and certificates of invention and (d) any and all extensions or restorations by existing or future extension or restoration mechanisms, including revalidations, reissues, re-examinations, supplemental examinations, inter partes reviews, post-grant reviews, oppositions and other existing or future post-issuance proceedings, and extensions (including future pending or issued unexpired patent term extension or supplemental protection certificate or equivalent extension right) of the foregoing patents or patent applications described in clauses (a), (b) and (c). Any Patent included in the Transferred Intellectual Property that is not a Lapsed Patent is referred to in this Agreement as a “ Maintained Patent ” and collectively as the “ Maintained Patents ”.

 

1.57                         Valid Patent Claim ” means (a) a claim of any issued, unexpired Patent included in the Transferred Intellectual Property that has not irretrievably lapsed or been donated to the

 


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public, finally disclaimed, abandoned or held finally invalid or unenforceable by a court of competent jurisdiction in an unappealed or unappealable decision, or (b) a claim of a patent application included in the Transferred Intellectual Property that has been pending less than [***] years from the earliest date on which such patent application claims priority and which claim was filed and is being prosecuted in good faith and has not been cancelled, withdrawn or abandoned or finally rejected by an administrative agency action from which no appeal can be taken; provided , that, in the event a claim that has been pending for more than [***] years subsequently issues, as long as the applicable Royalty Term has not otherwise expired, the resulting issued Patent shall be considered a Valid Patent Claim for so long as it meets the requirements of clause (a) above.

 

1.58                         Roivant FDA Letter ” means the letter from Roivant to the FDA, duly executed by Roivant, to be filed with the FDA no later than three (3) Business Days following the Closing Date with regard to the IND(s), excluding foreign equivalents of U.S. INDs, included in the Assets, the form of which is attached hereto in Section 1.58 of the Disclosure Schedule.

 

1.59                         Other Definitions

 

The following terms have the meaning set forth in the Sections below:

 

Defined Term

 

Location of Definition

Accounting Firm

 

2.8.1(c)

Additional Tax

 

6.2.1

Allocation

 

2.4.2

Agreed Amount

 

8.3.1

Agreement

 

Introduction

Asset Acquisition Statement

 

2.4.2

Audit Report

 

2.8.1(c)

Cap

 

8.2.5(a)

Claimed Amount

 

8.3.1

Closing

 

2.6.1

Closing Date

 

2.6.1

Closing Payment

 

2.4.1

Combination Product

 

2.8.2(c)

CPR

 

9.3

FCPA

 

4.1.13

Excluded Liabilities

 

2.3.2

First Agreement

 

2.8.2(d)

Fundamental Representation

 

8.1.2

GAAP

 

2.8.3

GSK

 

Introduction

GSK Bring-down Certificate

 

7.3.2

GSK Fundamental Representation

 

8.1.1

GSK Indemnified Party

 

8.2.3

 


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Defined Term

 

Location of Definition

Indemnified Party

 

8.2.3

Indemnifying Party

 

8.2.4

Interests

 

10.2.1

IP and Regulatory Cap

 

8.2.5(b)

Laboratory Notebooks

 

2.2.3

Lapsed Patent(s)

 

1.56

Maintained Patent(s)

 

1.56

Maximum Amount

 

8.2.5(d)

Milestone Payment

 

2.8.1

Milestone Event

 

2.8.1

Officer’s Certificate

 

8.2.4

Patent Assignment Agreement

 

3.1

PHSA

 

4.1.8

Proceedings

 

4.1.9

Retained Rights

 

2.2.1

Required Consents

 

4.1.4

Royalty(ies)

 

2.8.2(a)

Sales Milestone

 

2.8.1(a)

Selected Third Party Payments

 

2.8.2(f)

Standard Deductions

 

2.8.3

Threshold Amount

 

8.2.4

Roivant

 

Introduction

Roivant Bring-down Certificate

 

7.2.2

Roivant Fundamental Representation

 

8.1.2

Roivant Indemnified Party

 

8.2.2

Roivant Withholding Tax Action

 

6.2.1

 

1.60                         Interpretation .  The Section headings contained in this Agreement are for reference purposes only and shall not affect the meaning or interpretation of this Agreement. Except where the context clearly requires to the contrary:  (a) each reference in this Agreement to a designated “Section” or “Exhibit” is to the corresponding Section or Exhibit of or to this Agreement; (b) instances of gender or entity-specific usage (e.g., “his” “her” “its” “person” or “individual”) shall not be interpreted to preclude the application of any provision of this Agreement to any individual or entity; (c) “including” means “including, without limitation”; (d) references to “$” or “dollars” means the lawful currency of the United States; (e) references to “Federal” or “federal” shall be to Legal Requirements, agencies or other attributes of the United States (and not to any State or locality thereof); (f) the meaning of the terms “domestic” and “foreign” shall be determined by reference to the United States; (g) references to “days” (and not “business days” or “Business Days”) means calendar days; (h) references to months or years shall be to the actual calendar months or years at issue (taking into account the actual number of days in any such month or year); (i) days, Business Days and times of day shall be determined by reference to local time in Philadelphia, Pennsylvania, (j) if a word or

 


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phrase is defined, the other grammatical forms of such word or phrase shall have a corresponding meaning and (k) a reference to a Legal Requirement includes any amendment or modification to such Legal Requirement.

 

2.                                       SALE, TRANSFER, LICENSE AND PURCHASE OF ASSETS; LIABILITIES

 

2.1                                Sale and Transfer of Assets and Limited Technology Transfer

 

2.1.1                      On the Closing Date and subject to the terms and conditions hereof, GSK agrees to and shall sell, transfer and assign, or cause its Affiliates to sell, transfer and assign, to Roivant the Assets, free and clear of any Lien other than the Permitted Liens, and Roivant agrees to and shall purchase from GSK such Assets.

 

2.1.2                      Roivant shall not acquire pursuant hereto any assets or rights of any kind or nature, real or personal, tangible or intangible, other than the Assets and GSK shall retain any and all other assets and rights.

 

2.1.3                      GSK shall offer Roivant a limited technology transfer pursuant to the Technology Transfer Plan.

 

2.2                                Rights Retained by GSK; Certain Covenants of GSK .

 

2.2.1                      GSK and its Affiliates shall retain, and Roivant hereby agrees and acknowledges to GSK having, a fully paid-up, irrevocable, non-exclusive, non-transferable (sublicensable only to Affiliates) research right and license to use all retained data, reports and documents relating to the Selected Compounds or Assets as well as samples of the Selected Compounds, in each case solely for internal research purposes, including, but not limited to, using the Selected Compounds and/or such data, reports and documents as a reference when conducting research and development, and maintaining the Selected Compounds within GSK’s chemical compound libraries and high throughput screens (the “ Retained Rights ”).

 

2.2.2                      GSK hereby covenants that during the Primary Product Royalty Term it shall not conduct clinical development on any Selected Compound or commercialize any Selected Compound in any field of use.

 

2.2.3                      Notwithstanding anything else to the contrary, GSK shall not be required to remove and shall have the right to retain copies of any documents, reports or data relating to the Selected Compounds that may or may not comprise the Assets from its databases, electronic systems or physical files. GSK shall, in those systems that have such capability as of Closing, restrict access to all data, reports and documents related to the Selected Compounds or Assets housed in such systems to the extent practicable and legally permissible in accordance with its regular practices, including maintaining the confidentiality of all such data, reports and documents in the same manner that GSK maintains its own confidential or proprietary information; subject to GSK’s right to use same pursuant to GSK’s Retained Rights. GSK shall retain copies of all laboratory

 


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                                                notebooks related to the Selected Compounds or Assets (the “ Laboratory Notebooks ”) in accordance with its record retention policy.  In the event that GSK decides to discard or destroy any Laboratory Notebook within 15 years from the Closing Date, GSK shall give Roivant prior written notice of such decision and upon Roivant’s written request, GSK shall send to Roivant original copies of such Laboratory Notebook (or, to the extent acceptable to Roivant and its counsel in connection with such Litigation, certified copies thereof), at Roivant’s cost and expense. In the event of Litigation involving a Third Party with respect to the Selected Compounds or the Assets, Roivant shall, upon written request to GSK, have a right of access to, and GSK shall make available to Roivant, original copies of the Laboratory Notebooks (or, to the extent acceptable to Roivant and its counsel in connection with such Litigation, certified copies thereof) for the purpose of handling such Litigation, so long as such Laboratory Notebooks are not destroyed as permitted pursuant to this Section 2.2.3 .

 

2.3                                Liabilities .

 

2.3.1                      Assumed Liabilities .  Subject to the terms and conditions hereof, including without prejudice to the representations and warranties made by GSK to Roivant in Section 4 and the related indemnification obligations of GSK under Section 8 , as of the Closing Date, Roivant shall assume responsibility for Liabilities associated with (i) the continued development and manufacture of the Compound and Products following the Closing, as well as (ii) any resulting commercialization of the Compound and Products, including, in each case of (i) and (ii), product liability claims relating to the Compound and Products arising following the Closing.

 

2.3.2                      Excluded Liabilities .  Roivant shall not acquire any Liabilities relating to (a) any assets of GSK or its Affiliates other than the Assets (which Assets shall become assets of Roivant upon Closing), (b) GSK’s pre-Closing activities, including, for example, Liabilities GSK may have to participants in clinical studies for the Compound conducted by GSK prior to Closing, but, for clarity, excluding, for example, Liabilities that become owed to Third Parties after the Closing as result of post-Closing activities with respect to the Assets, (c) any amounts due or that become due following the Closing, for any Permitted Liens and (d) GSK or its Affiliates both prior to and following the Closing that is not an Assumed Liability (the foregoing (a), (b), (c) and (d), collectively, the “ Excluded Liabilities ”). Roivant will not assume any Liabilities of GSK or any of its Affiliates (other than the Assumed Liabilities to be assumed by Roivant), and the Excluded Liabilities will remain the sole obligation and responsibility of GSK and its Affiliates.

 


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2.4                                Consideration .

 

2.4.1                      Closing Payment and Contingent Payments .

 

(a)                                  At the Closing, Roivant shall pay to GSK the sum of five million U.S. dollars ($5,000,000) by wire transfer of immediately available funds in accordance with written instructions delivered by GSK to Roivant (the “ Closing Payment ”).

 

(b)                                  Unless Roivant is required by the FDA to complete additional clinical work prior to commencement of the first Phase 3 trial, Roivant shall pay GSK the sum of five million U.S. dollars ($5,000,000) by wire transfer of immediately available funds in accordance with written instructions delivered by GSK to Roivant within [***] of the earliest of (a) [***].

 

2.4.2                      Allocation of Consideration . GSK and Roivant recognize their mutual obligations pursuant to Section 1060 of the Code to file timely IRS Form 8594 (the “ Asset Acquisition Statement ”) with each of their respective United States federal income tax returns. Accordingly, Roivant, as promptly as practicable following the Closing Date, but in any event not later than sixty (60) days following the Closing Date, shall allocate the Purchase Price between and among the underlying asset categories (the “ Allocation ”) and shall deliver the Asset Acquisition Statement to GSK on or before the sixtieth (60th) day following the Closing Date. If GSK and Roivant have agreed on the Allocation and an Asset Acquisition Statement, then GSK and Roivant will file the Asset Acquisition Statement in the form so agreed, and neither GSK nor Roivant shall take a tax position which is inconsistent with such Allocation. GSK and Roivant agree to cooperate to make any and all filings necessary or required in all other jurisdictions in which Assets are located and further agree that the positions taken in such filings will be consistent with the Asset Acquisition Statement.

 

2.5                                Inventory .

 

2.5.1                      Inventory . Roivant shall, at Closing, acquire all inventory consisting of the physical materials listed in Section 2.5.1 of the Disclosure Schedule.

 

2.6                                Closing .

 

2.6.1                      Closing . The closing of the transactions contemplated by this Agreement (the “ Closing ”) and all actions specified in this Agreement to occur at the Closing will take place simultaneously with the execution of this Agreement, via facsimile or the electronic exchange of execution versions of the agreements and documents contemplated hereby and the signature pages thereto at 10:00 a.m., New York time, on the day on which the last of the conditions set forth in Section 7 have been fulfilled or waived, or at such other time and/or place and/or on such other date as GSK and Roivant agree. The date on which the execution of this Agreement and Closing take place is referred to in this Agreement as the “ Closing Date ”.

 


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2.6.2                      Closing Deliveries .

 

(a)                                  At the Closing, GSK shall deliver the following to Roivant:

 

(i)                                     Ancillary Transaction Agreements, executed by GSK or its Affiliates, as applicable;

 

(ii)                                 the GSK Bring-down Certificate; and

 

(iii)                             copies of the executed Required Consents (if any).

 

(b)                                  At the Closing, Roivant shall deliver the following to GSK:

 

(i)                                     Ancillary Transaction Agreements, executed by Roivant;

 

(ii)                                 the Roivant Bring-down Certificate; and

 

(iii)                             the Closing Payment (by wire transfer of immediately available funds to an account designated by GSK).

 

2.6.3                     Upon Closing, GSK and Roivant will perform the Technology Transfer Plan.

 

2.7                                Transfer of IND(s) . Roivant and GSK shall file the Roivant FDA Letter and the GSK FDA Letter with the FDA within three (3) Business Days after the Closing Date. Roivant will be responsible for the payment of all filing or similar fees, if any, payable to the FDA by Roivant or GSK with respect to the transfer to the Roivant of the IND(s), other than foreign equivalents of U.S. INDs, included in the Assets and rights to the Compound and the Products as provided hereunder. Transfer of title to the IND(s) included in the Assets will be effective as of Closing Date.

 

2.8                                Post-Closing Payments .

 

2.8.1                      Milestone Payment .

 

(a)                                  Roivant shall make contingent Milestone Payments (each such payment, a “ Milestone Payment ”) to GSK as set out in the table below within [***] of achievement of each applicable milestone (each such milestone, a “ Milestone Event ”). Each Milestone Payment shall be paid by Roivant only one time, regardless of how many times the Milestone Event is achieved, and no Milestone Payment shall be made for a Milestone Event that is not achieved. All Milestone Payments are non-refundable. For clarity, Milestone Payments do not apply to Secondary Products.

 

Milestone Event

 

Milestone
Payment

 

Global Development Milestones for a Primary Product:

 

Total: $70 million

 

NDA Approval By FDA:

 

$

35 million

 

MAA Approval By EMA:

 

$

25 million

 

JNDA Approval By Japanese Ministry of Health:

 

$

10 million

 

 

 

 

 

Global Sales Milestones of Primary Products:

 

$

85 million

 

First achievement of global Net Sales of $1.2 billion in any calendar year (the “ Sales Milestone ”)

 

$

85 million

 

 


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(b)                                  In the event Roivant fails to pay any Milestone Payment or Royalties, if any, pursuant to this Agreement when due, any such payment that is late shall be subject to a late payment charge, to the extent not prohibited by Legal Requirement, accruing on a daily basis, effective for the first date after the date on which payment was delinquent and calculated on the number of days until such payment is made (and excluding the date on which such payment is made), at a rate equal to the lesser of (i) the sum of [***] plus the prime rate of interest quoted in the Money Rates (or equivalent) section of The Wall Street Journal (or any substitute source mutually agreed to by the Parties), calculated daily on the basis of a three hundred sixty (360) day year, or (ii) the maximum interest rate allowed by applicable Legal Requirement.

 

(c)                                   Roivant shall keep or cause to be kept such financial records as are reasonably required to determine, in a manner, with respect to any financial records, consistent with generally accepted accounting principles as applied in the United States, Net Sales occurring on or after the Closing Date. In each case, financial records for a completed fiscal year of Roivant shall be retained for a period of three (3) years from such fiscal year end date. At the written request (and expense) of GSK, Roivant, its Affiliates, and the licensees of Roivant or its Affiliates shall permit GSK to engage an independent certified public accounting firm reasonably acceptable to Roivant (the “ Accounting Firm ”), at reasonable times, not more than once per fiscal year and not more than once in any twelve (12)- month period and upon reasonable notice, to examine those financial records of Roivant as may be necessary to determine the correctness or completeness of any report made under this Section 2.8 . Prior to each engagement, the Accounting Firm shall execute a confidentiality agreement that is reasonably acceptable to Roivant. Upon completion of any audit, the Accounting Firm shall promptly, but in no event less than five (5) Business Days, provide Roivant and GSK with a copy of the

 


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results of any such audit or examination (the “ Audit Report ”), which Audit Report shall be final absent any manifest error. GSK shall bear the full cost of the performance of any such audit or examination, including the production of such Audit Report, unless such Audit Report discloses (i) an underreporting of Net Sales by an amount equal to or greater than [***] of the actual amount of Net Sales occurring during the audited period or (ii) the failure of Roivant to report or make the Milestone Payment with respect to the Sales Milestone when due, in which case Roivant shall bear the reasonable, documented cost of the performance of such audit or examination subject to reasonable substantiation of such costs. In the event of an underpayment in Royalties or Milestone Payments as determined in the Audit Report, Roivant shall pay GSK any such Royalty or Milestone Payment due (plus interest, if applicable) within [***] following the delivery of such Audit Report to both Roivant and GSK. In the event of an overpayment in Royalties or Milestone Payments as determined in the Audit Report, GSK shall refund Roivant for any overpayment amount (plus interest, if applicable) within [***] following the delivery of such Audit Report to both Roivant and GSK.

 

(d)                                  Except to the limited extent expressly provided in Section 2.8.2 and this Section 2.8.1(d) , Roivant has no right of set-off of any amounts due and payable, or any Liabilities arising, under this Agreement against any amounts due and payable. In the event of overpayment in Royalties or Milestone Payments as determined in the Audit Report in Section 2.8.1(c) , or any indemnification obligations owed to Roivant by GSK or its Affiliates, Roivant shall have a right of set-off of any such amounts or obligations owed by GSK or Affiliates against any payment obligations of Roivant pursuant to this Agreement. The payment obligations under this Agreement remain the independent obligation of each Party, irrespective of any amounts owed to the other Party under this Agreement.

 

2.8.2                      Royalty .

 

(a)                                  As additional consideration for the sale of the Assets, during the Primary Product Royalty Term, on a country-by-country basis, Roivant shall pay GSK a twelve and one half percent (12.5%) royalty on annual Net Sales of Primary Products in the Territory. As additional consideration for the sale of the Assets, during the applicable Secondary Product Royalty Term, on a country-by-country basis, Roivant shall pay GSK a [***] royalty on annual Net Sales of Secondary Products in the Territory. All such payments provided for under the foregoing in this subsection (a) are referred to as “ Royalties ” under this Agreement, payable in accordance with and subject to the other terms and conditions of this Agreement (and each such payment is a “ Royalty ” under this Agreement).

 


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(b)                                  On a Product-by-Product and country-by-country basis, once a Primary Product is either (A) (i) no longer covered by either at least one Valid Patent Claim and (ii) no longer covered by Regulatory Exclusivity in a country in the Territory; or (B) there has been the entry of a generic product referencing the Regulatory Filings of a Product but prior to the expiry of the Primary Product Royalty Term, the Royalty provided in Section 2.8.2 for such Primary Product in such country will be reduced by [***].

 

(c)                                   In the event a Product is comprised of or contains a Selected Compound as an active pharmaceutical ingredient together with one or more other active pharmaceutical ingredients and is sold either as a fixed dose or as co-packaged doses as one product (each, a “ Combination Product ” and collectively, the “ Combination Products ”), then Net Sales of Combination Products shall be calculated by multiplying the Net Sales of the Combination Product by the fraction:  A divided by (A+B), in which A is the average selling price of any Product that is sold in substantial quantities comprising such Selected Compound as the sole therapeutically active ingredient, and B is the average selling price of any product that is sold separately in substantial quantities comprising the other therapeutically active ingredients contained in the Combination Product as the sole therapeutically active ingredients, in each case during the accounting period in which the sales of the Combination Product were made, or if no sales of such Product or product comprising the other therapeutically active ingredients occurred during such period, then such average selling prices as sold during the most recent accounting period in which such sales did occur. If, with respect to any year, either no Product containing the Selected Compound or no product containing the other active ingredients has been sold in the current or prior year in substantial quantities, then the Parties shall negotiate in good faith an appropriate allocation of Net Sales between the Selected Compound and the other active ingredients included in such Combination Product for purposes of this Section 2.8.2(c) .

 

(d)                                  Roivant shall be entitled to set-off against Royalties and Milestone Payments payable to GSK, [***] of any license fee, milestone, royalty or other amounts (or similar payments) payable by Roivant or its Affiliates to Third Parties:  (i) to secure, whether by license, acquisition or otherwise, the intellectual property rights under composition of matter Selected Patents issued as of the Closing Date that are reasonably necessary to Exploit the Compound as an active ingredient for a Product, whether as the sole active ingredient or as a Combination Product, for the treatment of central nervous system indications and (ii) regardless of whether clause (i) is applicable, to secure, whether by license, acquisition or otherwise, the intellectual property rights under the Selected Patents that are published patent applications that remain pending as of the Closing Date and that are

 


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reasonably necessary to Exploit the Compound or any Product for the treatment of Down Syndrome (in addition to the Third Party license set forth in (i) above). For the purpose of clarity, the Parties acknowledge and agree that: the offsets under this Section 2.8.2(d)  shall only apply with respect to one agreement that is entered into by Roivant or its Affiliates with a Third Party the subject matter of which is linked by a common priority application or patent application (i.e., the first license, acquisition or otherwise) with respect to clause (i) and one agreement the subject matter of which is linked by a common priority application or patent application (i.e., license, acquisition or otherwise) with respect to clause (ii) (each, a “ First Agreement ”).

 

(e)                                   Roivant shall also be entitled to set-off against Royalty and/or Milestone Payments payable to GSK [***] of any Royalty amounts payable by Roivant and/or its Affiliates to Third Parties pursuant to an agreement entered into that is not a First Agreement to secure, whether by license, acquisition or otherwise, intellectual property rights under any Selected Patents that are reasonably necessary to Exploit any Selected Compound and/or any Product (regardless of indication); provided , that if any given Royalty or Milestone Payment payable to GSK is eligible for a set-off under Section 2.8.2(d) , it shall not be eligible for a set-off under this Section 2.8.2(e) .

 

(f)                                    The set-offs provided for in the foregoing Sections 2.8.2(d)  and 2.8.2(e) , are collectively referred to herein as the “ Selected Third Party Payments ”. Notwithstanding the foregoing in Sections 2.8.2(d)  and 2.8.2(e) , in no event shall Roivant be entitled to reduce the amount of any Royalties or Milestone Payments to GSK by more than [***] of the amount of such payment as a result of the exercise of its set-off rights in Sections 2.8.2(d) and 2.8.2(e) ; provided , that Roivant shall be entitled to set-off against future Royalties and Milestone Payments to GSK the amount of Selected Third Party Payments (if any) that Roivant could not apply to reduce a present Milestone Payment or payment of Royalties to GSK as a result of the [***] limitation in the preceding sentence.

 

2.8.3                      Modification of Net Sales . If, in accordance with the terms of this Agreement, Roivant licenses the Assets to a Third Party that (a) has a dozen or more pharmaceutical products on the market in the U.S. at any given time and (b) takes deductions on a standard and formulaic basis, in respect of sales of each such pharmaceutical product on a consistent basis across its entire portfolio of marketed pharmaceutical products, accounted for as permitted under International Financial Reporting Standards or Generally Accepted Accounting Principles (“ GAAP ”), as generally and consistently applied throughout such Third Party’s operations, (the “ Standard Deductions ”), then, if demanded by such Third Party licensee and requested by Roivant, solely with respect to calculating Net Sales pursuant to such Third Party license, the Parties shall amend the definition of Net

 


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Sales in Section 1.31 to instead provide for such Standard Deductions in place of the deductions provided for in the definition of Net Sales.

 

2.8.4                      Payment Method . All amounts due under this Agreement will be paid in United States Dollars by wire transfer in immediately available funds to an account designated by the GSK. Roivant’s Net Sales in countries in the Territory invoiced in currency other than United States Dollars, as appropriate, shall be translated by Roivant to United States Dollars using exchange rates from Reuters or Bloomberg.

 

2.8.5                      Royalty Payment Schedules . Royalty payments due pursuant to Section 2.8.2 are due and payable within [***] of the end of each calendar quarter during the Royalty Term during which there were Net Sales.

 

2.8.6                      Sales Reports . Each payment of Royalties under this Agreement shall be accompanied by a report setting forth, on a Product-by Product and country-by-country basis, the amount of Net Sales of each Product in such country during the applicable calendar quarter, the currency conversion rate used (if any), the United States Dollar-equivalent of such Net Sales, and the Royalty payment due on such Net Sales.

 

3.                                       PATENT ASSIGNMENT

 

3.1                                Conveyance and Acceptance of Transferred Intellectual Property . GSK shall assign and Roivant shall accept the Transferred Intellectual Property listed in Section 1.3 of the Disclosure Schedule in accordance with the terms and provisions of the form of Patent Assignment Agreement attached hereto as Exhibit A (the “ Patent Assignment Agreement ”).

 

4.                                       REPRESENTATIONS AND WARRANTIES

 

4.1                                Representations and Warranties of GSK .  GSK represents and warrants to Roivant that, except as set forth in Section 4.1 of the Disclosure Schedule, the statements contained in this Section 4.1 are true and correct as of the Closing Date (as though made as of the Closing, except to the extent such representations and warranties are specifically made as of a particular date (in which case such representations and warranties will be true and correct as of such date)). The Disclosure Schedule will be arranged in paragraphs corresponding to the lettered and numbered paragraphs contained in this Section 4.1 , it being acknowledged and agreed, however, that to the extent that any of the representations and warranties contained herein call for the disclosure of matters on the Disclosure Schedule which are also required to be disclosed pursuant to other representations and warranties under this Agreement, disclosure in one Section of the Disclosure Schedule of such matter with such reasonable particularity that it can reasonably be concluded from the face of such disclosure that such disclosure is applicable to another representation or warranty shall, to the extent of such disclosure, be deemed to constitute disclosure of that matter pursuant to such other representation and warranty under this Agreement.

 


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4.1.1                      Organization and Good Standing . GSK is a limited liability company duly organized, validly existing and in good standing under the laws of the State of Delaware. GSK has the requisite limited liability company power and authority to own, operate and lease the Assets. GSK is duly qualified to do business as a foreign limited liability company and is in good standing in all jurisdictions in which the ownership of the Assets makes such qualification necessary except for any failure, individually or in the aggregate, to be so qualified or in good standing does not or would not reasonably be expected to have a Material Adverse Effect.

 

4.1.2                      Authority; Enforceability of Agreements . GSK has all requisite limited liability company power and authority to execute and deliver this Agreement and the Ancillary Transaction Agreements and to perform and consummate the transactions contemplated hereby and thereby. The execution, delivery and performance by GSK of this Agreement and the Ancillary Transaction Agreements have been duly and validly authorized by all necessary limited liability company action on the part of GSK. This Agreement has been, and the Ancillary Transaction Agreements at the Closing will be, duly executed and delivered by GSK, and each constitutes, or when executed and delivered will constitute, a valid and binding obligation of GSK, enforceable against GSK in accordance with its terms, except that enforceability thereof may be limited by bankruptcy, insolvency, reorganization or other similar Legal Requirements affecting creditors’ rights generally and by principles of equity regarding the availability of remedies.

 

4.1.3                      No Conflict or Breach . The execution, delivery and performance of this Agreement and the Ancillary Transaction Agreements by GSK, and the consummation by GSK of the transactions contemplated hereby and thereby, do not and will not:

 

(a)                                  conflict with or constitute a violation of the Organizational Documents of GSK;

 

(b)                                  assuming compliance with the requirements of the HSR Act, conflict with or constitute a violation of any Legal Requirement, judgment, order, decree or regulation of any Governmental Authority applicable to or relating to GSK or the Assets;

 

(c)                                   conflict with, constitute a default under, result in a breach or acceleration of, give rise to any right of termination, cancellation, or, except as set forth in Section 4.1.3(c)  of the Disclosure Schedule, require notice to or the consent of any Third Party under, any contract, agreement, commitment, mortgage, note, license or other instrument or obligation to which GSK is party or by which it is bound or by which any of the Assets are affected, except for such conflicts, defaults, breaches or accelerations that, individually or in the aggregate, do not or would not reasonably be expected to be material to the Assets, taken as a whole; or

 


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(d)                                  result in the creation or imposition of any Lien (other than any Permitted Lien) on any of the Assets.

 

4.1.4                      Consents and Approvals . Section 4.1.4 of the Disclosure Schedule describes each of the following which is required in connection with the valid execution and delivery by GSK of or the performance by GSK of its obligations under this Agreement and the Ancillary Transaction Agreements or the consummation by GSK of the transactions contemplated herein and therein (including the transfer of the Assets to Roivant):  (a) each consent, approval, authorization, registration or filing with any Governmental Authority and (b) each consent, approval, authorization of or notice to any other Third Party, which, in the case of this clause (b), is required in connection with the valid execution and delivery by GSK of or the performance by GSK of its obligations under this Agreement and the Ancillary Transaction Agreements or the consummation by GSK of the transactions contemplated by this Agreement and the Ancillary Transaction Agreements; provided , however , that Section 4.1.4 of the Disclosure Schedule does not describe any consents, approvals, authorizations, registrations, filings and notices the failure of which to obtain or give does not or would not reasonably be expected to have a material effect on the Assets, taken as a whole. The consents described in Section 4.1.4 of the Disclosure Schedule are referred to herein as the “ Required Consents ”.

 

4.1.5                      Title to Assets .

 

(a)                                  GSK has good and transferable title to each of the Assets, free and clear of all Liens, except for Permitted Liens.

 

(b)                                  Immediately prior to the assignment hereunder becoming effective, GSK is the sole and exclusive owner of the entire right, title and interest in and to the Transferred Intellectual Property and has a valid and enforceable right to assign the Maintained Patents as contemplated herein.

 

4.1.6                      Sufficiency of Assets; Other Development .

 

(a)                                  The Assets, together with the items listed in Section 4.1.6 of the Disclosure Schedule, constitute all of the assets and rights specific to the Compound owned or controlled by GSK or any of its Affiliates that were utilized by GSK and its Affiliates in the development program for the Compound and Primary Product undertaken by GSK prior to the Closing Date.

 

(b)                                  Neither GSK nor any of its Affiliates, nor any Third Party on behalf of GSK or any of its Affiliates, has imported, exported, distributed, commercialized, promoted, marketed, sold or offered for sale the Compound or Primary Product, other than importing, exporting, and distributing the Compound and Primary Product as a part of the

 


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development program for the Compound and Primary Product undertaken by GSK prior to the Closing Date as described in the Data Room.

 

(c)                                   As of Closing, and to the Knowledge of GSK, GSK is not conducting a development program with another 5HT6 antagonist for Alzheimer’s Disease, Schizophrenia, or Down Syndrome.

 

(d)                                  Neither GSK nor any of its Affiliates, nor any Third Party on behalf of GSK or any of its Affiliates, are currently engaged in the clinical development of the Compound.

 

4.1.7                      Intellectual Property .

 

(a)                                  Section 4.1.7(a)  of the Disclosure Schedule contains a complete and accurate list of the Transferred Intellectual Property, including, as applicable, the jurisdiction of filing and the applicable registration or serial number.

 

(b)                                  No funding, facilities or personnel of any Governmental Authority or any university or other education institution were used to develop or create, in whole or in part, any Transferred Intellectual Property.

 

(c)                                   Except as set forth in Section 4.1.7(c)  of the Disclosure Schedule: (i) GSK has not licensed, granted or transferred any rights in or to any of the Transferred Intellectual Property to any Third Party and has no obligation, absolute or contingent, to do so; and (ii) GSK is not a party to any agreement with a Third Party that limits or restricts or requires payments for the use of the Transferred Intellectual Property in connection with the Manufacture or Exploitation of any Compound or any Primary Product.

 

(d)                                  Except as listed in Section 4.1.7(d)  of the Disclosure Schedule, to the Knowledge of GSK, (i) there are no Contracts, licenses and agreements between GSK and any Third Party with respect to the Transferred Intellectual Property and (ii) there is no Litigation pending, or to the Knowledge of GSK, threatened in writing with respect to any such Contract listed in Section 4.1.7(d) .

 

(e)                                   GSK has not received written notice from any Third Party that the use of the Transferred Intellectual Property or the Manufacture or Exploitation of the Compound infringes or misappropriates the intellectual property of any Third Party and there are no Proceedings pending, or to the Knowledge of GSK, threatened in writing, alleging any such infringement or misappropriation.

 

(f)                                    To the Knowledge of GSK, except as described in Section 4.1.7(f)  of the Disclosure Schedule, no Third Party has infringed or misappropriated the

 


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Maintained Patents or is infringing or misappropriating any of the Maintained Patents.

 

(g)                                  Except as described in Section 4.1.7(g)  of the Disclosure Schedule, (i) no Maintained Patent is subject to any outstanding or, to the Knowledge of GSK, threatened in writing, Proceeding, decree, order, judgment or stipulation, including any claims, judgments or settlements against or owed by GSK, restricting in any manner the use, transfer or licensing thereof, and (ii) to the Knowledge of GSK, there are no reissue, re-examination, interference, cancellation, opposition or similar proceedings or other material Proceedings pending or threatened in writing, with respect to the Maintained Patents.

 

(h)                                  The execution, delivery or performance of this Agreement by GSK will not give any Third Party the right or option to cause or assert (i) a loss of, or Lien on, any Maintained Patent; (ii) the release, disclosure or delivery of any Maintained Patent to any escrow agent; (iii) the grant, assignment or transfer of any rights or interest to a Third Party, such as an ownership interest or covenant not to use, under, in or to any Maintained Patent; or (iv) the forfeiture or termination of the right of the GSK to use, possess, sell, transfer or license any Maintained Patent.

 

(i)                                     This Section 4.1.7 and Section 4.1.5 contain all warranties of GSK with respect to the Transferred Intellectual Property.

 

4.1.8                      Compliance With Legal Requirements; Governmental Authorizations . GSK and its Affiliates are in compliance in all material respects with all Legal Requirements applicable to the Assets during the conduct of the development program for the Compound and Primary Product undertaken by GSK prior to the Closing Date as described in the Data Room, including the FD&C Act, the Public Health Service Act (the “ PHSA ”), the Prescription Drug Marketing Act and regulations issued by the FDA thereunder. GSK has all material Governmental Authorizations necessary for the conduct of its business (solely as it relates to the Assets) as now being conducted and is in compliance in all material respects with such Governmental Authorizations. Neither GSK nor any of its Affiliates has granted any Third Party any rights of reference or use with respect to any such Governmental Authorizations.

 

4.1.9                      Legal Proceedings . Except as described in Section 4.1.9 of the Disclosure Schedule, there are no actions, suits, claims, arbitrations, audits, investigations or proceedings, in each case being pursued by Governmental Authorities or any Third Party (the “ Proceedings ”) that are instituted, pending or, to the Knowledge of GSK, threatened in writing against GSK or any of its Affiliates with respect to any Asset, the Compound or Primary Product.

 


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4.1.10               Regulatory Matters .

 

(a)                                  Except as described in Section 4.1.10(a)  of the Disclosure Schedule, GSK has maintained the Regulatory Filings relating to the Compound in accordance with its normal business practices. Other than the IND(s) included in the Assets, there are no Regulatory Filings (or regulatory approvals) with respect to the Compound or any Product that have been granted to or in the name of GSK or any of its Affiliates. There is no Proceeding pending or, to the Knowledge of GSK, threatened in writing seeking the revocation or suspension of any of the IND(s) included in the Assets. All maintenance and other fees related to the IND(s), other than foreign equivalents of U.S. INDs, included in the Assets occurring prior to the Closing Date have been paid.

 

(b)                                  Except as set forth in Section 4.1.10(b)  of the Disclosure Schedule, neither GSK nor any of its Affiliates nor any of its or their respective sublicensees, subcontractors or other Representatives, has received within the past five (5) years:  (i) any FDA Form 483s concerning the Compound; (ii) any FDA Notices of Adverse Findings concerning the Compound; or (iii) warning letters from the FDA or any other Governmental Authority concerning the Compound in which the FDA or other such Governmental Authority asserted that the operations of GSK and its Affiliates (solely as it relates to the Assets) or the Compound were not in compliance with applicable Legal Requirements. There is no Proceeding by the FDA or any other Governmental Authority pending or, to the Knowledge of GSK, threatened in writing against GSK or any of its Affiliates relating to safety or efficacy of the Compound.

 

(c)                                   All animal studies and other preclinical tests relating to the Compound were conducted by GSK in accordance with its standard operating procedures for the conduct of animal or preclinical studies at the time such tests were conducted. All human clinical trials conducted by or on behalf of GSK relating to the Compound have been and are being conducted in compliance with the requirements of Good Clinical Practice, informed consent, institutional review boards (as those terms are defined by the FDA or other relevant regulatory bodies), and other Legal Requirements relating to clinical trials or the protection of human subjects, in each case as applicable and that were in effect at the time such tests were conducted. With respect to the Compound, GSK and its Affiliates are in material compliance with the requirements of the applicable requirements of PHSA relating to registration of clinical trials and reporting of clinical trial results that were in effect at the time such tests were conducted. Neither GSK nor any of its Affiliates, nor anyone acting on behalf of GSK or any of its Affiliates, has received any written notice from the FDA or any other Governmental Authority, or any institutional review board threatening to initiate any clinical hold or other action to suspend or terminate any

 


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clinical trial relating to the Compound, or to suspend or terminate an IND application sponsored by or on behalf of GSK, relating to the Compound.

 

(d)                                  Neither GSK nor any of its Affiliates, nor any of its or their respective Representatives, has been subject to, or has been convicted of any crime or engaged in any conduct with respect to the Compound or the Manufacture or Exploitation thereof that would reasonably be expected to result in (i) debarment under 21 U.S.C. Section 335a or any similar Legal Requirement, or (ii) exclusion from participating in the federal health care programs under Section 1128 of the Social Security Act or any similar Legal Requirement.

 

(e)                                   All personal data collected, processed or disclosed by or on behalf of GSK or any of its Affiliates in connection with the Compound have been, and are being, collected, processed and disclosed in compliance, in all material respects, with applicable Legal Requirements that were in effect at the time such data was collected, processed or disclosed, or currently stored, including the Health Insurance Portability and Accountability Act of 1996 and the implementing regulations of the United States Department of Health and Human Services, Directive 95/46/EC of 24 October 1995 and the implementing Legal Requirements of the individual European Union countries, in each case, as applicable in the specific jurisdiction in which and at the time the applicable clinical trials were conducted. Neither GSK nor any of its Affiliates has received any:  (i) written notice or complaint alleging non-compliance with any Legal Requirements relating to the collection, processing and disclosure of information or data; (ii) written claim for compensation for loss or unauthorized collection, processing or disclosure of data; or (iii) written notification of an application for rectification, erasure or destruction of information or data that is still outstanding, in each case ((i) through (iii)), in connection with the Compound or the Exploitation thereof.

 

(f)                                    GSK has documented and stored all material data, documents and reports resulting from the pre-clinical and clinical development of the Compound in accordance with GSK’s business practices and standards in place for its own programs and products at the time such data, documents and reports were documented and stored.

 

4.1.11               Taxes . There are no tax liens upon any of the Assets.

 

4.1.12               Brokers . GSK and its Affiliates and agents have not incurred any obligation or Liability, contingent or otherwise, for brokerage or finders’ fees or agents’ commissions or other similar payment in connection with this Agreement.

 

4.1.13               Anticorruption Matters . None of GSK, any of its Affiliates or any of their respective employees or, to the Knowledge of GSK, agents or other Third Parties acting on behalf of GSK or any of its Affiliates, in any way relating to

 


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GSK or any of its Affiliates with respect to the Assets or the Manufacture or Exploitation of any Compound:  (i) has taken any action in violation of any applicable anticorruption Legal Requirement, including the Foreign Corrupt Practices Act of 1977 (the “ FCPA ”); or (ii) has corruptly offered, paid, given, promised to pay or give, or authorized the payment or gift of anything of value, directly or indirectly, to any Public Official, for purposes of (A) influencing any act or decision of any Public Official in his or her public capacity; (B) inducing such Public Official to do or omit to do any act in violation of his or her lawful duty; (C) securing any improper advantage; or (D) inducing such Public Official to use his or her influence with a Governmental Authority in order to assist GSK or any of its Affiliates or any person or entity in any way to any of them, in obtaining or retaining business with respect to the Assets. To the Knowledge of GSK, there are no pending issues with respect to violation of any applicable anticorruption Legal Requirement, including the FCPA, relating to the Assets or the Manufacture or Exploitation of any Compound.

 

4.1.14               Disclaimer of Other Representations and Warranties .  EXCEPT AS OTHERWISE EXPRESSLY SET FORTH IN THIS SECTION 4 , SECTION 10.3 AND SUBJECT TO SECTION 8.2.1 :

 

(a)                                  NONE OF GSK OR ANY OF ITS REPRESENTATIVES MAKES OR HAS MADE ANY OTHER REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, WRITTEN OR ORAL, AT LAW OR IN EQUITY, IN RESPECT OF THE ASSETS, ASSUMED LIABILITIES, THE COMPOUND, ANY PRODUCT OR THE TRANSFERRED INTELLECTUAL PROPERTY, WHETHER ORALLY OR IN WRITING, IN CERTAIN ELECTRONIC AND PHYSICAL “ DATA ROOMS ,” MANAGEMENT PRESENTATIONS, FUNCTIONAL “ BREAK-OUT ” DISCUSSIONS, RESPONSES TO QUESTIONS SUBMITTED ON BEHALF OF ROIVANT OR IN ANY OTHER FORM OR MANNER IN EXPECTATION OF THE TRANSACTIONS PROVIDED FOR IN THIS AGREEMENT. ANY SUCH OTHER REPRESENTATION OR WARRANTY IS HEREBY EXPRESSLY DISCLAIMED, INCLUDING ANY IMPLIED REPRESENTATION OR WARRANTY WITH RESPECT TO (I) MERCHANTABILITY, NON-INFRINGEMENT, SUITABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE, (II) THE DEVELOPMENT AND COMMERCIALIZATION OF THE COMPOUND OR PRODUCT BY ROIVANT AFTER THE CLOSING IN ANY MANNER, OR (III) THE PROBABLE SUCCESS OR PROFITABILITY OF THE COMPOUND OR PRODUCT AFTER THE CLOSING;

 

(b)                                  NONE OF GSK OR ANY OF ITS AFFILIATES OR REPRESENTATIVES WILL HAVE OR BE SUBJECT TO ANY LIABILITY OR INDEMNIFICATION OBLIGATION TO ROIVANT OR TO ANY OTHER PERSON RESULTING FROM

 


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THE DISTRIBUTION TO ROIVANT, ITS AFFILIATES OR REPRESENTATIVES, OR ROIVANT’S USE OF, ANY INFORMATION RELATING TO THE ASSETS (INCLUDING THE COMPOUND, ANY PRODUCT OR ANY OF THE TRANSFERRED INTELLECTUAL PROPERTY), INCLUDING ANY INFORMATION, DOCUMENTS OR MATERIAL MADE AVAILABLE TO ROIVANT, WHETHER ORALLY OR IN WRITING, IN CERTAIN ELECTRONIC AND PHYSICAL “ DATA ROOMS ,” MANAGEMENT PRESENTATIONS, FUNCTIONAL “ BREAK-OUT ” DISCUSSIONS, RESPONSES TO QUESTIONS SUBMITTED ON BEHALF OF ROIVANT OR IN ANY OTHER FORM IN EXPECTATION OF THE TRANSACTIONS PROVIDED FOR IN THIS AGREEMENT; AND

 

(c)                                  GSK’S INTERESTS IN THE ASSETS ARE BEING TRANSFERRED “ AS IS, WHERE IS, WITH ALL FAULTS ,” AND GSK EXPRESSLY DISCLAIMS ANY REPRESENTATIONS OR WARRANTIES OF ANY KIND OR NATURE, EXPRESS OR IMPLIED, INCLUDING WITHOUT LIMITATION AS TO THE CONDITION, VALUE OR QUALITY OF THE ASSETS AND THE PROSPECTS (FINANCIAL OR OTHERWISE), RISKS AND OTHER INCIDENTS OF THE ASSETS.

 

4.2                                Representations and Warranties of Roivant . Roivant represents and warrants to GSK that the statements contained in this Section 4.2 are correct and complete as of the date of this Agreement and will be correct and complete as of the Closing Date (as made then and as though the Closing Date were substituted for the date of this Agreement through this Section 4.2 ).

 

4.2.1                      Organization and Good Standing . Roivant is an exempted limited company duly organized, validly existing and in good standing under the laws of Bermuda. Roivant has the requisite corporate power and authority to own its properties and carry on its business as now being conducted. Roivant is duly qualified to do business as a foreign corporation and is in good standing in all jurisdictions in which it owns assets and conducts business, except for any failure, individually or in the aggregate, to be so qualified or in good standing does not or would not reasonably be expected to have a Material Adverse Effect.

 

4.2.2                      Authority; Enforceability of Agreements . Roivant has all requisite corporate power and authority to execute and deliver this Agreement and the Ancillary Transaction Agreements to which Roivant is or will become a party and to perform and consummate the transactions contemplated hereby and thereby.  The execution and delivery by Roivant of this Agreement and the Ancillary Transaction Agreements have been duly and validly authorized by all necessary corporate action on the part of Roivant. This Agreement and the Ancillary Transaction Agreements to which Roivant is or will become a party have been, or upon execution and delivery thereof by Roivant will be, duly executed and

 


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delivered by Roivant, and each constitutes, or when executed and delivered will constitute, a valid and binding obligation of Roivant, enforceable against Roivant in accordance with its terms, except that enforceability thereof may be limited by bankruptcy, insolvency, reorganization or other similar Legal Requirements affecting creditors’ rights generally and by principles of equity regarding the availability of remedies.

 

4.2.3                      No Conflict or Breach . The execution, delivery and performance of this Agreement and the Ancillary Transaction Agreements by Roivant, and the consummation by Roivant of the transactions contemplated hereby and thereby, do not and will not:

 

(a)                                  conflict with or constitute a violation of the Organizational Documents of Roivant;

 

(b)                                  assuming compliance with the requirements of the HSR Act, conflict with or constitute a violation of any Legal Requirement applicable to Roivant; or

 

(c)                                   conflict with, result in a default under, result in a breach or acceleration of, give rise to any right of termination or cancellation under any material Contract to which Roivant is a party, or, except as set forth in Section 4.2.3(c)  of the Disclosure Schedule, require notice to or the consent of any Third Party or by which it is bound or by which any of the Assets are affected, except for such conflicts, defaults, breaches or accelerations that, individually or in the aggregate, do not or would not reasonably be expected to be materially and adversely affect Roivant’s ability to consummate the transactions contemplated by this Agreement to the Assets, taken as a whole.

 

4.2.4                      Consents and Approvals Section 4.2.4 of the Disclosure Schedule describes each of the following which is required in connection with the valid execution and delivery by Roivant of or the performance by Roivant of its obligations under this Agreement and the Ancillary Transaction Agreements to which Roivant is or will become a party or the consummation by Roivant of the transactions contemplated herein and therein:  (a) each consent, approval, authorization, registration or filing with any applicable Governmental Authority and (b) each consent, approval, authorization of or notice to any other Third Party, which, in the case of this clause (b), is required in connection with the valid execution and delivery by Roivant of or the performance by Roivant of its obligations under this Agreement and the Ancillary Transaction Agreements to which Roivant is or will become a party or the consummation by Roivant of the transactions contemplated by this Agreement and the Ancillary Transaction Agreements; provided , however , that Section 4.2.4 of the Disclosure Schedule does not describe any consents, approvals, authorizations, registrations, filings and notices the failure of which to obtain or give does not or would not

 


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reasonably be expected to have a material and adverse effect on Roivant’s ability to consummate the transactions contemplated by this Agreement.

 

4.2.5                      Legal Proceedings . Except as described in Section 4.2.5 of the Disclosure Schedule, there are no Proceedings that are instituted, pending or, to the Knowledge of Roivant, threatened in writing against Roivant or any of its Affiliates that would prohibit the consummation of the transactions contemplated by this Agreement.

 

4.2.6                      Brokers . Roivant and its Affiliates and agents have not incurred any obligation or Liability, contingent or otherwise, for brokerage or finders’ fees or agents’ commissions or other similar payment in connection with this Agreement.

 

4.2.7                      Disclaimer of Other Representations and Warranties .  EXCEPT AS OTHERWISE EXPRESSLY SET FORTH IN THIS SECTION 4 AND SUBJECT TO SECTION 8.2.1 :

 

(a)                                  NONE OF ROIVANT OR ANY OF ITS REPRESENTATIVES MAKES OR HAS MADE ANY OTHER REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, WRITTEN OR ORAL, AT LAW OR IN EQUITY, IN RESPECT OF THE TRANSACTION CONTEMPLATED BY THIS AGREEMENT OR THE ANCILLARY TRANSACTION AGREEMENTS, WHETHER ORALLY OR IN WRITING, IN CERTAIN ELECTRONIC AND PHYSICAL “ DATA ROOMS ,” MANAGEMENT PRESENTATIONS, FUNCTIONAL “ BREAK-OUT ” DISCUSSIONS, RESPONSES TO QUESTIONS SUBMITTED ON BEHALF OF GSK OR IN ANY OTHER FORM OR MANNER IN EXPECTATION OF THE TRANSACTIONS PROVIDED FOR IN THIS AGREEMENT OR THE ANCILLARY TRANSACTION AGREEMENTS. ANY SUCH OTHER REPRESENTATION OR WARRANTY IS HEREBY EXPRESSLY DISCLAIMED.

 

(b)                                  NONE OF ROIVANT OR ANY OF ITS REPRESENTATIVES WILL HAVE OR BE SUBJECT TO ANY LIABILITY OR INDEMNIFICATION OBLIGATION TO GSK OR TO ANY OTHER PERSON RESULTING FROM THE DISTRIBUTION TO GSK, ITS AFFILIATES OR REPRESENTATIVES OF, OR GSK’S USE OF, ANY INFORMATION RELATING TO TRANSACTION CONTEMPLATED BY THIS AGREEMENT OR THE ANCILLARY TRANSACTION AGREEMENTS, INCLUDING ANY INFORMATION, DOCUMENTS OR MATERIAL MADE AVAILABLE TO GSK, WHETHER ORALLY OR IN WRITING, IN CERTAIN ELECTRONIC AND PHYSICAL “ DATA ROOMS ,” MANAGEMENT PRESENTATIONS, FUNCTIONAL “ BREAK-OUT ” DISCUSSIONS, RESPONSES TO QUESTIONS

 


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SUBMITTED ON BEHALF OF GSK OR IN ANY OTHER FORM IN EXPECTATION OF THE TRANSACTIONS PROVIDED FOR IN THIS AGREEMENT OR THE ANCILLARY TRANSACTION AGREEMENTS.

 

5.                                       REGULATORY COVENANTS

 

5.1                                Regulatory Compliance . From and after the Closing, Roivant will be responsible for, and shall conduct, all regulatory compliance activities with respect to the Products in the Territory.

 

5.1.1                      Third Party Contractors; Debarment . Roivant may not knowingly at any time retain or use in any capacity in connection with the research, development, manufacture, marketing, sale or distribution of any Product any Person who has been debarred pursuant to Section 306 of the FD&C Act or who is the subject of a conviction described in such section.

 

5.1.2                      Transfer of Responsibilities . GSK and Roivant shall cooperate to effect an orderly transfer of the responsibilities associated with correspondence and communication with the FDA relating to the Assets.

 

5.2                                Commercialization of the Compound . Roivant shall use commercially reasonable efforts to develop, manufacture and commercialize the Compound, and seek and if obtained, then maintain, appropriate regulatory approvals for the Compound. As between the Parties, Roivant shall be responsible for undertaking all such activities. Without limiting any of foregoing in this Section 5.2 , neither GSK nor its Affiliates shall have any obligation to (a) assist or otherwise participate in the amendment or supplementation of the INDs or otherwise to participate in any Regulatory Filings or other activities relating to the INDs or Product other than transmitting the GSK FDA Letter as contemplated by Section 2.7 , (b) assist or otherwise participate in efforts to validate, continue or improve any process for or related to the manufacture of the Compound or any Product, or (c) provide any assistance to Roivant related to manufacture, sale, distribution, marketing, export or import of the Compound or any Product, after the Closing Date or at any time in the future, except as specifically (if at all) set forth in this Agreement or in the Ancillary Transaction Agreements.

 

6.                                       ADDITIONAL COVENANTS

 

6.1                                Covenants of GSK .

 

6.1.1                      Further Assurances . If during the first [***] after Closing, Roivant becomes aware that any of the Assets has not been transferred to Roivant, Roivant shall promptly notify GSK, and GSK shall use commercially reasonable efforts to locate such Assets as soon as reasonably practicable, and transfer such Asset to Roivant or its Affiliate.

 


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6.1.2                      Financial Information . From and after the Closing Date, GSK shall (a) cooperate with Roivant and/or its Affiliates and their respective accountants and auditors by providing access to information, books and records related to the Assets as Roivant may reasonably request in connection with the preparation by Roivant and/or its Affiliates of historical and pro forma financial statements related to the Assets as may be required to be included in any filing made by Roivant and/or any of its Affiliates under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, and the regulations promulgated thereunder, including Regulation S-X, and (b) without limiting the foregoing, shall provide Roivant with such information as is required for Roivant and/or its Affiliates to prepare audited “carve out” financial statements related to the Assets, for the two (2) fiscal years prior to the Closing Date (or such shorter period as agreed to by Roivant) and information requested by Roivant and reasonably necessary to prepare any applicable pro forma financial information required to be filed by Roivant with the U.S. Securities and Exchange Commission. Such cooperation shall include, as applicable, (i) the signing of management representation letters to the extent required in connection with any such audit performed by Roivant’s auditors, (ii) providing Roivant and/or its Affiliates and their respective accountants and auditors with access to management representation letters provided by GSK to GSK’s accountants and auditors and (iii) causing GSK’s accountants, auditors and counsel to cooperate with Roivant and/or its Affiliates and its accountants, auditors and counsel in connection with the preparation and audit of any financial information to be provided under this Section. If GSK elects to provide Roivant with the audited financial statements contemplated hereunder, the selection of an external audit firm will be at the discretion of GSK. Such financial statements shall be derived from GSK’s historical financial statements, and accurately present in all material respects the financial position of the Assets as of the dates thereof. GSK hereby consents to the inclusion or incorporation by reference of any financial statements provided to Roivant under this Section in any filing by Roivant and/or its Affiliates with the U.S. Securities and Exchange Commission and, upon request therefor of Roivant, agrees to request that any auditor of GSK that audits any financial statements provided to Roivant and/or its Affiliates under this Section consent to the inclusion or incorporation by reference of its audit opinion with respect to such financial statements in any filing by Roivant and/or its Affiliates with the U.S. Securities and Exchange Commission. Roivant will be responsible for all costs incurred by GSK or its Affiliates in connection with the generation of financial information as set forth herein, to include external “carve out” audit fees, consents and any other fees associated with amendments and/or revisions required to support Purchasers’ Securities and Exchange Commission disclosure obligations.

 

6.2                                Mutual Covenants . GSK and Roivant hereby covenant and agree as follows:

 

6.2.1                      Taxes . Each of GSK and Roivant shall bear and be responsible for and pay for one half of the applicable Taxes related to (i) the transfer to Roivant of the Assets

 


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to be transferred thereto under this Agreement and (ii) the grant of rights to Roivant under the Transferred Intellectual Property; provided , that in any event each Party shall be solely responsible for the payment of all Taxes imposed on its share of income arising directly or indirectly from the efforts of the Parties under this Agreement; provided , further , that all payments to be made under this Agreement will be made without deduction or withholding for or on account of any present or future taxation unless Roivant is required by Legal Requirement to deduct or withhold such withholding Tax. To the extent such amounts are so deducted or withheld and remitted to the appropriate Governmental Authority, the amount of such withholding shall be treated for all purposes under this Agreement as having been paid to GSK. Roivant will cooperate with respect to all documentation required by any Tax authority or which may be reasonably requested by GSK to secure a reduction in the rate of applicable withholding Taxes. Notwithstanding any of the foregoing in this Section 6.2.1 , if Roivant is required to make a payment to GSK subject to a deduction or withholding of Tax, then (A) if such deduction or withholding of Tax obligation arises as a result of any action by Roivant, including an assignment of this Agreement, or any failure on the part of Roivant to comply with applicable Legal Requirements, that has the effect of modifying the Tax treatment or increasing the Tax of GSK (a “ Roivant Withholding Tax Action ”), then the payment by Roivant (in respect of which such deduction or withholding of Tax is required to be made) shall be increased by the amount necessary (the “ Additional Tax ”) to ensure that GSK receives an amount equal to the amount that it would have received had no such Roivant Withholding Tax Action occurred, and (B) the Additional Tax shall be deducted and withheld by Roivant from the payment made by Roivant to GSK. The Additional Tax, along with any other Tax deducted and withheld from the payment made by Roivant, shall be timely remitted to the proper Governmental Authority for the account of GSK in accordance with applicable Legal Requirements.

 

6.2.2                      Publicity . Other than as expressly permitted herein, no press release regarding this Agreement or the transactions contemplated hereby shall be made by either Party without the prior written consent of the other Party with respect to its form, content and means of dissemination (other than Product advertising) except for press releases that are consistent with prior public disclosures made in accordance with this Agreement. A press release substantially in the form attached hereto in Section 6.2.2 of the Disclosure Schedule is hereby approved by GSK. Notwithstanding the foregoing, (a) either Party or their respective Affiliates may make any filings with the U.S. Securities and Exchange Commission as may be required by the Exchange Act or the Securities Act of 1933, as amended, or other public disclosures required by the U.S. Securities and Exchange Commission or stock market rules or regulations; provided , that to the extent permitted by applicable Legal Requirements, the other Party is given [***] to review and comment on any proposed filing and (b) Roivant or its Affiliates may make any filings with the FDA and any other applicable Governmental Authority in connection with its obligations set forth in Section 5.2 .

 


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6.2.3                      Confidentiality .

 

(a)                                  GSK has disclosed to Roivant certain methods for accessing and interpreting the clinical data and statistical results included in the Assets. Notwithstanding anything to the contrary, all such methods are and shall remain the proprietary property of GSK, shall be deemed to be the Confidential Information of GSK and shall not be included in the Assets. Roivant and its Affiliates shall have the right to use such Confidential Information of GSK only to access and interpret the clinical data and statistical results included in the Assets.

 

(b)                                  All Confidential Information (x)(A) disclosed by Roivant or any of its Affiliates to GSK hereunder or (B) held or known by GSK and (i) included in the Assets, or (ii) transferred to Roivant in accordance with the Technology Transfer Plan to the extent solely related to the Selected Compounds, shall be maintained in confidence by GSK and its Affiliates and shall not be disclosed to any Third Party or used for any purpose except as set forth herein without the prior written consent of Roivant, and (y) disclosed by GSK to Roivant or any of its Affiliates hereunder, other than Confidential Information (i) included in the Assets or (ii) transferred to Roivant in accordance with the Technology Transfer Plan to the extent solely related to the Selected Compounds, shall be maintained in confidence by Roivant and its Affiliates, in each case, except to the extent that such Confidential Information:

 

(i)                                     with respect to any Confidential Information not relating to the Assets, is known by the receiving Party at the time of its receipt, and not through a prior disclosure by the disclosing Party, as documented by the receiving Party’s business records;

 

(ii)                                 is in the public domain by use and/or publication before its receipt from the disclosing Party, or thereafter enters the public domain through no fault of the receiving Party, including but not limited to any postings or information concerning the Compound or any Product or any clinical trials thereof on any Clinical Studies Register;

 

(iii)                             is subsequently disclosed to the receiving Party, without obligation of confidentiality, by a Third Party who may lawfully do so and is not under an obligation of confidentiality to the disclosing Party or any Third Party;

 

(iv)                              was or is developed by the receiving Party independently, and without benefit, of Confidential Information received from the disclosing Party, as documented by the receiving Party’s business records;

 


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(v)                                  is reasonably necessary to disclose to Governmental Authorities to comply with any Legal Requirements, judicial or administrative process or the rules and regulations of any stock exchange; provided , that (a) to the extent reasonably practicable, the disclosing Party is given [***] to review and comment on any proposed disclosure, (b) the receiving Party cooperates with any efforts by the disclosing Party to seek confidential or protective treatment of such information, as reasonably requested by the disclosing Party, and (c) the receiving Party minimizes the extent of any such disclosure to only such Confidential Information that is required to be disclosed by such Legal Requirement, judicial or administrative process or stock exchange rule or regulation;

 

(vi)                              is deemed necessary by counsel to the receiving Party to be disclosed to such Party’s attorneys, independent accountants or financial advisors for the sole purpose of enabling such attorneys, independent accountants or financial advisors to provide advice to the receiving Party, on the condition that such attorneys, independent accountants and financial advisors agree to be bound by confidentiality and non-use obligations at least as strict as those contained in this Agreement; or

 

(vii)                          is made by or on behalf of the receiving Party to potential or actual investors, acquirers, collaborators or other Third Parties who have a bona fide need to know in connection with their evaluation of such potential or actual investment, acquisition, collaboration or other similar transaction, in each case, relating at least in part to the Assets, on the condition that such Third Parties and their respective attorneys, independent accountants and financial advisors agree to be bound by confidentiality and non-use obligations at least as strict as those contained in this Agreement; provided , that the term of confidentiality for such Third Parties and their respective attorneys, independent accountants and financial advisors shall be no less than [***].

 

Any combination of features or disclosures shall not be deemed to fall within the foregoing exclusions merely because individual features are published or available to the general public or in the rightful possession of the receiving Party unless the combination itself and principle of operation are published or available to the general public or in the rightful possession of the receiving Party.

 

Confidential Information that is disclosed by judicial or administrative process shall remain otherwise subject to the confidentiality and non-use provisions of this Section 6.2.3 .

 


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For purposes of this Section 6.2.3 , references to the “receiving Party” and “disclosing Party” include both the relevant Party and its Affiliates, as applicable.

 

6.3                                Limitation on Covenants of GSK . Nothing in this Agreement shall be construed as restricting the ability of GSK or its Affiliates to use any information, data, or intellectual property contained in the Assets in a manner consistent with, and subject to the restrictions in, Section 2.2 .

 

6.4                                Limitation on Covenants of Roivant . Nothing in this Agreement shall be construed as restricting the ability of Roivant or its Affiliates to use any Confidential Information of Roivant or any Confidential Information provided by GSK to Roivant that relates to the Assets for any purpose, including Exploiting the Compound and the Primary Product.

 

7.                                       CONDITIONS TO CLOSING

 

7.1                                Conditions to the Obligations of Each Party to Effect the Closing . The respective obligations of GSK and Roivant to effect the Closing shall be subject to the satisfaction, at or prior to the Closing, of the following conditions:

 

7.1.1                      No Order; Illegality . No Governmental Authority shall have enacted, issued, promulgated, enforced or entered any statute, rule, regulation, executive order, decree, injunction or other order (whether temporary, preliminary or permanent) which is in effect and which has the effect of making the transactions contemplated by this Agreement illegal or otherwise prohibiting the consummation of the transactions contemplated by this Agreement.

 

7.1.2                      Governmental Consents . All requisite governmental approvals, including the expiration of any applicable waiting period under the HSR Act without any request for further information, shall have been obtained.

 

7.1.3                      No Injunctions or Restraints . No temporary restraining order, preliminary or permanent injunction or other order issued by any court of competent jurisdiction or other legal restraint or prohibition preventing the consummation of the transactions contemplated by this Agreement, shall have been issued.

 

7.2                                Additional Conditions to the Obligations of GSK . The obligation of GSK to effect the transactions contemplated by this Agreement also shall be subject to the satisfaction at or prior to the Closing of each of the following conditions, any of which may be waived, in writing, exclusively by GSK:

 

7.2.1                      Representations and Warranties .  Each representation and warranty of Roivant contained in this Agreement shall be true and correct in all material respects on and as of the Closing Date as if made on and as of the Closing Date (except for those representations and warranties which address matters only as of a particular date, which shall have been true and correct in all material respects as of such particular date);

 


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7.2.2                      Certificate of Roivant .  GSK shall have received a certificate, validly executed on behalf of Roivant by a duly authorized officer of Roivant to the effect that, as of the Closing, the conditions to the obligations of GSK set forth in this Section 7.2 have been satisfied (the “ Roivant Bring-down Certificate ”);

 

7.2.3                      Roivant has taken (or is ready, willing, and able to take) all actions required to be taken by it pursuant to this Agreement at or prior to Closing;

 

7.2.4                      Roivant shall have delivered the Closing Payment to GSK; and

 

7.2.5                      Roivant shall have executed and delivered to GSK all documents as are required to be delivered by Roivant pursuant to this Agreement or as reasonably requested by GSK.

 

7.3                                Additional Conditions to the Obligations of Roivant . The obligations of Roivant to enter into the transactions to be entered into by them at Closing shall be subject to the satisfaction at or prior to the Closing of each of the following conditions, any of which may be waived, in writing, exclusively by Roivant:

 

7.3.1                      Representations and Warranties . Each representation and warranty of GSK contained in this Agreement shall be true and correct in all material respects on and as of the Closing Date as if made on and as of the Closing Date (except for those representations and warranties which address matters only as of a particular date, which shall have been true and correct in all material respects as of such particular date);

 

7.3.2                      Certificate of the Company . Roivant shall have received a certificate, validly executed by the duly authorized officer of GSK for and on its behalf, to the effect that, as of the Closing, each and every one of the conditions to the obligations of Roivant set forth in this Section 7.3 have been satisfied (unless otherwise waived in accordance with the terms hereof) (the “ GSK Bring-down Certificate ”);

 

7.3.3                      GSK has taken (or is ready, willing and able to take) all actions required to be taken by it pursuant to this Agreement at or prior to Closing;

 

7.3.4                      the Required Consents shall have been obtained;

 

7.3.5                      all requisite governmental approvals shall have been obtained; and

 

7.3.6                      GSK shall have executed and delivered to Roivant all documents as are required to be delivered by GSK pursuant to this Agreement or as reasonably requested by Roivant.

 


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8.                                       INDEMNIFICATION

 

8.1                                Survival of Representations and Warranties .

 

8.1.1                      By GSK . The representations and warranties of GSK contained in this Agreement, shall survive for a period of [***] following the Closing Date; provided , however , (i) the representations and warranties of GSK in [ *** ] (each, a “ GSK Fundamental Representation ”), as well as claims for fraud and willful misconduct, shall survive indefinitely and (ii) the representations and warranties of GSK in [ *** ] shall survive until the [***] anniversary of the Closing Date. If an indemnification claim is properly asserted in writing pursuant to Section 8.3 prior to the expiration date (as provided in this Section 8.1.1 ) of the representation or warranty that is the basis for such claim, then such representation or warranty shall survive beyond such survival date until, but only for the purpose of, the resolution of such claim.

 

8.1.2                      By Roivant . The representations and warranties of Roivant contained in this Agreement, or in any certificate or other instrument delivered pursuant to this Agreement, shall terminate at the Closing; provided , however , that the representations and warranties of Roivant contained in [ *** ] of this Agreement will survive indefinitely (each, a “ Roivant Fundamental Representation ”, and together with the GSK Fundamental Representations, the “ Fundamental Representations ”).

 

8.2                                Indemnification .

 

8.2.1                      Sole Remedy .  Notwithstanding any other term in this Agreement to the contrary, the sole and exclusive remedies of the Indemnified Parties arising out of, relating to or resulting from this Agreement will be strictly limited to those contained in this Section 8 and Section 9.5 ; provided , however , nothing in the Agreement will limit either Party’s right to recover for Losses resulting from fraud and willful misconduct of the other Party.

 

8.2.2                      Roivant Losses . Subject to the terms and conditions of this Section 8 , from and after the Closing, GSK shall indemnify Roivant and its officers, directors and Affiliates (each, a “ Roivant Indemnified Party ”, and collectively, the “ Roivant Indemnified Parties ”), for any Losses paid, incurred, accrued or sustained by such Roivant Indemnified Parties, or any of them, directly or indirectly, as a result of, relating to or arising out of:

 

(a)                                  any breach or inaccuracy of a representation or warranty of GSK contained in this Agreement or in any certificate or other instruments delivered pursuant to this Agreement giving effect to the Disclosure Schedule as of the date of this Agreement;

 


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(b)                                  any failure by GSK to perform or comply with any covenant or other agreement applicable to it contained in this Agreement or in any certificate or other instruments delivered pursuant to this Agreement;

 

(c)                                   any Liabilities relating to (i) GSK’s pre-Closing activities relating to the Assets or the Selected Compounds, including, for example, Liabilities GSK may have to participants in clinical studies for the Compound conducted by GSK prior to Closing, but, for clarity, excluding, for example, Liabilities that become owed to Third Parties after the Closing as result of post-Closing activities with respect to the Assets, and (ii) any amounts due or that become due following the Closing, for any Permitted Liens; and

 

(d)                                  any failure by GSK to pay Taxes allocated to it under Section 6.2.1 .

 

8.2.3                      GSK Losses . Subject to the terms and conditions of this Section  8, from and after the Closing, Roivant shall indemnify GSK and its officers, directors and Affiliates (each, a “ GSK Indemnified Party ”, and collectively, the “ GSK Indemnified Parties ”, and each of the GSK Indemnified Parties or Roivant Indemnified Parties, an “ Indemnified Party ”), for any Losses paid, incurred, accrued or sustained by such GSK Indemnified Parties, or any of them, directly or indirectly, as a result of, relating to or arising out of:

 

(a)                                  any breach or inaccuracy of a representation or warranty of Roivant contained in this Agreement or in any certificate or other instruments delivered pursuant to this Agreement;

 

(b)                                  any failure by Roivant to perform or comply with any covenant or other agreement applicable to it contained in this Agreement or in any certificate or other instruments delivered pursuant to this Agreement; and

 

(c)                                   any failure by Roivant to pay Taxes allocated to it under Section 6.2.1 .

 

8.2.4                      Threshold . No Indemnified Party may recover any Losses pursuant to Section 8.2.2(a)  or Section 8.2.3(a)  of this Agreement, unless and until one or more certificates signed by an officer (each, an “ Officer’s Certificate ”) identifying a Loss or Losses subject to indemnification under Section 8.2.2(a)  or Section 8.2.3(a)  of this Agreement cumulatively totaling [***] of the Purchase Price actually paid or then payable by Roivant to GSK up to such point (calculated, with respect to each claim for Losses identified in an Officer’s Certificate, as of the date the Indemnifying Party receives such Officer’s Certificate) (the “ Threshold Amount ”) is provided to the other Party hereto (the “ Indemnifying Party ”) by one or more Indemnified Parties, in which case the Indemnified Parties may be entitled to all Losses so identified inclusive of, in the aggregate, the applicable Threshold Amount. With respect to a claim based on a breach or inaccuracy of a representation or warranty, an Indemnified Party must deliver an Officer’s Certificate identifying each such claim for any Losses subject to

 


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potential indemnification hereunder prior to the expiration of the applicable representation or warranty as provided in Section 8.1 , and an Indemnified Party shall not in any event be entitled to recover any Losses for which an Officer’s Certificate is not provided within such period of time. Further, for all other claims, an Indemnified Party must deliver an Officer’s Certificate identifying each new claim for any Losses subject to potential indemnification hereunder promptly following such Indemnified Party gaining Knowledge that such claim exists. Notwithstanding anything to the contrary, in the event of any increase in the Purchase Price (and, therefore, the Threshold Amount) following any payment made by an Indemnifying Party under this Section 8 as a result of Losses suffered by an Indemnified Party pursuant to Section 8.2.2(a)  or Section 8.2.3(a)  of this Agreement, no Losses of any Indemnified Party pursuant to Section 8.2.2(a)  or Section 8.2.3(a)  of this Agreement identified on any Officer’s Certificate received by such Indemnifying Party subsequent to such increase shall be payable hereunder by such Indemnifying Party unless and until the sum of the total Losses payable under Section 8.2.2(a)  or Section 8.2.3(a) , as applicable, pursuant to (a)

 

Officer’s Certificates received by the Indemnifying Party prior to such increase in the Purchase Price and (b) Officer’s Certificates received by the Indemnifying Party following such increase in the Purchase Price, collectively exceed the then-current Threshold Amount.  Notwithstanding the foregoing, each Indemnified Party shall be entitled to recover for, and the Threshold Amount shall not apply to, (i) any and all claims or payments made with respect to any breach or inaccuracy of (x) a Fundamental Representation, (y) [ *** ] and (z) [ *** ], (ii) any breach of the covenants in this Agreement, (iii) any Excluded Liability and (iv) any fraud or willful misconduct.

 

8.2.5                      Cap .

 

(a)                                  Except as set forth in Section 8.2.5(b)  and Section 8.2.5(c)  below, the maximum amount recoverable by any Indemnified Party for Losses claimed under Section 8.2.2(a)  or Section 8.2.3(a)  of this Agreement through one or more Officer’s Certificates received by the Indemnifying Party as of a particular date shall be [***] of the Purchase Price actually paid or then payable by Roivant to GSK up to such point (the “ Cap ”). All amounts previously paid by the Indemnifying Party under this Section 8 for Losses indemnified pursuant to Section 8.2.2(a)  or Section 8.2.3(a) , shall be included in determining whether the Cap has been achieved with respect to Losses claimed through a particular date, but Losses claimed prior to or on a particular date, that are in excess of the Cap in effect as of such date, shall not become payable after such date should the Cap subsequently increase as a result of Roivant’s payment of any Milestone Payment or Royalties.

 

(b)                                  Except as set forth in Section 8.2.5(a)  and Section 8.2.5(c) , the maximum amount recoverable by Roivant for Losses claimed under Section 8.2.2(a)

 


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of this Agreement through one or more Officer’s Certificates received by GSK as of a particular date that claims any breach or inaccuracy of a representation or warranty of GSK made in Section 4.1.7 or Section 4.1.10 shall be [***] of the Purchase Price actually paid or then payable by Roivant to GSK up to such point (the “ IP and Regulatory Cap ”). All amounts previously paid by GSK under this Section 8.2.5(b)  for Losses arising from claims of any breach or inaccuracy of a representation or warranty of GSK made in Section 4.1.7 or Section 4.1.10 indemnified pursuant to this Section 8.2.2(b) , shall be included in determining whether the IP and Regulatory Cap has been achieved with respect to Losses claimed through a particular date, but Losses claimed prior to or on a particular date, that are in excess of the IP and Regulatory Cap in effect as of such date, shall not become payable after such date should the IP and Regulatory Cap subsequently increase as a result of Roivant’s payment of any Milestone Payment or Royalties.

 

(c)                                   Notwithstanding the foregoing, each Indemnified Party shall be entitled to recover for, and the Cap shall not apply to, any and all claims or payments made with respect to any breach of (i) Fundamental Representations and (ii) any fraud or willful misconduct.

 

(d)                                  If Losses claimed by an Indemnified Party exceed the then current Cap or Maximum Amount, as applicable, and there is an increase in the Purchase Price (and, therefore, the Cap and Maximum Amount) following such increase in the Cap, any Losses of any Indemnified Party identified on any subsequent Officer’s Certificate received by such Indemnifying Party subsequent to such increase shall be payable hereunder by such Indemnifying Party up to the amount of the then current Cap or Maximum Amount, as applicable (following such increase).

 

(e)                                   The maximum amount recoverable by any Indemnified Party for Losses under this Agreement through one or more Officer’s Certificates received by the Indemnifying Party as of a particular date pursuant to (A) any claims arising under or pursuant to any breach or inaccuracy of a Fundamental Representation and (B) any claims or payments made with respect to any fraud or willful misconduct shall be equal to [***] (as calculated, with respect to such Losses, as of such date) (the “ Maximum Amount ”). All amounts previously paid by the Indemnifying Party under this Section 8 shall be included in determining whether the Maximum Amount has been achieved with respect to Losses claimed through a particular date, but Losses in excess of the Maximum Amount in effect as of such date, shall not become payable after such date should the Maximum Amount subsequently increase as a result of Roivant’s payment of any Milestone Payment or Royalties.

 


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8.2.6                      Treatment of Indemnification Payments . All indemnification payments under this Agreement shall be treated as an adjustment to the Purchase Price for all Tax purposes unless otherwise required by Legal Requirement.

 

8.3                                Claims for Indemnification .

 

8.3.1                      Procedure for Claims . An Indemnified Party wishing to assert a claim for indemnification under this Section  8 (other than a Third Party claim covered by Section 8.3.2 below) shall promptly deliver to the Indemnifying Party an Officer’s Certificate of the Indemnified Party within the applicable timeframe provided in Section 8.2.4 above (A) stating that such Indemnified Party has paid, sustained, incurred or accrued Losses subject to potential indemnification under this Section  8 (the aggregate amount of such Losses subject to indemnification hereunder as of the date of such claim being referred to as the “ Claimed Amount ”), (B) specifying in reasonable detail the facts pertinent to such claim(s), the individual items of Losses (if applicable) included in the amount so stated and the nature of basis for indemnification to which such item is related, and (C) demanding payment of the Claimed Amount. Within [***] after delivery of such Officer’s Certificate, the Indemnifying Party shall deliver to the Indemnified Party a written response in which the Indemnifying Party shall:  (I) agree that the Losses stated in such Officer’s Certificate are subject to indemnification under this Section 8 and the Indemnified Party is entitled to receive all of the Claimed Amount (in which case the Indemnifying Party shall pay to the Indemnified Party, within [***] following delivery of the response, an amount equal to the Claimed Amount); (II) agree that the Indemnified Party is entitled to receive part, but not all, of the Claimed Amount (the “ Agreed Amount ”) (in which case the Indemnifying Party shall pay to the Indemnified Party, within [***] following delivery of the response, an amount equal to the Agreed Amount and shall specify in reasonable detail which parts of the Claimed Amount the indemnifying Party is disputing and together with a summary of the reasons for such dispute; or (III) contest that the Indemnified Party is entitled to receive any of the Claimed Amount and provide a summary of the reasons for such dispute. If the Indemnifying Party in such response contests the payment of all or part of the Claimed Amount, then the Indemnifying Party and the Indemnified Party shall use good faith efforts to resolve such dispute within [***] following the delivery by the Indemnifying Party of its response to such Officer’s Certificate.

 

8.3.2                      Procedure for Third Party Claims .

 

(a)                                  All claims for indemnification made under this Agreement resulting from, related to or arising out of a Third Party claim against an Indemnified Party shall be made in accordance with the following procedures. In the event an Indemnified Party receives written notice of a Third Party claim, which such Indemnified Party reasonably believes may result in a Loss, such Indemnified Party shall notify promptly the Indemnifying Party of such claim by delivery of an Officer’s Certificate to such Indemnifying

 


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Party (such Officer’s Certificate including a brief description of the applicable claim(s), including damages sought or estimated, to the extent actually known by the Indemnified Party).

 

(b)                                  Within [***] after delivery of such Officer’s Certificate, the Indemnifying Party may, upon written notice thereof to the Indemnified Party, assume control of the defense of such action, suit, proceeding or claim if the defense of the Third Party claim is conducted actively and diligently by legal counsel reasonably acceptable to such Indemnified Party. If the Indemnifying Party does not assume control of such defense, the Indemnified Party shall control such defense. The Party not controlling such defense may participate therein at its own expense. The Party controlling such defense shall keep the other Party reasonably advised of the status of such action, suit, proceeding or claim and the defense thereof and shall consider recommendations made by the other Party with respect thereto. The non-controlling Party shall cooperate in such defense connection therewith and shall furnish such records, information and testimony and attend such conferences, discovery proceedings, hearings, trials and appeals as may be reasonably requested by the controlling Party in connection therewith. In any event, the Indemnified Party shall not agree to any settlement of such action, suit, proceeding or claim without the prior written consent of the Indemnifying Party, not to be unreasonably withheld, delayed or conditioned. The Indemnifying Party shall not agree to any settlement of such action, suit, proceeding or claim that does not include a complete release of all potential Indemnified Parties from all Liability with respect thereto, does not subject the Indemnified Party to any injunctive or equitable relief or remedy, does not include a statement or admission of fault, violation, culpability or failure to act by or on behalf of the Indemnified Party, or that imposes any Liability on any potential Indemnified Party without the prior written consent of such Indemnified Party.

 

9.                                       DISPUTE RESOLUTION

 

9.1                                Mandatory Procedures . Subject to the provisions of Section 9.5 , the Parties agree that any dispute arising out of or relating to this Agreement shall be resolved solely by means of the procedures set forth in this Section  9, and that such procedures constitute legally binding obligations that are an essential provision of this Agreement. If either Party fails to observe the procedures of this Section  9, as may be modified by their written agreement, the other Party may bring an action for specific performance of these procedures in any court of competent jurisdiction.

 

9.2                                Negotiation . The Parties shall endeavor to resolve in good faith any disputes or conflict arising from or relating to the subject matter of this Agreement, failing which either Party may submit such dispute for resolution to appropriate senior management of Roivant and GSK. If such senior management representatives are unable to resolve such dispute

 


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within [***] after such conflict is submitted to them for resolution, either Party may refer the dispute for mediation as set forth in Section 9.3 .

 

9.3                                Mediation . If the Parties are unable to resolve a dispute arising out of or relating to this Agreement through the negotiation procedures set forth in Section 9.2 , then at the end of such [***] period, the Parties agree that they shall submit such dispute for confidential mediation under the CPR Mediation Procedure then in effect at the start of mediation with the International Institute for Conflict Prevention & Resolution (www.cpradr.org) (the “ CPR ”). Unless otherwise agreed, the Parties shall select a mediator from the CPR Panels of Distinguished Neutrals. If the Parties cannot agree, they will defer to the CPR to select a mediator. The cost of the mediator shall be borne equally by the Parties. Any dispute not resolved within [***] (or within such other time period as may be agreed to by the Parties in writing) after appointment of a mediator shall be finally resolved by arbitration pursuant to Section 9.4 .

 

9.4                                Arbitration . If the Parties are unable to resolve a dispute arising out of or relating to this Agreement through the negotiation procedures set forth in Section 9.2 and the mediation procedures set forth in Section 9.3 within the timeframes set forth in such Sections, the Parties agree that they shall submit such dispute for final settlement via binding arbitration. The arbitration shall .be conducted under the Commercial Arbitration Rules of the American Arbitration Association in effect at the time of the arbitration, except as they may be modified herein or by mutual agreement of the Parties. The arbitral tribunal shall be composed of three (3) arbitrators experienced in the pharmaceutical industry, selected as follows: (i) each Party shall simultaneously nominate one (1) arbitrator within [***] after the date on which the respondent(s)’ answer is filed and (ii) the two (2) initial arbitrators will endeavor, within the following [***] to agree upon the third arbitrator, who shall be the chairman of the arbitral tribunal. If any arbitrator is not nominated pursuant to the foregoing sentence, the American Arbitration Association shall appoint such arbitrator. Such arbitration will be held in Wilmington, DE and shall be conducted in English. Each Party shall be responsible for its own expenses in connection therewith. Such arbitration shall be resolved as quickly as reasonably possible. Any arbitration award must be issued within [***] from completion of the hearing, or as soon as possible thereafter. The Parties hereby submit to the non-exclusive jurisdiction of the United States District Court for the District of Delaware or, if such action may not be brought in such court for jurisdictional reasons, the Delaware Court of Chancery located in Wilmington, Delaware for the limited purpose of enforcing this Agreement to arbitrate. The arbitration award shall be final and binding, and judgment over the award may be entered by any court having jurisdiction thereof or having jurisdiction over the relevant Party and its assets.

 

9.5                                Equitable Relief . Notwithstanding the foregoing, nothing contained in this Section  9 shall prohibit a Party from being entitled to an injunction or injunctions, specific performance or other equitable relief to prevent breaches of this Agreement and to enforce specifically the terms or provisions of this Agreement (i) regarding the confidentiality provisions in Section 6.2.3 , (ii) regarding publication of data in Section 10.3 , or (iii) to enforce any decision of the arbitral tribunal, including a final award from

 


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the United States District Court for the District of Delaware or, if such action may not be brought in such court for jurisdictional reasons, the Delaware Court of Chancery located in Wilmington, Delaware.

 

10.                                MISCELLANEOUS

 

10.1                         Force Majeure . Neither Party shall be held liable to the other Party nor be deemed to have defaulted under or breached this Agreement for failure or delay in performing any obligation under this Agreement to the extent that such failure or delay is caused by or results from causes beyond the reasonable control of the affected Party, potentially including, but not limited to, embargoes, war, acts of war (whether war be declared or not), acts of terrorism, insurrections, riots, civil commotions, strikes, lockouts or other labor disturbances, fire, floods, or other acts of God, or acts, omissions or delays in acting by any Governmental Authority or the other Party. The affected Party shall notify the other Party of such force majeure circumstances as soon as reasonably practical, and shall promptly undertake commercially reasonable efforts necessary to cure such force majeure circumstances.

 

10.2                         Assignment .

 

10.2.1               Assignment by GSK . GSK may not assign or otherwise transfer this Agreement or any right or obligation hereunder without the written consent of Roivant; provided , however , that GSK may, without Roivant’s consent, (i) assign this Agreement and its rights and obligations hereunder in whole or in part to an Affiliate or in connection with a merger, consolidation, sale of substantially all of GSK’s assets or otherwise by operation of law and (ii) sell, assign, pledge as security, contribute, convey, grant or otherwise transfer (collectively, “assign”) all or any part of the Royalties and/or Milestone Payments that may become due hereunder, including together with the right to enforce the payment thereof in accordance with the terms of this Agreement and the exercise of any rights and remedies provided under Section 2.8 (the “ Interests ”) to any Person (whether or not an Affiliate of GSK). In addition, any direct or indirect permitted assignee, pledgee or other transferee (collectively, an “assignee”) of GSK may likewise assign all or any part of such assignee’s Interests to any Person (whether or not GSK or an Affiliate of GSK) without the prior written consent of Roivant. Further, Roivant agrees that, upon written notice from GSK (or any direct or indirect permitted assignee contemplated above). Roivant shall deliver any future payments contemplated by this Agreement in respect of any such Interests, together with any reports or statements contemplated by this Agreement specified in Section 2.8 , in accordance with the directions in such written notice.

 

10.2.2               Assignment by Roivant . Roivant shall not assign, license or otherwise transfer all or any material portion of the Assets to any Third Party without (i) obligating such Third Party assignee, licensee or transferee to use commercially reasonable efforts to develop and commercialize the Compound and make the Milestone Payments and Royalty payments provided for in this Agreement (ii) agreeing that

 


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GSK (and any permitted assignee of GSK) shall be a third party beneficiary of such arrangements, with the right of enforcement of such arrangement and (iii) at least a material portion of the Assets being transferred with any such assignment, license or transfer; provided , that, the foregoing clause (iii) shall not prohibit any assignment, license or transfer of any Assets that is limited to any one or more (a) geographic territories, (b) indications, (c) formulations or (d) Secondary Compounds. For the avoidance of doubt, any such permitted assignee or transferee will be bound by the terms of this Agreement, including but not limited to the financial arrangements set forth in this Agreement.

 

10.3                         Publication of Data . Roivant shall have the exclusive right to control the content, submission or retraction of any publications of data generated by Roivant with respect to any Selected Compound from and after the Closing Date. GSK shall retain the exclusive right to control the content, submission or retraction of any publications of data generated by GSK or its Affiliates with respect to any Selected Compound, including the publication of clinical trials generating such data on any Clinical Studies Register and for the avoidance of doubt, full study protocols and study conclusions. GSK shall share with Roivant proposed publications and related data for review and consider input from Roivant. While GSK reserves it rights to make the publications of data provided for above in this Section 10.3 , GSK represents and warrants to Roivant as of the Closing Date that GSK does not contemplate doing so.

 

10.4                         Expenses . Except as expressly set forth herein, each of GSK and Roivant shall bear its own costs and expenses incurred in connection with this Agreement and the transactions contemplated hereby.

 

10.5                         Notices . All notices, requests and other communications to any Party hereunder or under the other Transaction Documents shall be in writing and shall be sent by facsimile transmission, by first class mail or nationally recognized overnight delivery service:

 

If to GSK, to:

 

GlaxoSmithKline LLC
5 Moore Drive
Research Triangle Park, North Carolina 27709
Attention:  Director Business Development
Facsimile:  [***]

 

with a copy sent concurrently to:

 

GlaxoSmithKline LLC
2301 Renaissance Boulevard
King of Prussia, PA 19406-2772
Attention:  Vice President, Legal Operations Business Development Transactions
Facsimile:  [***]

 


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If to Roivant, to:

 

Roivant Neurosciences Ltd.
Clarendon House
2 Church Street
Hamilton HM11
Bermuda
Attention:  Corporate Secretary
Facsimile:  [***]
Email:  [***]

 

with a copy sent concurrently to:

 

Roivant Sciences, Inc.
1441 Broadway, 3rd Floor
New York, NY 10018
Attention:  Alan S. Roemer, SVP, Finance & Operations
Facsimile:  [***]
Email:  [***]

 

and to:

 

[***]
[***]
[***]
[***]
[***]
[***]
[***]

 

or such other address as such Party may hereafter specify by written notice to the other Party. Each such notice, request or other communication shall be effective when received at the address specified in this Section 10.5 .

 

10.6                         Entire Agreement . This Agreement, including the Disclosure Schedule hereto and the Ancillary Transaction Agreements, embody the entire agreement of the Parties hereto with respect to the subject matter hereof and supersedes any and all prior agreements with respect thereto, except for any prior confidentiality agreements, which shall survive. In the event of any conflict between this Agreement and any such prior confidentiality agreement, the agreement imposing stricter confidentiality shall govern. No waiver, amendment or modification of any provision hereof or of any right or remedy hereunder shall be effective unless in writing and signed by the Party against whom such waiver, amendment or modification is sought to be enforced.

 

10.7                         Applicable Law . This Agreement shall be governed by, interpreted and construed, and all claims and disputes, whether in tort, contract or otherwise be resolved in accordance

 


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with the substantive laws of the State of Delaware without reference to any rules of conflict of laws.

 

10.8                         Jurisdiction . Subject to Section 9 , the Parties hereby irrevocably and unconditionally consent to the exclusive jurisdiction of the courts of the State of Delaware and the United States District Court for the District of Delaware for any action, suit or proceeding (other than appeals therefrom) arising out of or relating to this Agreement, and agree not to commence any action, suit or proceeding (other than appeals therefrom) related thereto except in such courts.  The Parties irrevocably and unconditionally waive their right to a jury trial.

 

10.9                         Expenses . All legal and other costs and expenses incurred in connection herewith and the transactions contemplated hereby shall (except as otherwise provided herein) be paid by the Party incurring such expenses.

 

10.10                  Bulk Sales Statutes . Roivant hereby waives compliance by GSK with any applicable bulk sales statutes in any jurisdiction in connection with the transactions under this Agreement.

 

10.11                  Waiver . No waiver by any Party in one or more instances of any of the provisions of this Agreement or the breach thereof shall establish a precedent for any other instance with respect to that or any other provision. Furthermore, in case of waiver of a particular provision, all other provisions of this Agreement will continue in full force and effect.

 

10.12                  Incorporation by Reference . The Disclosure Schedule and Exhibits hereto constitute integral parts of this Agreement and are hereby incorporated into this Agreement by this reference.

 

10.13                  Severability . If any provision of this Agreement is held to be illegal, invalid or unenforceable under any present or future law, and if the rights or obligations of either Party under this Agreement will not be materially and adversely affected thereby, (a) such provision will be fully severable, (b) this Agreement will be construed and enforced as if such illegal, invalid or unenforceable provision had never comprised a part hereof, (c) the remaining provisions of this Agreement will remain in full force and effect and will not be affected by the illegal, invalid or unenforceable provision or by its severance herefrom, and (d) in lieu of such illegal, invalid or unenforceable provision, there will be added automatically as a part of this Agreement a legal, valid and enforceable provision as similar to such illegal, invalid or unenforceable provision as may be possible and reasonably acceptable to the Parties.

 

10.14                  Independent Contractors . It is expressly agreed that Roivant and GSK shall be independent contractors and that the relationship between the Parties hereto shall not constitute a partnership, joint venture or agency. Neither Roivant nor GSK shall have the authority to make any statements, representations or commitments of any kind, or to take any action, which shall be binding on the other Party, without the prior written consent of the other Party.

 


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10.15                  No Third Party Beneficiaries . Except as provided in Section 8 , nothing in this Agreement, express or implied, is intended to confer upon any Third Party (other than a permitted successor or assign of a Party hereto) any rights, remedies, obligations or liabilities.

 

10.16                  Waiver of Rule of Construction . There shall not be any presumption against either Party hereto on the ground that such Party was responsible for drafting or preparing the term sheet or this Agreement or any part of either of such documents.

 

10.17                  Counterparts . This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original, but all of which together shall constitute but one and the same instrument. Delivery of an executed counterpart signature page of this Agreement by facsimile transmission or by email of a PDF attachment shall be as effective as delivery of a manually executed signature page.

 

10.18                  Compliance with Laws and Regulations . In performing their obligations pursuant to this Agreement, the Parties hereto agree and covenant that they will comply with all applicable Legal Requirements, including, during the Royalty Term, applicable anti-corruption Legal Requirements.

 

10.19                  Anti-Corruption . Roivant acknowledges receipt of the “Prevention of Corruption — Third Party Guidelines” and agrees to perform its obligations under this Agreement in accordance with the principles set out therein.

 

[SIGNATURE PAGE TO FOLLOW]

 


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IN WITNESS WHEREOF, the Parties hereto have duly executed this Agreement, as of the day and year first above written.

 

 

GLAXO GROUP LIMITED

 

 

By:

/s/ Paul Williamson

 

 

Name:

Paul Williamson

 

 

Title:

Authorised Signatory

 

 

 

For and on behalf of

 

 

 

Edinburgh Pharmaceutical Industries Limited

 

 

 

Corporate Director

 

 

[Signature Page to Asset Purchase Agreement]

 


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IN WITNESS WHEREOF, the Parties hereto have duly executed this Agreement, as of the day and year first above written.

 

 

GLAXOSMITHKLINE INTELLECTUAL PROPERTY DEVELOPMENT LIMITED

 

 

By:

/s/Sonja Arsenić

 

 

Name:

Sonja Arsenić

 

 

Title:

Authorised Signatory

 

 

 

For and on behalf of

 

 

 

Glaxo Group Limited

 

 

 

Corporate Director

 

 

[Signature Page to Asset Purchase Agreement]

 


***Confidential Treatment Requested

 



 

IN WITNESS WHEREOF, the Parties hereto have duly executed this Agreement, as of the day and year first above written.

 

 

ROIVANT NEUROSCIENCES LTD.

 

 

By:

/s/Vivek Ramaswamy

 

 

Name:

Vivek Ramaswamy

12/17/2014

 

Title:

Authorized signatory

Hamilton, Bermuda

 

 

For and on behalf of

 

 

 

Roivant Science Ltd., as

 

 

 

sole director of Roivant Neurosciences Ltd.

 

 

[Signature Page to Asset Purchase Agreement]

 


***Confidential Treatment Requested

 




Exhibit 3.1

 

FORM NO. 6

Registration No. 49659

 

 

BERMUDA

 

CERTIFICATE OF INCORPORATION

 

I hereby in accordance with section 14 of the Companies Act 1981 issue this Certificate of Incorporation and do certify that on the 31 st  day of October 2014

 

Roivant Neurosciences Ltd.

 

was registered by me in the Register maintained by me under the provisions of the said section and that the status of the said company is that of an exempted company.

 

 

Given under my hand and the Seal of the REGISTRAR OF COMPANIES this 31 st  day of October 2014

 

/s/ [ILLEGIBLE]

 

for Registrar of Companies

 

 

 

 

 

 

 

 

 

 

 




Exhibit 3.2

 

FORM NO. 2

 

 

BERMUDA
THE COMPANIES ACT 1981

MEMORANDUM OF ASSOCIATION OF
COMPANY LIMITED BY SHARES

(Section 7(1) and (2))

 

MEMORANDUM OF ASSOCIATION
OF

 

Roivant Neurosciences Ltd.
(hereinafter referred to as “the Company”)

 

1.                                       The liability of the members of the Company is limited to the amount (if any) for the time being unpaid on the shares respectively held by them.

 

2.                                       We, the undersigned, namely,

 

 

 

 

 

BERMUDIAN 

 

 

 

NUMBER OF

 

 

 

 

STATUS

 

 

 

SHARES

NAME

 

ADDRESS

 

(Yes/No)

 

NATIONALITY

 

SUBSCRIBED

 

 

 

 

 

 

 

 

 

Marcello A. Ausenda

 

Clarendon House

 

Yes

 

British

 

One

 

 

2 Church Street

 

 

 

 

 

 

 

 

Hamilton HM 11 Bermuda

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Jason Piney

 

 

Yes

 

British

 

One

 

 

 

 

 

 

 

 

 

Emily Costa

 

 

No

 

British

 

One

 

do hereby respectively agree to take such number of shares of the Company as may be allotted to us respectively by the provisional directors of the Company, not exceeding the number of shares for which we have respectively subscribed, and to satisfy such calls as may be made by the directors, provisional directors or promoters of the Company in respect of the shares allotted to us respectively.

 



 

3.                                     The Company is to be an exempted company as defined by the Companies Act 1981 (the “Act”).

 

4.                                     The Company, with the consent of the Minister of Finance, has power to hold land situate in Bermuda not exceeding         in all, including the following parcels:- N/A

 

5.                                     The authorised share capital of the Company is US$10,000.00 divided into shares of US$1.00 each.

 

6.                                     The objects for which the Company is formed and incorporated are unrestricted.

 

7.                                     The following are provisions regarding the powers of the Company —

 

Subject to paragraph 4, the Company may do all such things as are incidental or conducive to the attainment of its objects and shall have the capacity, rights, powers and privileges of a natural person, and —

 

(i)                                      pursuant to Section 42 of the Act, the Company shall have the power to issue preference shares which are, at the option of the holder, liable to be redeemed;

 

(ii)                                   pursuant to Section 42A of the Act, the Company shall have the power to purchase its own shares for cancellation; and

 

(iii)                                pursuant to Section 42B of the Act, the Company shall have the power to acquire its own shares to be held as treasury shares.

 



 

Signed by each subscriber in the presence of at least one witness attesting the signature thereof

 

 

/s/ Marcello A. Ausenda

 

/s/ [ILLEGIBLE]

 

 

 

 

 

 

/s/ Jason Piney

 

/s/ [ILLEGIBLE]

 

 

 

 

 

 

/s/ Emily Costa

 

/s/ [ILLEGIBLE]

 

 

 

 

 

 

 

 

 

 

 

 

(Subscribers)

 

(Witnesses)

 

SUBSCRIBED this Thirty-first day of October, 2014.

 




Exhibit 3.3

 

Standard exempted company Bye-laws

 

BYE-LAWS

 

OF

 

Roivant Neurosciences Ltd.

 

(Adopted by the sole member at the statutory meeting

held on November 18, 2014)

 



 

TABLE OF CONTENTS

 

INTERPRETATION

 

 

 

1.

 

Definitions

 

 

 

SHARES

 

 

 

2.

 

Power to Issue Shares

3.

 

Power of the Company to Purchase its Shares

4.

 

Rights Attaching to Shares

5.

 

Calls on Shares

6.

 

Forfeiture of Shares

7.

 

Share Certificates

8.

 

Fractional Shares

 

 

 

REGISTRATION OF SHARES

 

 

 

9.

 

Register of Members

10.

 

Registered Holder Absolute Owner

11.

 

Transfer of Registered Shares

12.

 

Transmission of Registered Shares

 

 

 

ALTERATION OF SHARE CAPITAL

 

 

 

13.

 

Power to Alter Capital

14.

 

Variation of Rights Attaching to Shares

 

 

 

DIVIDENDS AND CAPITALISATION

 

 

 

15.

 

Dividends

16.

 

Power to Set Aside Profits

17.

 

Method of Payment

18.

 

Capitalisation

 

 

 

MEETINGS OF MEMBERS

 

 

 

19.

 

Annual General Meetings

20.

 

Special General Meetings

21.

 

Requisitioned General Meetings

22.

 

Notice

23.

 

Giving Notice and Access

24.

 

Postponement of General Meeting

25.

 

Electronic Participation in Meetings

 



 

26.

 

Quorum at General Meetings

27.

 

Chairman to Preside at General Meetings

28.

 

Voting on Resolutions

29.

 

Power to Demand a Vote on a Poll

30.

 

Voting by Joint Holders of Shares

31.

 

Instrument of Proxy

32.

 

Representation of Corporate Member

33.

 

Adjournment of General Meeting

34.

 

Written Resolutions

35.

 

Directors Attendance at General Meetings

 

 

 

DIRECTORS AND OFFICERS

 

 

 

36.

 

Election of Directors

37.

 

Number of Directors

38.

 

Term of Office of Directors

39.

 

Alternate Directors

40.

 

Removal of Directors

41.

 

Vacancy in the Office of Director

42.

 

Remuneration of Directors

43.

 

Defect in Appointment

44.

 

Directors to Manage Business

45.

 

Powers of the Board of Directors

46.

 

Register of Directors and Officers

47.

 

Appointment of Officers

48.

 

Appointment of Secretary

49.

 

Duties of Officers

50.

 

Remuneration of Officers

51.

 

Conflicts of Interest

52.

 

Indemnification and Exculpation of Directors and Officers

 

 

 

MEETINGS OF THE BOARD OF DIRECTORS

 

 

 

53.

 

Board Meetings

54.

 

Notice of Board Meetings

55.

 

Electronic Participation in Meetings

56.

 

Representation of Corporate Director

57.

 

Quorum at Board Meetings

58.

 

Board to Continue in the Event of Vacancy

59.

 

Chairman to Preside

60.

 

Written Resolutions

61.

 

Validity of Prior Acts of the Board

 

 

 

CORPORATE RECORDS

 

 

 

62.

 

Minutes

 



 

63.

 

Place Where Corporate Records Kept

64.

 

Form and Use of Seal

 

 

 

ACCOUNTS

 

 

 

65.

 

Records of Account

66.

 

Financial Year End

 

 

 

AUDITS

 

 

 

67.

 

Annual Audit

68.

 

Appointment of Auditor

69.

 

Remuneration of Auditor

70.

 

Duties of Auditor

71.

 

Access to Records

72.

 

Financial Statements and the Auditor’s Report

73.

 

Vacancy in the Office of Auditor

 

 

 

VOLUNTARY WINDING-UP AND DISSOLUTION

 

 

 

74.

 

Winding-Up

 

 

 

CHANGES TO CONSTITUTION

 

 

 

75.

 

Changes to Bye-laws

76.

 

Changes to the Memorandum of Association

77.

 

Discontinuance

 



 

Roivant Neurosciences Ltd.

 

INTERPRETATION

 

1.                                       Definitions

 

1.1                                In these Bye-laws, the following words and expressions shall, where not inconsistent with the context, have the following meanings, respectively:

 

Act

 

the Companies Act 1981;

 

 

 

Alternate Director

 

an alternate director appointed in accordance with these Bye-laws;

 

 

 

Auditor

 

includes an individual, company or partnership;

 

 

 

Board

 

the board of directors (including, for the avoidance of doubt, a sole director) appointed or elected pursuant to these Bye-laws and acting by resolution in accordance with the Act and these Bye-laws or the directors present at a meeting of directors at which there is a quorum;

 

 

 

Company

 

the company for which these Bye-laws are approved and confirmed;

 

 

 

Director

 

a director of the Company and shall include an Alternate Director;

 

 

 

Member

 

the person registered in the Register of Members as the holder of shares in the Company and, when two or more persons are so registered as joint holders of shares, means the person whose name stands first in the Register of Members as one of such joint holders or all of such persons, as the context so requires;

 

 

 

notice

 

written notice as further provided in these Bye-laws unless otherwise specifically stated;

 

 

 

Officer

 

any person appointed by the Board to hold an office in the Company;

 

 

 

Register of Directors and Officers

 

the register of directors and officers referred to in these Bye-laws;

 

 

 

Register of Members

 

the register of Members referred to in these Bye-

 

1



 

 

 

laws;

 

 

 

Resident Representative

 

any person appointed to act as resident representative and includes any deputy or assistant resident representative;

 

 

 

Secretary

 

the person appointed to perform any or all of the duties of secretary of the Company and includes any deputy or assistant secretary and any person appointed by the Board to perform any of the duties of the Secretary; and

 

 

 

Treasury Share

 

a share of the Company that was or is treated as having been acquired and held by the Company and has been held continuously by the Company since it was so acquired and has not been cancelled.

 

1.2                                In these Bye-laws, where not inconsistent with the context:

 

(a)                                  words denoting the plural number include the singular number and vice versa ;

 

(b)                                  words denoting the masculine gender include the feminine and neuter genders;

 

(c)                                   words importing persons include companies, associations or bodies of persons whether corporate or not;

 

(d)                                  the words:-

 

(i)                            “may” shall be construed as permissive; and

 

(ii)                         “shall” shall be construed as imperative;

 

(e)                                   a reference to statutory provision shall be deemed to include any amendment or re-enactment thereof;

 

(f)                                    the word “corporation” means a corporation whether or not a company within the meaning of the Act; and

 

(g)                                   unless otherwise provided herein, words or expressions defined in the Act shall bear the same meaning in these Bye-laws.

 

1.3                                In these Bye-laws expressions referring to writing or its cognates shall, unless the contrary intention appears, include facsimile, printing, lithography, photography, electronic mail and other modes of representing words in visible form.

 

2



 

1.4                                Headings used in these Bye-laws are for convenience only and are not to be used or relied upon in the construction hereof.

 

SHARES

 

2.                                       Power to Issue Shares

 

2.1                                Subject to these Bye-laws and to any resolution of the Members to the contrary, and without prejudice to any special rights previously conferred on the holders of any existing shares or class of shares, the Board shall have the power to issue any unissued shares on such terms and conditions as it may determine and any shares or class of shares may be issued with such preferred, deferred or other special rights or such restrictions, whether in regard to dividend, voting, return of capital, or otherwise as the Company may by resolution of the Members prescribe.

 

2.2                                Subject to the Act, any preference shares may be issued or converted into shares that (at a determinable date or at the option of the Company or the holder) are liable to be redeemed on such terms and in such manner as may be determined by the Board (before the issue or conversion).

 

3.                                       Power of the Company to Purchase its Shares

 

3.1                                The Company may purchase its own shares for cancellation or acquire them as Treasury Shares in accordance with the Act on such terms as the Board shall think fit.

 

3.2                                The Board may exercise all the powers of the Company to purchase or acquire all or any part of its own shares in accordance with the Act.

 

4.                                       Rights Attaching to Shares

 

4.1                                Subject to any resolution of the Members to the contrary (and without prejudice to any special rights conferred thereby on the holders of any other shares or class of shares), the share capital shall be divided into shares of a single class the holders of which shall, subject to these Bye-laws:

 

(a)                                  be entitled to one vote per share;

 

(b)                                  be entitled to such dividends as the Board may from time to time declare;

 

(c)                                   in the event of a winding-up or dissolution of the Company, whether voluntary or involuntary or for the purpose of a reorganisation or otherwise or upon any distribution of capital, be entitled to the surplus assets of the Company; and

 

(d)                                  generally be entitled to enjoy all of the rights attaching to shares.

 

3



 

4.2                                All the rights attaching to a Treasury Share shall be suspended and shall not be exercised by the Company while it holds such Treasury Share and, except where required by the Act, all Treasury Shares shall be excluded from the calculation of any percentage or fraction of the share capital, or shares, of the Company.

 

5.                                       Calls on Shares

 

5.1                                The Board may make such calls as it thinks fit upon the Members in respect of any monies (whether in respect of nominal value or premium) unpaid on the shares allotted to or held by such Members and, if a call is not paid on or before the day appointed for payment thereof, the Member may at the discretion of the Board be liable to pay the Company interest on the amount of such call at such rate as the Board may determine, from the date when such call was payable up to the actual date of payment.  The Board may differentiate between the holders as to the amount of calls to be paid and the times of payment of such calls.

 

5.2                                The joint holders of a share shall be jointly and severally liable to pay all calls and any interest, costs and expenses in respect thereof.

 

5.3                                The Company may accept from any Member the whole or a part of the amount remaining unpaid on any shares held by him, although no part of that amount has been called up.

 

6.                                       Forfeiture of Shares

 

6.1                                If any Member fails to pay, on the day appointed for payment thereof, any call in respect of any share allotted to or held by such Member, the Board may, at any time thereafter during such time as the call remains unpaid, direct the Secretary to forward such Member a notice in writing in the form, or as near thereto as circumstances admit, of the following:

 

Notice of Liability to Forfeiture for Non-Payment of Call

[ Name of Company] (the “Company”)

 

You have failed to pay the call of [amount of call] made on [date], in respect of the [number] share(s) [number in figures] standing in your name in the Register of Members of the Company, on [date], the day appointed for payment of such call.  You are hereby notified that unless you pay such call together with interest thereon at the rate of [ ] per annum computed from the said [date] at the registered office of the Company the share(s) will be liable to be forfeited.

 

Dated this [date]

 

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[Signature of Secretary] By Order of the Board

 

6.2                                If the requirements of such notice are not complied with, any such share may at any time thereafter before the payment of such call and the interest due in respect thereof be forfeited by a resolution of the Board to that effect, and such share shall thereupon become the property of the Company and may be disposed of as the Board shall determine.  Without limiting the generality of the foregoing, the disposal may take place by sale, repurchase, redemption or any other method of disposal permitted by and consistent with these Bye-laws and the Act.

 

6.3                                A Member whose share or shares have been so forfeited shall, notwithstanding such forfeiture, be liable to pay to the Company all calls owing on such share or shares at the time of the forfeiture, together with all interest due thereon and any costs and expenses incurred by the Company in connection therewith.

 

6.4                                The Board may accept the surrender of any shares which it is in a position to forfeit on such terms and conditions as may be agreed.  Subject to those terms and conditions, a surrendered share shall be treated as if it had been forfeited.

 

7.                                       Share Certificates

 

7.1                                Every Member shall be entitled to a certificate under the common seal (or a facsimile thereof) of the Company or bearing the signature (or a facsimile thereof) of a Director or the Secretary or a person expressly authorised to sign specifying the number and, where appropriate, the class of shares held by such Member and whether the same are fully paid up and, if not, specifying the amount paid on such shares.  The Board may by resolution determine, either generally or in a particular case, that any or all signatures on certificates may be printed thereon or affixed by mechanical means.

 

7.2                                The Company shall be under no obligation to complete and deliver a share certificate unless specifically called upon to do so by the person to whom the shares have been allotted.

 

7.3                                If any share certificate shall be proved to the satisfaction of the Board to have been worn out, lost, mislaid, or destroyed the Board may cause a new certificate to be issued and request an indemnity for the lost certificate if it sees fit.

 

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8.                                       Fractional Shares

 

The Company may issue its shares in fractional denominations and deal with such fractions to the same extent as its whole shares and shares in fractional denominations shall have in proportion to the respective fractions represented thereby all of the rights of whole shares including (but without limiting the generality of the foregoing) the right to vote, to receive dividends and distributions and to participate in a winding-up.

 

REGISTRATION OF SHARES

 

9.                                       Register of Members

 

9.1                                The Board shall cause to be kept in one or more books a Register of Members and shall enter therein the particulars required by the Act.

 

9.2                                The Register of Members shall be open to inspection without charge at the registered office of the Company on every business day, subject to such reasonable restrictions as the Board may impose, so that not less than two hours in each business day be allowed for inspection.  The Register of Members may, after notice has been given in accordance with the Act, be closed for any time or times not exceeding in the whole thirty days in each year.

 

10.                                Registered Holder Absolute Owner

 

The Company shall be entitled to treat the registered holder of any share as the absolute owner thereof and accordingly shall not be bound to recognise any equitable claim or other claim to, or interest in, such share on the part of any other person.

 

11.                                Transfer of Registered Shares

 

11.1                         An instrument of transfer shall be in writing in the form of the following, or as near thereto as circumstances admit, or in such other form as the Board may accept:

 

Transfer of a Share or Shares

[Name of Company] (the “Company”)

 

FOR VALUE RECEIVED                            [amount], I, [name of transferor] hereby sell, assign and transfer unto [transferee] of [address], [number] shares of the Company.

 

 

DATED this [date]

 

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Signed by:

In the presence of:

 

 

 

 

 

 

 

 

 

Transferor

 

Witness

 

 

 

 

 

 

 

 

 

 

 

 

Signed by:

 

In the presence of:

 

 

 

 

 

 

 

 

 

 

 

 

Transferee

 

Witness

 

 

11.2                         Such instrument of transfer shall be signed by (or in the case of a party that is a corporation, on behalf of) the transferor and transferee, provided that, in the case of a fully paid share, the Board may accept the instrument signed by or on behalf of the transferor alone.  The transferor shall be deemed to remain the holder of such share until the same has been registered as having been transferred to the transferee in the Register of Members.

 

11.3                         The Board may refuse to recognise any instrument of transfer unless it is accompanied by the certificate in respect of the shares to which it relates and by such other evidence as the Board may reasonably require showing the right of the transferor to make the transfer.

 

11.4                         The joint holders of any share may transfer such share to one or more of such joint holders, and the surviving holder or holders of any share previously held by them jointly with a deceased Member may transfer any such share to the executors or administrators of such deceased Member.

 

11.5                         The Board may in its absolute discretion and without assigning any reason therefor refuse to register the transfer of a share.  The Board shall refuse to register a transfer unless all applicable consents, authorisations and permissions of any governmental body or agency in Bermuda have been obtained.  If the Board refuses to register a transfer of any share the Secretary shall, within three months after the date on which the transfer was lodged with the Company, send to the transferor and transferee notice of the refusal.

 

11.6                         Notwithstanding anything to the contrary in these Bye-laws, shares that are listed or admitted to trading on an appointed stock exchange may be transferred in accordance with the rules and regulations of such exchange.

 

12.                                Transmission of Registered Shares

 

12.1                         In the case of the death of a Member, the survivor or survivors where the deceased Member was a joint holder, and the legal personal representatives of the deceased

 

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Member where the deceased Member was a sole holder, shall be the only persons recognised by the Company as having any title to the deceased Member’s interest in the shares.  Nothing herein contained shall release the estate of a deceased joint holder from any liability in respect of any share which had been jointly held by such deceased Member with other persons.  Subject to the Act, for the purpose of this Bye-law, legal personal representative means the executor or administrator of a deceased Member or such other person as the Board may, in its absolute discretion, decide as being properly authorised to deal with the shares of a deceased Member.

 

12.2                         Any person becoming entitled to a share in consequence of the death or bankruptcy of any Member may be registered as a Member upon such evidence as the Board may deem sufficient or may elect to nominate some person to be registered as a transferee of such share, and in such case the person becoming entitled shall execute in favour of such nominee an instrument of transfer in writing in the form, or as near thereto as circumstances admit, of the following:

 

Transfer by a Person Becoming Entitled on Death/Bankruptcy of a Member

[Name of Company] (the “Company”)

 

I/We, having become entitled in consequence of the [death/bankruptcy] of [name and address of deceased/bankrupt Member] to [number] share(s) standing in the Register of Members of the Company in the name of the said [name of deceased/bankrupt Member] instead of being registered myself/ourselves, elect to have [name of transferee] (the “Transferee”) registered as a transferee of such share(s) and I/we do hereby accordingly transfer the said share(s) to the Transferee to hold the same unto the Transferee, his or her executors, administrators and assigns, subject to the conditions on which the same were held at the time of the execution hereof; and the Transferee does hereby agree to take the said share(s) subject to the same conditions.

 

 

DATED this [date]

 

 

 

 

 

 

 

 

 

Signed by:

 

In the presence of:

 

 

 

 

 

 

 

 

 

 

 

 

Transferor

 

Witness

 

 

 

 

 

 

 

 

 

 

 

 

Signed by:

 

In the presence of:

 

 

 

 

 

 

 

 

 

 

 

 

Transferee

 

Witness

 

 

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12.3                         On the presentation of the foregoing materials to the Board, accompanied by such evidence as the Board may require to prove the title of the transferor, the transferee shall be registered as a Member.  Notwithstanding the foregoing, the Board shall, in any case, have the same right to decline or suspend registration as it would have had in the case of a transfer of the share by that Member before such Member’s death or bankruptcy, as the case may be.

 

12.4                         Where two or more persons are registered as joint holders of a share or shares, then in the event of the death of any joint holder or holders the remaining joint holder or holders shall be absolutely entitled to such share or shares and the Company shall recognise no claim in respect of the estate of any joint holder except in the case of the last survivor of such joint holders.

 

ALTERATION OF SHARE CAPITAL

 

13.                                Power to Alter Capital

 

13.1                         The Company may if authorised by resolution of the Members increase, divide, consolidate, subdivide, change the currency denomination of, diminish or otherwise alter or reduce its share capital in any manner permitted by the Act.

 

13.2                         Where, on any alteration or reduction of share capital, fractions of shares or some other difficulty would arise, the Board may deal with or resolve the same in such manner as it thinks fit.

 

14.                                Variation of Rights Attaching to Shares

 

If, at any time, the share capital is divided into different classes of shares, the rights attached to any class (unless otherwise provided by the terms of issue of the shares of that class) may, whether or not the Company is being wound-up, be varied with the consent in writing of the holders of three-fourths of the issued shares of that class or with the sanction of a resolution passed by a majority of the votes cast at a separate general meeting of the holders of the shares of the class at which meeting the necessary quorum shall be two persons at least holding or representing by proxy one-third of the issued shares of the class.  The rights conferred upon the holders of the shares of any class or series issued with preferred or other rights shall not, unless otherwise expressly provided by the terms of issue of the shares of that class or series, be deemed to be varied by the creation or issue of further shares ranking pari passu therewith.

 

DIVIDENDS AND CAPITALISATION

 

15.                                Dividends

 

15.1                         The Board may, subject to these Bye-laws and in accordance with the Act, declare a dividend to be paid to the Members, in proportion to the number of shares held by

 

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them, and such dividend may be paid in cash or wholly or partly in specie in which case the Board may fix the value for distribution in specie of any assets.  No unpaid dividend shall bear interest as against the Company.

 

15.2                         The Board may fix any date as the record date for determining the Members entitled to receive any dividend.

 

15.3                         The Company may pay dividends in proportion to the amount paid up on each share where a larger amount is paid up on some shares than on others.

 

15.4                         The Board may declare and make such other distributions (in cash or in specie) to the Members as may be lawfully made out of the assets of the Company.  No unpaid distribution shall bear interest as against the Company.

 

16.                                Power to Set Aside Profits

 

The Board may, before declaring a dividend, set aside out of the surplus or profits of the Company, such amount as it thinks proper as a reserve to be used to meet contingencies or for equalising dividends or for any other purpose.

 

17.                                Method of Payment

 

17.1                         Any dividend, interest, or other monies payable in cash in respect of the shares may be paid by cheque or draft sent through the post directed to the Member at such Member’s address in the Register of Members, or to such person and to such address as the holder may in writing direct.

 

17.2                         In the case of joint holders of shares, any dividend, interest or other monies payable in cash in respect of shares may be paid by cheque or draft sent through the post directed to the address of the holder first named in the Register of Members, or to such person and to such address as the joint holders may in writing direct.  If two or more persons are registered as joint holders of any shares any one can give an effectual receipt for any dividend paid in respect of such shares.

 

17.3                         The Board may deduct from the dividends or distributions payable to any Member all monies due from such Member to the Company on account of calls or otherwise.

 

18.                                Capitalisation

 

18.1                         The Board may capitalise any amount for the time being standing to the credit of any of the Company’s share premium or other reserve accounts or to the credit of the profit and loss account or otherwise available for distribution by applying such amount in paying up unissued shares to be allotted as fully paid bonus shares pro rata to the Members.

 

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18.2                         The Board may capitalise any amount for the time being standing to the credit of a reserve account or amounts otherwise available for dividend or distribution by applying such amounts in paying up in full, partly or nil paid shares of those Members who would have been entitled to such amounts if they were distributed by way of dividend or distribution.

 

MEETINGS OF MEMBERS

 

19.                                Annual General Meetings

 

Subject to an election made by the Company in accordance with the Act to dispense with the holding of annual general meetings, an annual general meeting shall be held in each year (other than the year of incorporation) at such time and place as the president or the chairman of the Company (if any) or any two Directors or any Director and the Secretary or the Board shall appoint.

 

20.                                Special General Meetings

 

The president or the chairman of the Company (if any) or any two Directors or any Director and the Secretary or the Board may convene a special general meeting whenever in their judgment such a meeting is necessary.

 

21.                                Requisitioned General Meetings

 

The Board shall, on the requisition of Members holding at the date of the deposit of the requisition not less than one-tenth of such of the paid-up share capital of the Company as at the date of the deposit carries the right to vote at general meetings, forthwith proceed to convene a special general meeting and the provisions of the Act shall apply.

 

22.                                Notice

 

22.1                         At least five days’ notice of an annual general meeting shall be given to each Member entitled to attend and vote thereat, stating the date, place and time at which the meeting is to be held, that the election of Directors will take place thereat, and as far as practicable, the other business to be conducted at the meeting.

 

22.2                         At least five days’ notice of a special general meeting shall be given to each Member entitled to attend and vote thereat, stating the date, time, place and the general nature of the business to be considered at the meeting.

 

22.3                         The Board may fix any date as the record date for determining the Members entitled to receive notice of and to vote at any general meeting.

 

22.4                         A general meeting shall, notwithstanding that it is called on shorter notice than that specified in these Bye-laws, be deemed to have been properly called if it is so agreed by

 

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(i) all the Members entitled to attend and vote thereat in the case of an annual general meeting; and (ii) by a majority in number of the Members having the right to attend and vote at the meeting, being a majority together holding not less than 95% in nominal value of the shares giving a right to attend and vote thereat in the case of a special general meeting.

 

22.5                         The accidental omission to give notice of a general meeting to, or the non-receipt of a notice of a general meeting by, any person entitled to receive notice shall not invalidate the proceedings at that meeting.

 

23.                                Giving Notice and Access

 

23.1                         A notice may be given by the Company to a Member:

 

(a)                                  by delivering it to such Member in person, in which case the notice shall be deemed to have been served upon such delivery; or

 

(b)                                  by sending it by post to such Member’s address in the Register of Members, in which case the notice shall be deemed to have been served seven days after the date on which it is deposited, with postage prepaid, in the mail; or

 

(c)                                   by sending it by courier to such Member’s address in the Register of Members, in which case the notice shall be deemed to have been served two days after the date on which it is deposited, with courier fees paid, with the courier service; or

 

(d)                                  by transmitting it by electronic means (including facsimile and electronic mail, but not telephone) in accordance with such directions as may be given by such Member to the Company for such purpose, in which case the notice shall be deemed to have been served at the time that it would in the ordinary course be transmitted; or

 

(e)                                   by delivering it in accordance with the provisions of the Act pertaining to delivery of electronic records by publication on a website, in which case the notice shall be deemed to have been served at the time when the requirements of the Act in that regard have been met.

 

23.2                         Any notice required to be given to a Member shall, with respect to any shares held jointly by two or more persons, be given to whichever of such persons is named first in the Register of Members and notice so given shall be sufficient notice to all the holders of such shares.

 

23.3                         In proving service under paragraphs 23.1(b), (c) and (d), it shall be sufficient to prove that the notice was properly addressed and prepaid, if posted or sent by courier, and the time when it was posted, deposited with the courier, or transmitted by electronic means.

 

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24.                                Postponement of General Meeting

 

The Secretary may postpone any general meeting called in accordance with these Bye-laws (other than a meeting requisitioned under these Bye-laws) provided that notice of postponement is given to the Members before the time for such meeting.  Fresh notice of the date, time and place for the postponed meeting shall be given to each Member in accordance with these Bye-laws.

 

25.                                Electronic Participation in Meetings

 

Members may participate in any general meeting by such telephonic, electronic or other communication facilities or means as permit all persons participating in the meeting to communicate with each other simultaneously and instantaneously, and participation in such a meeting shall constitute presence in person at such meeting.

 

26.                                Quorum at General Meetings

 

26.1                         At any general meeting two or more persons present in person and representing in person or by proxy in excess of 50% of the total issued voting shares in the Company throughout the meeting shall form a quorum for the transaction of business, provided that if the Company shall at any time have only one Member, one Member present in person or by proxy shall form a quorum for the transaction of business at any general meeting held during such time.

 

26.2                         If within half an hour from the time appointed for the meeting a quorum is not present, then, in the case of a meeting convened on a requisition, the meeting shall be deemed cancelled and, in any other case, the meeting shall stand adjourned to the same day one week later, at the same time and place or to such other day, time or place as the Secretary may determine. Unless the meeting is adjourned to a specific date, time and place announced at the meeting being adjourned, fresh notice of the resumption of the meeting shall be given to each Member entitled to attend and vote thereat in accordance with these Bye-laws.

 

27.                                Chairman to Preside at General Meetings

 

Unless otherwise agreed by a majority of those attending and entitled to vote thereat, the chairman or the president of the Company, if there be one, shall act as chairman of the meeting at all general meetings at which such person is present.  In their absence a chairman of the meeting shall be appointed or elected by those present at the meeting and entitled to vote.

 

28.                                Voting on Resolutions

 

28.1                         Subject to the Act and these Bye-laws, any question proposed for the consideration of the Members at any general meeting shall be decided by the affirmative votes of a

 

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majority of the votes cast in accordance with these Bye-laws and in the case of an equality of votes the resolution shall fail.

 

28.2                         No Member shall be entitled to vote at a general meeting unless such Member has paid all the calls on all shares held by such Member.

 

28.3                         At any general meeting a resolution put to the vote of the meeting shall, in the first instance, be voted upon by a show of hands and, subject to any rights or restrictions for the time being lawfully attached to any class of shares and subject to these Bye-laws, every Member present in person and every person holding a valid proxy at such meeting shall be entitled to one vote and shall cast such vote by raising his hand.

 

28.4                         In the event that a Member participates in a general meeting by telephone, electronic or other communication facilities or means, the chairman of the meeting shall direct the manner in which such Member may cast his vote on a show of hands.

 

28.5                         At any general meeting if an amendment is proposed to any resolution under consideration and the chairman of the meeting rules on whether or not the proposed amendment is out of order, the proceedings on the substantive resolution shall not be invalidated by any error in such ruling.

 

28.6                         At any general meeting a declaration by the chairman of the meeting that a question proposed for consideration has, on a show of hands, been carried, or carried unanimously, or by a particular majority, or lost, and an entry to that effect in a book containing the minutes of the proceedings of the Company shall, subject to these Bye-laws, be conclusive evidence of that fact.

 

29.                                Power to Demand a Vote on a Poll

 

29.1                         Notwithstanding the foregoing, a poll may be demanded by any of the following persons:

 

(a)                                  the chairman of such meeting; or

 

(b)                                  at least three Members present in person or represented by proxy; or

 

(c)                                   any Member or Members present in person or represented by proxy and holding between them not less than one-tenth of the total voting rights of all the Members having the right to vote at such meeting; or

 

(d)                                  any Member or Members present in person or represented by proxy holding shares in the Company conferring the right to vote at such meeting, being shares on which an aggregate sum has been paid up equal to not less than one-tenth of the total amount paid up on all such shares conferring such right.

 

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29.2                         Where a poll is demanded, subject to any rights or restrictions for the time being lawfully attached to any class of shares, every person present at such meeting shall have one vote for each share of which such person is the holder or for which such person holds a proxy and such vote shall be counted by ballot as described herein, or in the case of a general meeting at which one or more Members are present by telephone, electronic or other communication facilities or means, in such manner as the chairman of the meeting may direct and the result of such poll shall be deemed to be the resolution of the meeting at which the poll was demanded and shall replace any previous resolution upon the same matter which has been the subject of a show of hands.  A person entitled to more than one vote need not use all his votes or cast all the votes he uses in the same way.

 

29.3                         A poll demanded for the purpose of electing a chairman of the meeting or on a question of adjournment shall be taken forthwith.  A poll demanded on any other question shall be taken at such time and in such manner during such meeting as the chairman (or acting chairman) of the meeting may direct.  Any business other than that upon which a poll has been demanded may be conducted pending the taking of the poll.

 

29.4                         Where a vote is taken by poll, each person physically present and entitled to vote shall be furnished with a ballot paper on which such person shall record his vote in such manner as shall be determined at the meeting having regard to the nature of the question on which the vote is taken, and each ballot paper shall be signed or initialled or otherwise marked so as to identify the voter and the registered holder in the case of a proxy.  Each person present by telephone, electronic or other communication facilities or means shall cast his vote in such manner as the chairman of the meeting shall direct.  At the conclusion of the poll, the ballot papers and votes cast in accordance with such directions shall be examined and counted by a committee of not less than two Members or proxy holders appointed by the chairman of the meeting for the purpose and the result of the poll shall be declared by the chairman of the meeting.

 

30.                                Voting by Joint Holders of Shares

 

In the case of joint holders, the vote of the senior who tenders a vote (whether in person or by proxy) shall be accepted to the exclusion of the votes of the other joint holders, and for this purpose seniority shall be determined by the order in which the names stand in the Register of Members.

 

31.                                Instrument of Proxy

 

31.1                         An instrument appointing a proxy shall be in writing in substantially the following form or such other form as the chairman of the meeting shall accept:

 

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Proxy

[Name of Company] (the “Company”)

 

I/We, [insert names here], being a Member of the Company with [number] shares, HEREBY APPOINT [name] of [address] or failing him, [name] of [address] to be my/our proxy to vote for me/us at the meeting of the Members to be held on [date] and at any adjournment thereof.  [Any restrictions on voting to be inserted here.]

 

 

Signed this [date]

 

 

 

 

 

 

 

 

Member(s)

 

 

31.2                         The instrument appointing a proxy must be received by the Company at the registered office or at such other place or in such manner as is specified in the notice convening the meeting or in any instrument of proxy sent out by the Company in relation to the meeting at which the person named in the instrument appointing a proxy proposes to vote, and an instrument appointing a proxy which is not received in the manner so prescribed shall be invalid.

 

31.3                         A Member who is the holder of two or more shares may appoint more than one proxy to represent him and vote on his behalf in respect of different shares.

 

31.4                         The decision of the chairman of any general meeting as to the validity of any appointment of a proxy shall be final.

 

32.                                Representation of Corporate Member

 

32.1                         A corporation which is a Member may, by written instrument, authorise such person or persons as it thinks fit to act as its representative at any meeting and any person so authorised shall be entitled to exercise the same powers on behalf of the corporation which such person represents as that corporation could exercise if it were an individual Member, and that Member shall be deemed to be present in person at any such meeting attended by its authorised representative or representatives.

 

32.2                         Notwithstanding the foregoing, the chairman of the meeting may accept such assurances as he thinks fit as to the right of any person to attend and vote at general meetings on behalf of a corporation which is a Member.

 

33.                                Adjournment of General Meeting

 

The chairman of a general meeting may, with the consent of the Members at any general meeting at which a quorum is present, and shall if so directed by the meeting, adjourn the

 

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meeting. Unless the meeting is adjourned to a specific date, place and time announced at the meeting being adjourned, fresh notice of the date, place and time for the resumption of the adjourned meeting shall be given to each Member entitled to attend and vote thereat in accordance with these Bye-laws.

 

34.                                Written Resolutions

 

34.1                         Subject to these Bye-laws, anything which may be done by resolution of the Company in general meeting or by resolution of a meeting of any class of the Members may be done without a meeting by written resolution in accordance with this Bye-law.

 

34.2                         Notice of a written resolution shall be given, and a copy of the resolution shall be circulated to all Members who would be entitled to attend a meeting and vote thereon.  The accidental omission to give notice to, or the non-receipt of a notice by, any Member does not invalidate the passing of a resolution.

 

34.3                         A written resolution is passed when it is signed by (or in the case of a Member that is a corporation, on behalf of) the Members who at the date that the notice is given represent such majority of votes as would be required if the resolution was voted on at a meeting of Members at which all Members entitled to attend and vote thereat were present and voting.

 

34.4                         A resolution in writing may be signed in any number of counterparts.

 

34.5                         A resolution in writing made in accordance with this Bye-law is as valid as if it had been passed by the Company in general meeting or by a meeting of the relevant class of Members, as the case may be, and any reference in any Bye-law to a meeting at which a resolution is passed or to Members voting in favour of a resolution shall be construed accordingly.

 

34.6                         A resolution in writing made in accordance with this Bye-law shall constitute minutes for the purposes of the Act.

 

34.7                         This Bye-law shall not apply to:

 

(a)                                  a resolution passed to remove an Auditor from office before the expiration of his term of office; or

 

(b)                                  a resolution passed for the purpose of removing a Director before the expiration of his term of office.

 

34.8                         For the purposes of this Bye-law, the effective date of the resolution is the date when the resolution is signed by (or in the case of a Member that is a corporation, on behalf of) the last Member whose signature results in the necessary voting majority being

 

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achieved and any reference in any Bye-law to the date of passing of a resolution is, in relation to a resolution made in accordance with this Bye-law, a reference to such date.

 

35.                                Directors Attendance at General Meetings

 

The Directors shall be entitled to receive notice of, attend and be heard at any general meeting.

 

DIRECTORS AND OFFICERS

 

36.                                Election of Directors

 

36.1                         The Board shall be elected or appointed in the first place at the statutory meeting of the Company and thereafter, except in the case of a casual vacancy, at the annual general meeting or at any special general meeting called for that purpose.

 

36.2                         At any general meeting the Members may authorise the Board to fill any vacancy in their number left unfilled at a general meeting.

 

37.                                Number of Directors

 

The Board shall consist of not less than one Director or such number in excess thereof as the Members may determine.

 

38.                                Term of Office of Directors

 

Directors shall hold office for such term as the Members may determine or, in the absence of such determination, until the next annual general meeting or until their successors are elected or appointed or their office is otherwise vacated.

 

39.                                Alternate Directors

 

39.1                         At any general meeting, the Members may elect a person or persons to act as a Director in the alternative to any one or more Directors or may authorise the Board to appoint such Alternate Directors.

 

39.2                         Unless the Members otherwise resolve, any Director may appoint a person or persons to act as a Director in the alternative to himself by notice deposited with the Secretary.

 

39.3                         Any person elected or appointed pursuant to this Bye-law shall have all the rights and powers of the Director or Directors for whom such person is elected or appointed in the alternative, provided that such person shall not be counted more than once in determining whether or not a quorum is present.

 

39.4                         An Alternate Director shall be entitled to receive notice of all Board meetings and to attend and vote at any such meeting at which a Director for whom such Alternate Director was appointed in the alternative is not personally present and generally to

 

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perform at such meeting all the functions of such Director for whom such Alternate Director was appointed.

 

39.5                         An Alternate Director’s office shall terminate —

 

(a)                                  in the case of an alternate elected by the Members:

 

(i)                                      on the occurrence in relation to the Alternate Director of any event which, if it occurred in relation to the Director for whom he was elected to act, would result in the termination of that Director; or

 

(ii)                                   if the Director for whom he was elected in the alternative ceases for any reason to be a Director, provided that the alternate removed in these circumstances may be re-appointed by the Board as an alternate to the person appointed to fill the vacancy; and

 

(b)                                  in the case of an alternate appointed by a Director:

 

(i)                                      on the occurrence in relation to the Alternate Director of any event which, if it occurred in relation to his appointor, would result in the termination of the appointor’s directorship; or

 

(ii)                                   when the Alternate Director’s appointor revokes the appointment by notice to the Company in writing specifying when the appointment is to terminate; or

 

(iii)                                if the Alternate Director’s appointor ceases for any reason to be a Director.

 

40.                                Removal of Directors

 

40.1                         Subject to any provision to the contrary in these Bye-laws, the Members entitled to vote for the election of Directors may, at any special general meeting convened and held in accordance with these Bye-laws, remove a Director provided that the notice of any such meeting convened for the purpose of removing a Director shall contain a statement of the intention so to do and be served on such Director not less than 14 days before the meeting and at such meeting the Director shall be entitled to be heard on the motion for such Director’s removal.

 

40.2                         If a Director is removed from the Board under this Bye-law the Members may fill the vacancy at the meeting at which such Director is removed.  In the absence of such election or appointment, the Board may fill the vacancy.

 

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41.                                Vacancy in the Office of Director

 

41.1                         The office of Director shall be vacated if the Director:

 

(a)                                  is removed from office pursuant to these Bye-laws or is prohibited from being a Director by law;

 

(b)                                  is or becomes bankrupt, or makes any arrangement or composition with his creditors generally;

 

(c)                                   is or becomes of unsound mind or dies; or

 

(d)                                  resigns his office by notice to the Company.

 

41.2                         The Board shall have the power to appoint any person as a Director to fill a vacancy on the Board occurring as a result of the death, disability, disqualification or resignation of any Director and to appoint an Alternate Director to any Director so appointed.

 

42.                                Remuneration of Directors

 

The remuneration (if any) of the Directors shall be determined by the Company in general meeting and shall be deemed to accrue from day to day.  The Directors may also be paid all travel, hotel and other expenses properly incurred by them (or in the case of a director that is a corporation, by its representative or representatives) in attending and returning from Board meetings, meetings of any committee appointed by the Board or general meetings, or in connection with the business of the Company or their duties as Directors generally.

 

43.                                Defect in Appointment

 

All acts done in good faith by the Board, any Director, a member of a committee appointed by the Board, any person to whom the Board may have delegated any of its powers, or any person acting as a Director shall, notwithstanding that it be afterwards discovered that there was some defect in the appointment of any Director or person acting as aforesaid, or that he was, or any of them were, disqualified, be as valid as if every such person had been duly appointed and was qualified to be a Director or act in the relevant capacity.

 

44.                                Directors to Manage Business

 

The business of the Company shall be managed and conducted by the Board.  In managing the business of the Company, the Board may exercise all such powers of the Company as are not, by the Act or by these Bye-laws, required to be exercised by the Company in general meeting.

 

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45.                                Powers of the Board of Directors

 

The Board may:

 

(a)                                  appoint, suspend, or remove any manager, secretary, clerk, agent or employee of the Company and may fix their remuneration and determine their duties;

 

(b)                                  exercise all the powers of the Company to borrow money and to mortgage or charge or otherwise grant a security interest in its undertaking, property and uncalled capital, or any part thereof, and may issue debentures, debenture stock and other securities whether outright or as security for any debt, liability or obligation of the Company or any third party;

 

(c)                                   appoint one or more Directors to the office of managing director or chief executive officer of the Company, who shall, subject to the control of the Board, supervise and administer all of the general business and affairs of the Company;

 

(d)                                  appoint a person to act as manager of the Company’s day-to-day business and may entrust to and confer upon such manager such powers and duties as it deems appropriate for the transaction or conduct of such business;

 

(e)                                   by power of attorney, appoint any company, firm, person or body of persons, whether nominated directly or indirectly by the Board, to be an attorney of the Company for such purposes and with such powers, authorities and discretions (not exceeding those vested in or exercisable by the Board) and for such period and subject to such conditions as it may think fit and any such power of attorney may contain such provisions for the protection and convenience of persons dealing with any such attorney as the Board may think fit and may also authorise any such attorney to sub-delegate all or any of the powers, authorities and discretions so vested in the attorney;

 

(f)                                    procure that the Company pays all expenses incurred in promoting and incorporating the Company;

 

(g)                                   delegate any of its powers (including the power to sub-delegate) to a committee of one or more persons appointed by the Board which may consist partly or entirely of non-Directors, provided that every such committee shall conform to such directions as the Board shall impose on them and provided further that the meetings and proceedings of any such committee shall be governed by the provisions of these Bye-laws regulating the meetings and proceedings of the Board, so far as the same are applicable and are not superseded by directions imposed by the Board;

 

(h)                                  delegate any of its powers (including the power to sub-delegate) to any person on such terms and in such manner as the Board may see fit;

 

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(i)                                      present any petition and make any application in connection with the liquidation or reorganisation of the Company;

 

(j)                                     in connection with the issue of any share, pay such commission and brokerage as may be permitted by law; and

 

(k)                                  authorise any company, firm, person or body of persons to act on behalf of the Company for any specific purpose and in connection therewith to execute any deed, agreement, document or instrument on behalf of the Company.

 

46.                                Register of Directors and Officers

 

The Board shall cause to be kept in one or more books at the registered office of the Company a Register of Directors and Officers and shall enter therein the particulars required by the Act.

 

47.                                Appointment of Officers

 

The Board may appoint such Officers (who may or may not be Directors) as the Board may determine for such terms as the Board deems fit.

 

48.                                Appointment of Secretary

 

The Secretary shall be appointed by the Board from time to time for such term as the Board deems fit.

 

49.                                Duties of Officers

 

The Officers shall have such powers and perform such duties in the management, business and affairs of the Company as may be delegated to them by the Board from time to time.

 

50.                                Remuneration of Officers

 

The Officers shall receive such remuneration as the Board may determine.

 

51.                                Conflicts of Interest

 

51.1                         Any Director, or any Director’s firm, partner or any company with whom any Director is associated, may act in any capacity for, be employed by or render services to the Company on such terms, including with respect to remuneration, as may be agreed between the parties.  Nothing herein contained shall authorise a Director or a Director’s firm, partner or company to act as Auditor to the Company.

 

51.2                         A Director who is directly or indirectly interested in a contract or proposed contract with the Company (an “Interested Director”) shall declare the nature of such interest as required by the Act.

 

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51.3                         An Interested Director who has complied with the requirements of the foregoing Bye-law may:

 

(a)                                  vote in respect of such contract or proposed contract; and/or

 

(b)                                  be counted in the quorum for the meeting at which the contract or proposed contract is to be voted on,

 

and no such contract or proposed contract shall be void or voidable by reason only that the Interested Director voted on it or was counted in the quorum of the relevant meeting and the Interested Director shall not be liable to account to the Company for any profit realised thereby.

 

52.                                Indemnification and Exculpation of Directors and Officers

 

52.1                         The Directors, Resident Representative, Secretary and other Officers (such term to include any person appointed to any committee by the Board) acting in relation to any of the affairs of the Company or any subsidiary thereof and the liquidator or trustees (if any) acting in relation to any of the affairs of the Company or any subsidiary thereof and every one of them (whether for the time being or formerly), and their heirs, executors and administrators (each of which an “indemnified party”), shall be indemnified and secured harmless out of the assets of the Company from and against all actions, costs, charges, losses, damages and expenses which they or any of them, their heirs, executors or administrators, shall or may incur or sustain by or by reason of any act done, concurred in or omitted in or about the execution of their duty, or supposed duty, or in their respective offices or trusts, and no indemnified party shall be answerable for the acts, receipts, neglects or defaults of the others of them or for joining in any receipts for the sake of conformity, or for any bankers or other persons with whom any monies or effects belonging to the Company shall or may be lodged or deposited for safe custody, or for insufficiency or deficiency of any security upon which any monies of or belonging to the Company shall be placed out on or invested, or for any other loss, misfortune or damage which may happen in the execution of their respective offices or trusts, or in relation thereto, PROVIDED THAT this indemnity shall not extend to any matter in respect of any fraud or dishonesty in relation to the Company which may attach to any of the indemnified parties.  Each Member agrees to waive any claim or right of action such Member might have, whether individually or by or in the right of the Company, against any Director or Officer on account of any action taken by such Director or Officer, or the failure of such Director or Officer to take any action in the performance of his duties with or for the Company or any subsidiary thereof, PROVIDED THAT such waiver shall not extend to any matter in respect of any fraud or dishonesty in relation to the Company which may attach to such Director or Officer.

 

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52.2                         The Company may purchase and maintain insurance for the benefit of any Director or Officer against any liability incurred by him under the Act in his capacity as a Director or Officer or indemnifying such Director or Officer in respect of any loss arising or liability attaching to him by virtue of any rule of law in respect of any negligence, default, breach of duty or breach of trust of which the Director or Officer may be guilty in relation to the Company or any subsidiary thereof.

 

52.3                         The Company may advance monies to a Director or Officer for the costs, charges and expenses incurred by the Director or Officer in defending any civil or criminal proceedings against him, on condition that the Director or Officer shall repay the advance if any allegation of fraud or dishonesty in relation to the Company is proved against him.

 

MEETINGS OF THE BOARD OF DIRECTORS

 

53.                                Board Meetings

 

The Board may meet for the transaction of business, adjourn and otherwise regulate its meetings as it sees fit.  A resolution put to the vote at a Board meeting shall be carried by the affirmative votes of a majority of the votes cast and in the case of an equality of votes the resolution shall fail.

 

54.                                Notice of Board Meetings

 

A Director may, and the Secretary on the requisition of a Director shall, at any time summon a Board meeting.  Notice of a Board meeting shall be deemed to be duly given to a Director if it is given to such Director verbally (including in person or by telephone) or otherwise communicated or sent to such Director by post, electronic means or other mode of representing words in a visible form at such Director’s last known address or in accordance with any other instructions given by such Director to the Company for this purpose.

 

55.                                Electronic Participation in Meetings

 

Directors may participate in any meeting by such telephonic, electronic or other communication facilities or means as permit all persons participating in the meeting to communicate with each other simultaneously and instantaneously, and participation in such a meeting shall constitute presence in person at such meeting.

 

56.                                Representation of Corporate Director

 

56.1                         A Director which is a corporation may, by written instrument, authorise such person or persons as it thinks fit to act as its representative at any meeting and any person so authorised shall be entitled to exercise the same powers on behalf of the corporation which such person represents as that corporation could exercise if it were an

 

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individual Director, and that Director shall be deemed to be present in person at any such meeting attended by its authorised representative or representatives.

 

56.2                         Notwithstanding the foregoing, the chairman of the meeting may accept such assurances as he thinks fit as to the right of any person to attend and vote at Board meetings on behalf of a corporation which is a Director.

 

57.                                Quorum at Board Meetings

 

The quorum necessary for the transaction of business at a Board meeting shall be two Directors, provided that if there is only one Director for the time being in office the quorum shall be one.

 

58.                                Board to Continue in the Event of Vacancy

 

The Board may act notwithstanding any vacancy in its number but, if and so long as its number is reduced below the number fixed by these Bye-laws as the quorum necessary for the transaction of business at Board meetings, the continuing Directors or Director may act for the purpose of (i) summoning a general meeting; or (ii) preserving the assets of the Company.

 

59.                                Chairman to Preside

 

Unless otherwise agreed by a majority of the Directors attending, the chairman or the president of the Company, if there be one, shall act as chairman of the meeting at all Board meetings at which such person is present.  In their absence a chairman of the meeting shall be appointed or elected by the Directors present at the meeting.

 

60.                                Written Resolutions

 

A resolution signed by (or in the case of a Director that is a corporation, on behalf of) all the Directors, which may be in counterparts, shall be as valid as if it had been passed at a Board meeting duly called and constituted, such resolution to be effective on the date on which the resolution is signed by (or in the case of a Director that is a corporation, on behalf of) the last Director.  For the purposes of this Bye-law only, “the Directors” shall not include an Alternate Director.

 

61.                                Validity of Prior Acts of the Board

 

No regulation or alteration to these Bye-laws made by the Company in general meeting shall invalidate any prior act of the Board which would have been valid if that regulation or alteration had not been made.

 

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CORPORATE RECORDS

 

62.                                Minutes

 

The Board shall cause minutes to be duly entered in books provided for the purpose:

 

(a)                                  of all elections and appointments of Officers;

 

(b)                                  of the names of the Directors present at each Board meeting and of any committee appointed by the Board; and

 

(c)                                   of all resolutions and proceedings of general meetings of the Members, Board meetings, meetings of managers and meetings of committees appointed by the Board.

 

63.                                Place Where Corporate Records Kept

 

Minutes prepared in accordance with the Act and these Bye-laws shall be kept by the Secretary at the registered office of the Company.

 

64.                                Form and Use of Seal

 

64.1                         The Company may adopt a seal in such form as the Board may determine.  The Board may adopt one or more duplicate seals for use in or outside Bermuda.

 

64.2                         A seal may, but need not, be affixed to any deed, instrument or document, and if the seal is to be affixed thereto, it shall be attested by the signature of (i) any Director, or (ii) any Officer, or (iii) the Secretary, or (iv) any person authorised by the Board for that purpose.

 

64.3                         A Resident Representative may, but need not, affix the seal of the Company to certify the authenticity of any copies of documents.

 

ACCOUNTS

 

65.                                Records of Account

 

65.1                         The Board shall cause to be kept proper records of account with respect to all transactions of the Company and in particular with respect to:

 

(a)                                  all amounts of money received and expended by the Company and the matters in respect of which the receipt and expenditure relates;

 

(b)                                  all sales and purchases of goods by the Company; and

 

(c)                                   all assets and liabilities of the Company.

 

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65.2                         Such records of account shall be kept at the registered office of the Company or, subject to the Act, at such other place as the Board thinks fit and shall be available for inspection by the Directors during normal business hours.

 

65.3                         Such records of account shall be retained for a minimum period of five years from the date on which they are prepared.

 

66.                                Financial Year End

 

The financial year end of the Company may be determined by resolution of the Board and failing such resolution shall be 31st December in each year.

 

AUDITS

 

67.                                Annual Audit

 

Subject to any rights to waive laying of accounts or appointment of an Auditor pursuant to the Act, the accounts of the Company shall be audited at least once in every year.

 

68.                                Appointment of Auditor

 

68.1                         Subject to the Act, the Members shall appoint an auditor to the Company to hold office for such term as the Members deem fit or until a successor is appointed.

 

68.2                         The Auditor may be a Member but no Director, Officer or employee of the Company shall, during his continuance in office, be eligible to act as an Auditor of the Company.

 

69.                                Remuneration of Auditor

 

69.1                         The remuneration of an Auditor appointed by the Members shall be fixed by the Company in general meeting or in such manner as the Members may determine.

 

69.2                         The remuneration of an Auditor appointed by the Board to fill a casual vacancy in accordance with these Bye-laws shall be fixed by the Board.

 

70.                                Duties of Auditor

 

70.1                         The financial statements provided for by these Bye-laws shall be audited by the Auditor in accordance with generally accepted auditing standards.  The Auditor shall make a written report thereon in accordance with generally accepted auditing standards.

 

70.2                         The generally accepted auditing standards referred to in this Bye-law may be those of a country or jurisdiction other than Bermuda or such other generally accepted auditing standards as may be provided for in the Act.  If so, the financial statements and the report of the Auditor shall identify the generally accepted auditing standards used.

 

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71.                                Access to Records

 

The Auditor shall at all reasonable times have access to all books kept by the Company and to all accounts and vouchers relating thereto, and the Auditor may call on the Directors or Officers for any information in their possession relating to the books or affairs of the Company.

 

72.                                Financial Statements and the Auditor’s Report

 

72.1                         Subject to the following bye-law, the financial statements and/or the auditor’s report as required by the Act shall

 

(a)                                  be laid before the Members at the annual general meeting; or

 

(b)                                  be received, accepted, adopted, approved or otherwise acknowledged by the Members by written resolution passed in accordance with these Bye-laws; or

 

(c)                                   in circumstances where the Company has elected to dispense with the holding of an annual general meeting, be made available to the Members in accordance with the Act in such manner as the Board shall determine.

 

72.2                         If all Members and Directors shall agree, either in writing or at a meeting, that in respect of a particular interval no financial statements and/or auditor’s report thereon need be made available to the Members, and/or that no auditor shall be appointed then there shall be no obligation on the Company to do so.

 

73.                                Vacancy in the Office of Auditor

 

The Board may fill any casual vacancy in the office of the auditor.

 

VOLUNTARY WINDING-UP AND DISSOLUTION

 

74.                                Winding-Up

 

If the Company shall be wound up the liquidator may, with the sanction of a resolution of the Members, divide amongst the Members in specie or in kind the whole or any part of the assets of the Company (whether they shall consist of property of the same kind or not) and may, for such purpose, set such value as he deems fair upon any property to be divided as aforesaid and may determine how such division shall be carried out as between the Members or different classes of Members.  The liquidator may, with the like sanction, vest the whole or any part of such assets in the trustees upon such trusts for the benefit of the Members as the liquidator shall think fit, but so that no Member shall be compelled to accept any shares or other securities or assets whereon there is any liability.

 

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CHANGES TO CONSTITUTION

 

75.                                Changes to Bye-laws

 

No Bye-law may be rescinded, altered or amended and no new Bye-law may be made save in accordance with the Act and until the same has been approved by a resolution of the Board and by a resolution of the Members.

 

76.                                Changes to the Memorandum of Association

 

No alteration or amendment to the Memorandum of Association may be made save in accordance with the Act and until same has been approved by a resolution of the Board and by a resolution of the Members.

 

77.                                Discontinuance

 

The Board may exercise all the powers of the Company to discontinue the Company to a jurisdiction outside Bermuda pursuant to the Act.

 

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Exhibit 10.6

 

EXECUTION VERSION

 

SERVICES AGREEMENT

 

This Services Agreement (the “Agreement”) is entered into as of October 31, 2014 (the “RNL Effective Date”), by and between Roivant Sciences, Inc., a corporation organized under the laws of the State of Delaware (“Service Provider”) and Roivant Neurosciences Ltd., an exempted limited company organized under the laws of the country of Bermuda (“RNL”), and is entered into as of March 7, 2015 (the “RNL/RNI Effective Date”), by and between the Service Provider, RNL and Roivant Neurosciences, Inc., a corporation organized under the laws of the State of Delaware and a wholly owned subsidiary of RNL (“RNI”, and together with RNL, the “Service Recipients” and each a “Service Recipient”).

 

RECITALS

 

WHEREAS, RNL is a biotechnology company focused on acquiring, developing and commercializing late-stage neuroscience drug candidates, including non-strategic neuroscience assets from large pharmaceutical companies, distressed neuroscience drug candidates from small biotech companies, neuroscience drugs or novel approaches from universities, and high-risk neuroscience projects abandoned by conventional biopharmaceutical firms;

 

WHEREAS, RNI has agreed to provide certain preparatory services in relation to the identification of potential neuroscience drug asset candidates, managing the performance of clinical trials or other research and development activities, performing or evaluating scientific and statistical analyses, and various administrative matters pursuant to a Services Agreement between RNI and RNL dated as of March 7, 2015 (the “RNI-RNL Services Agreement”);

 

WHEREAS, Service Provider is capable of providing preparatory services in relation to the identification of potential neuroscience drug asset candidates, managing the performance of clinical trials or other research and development activities, performing or evaluating scientific and statistical analyses, and various administrative matters and is also capable of assisting RNI in providing such services in connection with the RNI-RNL Services Agreement;

 

WHEREAS, RNI is in the early stages of operations and may, in some circumstances, not yet be able to provide all of the services required by RNL in connection with the RNI-RNL Services Agreement, and

 

WHEREAS, Service Recipients desire to engage the services of Service Provider until such time as RNI is able to provide all of the services required by RNL in connection with the RNI-RNL Services Agreement, and the Service Provider is willing to provide such services in consideration for a fee.

 

NOW, THEREFORE, in consideration of the mutual covenants, rights and obligations set forth herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:

 

1.                                       DEFINITIONS

 

1.1                                Affiliate . “Affiliate” shall mean any Person, whether de jure or de facto, other than a Party, that directly or indirectly owns, is owned by or is under common ownership with a

 



 

Party to the extent of at least 50 percent of the equity having the power to vote on or direct the affairs of the entity, and any Person actually controlled by, controlling, or under common control with a Party.

 

1.2                                Costs . “Costs” shall mean the fully-burdened cost incurred by the Service Provider and its Affiliates during any applicable month to provide the Services. For purposes of this definition, the fully-burdened cost includes without limitation: (i) the costs of any materials used in providing the Services; (ii) the salary, stock option plan or other similar plans, benefits (if any) (including without limitation, medical plans and 401(k) or other retirement plans), employment taxes (if any) of all the Service Provider’s employees involved in providing such services; (iii) related overhead expenses (including without limitation cost of facilities and utilities costs, insurance, and the cost of all general support, operational and business services); (iv) any and all licensing fees paid or payable to Third Parties for any intellectual property incorporated into such services; and (v) any depreciation, amortization or other cost recovery for financial accounting purposes related to assets of the Service Provider to the extent such assets are used in providing the Services; provided however that the fully-burdened cost shall not include costs incurred by the Service Provider to engage a Third Party for the purpose of providing Services pursuant to Section 3.4 of the Agreement.

 

1.3.                             Marks . “Marks” shall mean and include trademarks, service marks, trade names, domain names, trade dress, logos, and similar designations, whether registered or unregistered, and all applications and registrations therefor.

 

1.4.                             Party . “Party” shall mean Service Provider or either Service Recipient, and “Parties” shall mean Service Provider and Service Recipients collectively.

 

1.5.                             Person . “Person” shall mean and include any individual, corporation, trust, estate, partnership, joint venture, company, association, governmental bureau or agency, or any other entity regardless of the type or nature thereof.

 

1.6.                             Third Party . “Third Party” shall mean any entity other than a Party or an Affiliate.

 

1.7.                             Works . “Works” shall mean any work product, technical knowledge, creations, know-how, formulations, recipes, specifications, rights, devices, drawings, instructions, expertise, trade practices, customer lists, computer data, source codes, analytical and quality control data, Marks, copyrights, commercial information, inventions, works of authorship, designs, methods, processes, technology, patterns, techniques, data, Confidential Information, patents, trade secrets, copyrights, and the like, and all other intellectual property created, authored, composed, invented, discovered, performed, perfected, provided, acquired or learned by the Service Provider, whether solely or jointly with others, whether patented, patentable or not, whether in written form or otherwise, whether disclosed to Service Provider by either Service Recipient or otherwise, in performing its obligations under this Agreement.

 

1.8.                             Year . “Year” shall mean the 12-month period ending on December 31.

 

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2.                                       ENGAGEMENT.

 

Subject to the terms of this Agreement, the Service Recipients hereby engage the Service Provider to perform the services set forth on Exhibit A attached hereto (the “Services”). Any additional services requested by a Service Recipient that are not included within the Services shall, if mutually agreed upon by the Parties, each in its sole discretion, be negotiated and included in this Agreement through amendments to Exhibit A hereto. The scope of the Service Provider’s authority shall be specifically limited to those activities outlined in this Agreement.

 

3.                                       RELATIONSHIP OF THE PARTIES.

 

3.1                                The Service Provider and the Service Recipients are each independent contractors and not joint venturers, partners, agents, or representatives of the other. The Service Provider shall perform the Services for the Service Recipients under this Agreement as an independent contractor and neither the Service Provider nor its employees, subcontractors or agents shall be deemed to be agents, servants or employees of either of the Service Recipients, nor shall the Service Provider and any of the Service Recipients be deemed or construed solely by this Agreement to be partners or joint venturers. The Service Provider shall have exclusive control over the direction and conduct of its employees in carrying out the activities required under this Agreement.

 

3.2                                Neither the Service Provider nor its employees, subcontractors or agents shall have the authority to (i) negotiate the terms of or execute contracts and agreements of either of the Service Recipients (including letters of intent, even if non-binding), provided the Service Provider may suggest incorporating certain non-core agreement terms within the parameters and guidelines provided by the applicable Service Recipient; (ii) hire personnel for either of the Service Recipients; (iii) exercise binding authority with respect to the operations of either of the Service Recipients; (iv) make binding recommendations to either of the Service Recipients; (v) make decisions or have decision-making rights with respect to either of the Service Recipients; (vi) hold itself out as representing either of the Service Recipients or as having the authority to negotiate the terms of or conclude contracts on behalf of either of the Service Recipients or (vii) perform services for either of the Service Recipients that are not covered by this Agreement.

 

3.3                                The Service Provider and its employees, subcontractors or agents shall have the authority to (i) provide advice, assistance, direction and recommendations to the Service Recipients with respect to the operation of RNL; (ii) make recommendations on key points of contracts, without having the power to negotiate the terms of or conclude contracts or agreements on behalf of either of the Service Recipients; (iii) participate in discussions on contracts and agreements; (iv) arrange transactions between a Service Recipient and other parties, provided that the Service Provider does not make any actual decisions or participate in substantive activities, such as negotiations with respect to the terms of such transactions, provided the Service Provider may suggest incorporating certain non-core agreement terms within the parameters and guidelines provided by the applicable Service Recipient; and (v) contact banks in connection with raising capital for the Service Recipient, without having, in any circumstance, the power to negotiate the terms of or

 

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conclude contracts or agreements on behalf of either of the Service Recipients in connection with raising capital for RNL.

 

3.4                                Engagement of Third Parties . The Service Provider may, with the prior consent of the applicable Service Recipient, engage such persons, corporations, or other entities as it reasonably deems necessary for the purpose of performing Services under this Agreement; provided, however, that the Service Provider shall remain responsible for the performance of all such Services and shall be considered to engage with such persons, corporations, or other entities in its own name and on its own behalf .

 

4.                                       FEES AND EXPENSES.

 

4.1                                Each Service Recipient shall pay the Service Provider a fee in accordance with Exhibit B attached hereto for the Services provided to such Service Recipient hereunder. The rates specified in Exhibit B attached hereto shall be reviewed and may be updated from time to time by the Parties. Fees for Services performed by the Service Provider will be billed by the Service Provider to the applicable Service Recipient on a monthly basis. All other costs for Third Party services shall be billed, by or on behalf of the Service Provider, to the applicable Service Recipient, in such manner and format and with such supporting information as the Parties may reasonably agree from time to time. Payment for undisputed invoices received by the applicable Service Recipient shall be due within sixty (60) days after the billing date. Any fees and expenses not paid by the due date thereof shall accrue interest at the safe harbor interest rate based on the applicable Federal rate as set forth in U.S. Treasury Regulations Section 1.482-2(a)(2)(iii)(B). All fees and expenses shall be invoiced and payable in U.S. dollars.

 

4.2                                Yearly Reconciliation . The Parties shall perform a yearly reconciliation for the compensation amounts paid as follows:

 

a.               As soon as reasonably practical following the close of each Year during the Term of this Agreement, the Parties will calculate the overall actual mark-up percentage on the Service Provider’s Costs with respect to the activities listed in Exhibit A, subsection 2 (“Other Services”) undertaken by Service Provider pursuant to this Agreement during such Year (the “Actual Mark-up Percentage”).

 

b.               If, for any Year, the Actual Mark-up Percentage is greater than the percentage specified in Exhibit B for such Year, there shall be deemed to exist an excess of Service Provider’s mark-up on Costs with respect to the activities listed in Exhibit A, subsection 2 in an amount equal to such difference in percentage times Service Provider’s Costs with respect to the activities listed in Exhibit A, subsection 2 for such Year (hereinafter “Excess”).

 

c.                If, for any Year, the Actual Mark-up Percentage is less than the percentage specified in Exhibit B for such Year, there shall be deemed to exist a shortfall in the amount of Service Provider’s mark-up on Costs with respect to the activities listed in Exhibit A, subsection 2 in an amount equal to such difference in percentage times Service Provider’s Costs with respect to the activities listed in Exhibit A, subsection 2 for such Year (hereinafter “Shortfall”).

 

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d.               In the event of any Shortfall in a given calendar year, the applicable Service Recipient shall pay such Shortfall to Service Provider within sixty (60) days after the Actual Mark-up Percentage has been calculated.

 

e.                In the event of any Excess in a given calendar year, Service Provider shall pay such Excess to the applicable Service Recipient within sixty (60) days after the Actual Mark-up Percentage has been calculated.

 

4.3                                Withholding . The Service Recipients shall be entitled to deduct from any payments to Service Provider the amount of any withholding taxes with respect to such amounts payable, or any taxes in each case required to be withheld by the applicable Service Recipient to the extent that such Service Recipient pays to the appropriate governmental authority on behalf of Service Provider such taxes, levies, or charges. Such Service Recipient shall, upon the request of Service Provider, deliver to Service Provider proof of payment of all such taxes, levies, and other charges and the appropriate documentation that is necessary to obtain a tax credit, to the extent such tax credit can be obtained.

 

5.                                       ACCESS TO BOOKS AND RECORDS.

 

Service Provider shall maintain books and records pertaining to the Services provided in any Year pursuant to this Agreement for seven (7) Years following the performance of such Services and shall make them available for inspection and audit, at the applicable Service Recipient’s expense, by a mutually acceptable independent certified public accounting firm during normal business hours upon reasonable prior written notice to Service Provider.

 

6.                                       CONFIDENTIAL INFORMATION

 

6.1                                Obligations. The Parties acknowledge that, from time to time, one Party (the “Disclosing Party”) may disclose to another Party (the “Receiving Party”) information that is marked as “proprietary,” or “confidential,” or which would, under the circumstances, be understood by a reasonable person to be proprietary and nonpublic (“Confidential Information”). The Receiving Party shall retain such Confidential Information in confidence. Each Party shall use at least the same procedures and degree of care that it uses to protect its own Confidential Information of like importance, including those procedures used when disclosing Confidential Information to Third Parties, and in no event less than reasonable care.

 

6.2                                Exceptions. Nothing in this Agreement shall prevent the disclosure by the Receiving Party or its employees of Confidential Information that:

 

a.               Prior to the transmittal thereof to Receiving Party was of general public knowledge;

 

b.               Becomes, subsequent to the time of transmittal to Receiving Party, a matter of general public knowledge otherwise than as a consequence of a breach by Receiving Party of any obligation under this Agreement;

 

c.                Is made public by Disclosing Party;

 

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d.               Was in the possession of Receiving Party in documentary form prior to the time of disclosure thereof to Receiving Party by Disclosing Party, and is held by Receiving Party free of any obligation of confidence to Disclosing Party or any Third Party; or

 

e.                Is received in good faith from a Third Party having the right to disclose it, who, to the best of Receiving Party’s knowledge, did not obtain the same from Disclosing Party and who imposed no obligation of secrecy on Receiving Party with respect to such information.

 

6.3                                No Unauthorized Use . The Receiving Party shall refrain from using or exploiting any and all Confidential Information for any purposes or activities other than those contemplated in this Agreement or any other written agreement entered into by and between the Parties.

 

6.4                                Survival . The Parties’ obligations under this Article 6 shall survive the termination of this Agreement for any reason whatsoever.

 

7.                                       OWNERSHIP OF INTANGIBLE PROPERTY

 

Service Provider agrees that all right, title and interest in and to any and all Works will be owned exclusively by the Service Recipient for which Service Provider performed Services using such Works. All Works, as applicable, shall be considered “works made for hire” to the extent permitted under applicable copyright law and will be considered the sole property of the Service Recipient for which Service Provider performed Services using such Works. To the extent such Works are not considered “works made for hire,” all right, title, and interest to such Works, including, but not limited to, all copyrights, patents, trademarks, rights of publicity, and trade secrets, is hereby assigned by Service Provider to the applicable Service Recipient and the Service Provider agrees, at such Service Recipient’s expense, to execute any documents requested by such Service Recipient or any successor in interest to such Service Recipient, at any time in relation to such assignment. Service Provider acknowledges and agrees that the applicable Service Recipient is and will be the sole and absolute owner of all Marks, patents, copyrights, trade secrets, business names, rights of publicity, inventions, proprietary know-how and information of any type, whether or not in writing, and all other intellectual property used by such Service Recipient or held for use in the business of such Service Recipient, including all Works. Service Provider further acknowledges and agrees that any and all derivative works, developments, or improvements based on the Works, shall also be deemed Works and all right, title and interest therein shall be exclusively owned by the applicable Service Recipient. Service Provider shall cooperate with the applicable Service Recipient and any of its Affiliates, at no additional cost to such parties (whether during or after the term of this Agreement), in the confirmation, registration, protection and enforcement of the rights and property of such Service Recipient and its successors in interest in such Works. The Service Provider shall be entitled to use the Works only for purposes of performing the Services. The Service Provider shall not at any time do or cause to be done, or fail to do or cause to be done, any act or thing, directly or indirectly, contesting or in any way impairing either Service Recipient’s right, title, or interest in the Intangible Property. Every use of any Works (and any derivative works, developments,

 

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or improvements based on the Works) by Service Provider shall inure to the benefit of the Service Recipient for which the Service Provider performed Services using such Works.

 

8.                                       USE OF TRADEMARKS

 

Each Service Recipient shall grant the Service Provider a right to use its Marks only in connection with the Services, provided that if a Service Recipient provides the Service Provider with reasonable written trademark guidelines governing the use of such Service Recipient’s Marks (which guidelines may be updated by such Service Recipient from time to time with prior written notice to the Service Provider), the Service Provider’s use of such Marks shall be subject to such written guidelines so provided. Notwithstanding the foregoing, the Service Provider will comply with all of such Service Recipient’s reasonable instructions and quality control requirements regarding such Service Provider’s use of its Marks. The Service Provider acknowledges that any of a Service Recipient’s Marks are owned and licensed solely and exclusively by such Service Recipient, and agrees to use such Marks only in the form and with appropriate legends as described by such Service Recipient. All use of a Service Recipient’s Marks and associated goodwill will inure to the benefit of such Service Recipient. All rights not expressly granted are reserved to the applicable Service Recipient. The Service Provider shall not remove, cover, or modify any proprietary rights notice or legend placed by the other party on materials used in connection with this Agreement.

 

9.                                       INDEMNIFICATION; LIMITATION OF LIABILITY

 

9.1                                The Service Provider, to the maximum extent permitted by law, shall defend, protect, indemnify and hold the Service Recipients and their officers, employees and directors, as the case may be (“ Indemnified Parties ”), harmless from and against any and all losses, demands, damages (including, without limitation, special, consequential and punitive damages awarded to Third Parties), claims, liabilities, interest, awards, actions or causes of action, suits, judgments, settlements and compromises relating thereto, and all reasonable attorney’s fees and other fees and expenses in connection therewith (“ Losses ”) which may be incurred by an Indemnified Party, arising out of, due to, or in connection with, directly or indirectly, the provision of the Services or failure to provide the Services under this Agreement, except to the extent that such Losses are the result of the gross negligence or willful misconduct of an Indemnified Party.

 

9.2                                The Service Provider’s liability for aggregate Losses under this Agreement for any cause whatsoever, and regardless of the form of action, whether in contract or in tort, shall be limited to the payments made by the Service Recipients under this Agreement for the specific Service that allegedly caused or was related to the Losses during the period in which the alleged Losses were incurred. In no event shall the Service Provider be liable for any Losses caused by a Service Recipient’s failure to perform such Service Recipient’s obligations under this Agreement.

 

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9.3                                NOTWITHSTANDING ANYTHING TO THE CONTRARY IN THIS AGREEMENT OR AT LAW OR IN EQUITY, IN NO EVENT SHALL EITHER PARTY BE LIABLE FOR PUNITIVE, SPECIAL, INDIRECT, INCIDENTAL OR CONSEQUENTIAL DAMAGES TO THE OTHER PARTY OR ANY OTHER PERSON (INCLUDING, WITHOUT LIMITATION, DAMAGES FOR LOSS OF BUSINESS PROFITS, BUSINESS INTERRUPTION, ACTIONS OF THIRD PARTIES OR ANY OTHER LOSS) ARISING FROM OR RELATING TO ANY CLAIM MADE UNDER THIS AGREEMENT OR THE PROVISION OR THE FAILURE TO PROVIDE THE SERVICES.

 

10.                                TERM AND TERMINATION

 

10.1                         Term . This Agreement shall commence on the RNL Effective Date (with respect to the Service Provider and RNL) and on the RNL/RNI Effective Date (with respect to the Service Provider, RNL and RNI) continue until terminated by a Party in accordance with this Section 10.1. A Party may terminate this Agreement at its discretion by giving written notice to the other Parties at least sixty (60) days before the proposed termination date. Section 12.14 and Article 6 shall survive the termination of this Agreement. The Service Recipients hereby specifically agree and acknowledge that all obligations of the Service Provider to provide any and all Services shall immediately cease upon termination of this Agreement. The Service Provider hereby specifically agrees and acknowledges that all of its rights to use Marks pursuant to Article 8 of this Agreement shall immediately cease upon termination of this Agreement. To the extent permitted by applicable law, no Party shall be liable to another Party for, and each Party hereby expressly waives any right to, any termination compensation of any kind or character whatsoever, to which such Party may be entitled solely by virtue of termination of this Agreement.

 

10.2                         Rights and Duties on Termination . Upon termination of this Agreement for any reason, each Party shall cease all use of the other Party’s Confidential Information, and the Service Recipients shall pay Service Provider all accrued and unpaid fees for Services performed through the date of termination.

 

11.                                COMPLIANCE WITH LAWS

 

11.1                         General Compliance . The Parties shall at all times strictly comply with all applicable laws, rules, regulations, and governmental orders, now or hereafter in effect, relating to their performance of this Agreement. Each Party further agrees to make, obtain, and maintain in force at all times during the term of this Agreement, all filings, registrations, reports, licenses, permits, and authorizations (collectively, “ Authorizations ”) required under applicable law, regulation, or order for such Party to perform its obligations under this Agreement. The Service Recipients shall provide Service Provider with such assistance as Service Provider may reasonably request in making or obtaining any such Authorizations.

 

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12.                                GENERAL PROVISIONS

 

12.1                         Notices . Any and all notices, elections, offers, acceptances, and demands permitted or required to be made under this Agreement shall be in writing, signed by the Party giving such notice, election, offer, acceptance, or demand and shall be delivered personally, by messenger, courier service, telecopy, first class mail or similar transmission, to the Party, at its address on file with the Party giving such notice, election, offer, acceptance or demand or at such other address as may be supplied in writing. The date of personal delivery or the date of mailing, as the case may be, shall be the date of such notice, election, offer, acceptance, or demand.

 

12.2                         Force Majeure . If the performance of any part of this Agreement by a Party, or of any obligation under this Agreement, is prevented, restricted, interfered with, or delayed by reason of any cause beyond the reasonable control of the Party liable to perform, unless conclusive evidence to the contrary is provided, the Party so affected shall, on giving written notice to the other Parties, be excused from such performance to the extent of such prevention, restriction, interference, or delay, provided that the affected Party shall use its reasonable best efforts to avoid or remove such causes of nonperformance and shall continue performance with the utmost dispatch whenever such causes are removed. When such circumstances arise, the Parties shall discuss what, if any, modification of the terms of this Agreement may be required in order to arrive at an equitable solution.

 

12.3                         Successors and Assigns . This Agreement may not be assigned or otherwise conveyed by any Party without the prior written consent of the other Parties; provided however that such prior written consent will not be required for an assignment to an Affiliate of a Party. This Agreement shall be binding on and inure to the benefit of the Parties hereto and their respective successors, successors in title and assigns to the extent that such assignment is permitted under this paragraph.

 

12.4                         Entire Agreement, Amendments . This Agreement constitutes the entire agreement between the Parties with respect to the subject matter hereof, and supersedes all prior agreements, understandings, and communications between the Parties, whether oral or written, relating to the same subject matter. No change, modification, or amendment of this Agreement shall be valid or binding on the Parties unless such change or modification shall be in writing signed by the Party or Parties against whom the same is sought to be enforced.

 

12.5                         Remedies Cumulative . The remedies of the Parties under this Agreement are cumulative and shall not exclude any other remedies to which the Party may be lawfully entitled.

 

12.6                         Other Persons . Nothing in this Agreement shall be construed to prevent or prohibit the Service Provider from providing services to any other Person or from engaging in any other business activity.

 

12.7                         Not for the Benefit of Third Parties . This Agreement is for the exclusive benefit of the Parties to this Agreement and not for the benefit of any Third Party.

 

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12.8                         Further Assurances . Each Party hereby covenants and agrees that it shall execute and deliver such deeds and other documents as may be required to implement any of the provisions of this Agreement.

 

12.9                         No Waiver . The failure of any Party to insist on strict performance of a covenant hereunder or of any obligation hereunder shall not be a waiver of such Party’s right to demand strict compliance therewith in the future, nor shall the same be construed as a novation of this Agreement.

 

12.10                  Integration . This Agreement constitutes the full and complete agreement of the Parties.

 

12.11                  Captions . Titles or captions of articles and paragraphs contained in this Agreement are inserted only as a matter of convenience and for reference, and in no way define, limit, extend, or describe the scope of this Agreement or the intent of any provision hereof.

 

12.12                  Number and Gender . Whenever required by the context, the singular number shall include the plural, the plural number shall include the singular, and the gender of any pronoun shall include all genders.

 

12.13                  Counterparts . This Agreement may be executed in multiple copies, each one of which shall be an original and all of which shall constitute one and the same document, binding on the Parties, and each Party hereby covenants and agrees to execute all duplicates or replacement counterparts of this Agreement as may be required.

 

12.14                  Governing Law and Jurisdiction . THIS AGREEMENT AND THE LEGAL RELATIONS BETWEEN THE PARTIES HERETO SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO ANY CONFLICT OF LAWS RULES. THE COURTS LOCATED WITHIN THE STATE OF NEW YORK SHALL HAVE EXCLUSIVE JURISDICTION OVER ANY AND ALL DISPUTES BETWEEN THE PARTIES HERETO, WHETHER IN LAW OR EQUITY, ARISING OUT OF OR RELATING TO THIS AGREEMENT AND THE AGREEMENTS, INSTRUMENTS AND DOCUMENTS CONTEMPLATED HEREBY AND THE PARTIES CONSENT TO AND AGREE TO SUBMIT TO THE EXCLUSIVE JURISDICTION OF SUCH COURTS. EACH OF THE PARTIES HEREBY WAIVES AND AGREES NOT TO ASSERT IN ANY SUCH DISPUTE, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY CLAIM THAT (A) SUCH PARTY IS NOT PERSONALLY SUBJECT TO THE JURISDICTION OF SUCH COURTS, (B) SUCH PARTY AND SUCH PARTY’S PROPERTY IS IMMUNE FROM ANY LEGAL PROCESS ISSUED BY SUCH COURTS OR (C) ANY LITIGATION OR OTHER PROCEEDING COMMENCED IN SUCH COURTS IS BROUGHT IN AN INCONVENIENT FORUM.

 

12.15                  Computation of Time . Whenever the last day for the exercise of any privilege or the discharge of any duty hereunder shall fall on a Saturday, Sunday, or any public or legal holiday, whether local or national, the Party having such privilege or duty shall have until 5:00 p.m. (EST or, if in effect in New York, EDT) on the next succeeding business day to exercise such privilege, or to discharge such duty.

 

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12.16                  Severability . In the event any provision, clause, sentence, phrase, or word hereof, or the application thereof in any circumstances, is held to be invalid or unenforceable, such invalidity or unenforceability shall not affect the validity or enforceability of the remainder hereof, or of the application of any such provision, sentence, clause, phrase, or word in any other circumstances.

 

12.17                  Costs and Expenses . Unless otherwise provided in this Agreement, each Party shall bear all fees and expenses incurred in performing its obligations under this Agreement.

 

12.18                  Provisions of Law . A reference in this Agreement to a provision of law, regulation, rule, official directive, request, or guideline (whether or not having the force of law) of any governmental, intergovernmental or supranational body, agency, department or regulatory, self-regulatory, or other authority or organization is a reference to that provision as amended or re-enacted currently or in the future.

 

12.19                  Meaning in Notices . Unless a contrary indication appears, a term used in any notice given under or in connection with this Agreement has the same meaning in that notice as in this Agreement.

 

(The remainder of this page has been intentionally left blank)

 

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IN WITNESS WHEREOF , the Parties hereto have caused this Agreement to be executed by their duly authorized officers.

 

 

ROIVANT NEUROSCIENCES LTD.

ROIVANT SCIENCES, INC.

 

 

 

 

/s/ Ilan Oren

 

/s/ Alan S. Roemer

By: Ilan Oren

By: Alan S. Roemer

Title: Roivant Sciences Ltd., Director

Title: SVP, Finance & Operations

Date: March 7, 2015

Date: 7 MARCH 2015

 

 

 

 

ROIVANT NEUROSCIENCES, INC.

 

 

 

 

 

/s/ Vivek Ramaswamy

 

 

By: Vivek Ramaswamy

 

Title: Chief Executive Officer

 

Date:3/7/2015

 

 

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EXHIBIT A

 

SERVICES PROVIDED

 

1.                                       Administrative and Support Services. Those services that do not contribute significantly to the fundamental risks of business success or failure of any of Service Provider or either Service Recipient, and that are eligible to be charged to a Service Recipient without a mark-up on Costs under the Services Cost Method (“SCM”) of U.S. Treasury Regulation § 1.482-9(b) and the guidance set forth in Internal Revenue Service Revenue Procedure 2007-13. Such Services may include, but are not limited to:

 

(a)          Payroll

(b)          Premiums for Unemployment, Disability, and Workers Compensation

(c)           Accounts Receivable

(d)          Accounts Payable

(e)           General Administrative

(f)            Corporate and Public Relations (including advertising, investor relations and/or financial marketing)

(g)           Meeting Coordination and Travel Planning (h) Accounting and Auditing

(i)              Tax

(j)             Health, Safety, Environmental, and Regulatory Affairs

(k)          Budgeting

(l)              Treasury Activities

(m)      Statistical Assistance

(n)          Staffing and Recruiting

(o)          Training and Employee Development

(p)          Benefits

(q)          Information and Technology Services

(r)             Legal Services

(s)            Insurance Claims Management

(t)             Purchasing

 

And other similar activities.

 

2.                                       Other Services

 

Research and development services, including, but not limited to:

(a)     Preparatory assistance in respect of the identification/location of potential drug asset candidates

(b)     Perform/oversee due diligence to evaluate a drug candidate (including, but not limited to, studying the compound, market demand, potential opportunities and competitive landscape with respect to such drug candidate and probability of commercial success of such drug candidate)

(c)      Manage and oversee external consultants in connection with in-depth analyses of potential drug investment opportunities

(d)     Form recommendations regarding potential drug investment opportunities and deliver recommendations to the board of directors of either of the Service Recipients

 



 

(e)      Provide the board of directors of either of the Service Recipients with advice in connection with the acquisition of drug assets and, if necessary, assist in communications between the board of directors of the applicable Service Recipient and the sellers of the relevant drug asset in order for RNL to negotiate and conclude agreements to acquire drug assets and related intellectual property

(f)       Participate in meetings with regulatory authorities related to drug assets of RNL (within the parameters and guidelines provided by RNL)

(g)      Develop a plan for clinical testing with respect to a drug asset, identify appropriate contract research organizations to be used in connection with such clinical testing and contract with such contract research organizations (within the parameters and guidelines provided by RNL)

(h)     Select manufacturers to manufacture small batch sample of drug product for purposes of clinical trials and contract with such manufactures (within the parameters and guidelines provided by RNL)

(i)         Manage and oversee clinical trials and drug manufacturing to the extent such clinical trials and drug manufacturing costs do not exceed established cost parameters set by RNL

(j)        Gather and analyze data obtained in connection with clinical trials and present such information to the board of directors of RNL

(k)     Conduct final filings to obtain regulatory approvals with respect to a drug asset

 

The Service Provider shall provide such other services as are agreed with the Service Recipients from time to time.

 



 

EXHIBIT B

 

CALCULATION OF COMPENSATION FOR SERVICES PROVIDED

 

The fees set forth in this Exhibit B represent the entire amount to be paid by the Service Recipients in connection with the Service Provider’s provision of the Services, and any and all other costs and expenses associated with the Services or the Agreement. In addition, the fees set forth in this Exhibit B include any and all applicable federal, state or local sales or use tax payable in connection with the Services or the Agreement.

 

Except as otherwise agreed to by the Parties from time to time, the Service Recipients shall compensate Service Provider for its Services rendered and Costs incurred under this Agreement in accordance with the following:

 

(a)                                  The applicable Service Recipient shall reimburse Service Provider for its Costs, excluding third-party costs as provided in (c), incurred in providing the Administrative and Support Services described in Exhibit A to such Service Recipient or in making, obtaining, and maintaining in force the Authorizations as described in Section 11.1 for such Service Recipient, without mark-up.

 

(b)                                  The applicable Service Recipient shall reimburse Service Provider for its Costs, excluding third-party costs as provided in (c), incurred in providing the Other Services described in Exhibit A to such Service Recipient, and shall further pay Service Provider a mark-up on such costs. The mark-up on such costs shall initially be ten percent (10%) and may be adjusted by the Parties on an annual basis. Notwithstanding the foregoing, the mark-up on such costs cannot be outside the range of eight percent (8%) to twelve percent (12%) (such range, the “Mark-Up Range”), provided, however, that the Parties agree to adjust the Mark-Up Range from time to time as required by the U.S. Treasury Regulations relating to transfer pricing and as recommended by the Organisation for Economic Co-Operation and Development guidelines.

 

(c)                                   If the Service Provider engages a third party pursuant to Section 3.4 hereof, the applicable Service Recipient shall reimburse the Service Provider for all reasonable and actual out-of-pocket costs incurred by the Service Provider in connection with such engagement to the extent such Service Recipient is the beneficiary of the services performed by such third party.

 




Exhibit 10.7

 

EXECUTION VERSION

 

INFORMATION SHARING AND COOPERATION AGREEMENT

 

This Information Sharing and Cooperation Agreement, dated as of March 18, 2015 (this “ Agreement ”), is by and between Roivant Sciences Ltd., a Bermuda exempted company (“ Roivant ”), and Roivant Neurosciences Ltd., a Bermuda exempted company (“ RNL ”, with each of Roivant and RNL, a “ Party ” and together, the “ Parties ”).

 

RECITALS

 

WHEREAS, Roivant is the beneficial owner of all the issued and outstanding stock of RNL;

 

WHEREAS, Roivant and RNL currently contemplate that RNL will engage in an initial public offering (“ IPO ”) of shares of RNL’s stock (“ Shares ”) pursuant to a Registration Statement on Form S-1 filed with the Securities and Exchange Commission (the “ SEC ”);

 

WHEREAS, in connection with the IPO, RNL will apply to list the Shares for trading on the NASDAQ Stock Market (“ NASDAQ ”);

 

WHEREAS, Roivant’s majority ownership of RNL after the IPO will require Roivant to continue consolidating RNL’s financial statements with its own under U.S. generally accepted accounting principles (“ GAAP ”) and SEC reporting requirements;

 

WHEREAS, the significance of RNL to Roivant may, under certain circumstances, result in Roivant requiring access to certain information regarding RNL even if Roivant ceases to consolidate RNL’s financial statements with its own; and

 

WHEREAS, the Parties intend that this Agreement shall set forth the principal arrangements between Roivant and RNL regarding the sharing of information and cooperation of the Parties in connection with the preparation of each Party’s financial statements and, to the extent applicable in the future, their respective reporting obligations under other circumstances, from and after the date of effectiveness of the Registration Statement for the IPO (the “ Effective Date ”).

 

NOW, THEREFORE, in consideration of the foregoing recitals and the covenants and conditions set forth herein, and for other good and valuable consideration, the receipt and adequacy of which is hereby acknowledged, the Parties hereto agree as follows.

 

ARTICLE I

 

RIGHT OF FIRST REVIEW

 

Section 1.01                              As consideration for entering into this Agreement, Roivant agrees not to pursue any potential dementia-related product or investment opportunity (a “ Dementia Opportunity ”) without first notifying RNL (the “ Offer Notice ”) of its intention to do so, such Offer Notice to include reasonable details of such opportunity to the extent known or otherwise made available to Roivant, and offering RNL the opportunity to evaluate and independently pursue the Dementia Opportunity. RNL shall have 30 days after receipt of the Offer Notice to inform Roivant of its intent to pursue in good faith the Dementia Opportunity subject to the Offering Notice (the “ Acceptance Notice ”) in which case Roivant shall not pursue such Dementia Opportunity and shall refer such Dementia Opportunity to RNL. If RNL has not entered into a definitive agreement with respect to the Dementia Opportunity described in the Offer Notice within 60 days of the Acceptance Notice, Roivant shall be free to pursue such Dementia Opportunity.

 



 

ARTICLE II

FINANCIAL REPORTING AND DISCLOSURE COVENANTS

 

Section 2.01                              Financial Reporting and Controls . The Parties agree that they will comply with the requirements set forth in this Section 2.01, (A) with respect to Sections 2.01(b), (c), (d), (g), (h) and (j) from and after the Effective Date, and (B) with respect to Sections 2.01(a) through (j), from and after such time that Roivant (i) notifies RNL that it is actively engaging in the preparation of a registration statement to be filed under the Securities Act for an initial public offering of its securities or (ii) has a class of securities registered under Section 13(a) or 15(d) of the Exchange Act, in each case, for so long as Roivant is required (x) by GAAP reporting requirements to consolidate the results of operations and financial position of RNL, (y) to account for its investment in RNL under the equity method of accounting (determined in accordance with GAAP and consistent with SEC reporting requirements), or (z) pursuant to any rule of the SEC that is applicable to Roivant and requires Roivant to include separate financial statements of RNL in any filing with the SEC. Notwithstanding anything to the contrary and for further clarification purposes, all covenants of RNL contained in this Article II of this Agreement will expire and terminate when Roivant is no longer required by GAAP reporting requirements to consolidate the results of the operations and financial position of RNL, account for its investment in RNL under the equity method of accounting, or otherwise include separate financial statements of RNL in its filings with the SEC pursuant to any rule of SEC.

 

(a)                                  Disclosure of Financial Controls . In connection with the filing of Roivant’s annual and quarterly reports under the Exchange Act or any investigations of prior periods, RNL shall cause its principal executive officer and principal financial officer to provide to Roivant (A) on a timely basis, if this provision is applicable by virtue of Section 2,01(x) and (B) on a timely basis and if reasonably requested by Roivant, if this provision is applicable by virtue of Sections 2.01(y) or (z), (1) certifications to Roivant corresponding to those required under Sections 302 and 906 of the Sarbanes-Oxley Act of 2002, (2) any certificate that may be reasonably necessary for Roivant to satisfy the requirements applicable to it under Section 404 of the Sarbanes-Oxley Act of 2002, (3) any certificates or other written information that RNL’s principal executive officer or principal financial officer received as support for the certificates provided to Roivant and (4) a reasonable opportunity to discuss with RNL’s principal financial officer and other appropriate officers and employees of RNL any issues reasonably related to the foregoing.

 

(b)                                  Quarterly Financial Statements .

 

(i)                                      As soon as reasonably practicable and no later than 15 days before the date by which Roivant is required to file a quarterly report on Form 10-Q if this provision is applicable by virtue of Section 2.01(x) above or 10 days before the date by which Roivant is required to file a quarterly report on Form 10-Q if this provision is applicable by virtue of Section 2.01(y) or (z) above, RNL will deliver to Roivant reasonably complete drafts of (i) the consolidated financial statements of RNL (and notes thereto) for the quarterly periods and for the period from the beginning of the current fiscal year to the end of such quarter, setting forth in each case in comparative form for each such fiscal quarter of RNL the consolidated figures (and notes thereto) for the corresponding quarter and periods of the previous fiscal year prepared in accordance with Article 10 of Regulation S-X and GAAP and (ii) a discussion and analysis by management of RNL’s financial condition and results of operations for such fiscal period, including, without limitation, an explanation of any material period-to-period change and any off-balance sheet transactions, prepared in accordance with Item 303(b) of Regulation S-K. The information set forth in (i) and (ii) above is referred to in this Agreement as the “ RNL Quarterly Financial Statements .” As soon as reasonably possible and no later than 5 days before the date by which Roivant is required to file a quarterly report on Form 10-Q, RNL will deliver to Roivant the final form of the RNL Quarterly Financial Statements, provided , however , that RNL may continue to revise such RNL Quarterly Financial

 

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Statements prior to its filing thereof in order to make corrections, updates and changes, which corrections, updates and changes, if substantive, will be delivered by RNL to Roivant as soon as reasonably possible. At Roivant’s request, RNL’s representatives will consult and discuss with RNL’s representatives any such corrections, updates and changes. To the extent that the fiscal year of Roivant is not the same as the fiscal year of RNL or Roivant is not subject to reporting obligations under Section 13(a) or 15(d) of the Exchange Act, the obligation to deliver RNL Quarterly Financial Statements before the date by which Roivant is required to file its quarterly report on Form 10-Q shall be determined based on the date by which RNL is required to file its quarterly report on Form 10-Q.

 

(ii)                                   As soon as reasonably practicable and no later than 45 days after the end of its fiscal year, RNL will deliver to Roivant its consolidated financial statements (and notes thereto) for the last quarter of its fiscal year, setting forth in each case in comparative form for such fiscal quarter of RNL the consolidated figures (and notes thereto) for the corresponding quarter of the previous fiscal year prepared in accordance with Article 10 of Regulation S-X and GAAP; provided , however , that RNL may continue to revise such financial statements in order to make corrections, updates and changes in connection with the preparation of its audited annual financial statements, which corrections, updates and changes, if substantive, will be delivered by RNL to Roivant as soon as reasonably possible.

 

(c)                                   Annual Financial Statements . As soon as reasonably practicable and no later than 45 days after the end of its fiscal year if this provision is applicable by virtue of Section 2.01(x) above or 55 days after the end of its fiscal year if this provision is applicable by virtue of Section 2.01(y) or (z) above, RNL will deliver to Roivant reasonably complete drafts of (i) the consolidated financial statements of RNL (and notes thereto) for such year, setting forth in each case in comparative form the consolidated figures (and notes thereto) for the previous fiscal years, prepared in accordance with Article 10 of Regulation S-X and GAAP and (ii) a discussion and analysis by management of RNL’s financial condition and results of operations for such year, including, without limitation, an explanation of any material period-to-period changes and any off-balance sheet transactions, prepared in accordance with Item 303(a) and 305 of Regulation S-K. The information set forth in (i) and (ii) above is referred to in this Agreement as the “ RNL Annual Financial Statements .” As soon as reasonably possible and no later than 15 days before the date by which Roivant is required to file its annual report on Form 10-K if this provision is applicable by virtue of Section 2.01(x) above or 10 days before the date by which Roivant is required to file its annual report on Form 10-K if this provision is applicable by virtue of Section 2.01 (y) or (z) above, RNL will deliver to Roivant the final form of the RNL Annual Financial Statements and an opinion on the RNL Annual Financial Statements by RNL’s independent registered public accountants (the “ RNL Auditors ”); provided , however , that RNL may, if necessary, continue to revise such RNL Annual Financial Statements prior to the filing thereof in order to make corrections, updates and changes, which corrections, updates and changes, if substantive, will be delivered by RNL to Roivant as soon as reasonably possible. At Roivant’s request, RNL’s representatives will consult and discuss with Roivant’s representatives any such corrections, updates and changes. To the extent that the fiscal year of Roivant is not the same as the fiscal year of RNL or Roivant is not subject to reporting obligations under Section 13(a) or 15(d) of the Exchange Act, the obligation to deliver RNL Annual Financial Statements before the date by which Roivant is required to file its annual report on Form 10-K shall be determined based on the date by which RNL is required to file its quarterly report on Form 10-K.

 

(d)                                          Conformance of Financial Statements . Subject to the other terms in this Agreement, RNL shall not make or adopt any significant changes to its accounting estimates or accounting policies and principles from those in effect on the Effective Date to the extent that such changes would significantly impact Roivant’s financial statements. Notwithstanding the previous sentence, nothing in this Agreement shall prevent RNL making those changes to its accounting estimates or accounting policies and principles if such changes are required by GAAP or which the audit committee of RNL determines are necessary or appropriate for the proper presentation of such Party’s financial

 

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statements; provided , however , that RNL shall first consult with Roivant and, if requested by Roivant, with Roivant’s independent certified public accountants.

 

(e)                                   Press Releases and Similar Information . RNL and Roivant will consult with each other as to the timing of their annual and quarterly earnings releases and any interim financial guidance for a current or future period and, to the extent reasonably possible. If the Parties are unable to agree as to such timing, then Roivant and RNL shall each make reasonable efforts to issue their respective annual and quarterly earnings releases at approximately the same time on the same date, which will include for these purposes during the same period of time beginning after the close of market on one day and ending just prior to the opening of market on the next day. Roivant and RNL agree to consult with each other as to the timing of their respective earnings release conference calls.

 

(f)                                    Cooperation on Roivant Filings . RNL agrees to provide to Roivant, and to instruct the RNL Auditors to provide to Roivant, all material information with respect to RNL that Roivant reasonably requires in connection with the preparation by Roivant of its Quarterly Reports on Form 10-Q, Annual Reports to Shareholders, Annual Reports on Form 10-K, any Current Reports on Form 8-K and any registration statements, or other filings made by Roivant with the SEC, any national securities exchange or otherwise made publicly available with respect to the disclosures pertaining to RNL (collectively, the “ Roivant Public Filings ”). The Parties agree to reasonably cooperate with each other with respect to the requesting and furnishing of such required information in order to enable Roivant to file all Roivant Public Filings within the deadlines as required by applicable law. RNL will cause the RNL Auditors (as defined below) to consent to any reference to them as experts in any Roivant Public Filings required under any law, rule or regulation.

 

(g)                                   Access to the RNL Auditors . RNL will authorize the RNL Auditors to make reasonably available to the Roivant Auditors both the personnel who performed, or are performing, the annual audit and quarterly reviews of RNL and work papers related to the annual audit and quarterly reviews of RNL, in all cases within a reasonable time prior to the Roivant Auditors’ opinion date, so that the Roivant Auditors are able to perform the procedures they consider necessary to take responsibility for the work of the RNL Auditors as it relates to the Roivant Auditors’ report on Roivant’s statements.

 

(h)                                  Access to Records . If Roivant determines in good faith that there may be a material inaccuracy in RNL’s financial statements or deficiency or inadequacy in RNL’s internal accounting controls or operations that could reasonably be expected to materially impact Roivant’s financial statements, and at Roivant’s request, RNL will provide Roivant’s internal auditors with reasonable access to RNL’s books and records so that Roivant may conduct reasonable audits relating to the financial statements provided by RNL under this Agreement, as well as to the internal accounting controls and operations of RNL.

 

(i)                                      Provision of Information . RNL shall provide, or cause to be provided, to Roivant, as soon as reasonably practicable after request therefor, confirmation as to whether RNL is in possession of information that would reasonably be considered to be material nonpublic information with respect to RNL under applicable U.S. securities laws, and sufficient additional information as is necessary, in the reasonable judgment of Roivant and its counsel, to determine whether such information is material with respect to Roivant under applicable U.S. securities laws.

 

(j)                                     Fiscal Year. RNL shall not change its fiscal year without the prior written consent of Roivant.

 

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ARTICLE III

 

EXCHANGE OF INFORMATION; CONFIDENTIALITY

 

Section 3.01                              Privilege . In the event that RNL reasonably determines that the provision of information pursuant to this Agreement would violate any law or bona fide contractual restriction, or result in the waiver of any Privilege, the Parties shall take all commercially reasonable measures to permit the compliance with the provision of information obligations in a manner that avoids any such harm or consequence, which shall include, but not be limited to, compliance with Sections 3.05, 3.06 and 3.07 hereof. For purposes of this Agreement, the term “ Privilege ” shall mean information and advice that has been previously developed but is legally protected from disclosure under legal privileges, such as the attorney-client privilege, work product exemption or similar concept of legal protection.

 

Section 3.02                              Ownership of Information . Any information owned by RNL that is provided to Roivant pursuant to the terms of this Agreement shall be deemed to remain the property of RNL. Unless expressly set forth in this Agreement, nothing contained in this Agreement shall be construed as granting or conferring any right, title or interest (whether by license or otherwise) in, to, or under any such information.

 

Section 3.03                              Record Retention . To facilitate the provision of information pursuant to this Agreement after the Effective Date, RNL agrees to retain all information in its possession or control on the Effective Date in accordance with its document retention policies, as such policies may be reasonably amended or revised after the Effective Date. RNL shall provide Roivant with reasonable notice of any material amendment or revision to its retention policies after the Effective Date. RNL shall not materially amend or revise its retention policy in effect at the time of its IPO for a period of three years after the IPO.

 

Section 3.04                              Limitations of Liability . RNL shall have no liability to Roivant in the event that any information exchanged or provided pursuant to this Agreement is found to be inaccurate or the requested information is not provided, in the absence of willful misconduct by, or gross negligence of, RNL. RNL shall not have any liability to Roivant if any information is destroyed in compliance with its document retention policies.

 

Section 3.05                              Confidentiality .

 

(a)                                  Subject to Section 3.07, Roivant agrees to hold, and to cause its respective directors, officers, employees, agents, accountants, counsel and other advisors and representatives, including for the avoidance of doubt underwriters or other parties providing financing to Roivant, to hold in strict confidence, with at least the same degree of care that applies to its confidential and proprietary information pursuant to its policies in effect as of the Effective Date, all information with respect to RNL that is accessible to it, in its possession (including information in its possession prior to the Effective Date) or furnished by RNL, or accessible to, in the possession of, or furnished to Roivant pursuant to this Agreement or otherwise, except, in each case, to the extent that such information (i) is or becomes part of the public domain through no breach of this Agreement by Roivant or its directors, officers, employees, agents, accountants, counsel and other advisors and representatives, (ii) was independently developed following the Effective Date by employees or agents of Roivant or its directors, officers, employees, agents, accountants, counsel and other advisors and representatives who have not accessed or otherwise received the applicable information; provided that such independent development can be demonstrated by competent, contemporaneous written records of Roivant, (iii) becomes available to Roivant following the Effective Date on a non-confidential basis from a third Party who is not bound directly or indirectly by a duty of confidentiality to RNL; or (iv) is provided by RNL and appropriately disclosed by Roivant in accordance with the terms of Article II.

 

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(b)                                  The Parties acknowledge that they may have in their possession confidential or proprietary information of third Parties that was received under confidentiality or non-disclosure agreements with such third Party. The Parties will hold in strict confidence the confidential and proprietary information of third Parties to which they have access in accordance with the terms of any such agreements.

 

(c)                                   Notwithstanding anything herein to the contrary, following the Effective Date, Roivant shall be permitted to (i) use the RNL trademark in its written materials when referencing RNL, (ii) provide confidential information regarding RNL (including but not limited to historical financial and other information) to persons who have a legitimate reason to know such information and who are under an obligation to keep such information confidential, and (iii) publish non-confidential information of RNL (including but not limited to historical financial and other information).

 

(d)                                  Notwithstanding anything to the contrary in this Article III, Roivant shall have no right to use any information disclosed by RNL unless otherwise provided for in this Agreement or specifically provided for in any other agreement between the Parties.

 

Section 3.06                              Protective Arrangements . In the event that Roivant either determines on the advice of its counsel that it is required to disclose any information pursuant to applicable law (including the rules and regulations of the SEC in connection with any proposed registration of Roivant’s securities under the Securities Act of 1933, as amended (the “ Securities Act ”) or the Securities Exchange Act of 1934, as amended (the “ Exchange Act ”) or pursuant to the requirements of any national securities exchange) or receives any request or demand from any governmental authority to disclose or provide information of RNL that is subject to the confidentiality provisions hereof, Roivant shall notify RNL prior to disclosing or providing such information and shall cooperate at the expense of Roivant in seeking any reasonable protective arrangements (including by seeking confidential treatment of such information) requested by RNL. Subject to the foregoing, Roivant may thereafter disclose or provide information to the extent required by such law (as so advised by counsel) or requested or required by such governmental authority; provided , however , that Roivant provides RNL, to the extent legally permissible, upon request with a copy of the information so disclosed.

 

Section 3.07                              Preservation of Legal Privileges .

 

(a)                                  The Parties recognize that they possess and will possess Privileged information. Each Party recognizes that they shall be jointly entitled to the Privilege with respect to such Privileged information and that each shall be entitled to maintain, preserve and assert for its own benefit all such information and advice, but both Parties shall ensure that such information is maintained so as to protect the Privileges with respect to the other Party’s interest. To that end, neither Party will knowingly waive or compromise any Privilege associated with such information and advice without the prior written consent of the other Party, which shall not be unreasonably withheld. In the event that Privileged information is required to be disclosed to any arbitrator or mediator in connection with a dispute between the Parties, such disclosure shall not be deemed a waiver of Privilege with respect to such information, and any Party receiving it in connection with a proceeding shall be informed of its nature and shall be required to safeguard and protect it.

 

(b)                                  Upon receipt by either Party of any subpoena, discovery or other request that may call for the production or disclosure of information that is the subject of a Privilege, or if a Party obtains knowledge that any current or former employee of a Party has received any subpoena, discovery or other request that may call for the production or disclosure of such information, such Party shall provide the other Party a reasonable opportunity to review the information and to assert any rights it may have under this Section 3.07 or otherwise to prevent the production or disclosure of such information. Absent receipt of written consent from the other Party to the production or disclosure of information that

 

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may be covered by a Privilege, each Party agrees that it will not produce or disclose any information that may be covered by a Privilege unless a court of competent jurisdiction has entered a final, nonappealable order finding that the information is not entitled to protection under any applicable Privilege.

 

ARTICLE IV

TAX MATTERS

 

Section 4.01.             PFIC . For so long as Roivant owns stock of RNL, RNL will use reasonable best efforts to avoid, in respect of any taxable year, being treated as a passive foreign investment company (“PFIC”) within the meaning of Section 1297 of the Code, including, but not limited to, causing any of its subsidiaries to file an election pursuant to Treasury Regulation Section 301.7701-3. No later than 75 days after the end of each taxable year, RNL shall deliver to Roivant an analysis as to whether RNL believes that it will be treated as a PFIC in respect of such taxable year. Such analysis may be prepared by RNL, but in preparing such analysis RNL shall consult with its internationally recognized tax advisors.

 

Section 4.02.                           OEF Information. RNL shall use reasonable best efforts to provide, and shall cause each of its subsidiaries to use reasonable best efforts to provide, to Roivant all information that may be necessary to allow Roivant, and any direct or indirect owners of Roivant, to evaluate the analysis referenced in Section 4.01 and to fulfill their U.S. tax filing and reporting obligations. RNL shall provide, and shall cause each of its subsidiaries to provide, such information to Roivant, and any direct or indirect owners of Roivant, as may reasonably be required to timely file and maintain a “qualified electing fund” election (as defined in Section 1295(a) of the Code) with respect to any such entity.

 

Section 4.03.                           No Passive Income . For a period of six months after the consummation of the IPO, RNL shall invest its cash and cash equivalents in a non-interest bearing account and will not otherwise generate “passive income” within the meaning of Section 1297(b) of the U.S. Internal Revenue Code of 1986, as amended.

 

ARTICLE V

DISPUTE RESOLUTION

 

Section 5.01                              Limitation on Monetary Damages: Equitable Remedies . RNL and Roivant hereby agree that neither Party shall have any liability for monetary damages for any breach of this Agreement so long as such Party used commercially reasonable efforts to comply with the obligation such Party breached and continues thereafter to use commercially reasonable efforts to remedy such breach. In addition to other remedies provided by applicable law, RNL and Roivant may each enforce the provisions of this Agreement through such legal or equitable remedies as a court of competent jurisdiction shall allow without the necessity of proving actual damages or bad faith, and the Party subject to a claim under this Agreement hereby waives any claim or defense that such Party has an adequate remedy at law, and waives any requirement for the securing or posting of any bond in connection with such equitable remedy.

 

Section 5.02                              Disputes . The procedures for discussion, negotiation and mediation set forth in this Article V shall apply to all disputes, controversies or claims (whether arising in contract, tort or otherwise) that may arise out of or relate to, or arise under or in connection with, this Agreement or the transactions contemplated hereby or thereby (including all actions taken in furtherance of the transactions contemplated hereby on the Effective Date). RNL hereby agrees that its members of the board of directors or senior management that are not affiliated with Roivant shall lead all discussions, negotiations and mediations that occur pursuant to this Article V.

 

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Section 5.03                              Escalation; Mediation .

 

(a)                                  It is the intent of the Parties to use their respective commercially reasonable efforts to resolve expeditiously any dispute, controversy or claim between or among them with respect to the matters covered by this Agreement. In furtherance of the foregoing, any Party involved in a dispute, controversy or claim with respect to such matters may deliver a notice (an “ Escalation Notice ”) demanding an in person meeting involving representatives of the Parties at a senior level of management of the Parties (or if the Parties agree, of the appropriate strategic business unit or division within such entity). A copy of any such Escalation Notice shall be given to the general counsel, or like officer or official, of each Party involved in the dispute, controversy or claim (which copy shall state that it is an Escalation Notice pursuant to this Agreement). Any agenda, location or procedures for such discussions or negotiations between the Parties may be established by the Parties from time to time; provided , however , that the Parties shall use their commercially reasonable efforts to meet within 30 days of the Escalation Notice.

 

(b)                                  If the Parties are not able to resolve the dispute, controversy or claim through the escalation process referred to above, then the matter shall be referred to mediation. The Parties shall retain a mediator to aid the Parties in their discussions and negotiations by informally providing advice to the Parties. Any opinion expressed by the mediator shall be strictly advisory and shall not be binding on the Parties, nor shall any opinion expressed by the mediator be admissible in any other proceeding. The mediator may be chosen from a list of mediators previously selected by the Parties or by other agreement of the Parties. Costs of the mediation shall be borne equally by the Parties involved in the matter, except that each Party shall be responsible for its own expenses. Mediation shall be a prerequisite to the commencement of any action by either Party.

 

Section 5.04                              Court Actions .

 

(a)                                  In the event that any Party, after complying with the provisions set forth in Section 5.03 above, desires to commence an action, such Party, subject to Section 7.15, may submit the dispute, controversy or claim (or such series of related disputes, controversies or claims) to any court of competent jurisdiction as set forth in Section 7.15.

 

(b)                                  Unless otherwise agreed in writing, the Parties will continue to provide service and honor all other commitments under this Agreement during the course of dispute resolution pursuant to the provisions of this Article V, except to the extent such commitments are the subject of such dispute, controversy or claim.

 

ARTICLE VI

FURTHER ASSURANCES

 

Section 6.01                              Further Assurances .

 

(a)                                  In addition to the actions specifically provided for elsewhere in this Agreement, each of the Parties hereto will cooperate with each other and shall use their commercially reasonable efforts to take, or cause to be taken, all actions, and to do, or cause to be done, all things, reasonably necessary, proper or advisable under applicable laws, regulations and agreements to consummate and make effective the transactions contemplated by this Agreement.

 

(b)                                  Without limiting the foregoing, prior to, on and after the Effective Date, each Party hereto shall cooperate with the other Party, and without any further consideration, but at the expense of the requesting Party, to execute and deliver, or use its commercially reasonable efforts to cause to be executed and delivered, all instruments, including instruments of conveyance, assignment and transfer,

 

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and to make all filings with, and to obtain all consents, approvals or authorizations of, any governmental authority or any other person or entity under any permit, license, agreement, indenture, order, decree, financial assurance (including letter of credit) or other instrument, and to take all such other actions as such Party may reasonably be requested to take by such other Party hereto from time to time, consistent with the terms of this Agreement.

 

(c)                                   Nothing in this Agreement shall be construed to restrict or limit any right, responsibility or authority of either of Parties hereto or their respective, independent registered public accountants, audit committee or board of directors in violation of any law, legal requirement or listing standard applicable to such Party, whether existing today or hereafter. In the event either Party hereto reasonably determines that any provision in this Agreement does or will so limit any right, responsibility or authority of such Party or such Party’s independent registered public accountants, audit committee or board of directors, then the Parties hereto agree to attempt to negotiate in good faith any changes necessary or advisable to this Agreement to avoid or prevent such violation.

 

ARTICLE VII

MISCELLANEOUS

 

Section 7.01                              Counterparts; Entire Agreement; Conflicting Agreements .

 

(a)                                  This Agreement may be executed in one or more counterparts, all of which shall be considered one and the same agreement, and shall become effective when one or more counterparts have been signed by each of the Parties and delivered to the other Party. Execution of this Agreement or any other documents pursuant to this Agreement by facsimile or other electronic transmission shall be deemed to be, and shall have the same effect as, executed by an original signature.

 

(b)                                  This Agreement contains the entire agreement of the Parties with respect to the subject matter hereof, supersede all previous agreements, negotiations, discussions, writings, understandings, commitments and conversations with respect to such subject matter and there are no agreements or understandings between the Parties with respect to such subject matter other than those set forth or referred to herein or therein.

 

(c)                                   In the event and to the extent that there shall be a conflict between the provisions of this Agreement and the provisions of any other agreement between the Parties, the other agreement shall control with respect to the subject matter thereof, and this Agreement shall control with respect to all other matters.

 

Section 7.02                              No Construction Against Drafter . The Parties acknowledge that this Agreement and all the terms and conditions herein have been fully reviewed and negotiated by the Parties and their respective attorneys. Having acknowledged the foregoing, the Parties agree that any principle of construction or rule of law that provides that, in the event of any inconsistency or ambiguity, an agreement shall be construed against the drafter of the agreement shall have no application to the terms and conditions of this Agreement.

 

Section 7.03                              Governing law . This Agreement shall be governed by and construed and interpreted in accordance with the laws of the State of New York, without regard to the conflict of laws principles thereof that would result in the application of any law other than the laws of the State of New York.

 

Section 7.04                              Assignability . This Agreement shall be binding upon and inure to the benefit of the Parties hereto and their respective successors and permitted assigns; provided , however , that no Party

 

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may assign its respective rights or delegate its respective obligations under this Agreement without the express prior written consent of the other Party.

 

Section 7.05                              Notices . All notices and other communications required or permitted hereunder to be given to a party to this Agreement shall be in writing and shall be transmitted via facsimile or email or mailed by registered or certified mail, postage prepaid, or otherwise delivered by hand or by messenger, addressed to such party’s address as set forth below or at such other address as the party shall have furnished to each other party in writing in accordance with this provision.

 

If to Roivant, to:

 

Roivant Sciences Ltd.

Clarendon House

2 Church Street

Hamilton HM11

Bermuda

Attention: Corporate Secretary

Facsimile: +1 (441) 292 4720

Email: info@roivant.com

 

with a copy sent concurrently to:

 

Roivant Sciences, Inc.

1441 Broadway, 3rd Floor

New York, NY 10018

Attention: Alan S. Roemer, SVP, Finance & Operations

Facsimile: (212) 202-4650

Email: alan.roemer@roivant.com

 

If to RNL to:

 

Roivant Neurosciences Ltd.

Clarendon House

2 Church Street

Hamilton HM11

Bermuda

Attention: Corporate Secretary

Facsimile: +1 (441) 292 4720

Email: info@roivant.com

 

with a copy sent concurrently to:

 

Roivant Neurosciences, Inc.

1441 Broadway, 3rd Floor

New York, NY 10018

Attention: Alan S. Roemer

Facsimile: (212) 202-4650

Email: alan.roemer@roivant.com

 

Any Party may, by notice to the other Party, change the address to which such notices are to be given.

 

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Any notice sent in accordance with this Section 7.05 shall be effective (i) if mailed, 7 Business Days after mailing, (ii) if sent by messenger, upon delivery, and (iii) if sent via facsimile or email, upon transmission and electronic confirmation of receipt or (if transmitted and received on a non-Business Day) on the first Business Day following transmission and electronic confirmation of receipt (provided, however, that any notice of change of address shall only be valid upon receipt). A “ Business Day ” shall mean any day other than a Saturday or Sunday or any other day on which banks in the State of New York are required or permitted by law to close.

 

Section 7.06                              Severability . If any provision of this Agreement or the application thereof to any person or circumstance is determined by a court of competent jurisdiction to be invalid, void or unenforceable, the remaining provisions hereof or the application of such provision to persons or circumstances or in jurisdictions other than those as to which it has been held invalid or unenforceable, shall remain in full force and effect and shall in no way be affected, impaired or invalidated thereby, so long as the economic or legal substance of the transactions contemplated hereby is not affected in any manner adverse to any Party. Upon such determination, the Parties shall negotiate in good faith in an effort to agree upon such a suitable and equitable provision to effect the original intent of the Parties.

 

Section 7.07                              Force Majeure . No Party shall be deemed in default of this Agreement to the extent that any delay or failure in the performance of its obligations under this Agreement results from any cause beyond its reasonable control and without its fault or negligence, such as acts of God, acts of civil or military authority, embargoes, epidemics, war, riots, insurrections, fires, explosions, earthquakes, floods, unusually severe weather conditions or labor problems. In the event of any such excused delay, the time for performance shall be extended for a period equal to the time lost by reason of the delay.

 

Section 7.08                              Headings . The article, section and paragraph headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement.

 

Section 7.09                              Termination; Survival . This Agreement and all covenants and obligations herein terminate upon the earlier of (i) written consent of RNL and Roivant, or (ii) when Roivant is no longer required by GAAP reporting requirements to consolidate the results of the operations and financial position of RNL, account for its investment in RNL under the equity method of accounting or otherwise include separate financial statements of RNL in its filings with the SEC pursuant to any rule of SEC; provided , however , Sections 3.02, 3.04, 3.05, 3.06, 3.07, Article V, Article VI and Article VII of this Agreement shall remain in full force and effect following any termination of this Agreement.

 

Section 7.10                              Waivers of Default . Waiver by any Party of any default by the other Party of any provision of this Agreement shall not be deemed a waiver by the waiving Party of any subsequent or other default, nor shall it prejudice the rights of the other Party.

 

Section 7.11                              Specific Performance . In the event of any actual or threatened default in, or breach of, any of the terms, conditions and provisions of this Agreement, the Party or Parties who are or are to be thereby aggrieved shall have the right to specific performance and injunctive or other equitable relief of its rights under this Agreement, in addition to any and all other rights and remedies at law or in equity, and all such rights and remedies shall be cumulative.

 

Section 7.12                              Amendments . No provisions of this Agreement shall be deemed waived, amended, supplemented or modified by any Party, unless such waiver, amendment, supplement or modification is in writing and signed by an authorized representative of the Party against whom it is sought to enforce such waiver, amendment, supplement or modification.

 

Section 7.13                              Interpretation . Words in the singular shall be held to include the plural and vice versa and words of one gender shall be held to include the other genders as the context requires. The

 

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terms “hereof, “herein” and “herewith” and words of similar import shall, unless otherwise stated, be construed to refer to this Agreement as a whole and not to any particular provision of this Agreement. Article and Section references are to the Articles and Sections to this Agreement unless otherwise specified. The word “including” and words of similar import when used in this Agreement shall mean “including, without limitation,” unless the context otherwise requires or unless otherwise specified.

 

Section 7.14                              Waiver of Jury Trial . SUBJECT TO ARTICLE V AND SECTIONS 7.10 AND 7.11 HEREIN, EACH OF THE PARTIES HEREBY WAIVES TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY WITH RESPECT TO ANY COURT PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF AND PERMITTED UNDER OR IN CONNECTION WITH THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT. EACH OF THE PARTIES HEREBY (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF THE OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT, AS APPLICABLE, BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 7.14.

 

Section 7.15                              Submission to Jurisdiction; Waivers . With respect to any action relating to or arising out of this Agreement, subject to the provisions of Article V, each Party to this Agreement irrevocably (a) consents and submits to the exclusive jurisdiction of the U.S. federal and New York state courts in the Borough of Manhattan, The City of New York; (b) waives any objection which such Party may have at any time to the laying of venue of any action brought in any such court, waives any claim that such action has been brought in an inconvenient forum and further waives the right to object, with respect to such action, that such court does not have jurisdiction over such Party; and (c) consents to the service of process at the address set forth for notices in Section 7.05 herein; provided , however , that such manner of service of process shall not preclude the service of process in any other manner permitted under applicable law.

 

Section 7.16                              No Third-Party Beneficiaries . This Agreement is not intended, nor shall it be deemed, to confer any rights or remedies on any person other than the Parties hereto and their respective successors and assigns. This Agreement does not create any third-party beneficiary hereto and RNL and Roivant are the only parties entitled to commence any action, proceeding or claim under this Agreement.

 

Section 7.17                              Expenses . Each Party is responsible for its own fees, costs and expenses incurred in connection with this Agreement and the activities contemplated hereby; provided , further , to the extent that the observation of the covenants and performance of the obligations set forth in Article II result in additional significant financial expenses to RNL, upon RNL’s request, the Parties will discuss potential reimbursement by Roivant with respect to such additional financial expenses incurred by RNL.

 

[ Signature page immediately follows .]

 

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IN WITNESS WHEREOF, the Parties have caused this Information Sharing and Cooperation Agreement to be executed by their duly authorized representatives as of the date first set forth above.

 

 

 

ROIVANT SCIENCES LTD.

 

 

 

 

 

By:

/s/ Vivek Ramaswamy

 

 

Name:

 

 

Title:

 

 

 

 

 

 

 

ROIVANT NEUROSCIENCES LTD.

 

 

 

 

 

 

 

By:

/s/ Marianne Romeo Dinsmore

 

 

Name:

Marianne Romeo Dinsmore

 

 

Title:

Authorized Signatory

 

 

 

Head, Global Transaction & Risk Management

 

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Exhibit 21.1

 

Axovant Sciences Ltd.

List of Subsidiaries

 

Subsidiary

 

Jurisdiction of Incorporation

Axovant Sciences, Inc.

 

Delaware

 




Exhibit 23.1

 

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

 

We hereby consent to the use in this Registration Statement on Form S-1 of Axovant Sciences Ltd. of our report dated March 24, 2015 relating to the financial statements of Axovant Sciences Ltd., which appears in such Registration Statement.  We also consent to the reference to us under the heading “Experts” in such Registration Statement.

 

 

/s/ PricewaterhouseCoopers LLP

 

Florham Park, New Jersey

 

May 8, 2015