Loxo Oncology, Inc. (Form: 10-Q, Received: 11/10/2015 16:35:15)

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2015

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File Number 001-36562

LOXO ONCOLOGY, INC.

(Exact Name of Registrant as Specified in Its Charter)

Delaware		46-2996673
(State or Other Jurisdiction of Incorporation or Organization)		(I.R.S. Employer Identification No.)

One Landmark Square, Suite 1122 Stamford, CT		06901
(Address of Principal Executive Offices)		(Zip Code)

Registrant’s telephone number, including area code: (203) 653-3880

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

Title of each class		Name of each exchange on which registered
Common Stock, par value $0.0001 per share		NASDAQ Global Market

Securities registered pursuant to Section 12(g) of the Act: None

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

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x No 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 of the Exchange Act.:

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

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

Common Stock, $0.0001 par value

Shares outstanding as of October 31, 2015: 16,687,436

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TABLE OF CONTENTS

		Page
	PART I- FINANCIAL INFORMATION
Item 1.	Financial Statements	1
	Condensed Balance Sheets as of September 30, 2015 (unaudited) and December 31, 2014	1
	Condensed Statements of Operations (unaudited) for the three and nine months ended September 30, 2015 and 2014	2
	Condensed Statements of Comprehensive Loss (unaudited) for the three and nine months ended September 30, 2015 and 2014	3
	Condensed Statement of Stockholders’ Equity (unaudited) for the period from January 1, 2015 to September 30, 2015	4
	Condensed Statements of Cash Flows (unaudited) for the nine months ended September 30, 2015 and 2014	5
	Notes to Unaudited Condensed Financial Statements	6
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	14
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	22
Item 4.	Controls and Procedures	22
	PART II- OTHER INFORMATION
Item 1.	Legal Proceedings	23
Item 1A.	Risk Factors	23
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	54
Item 3.	Defaults upon Senior Securities	54
Item 4.	Mine Safety Disclosures	54
Item 5.	Other Information	54
Item 6.	Exhibits	55

SIGNATURES		56

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PART I

ITEM 1. FINANCIAL STATEMENTS

LOXO ONCOLOGY, INC.

Condensed Balance Sheets

(in thousands, except share and per share amounts)

	September 30, 2015			December 31, 2014
	(unaudited)			(Note 2)
Assets
Current assets:
Cash and cash equivalents	$	34,409		$	43,930
Short-term investments	59,013			62,362
Prepaid expenses with related party	922			663
Other prepaid expenses and current assets	2,062			821
Total current assets	96,406			107,776
Long-term investments	—			6,648
Property and equipment, net	74			12
Other assets	222			23
Total assets	$	96,702		$	114,459
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	731		$	239
Accrued expenses and other current liabilities	2,108			1,548
Total liabilities	2,839			1,787
Commitments and contingencies
Stockholders’ equity:
Common stock, $0.0001 par value; 125,000,000 shares authorized; 16,687,436 shares issued and outstanding at September 30, 2015; 16,644,219 shares issued and 16,634,063 shares outstanding at December 31, 2014	2			2
Additional paid-in capital	147,825			143,660
Accumulated deficit	(53,971		)	(30,962		)
Accumulated other comprehensive income (loss)	7			(28		)
Total stockholders’ equity	93,863			112,672
Total liabilities and stockholders’ equity	$	96,702		$	114,459

See accompanying notes to unaudited condensed financial statements.

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LOXO ONCOLOGY, INC.

Condensed Statements of Operations

(unaudited)

(in thousands, except share and per share amounts)

	Three Months			Three Months			Nine Months			Nine Months
	Ended			Ended			Ended			Ended
	September 30, 2015			September 30, 2014			September 30, 2015			September 30, 2014

Operating expenses:
Research and development with related party	$	2,874		$	2,413		$	7,711		$	5,395
Research and development	3,387			2,708			8,095			4,543
General and administrative	2,552			1,622			7,331			3,612
Total operating expenses and loss from operations	(8,813		)	(6,743		)	(23,137		)	(13,550		)
Interest income, net	42			—			128			—
Net loss	(8,771		)	(6,743		)	(23,009		)	(13,550		)
Accretion of redeemable convertible preferred stock	—			(6		)	—			(34		)
Net loss attributable to common stockholders	$	(8,771	)	$	(6,749	)	$	(23,009	)	$	(13,584	)

Share information:
Net loss per share, basic and diluted	$	(0.53	)	$	(0.68	)	$	(1.39	)	$	(3.87	)
Weighted average shares outstanding, basic and diluted	16,560,610			9,947,321			16,525,530			3,510,170

See accompanying notes to unaudited condensed financial statements.

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LOXO ONCOLOGY, INC.

Condensed Statements of Comprehensive Loss

(unaudited)

(in thousands)

	Three Months			Three Months			Nine Months			Nine Months
	Ended			Ended			Ended			Ended
	September 30, 2015			September 30, 2014			September 30, 2015			September 30, 2014

Net loss	$	(8,771	)	$	(6,743	)	$	(23,009	)	$	(13,550	)
Other comprehensive income:
Unrealized gain on available for sale securities	4			—			35			—
Comprehensive loss	$	(8,767	)	$	(6,743	)	$	(22,974	)	$	(13,550	)

See accompanying notes to unaudited condensed financial statements.

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LOXO ONCOLOGY, INC.

Condensed Statement of Stockholders’ Equity

(unaudited)

For the period from January 1, 2015 to September 30, 2015

(in thousands, except share and per share amounts)

	Stockholders’ Equity
	Common Stock								Accumulated
		$0.0001		Additional					Other			Total
		Par		Paid-in		Accumulated			Comprehensive			Stockholders’
	Shares	Value		Capital		Deficit			Income (Loss)			Equity
Balance at January 1, 2015	16,634,063	$	2	$	143,660	$	(30,962	)	$	(28	)	$	112,672
Stock-based compensation expense	—	—		3,849		—			—			3,849
Stock option exercises	43,217	—		279		—			—			279
Reclassification of shares issued and previously subject to repurchase	10,156	—		37		—			—			37
Other comprehensive income	—	—		—		—			35			35
Net loss	—	—		—		(23,009		)	—			(23,009		)
Balance at September 30, 2015	16,687,436	$	2	$	147,825	$	(53,971	)	$	7		$	93,863

See accompanying notes to unaudited condensed financial statements.

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LOXO ONCOLOGY, INC.

Condensed Statements of Cash Flows

(unaudited)

(in thousands)

	Nine Months Ended September 30, 2015			Nine Months Ended September 30, 2014
Operating activities:
Net loss	$	(23,009	)	$	(13,550	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization of premium and discounts on investments, net	296			1
Stock-based compensation	3,849			2,572
Changes in operating assets and liabilities:
Prepaid expenses and other assets	(1,699		)	(1,242		)
Accounts payable	492			(14		)
Accrued expenses and other current liabilities	597			163
Net cash used in operating activities	(19,474		)	(12,070		)
Investing activities:
Purchases of available-for-sale securities	(65,573		)	—
Proceeds from maturing available-for-sale securities	75,320			—
Purchase of property and equipment	(73		)	(14		)
Net cash provided by (used in) investing activities	9,674			(14		)
Financing activities:
Proceeds from issuance of redeemable convertible preferred stock, net	—			43,178
Proceeds from the issuance of common stock	—			74,164
Proceeds from the exercise of stock options	279			167
Payment of deferred financing fees	—			(1,798		)
Net cash provided by financing activities	279			115,711
Net (decrease) increase in cash and cash equivalents	(9,521		)	103,627
Cash and cash equivalents—beginning of period	43,930			14,994
Cash and cash equivalents—end of period	$	34,409		$	118,621

Supplemental schedule of noncash investing activities:
Unrealized gain on available for sale securities	$	35		$	—
Supplemental schedule of noncash financing activities:
Conversion of redeemable convertible preferred stock	$	—		$	68,055
Reclassification of share repurchase obligation	$	37		$	—

See accompanying notes to unaudited condensed financial statements.

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LOXO ONCOLOGY, INC.

Notes to Unaudited Condensed Financial Statements

September 30, 2015

1. Organization and Description of the Business

Loxo Oncology, Inc. (the “Company”) was incorporated on May 9, 2013 in the State of Delaware. The Company is a biopharmaceutical company innovating the development of highly selective medicines for patients with genetically defined cancers. Its pipeline focuses on cancers that are uniquely dependent on single gene abnormalities, such that a single drug has the potential to treat the cancer with dramatic effect. The Company operates in one segment and has its principal office in Stamford, Connecticut.

Liquidity

At September 30, 2015, the Company had working capital of $93.6 million and an accumulated deficit of $54.0 million. The Company had cash, cash equivalents and investments of $93.4 million at September 30, 2015. The Company has not generated any product revenues and has not achieved profitable operations. There is no assurance that profitable operations will ever be achieved, and, if achieved, could be sustained on a continuing basis. In addition, development activities, clinical and pre-clinical testing, and commercialization of the Company’s products will require significant additional capital.

The Company believes that its existing cash, cash equivalents, and investments, will be sufficient to enable the Company to continue as a going-concern for a reasonable period of time beyond September 30, 2016. However, the Company will need to secure additional funding in the future, from one or more equity or debt financings, collaborations, or other sources, in order to carry out all of its planned research and development activities. If the Company is unable to obtain additional financing or generate license or product revenue, the lack of liquidity could have a material adverse effect on the Company’s future prospects.

2. Summary of Significant Accounting Policies

Basis of Presentation

The accompanying financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”). Any reference in these notes to applicable guidance is meant to refer to GAAP as found in the Accounting Standards Codification (“ASC”) and Accounting Standards Update (“ASU”) of the Financial Accounting Standards Board (“FASB”).

Unaudited Interim Financial Information

The accompanying balance sheet as of December 31, 2014, was derived from the Company’s audited financial statements included in Form 10-K filed with the Securities and Exchange Commission (“SEC”) on March 27, 2015. It is suggested that the interim unaudited condensed financial statements be read in conjunction with the annual financial statements and the notes thereto included in the Company’s Annual Report on Form 10-K.

The accompanying balance sheet as of September 30, 2015, the statements of operations for the three and nine months ended September 30, 2015 and 2014, the statements of comprehensive loss for the three and nine months ended September 30, 2015 and 2014, the statement of stockholders’ equity for the nine months ended September 30, 2015 and the statements of cash flows for the nine months ended September 30, 2015 and 2014 are unaudited.

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The interim unaudited condensed financial statements have been prepared on the same basis as the annual audited financial statements and, in the opinion of management, reflect all adjustments, which include only normal recurring adjustments, necessary for the fair presentation of the Company’s financial position as of September 30, 2015 and the results of its operations for the three and nine months ended September 30, 2015 and 2014 as well as its cash flows for the nine months ended September 30, 2015 and 2014.

The interim unaudited condensed financial statements have been prepared pursuant to the rules and regulations of the SEC. Certain information and note disclosures normally included in annual financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to those rules and regulations, although the Company believes that the disclosures made are adequate to make the information not misleading.

Significant Accounting Policies

The Company’s significant accounting policies are disclosed in the audited financial statements for the year ended December 31, 2014 included in the Company’s Form 10-K filed with the SEC on March 27, 2015. Since the date of such financial statements, there have been no changes to the Company’s significant accounting policies.

Reclassifications

Certain reclassifications were made to prior period amounts to correct the previous presentation. During the three and nine months ended September 30, 2014, $85,000 and $121,000, respectively, of certain expenses that had been previously classified as general and administrative were reclassified into research and development. During the nine months ended September 30, 2014, the Company is also presenting $167,000 of proceeds from the issuance of stock options on its statement of cash flows that had previously been included in proceeds from the issuance of common stock.

3. Net Loss Per Common Share

The following table sets forth the computation of basic and diluted net loss per common share for the periods indicated (in thousands, except share and per share data):

	Three Months			Three Months			Nine Months			Nine Months
	Ended			Ended			Ended			Ended
	September 30, 2015			September 30, 2014			September 30, 2015			September 30, 2014

Basic and diluted net loss per common share calculation:
Net loss	$	(8,771	)	$	(6,743	)	$	(23,009	)	$	(13,550	)
Accretion of redeemable convertible preferred stock	—			(6		)	—			(34		)
Net loss attributable to common stockholders	$	(8,771	)	$	(6,749	)	$	(23,009	)	$	(13,584	)
Weighted average common shares outstanding — basic and diluted	16,560,610			9,947,321			16,525,530			3,510,170
Net loss per share of common stock—basic and diluted	$	(0.53	)	$	(0.68	)	$	(1.39	)	$	(3.87	)

The following outstanding securities at September 30, 2015 and 2014 have been excluded from the computation of diluted weighted average shares outstanding, as they would have been anti-dilutive:

	2015	2014
Unvested restricted stock	121,086	187,134
Stock options	2,091,082	1,507,905
	2,212,168	1,695,039

4. Fair Value Investments

Financial Instruments

The financial instruments recorded in the Company’s balance sheets include cash and cash equivalents, investments, and accounts payable.

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Included in cash and cash equivalents are money market funds representing a type of mutual fund required by law to invest in low-risk securities (for example, U.S. government bonds, U.S. treasury bills and commercial paper) and overnight repurchase agreements. Money market funds are structured to maintain the fund’s net asset value at $1.00 per unit, which assists in providing adequate liquidity upon demand by the holder. Money market funds pay dividends that generally reflect short-term interest rates. Thus, only the dividend yield fluctuates. Also included in cash and cash equivalents are U.S. government sponsored enterprise debt securities that have a maturity of 3 months or less from their original acquisition date. Due to their short-term maturity, the carrying amounts of cash and cash equivalents (including money market funds), and accounts payable approximate their fair values. The Company classifies its remaining investments as available-for-sale. Gains or losses on securities sold are based on the specific identification method.

For investments classified as available-for-sale, the Company records unrealized gains or losses resulting from changes in fair value between measurement dates as a component of other comprehensive income (loss).

(amounts in thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized (Losses)			Fair Value
September 30, 2015
Overnight repurchase agreements	$	15,000	$	—	$	—		$	15,000
Money market funds	9,970		—		—			9,970
Government enterprise debt securities	2,872		—		—			2,872
Total included in cash and cash equivalents	27,842		—		—			27,842

Government enterprise debt securities
Short-term available-for-sale securities	53,982		6		—			53,988
Totals	53,982		6		—			53,988

US Government debt securities
Short-term available-for-sale securities	5,024		1		—			5,025
Totals	5,024		1		—			5,025

Total fair value financial instruments	$	86,848	$	7	$	—		$	86,855

December 31, 2014
Government enterprise debt securities	$	17,009	$	—	$	—		$	17,009
Money market funds	8,846		—		—			8,846
Total included in cash and cash equivalents	25,855		—		—			25,855

Government enterprise debt securities
Short-term available-for-sale securities	62,387		—		(25		)	62,362
Long-term available-for-sale securities	6,651		—		(3		)	6,648
Totals	69,038		—		(28		)	69,010

Total fair value financial instruments	$	94,893	$	—	$	(28	)	$	94,865

Fair value guidance establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. These tiers include:

· Level 1—Quoted prices in active markets for identical assets or liabilities.

· Level 2—Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

· Level 3—Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

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The Company’s financial assets measured at fair value on a recurring basis at September 30, 2015 were as follows (in thousands):

	Fair Value Measurements at Measurement Date:
	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total As Of September 30, 2015

Assets:
Government enterprise debt securities	$	—	$	56,860	$	—	$	56,860
Overnight repurchase agreements	15,000		—		—		15,000
Money market funds	9,970		—		—		9,970
US Government debt securities	5,025		—		—		5,025
Totals	$	29,995	$	56,860	$	—	$	86,855

The Company’s financial assets measured at fair value on a recurring basis at December 31, 2014 were as follows (in thousands):

	Fair Value Measurements at Measurement Date:
	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total As Of December 31, 2014

Assets:
Government enterprise debt securities	$	—	$	86,019	$	—	$	86,019
Money market funds	8,846		—		—		8,846
Totals	$	8,846	$	86,019	$	—	$	94,865

There were no items that were accounted for at fair value on a non-recurring basis for the nine months ended September 30, 2015 and 2014.

Financial instruments that potentially subject the Company to a concentration of credit risk consist of cash and cash equivalents and investments. At September 30, 2015 and December 31, 2014, the Company’s cash and cash equivalents were held by two financial institutions and the amounts on deposit were in excess of Federal Deposit Insurance Company insurance limits. The Company mitigates this risk by depositing its uninsured cash in major well capitalized financial institutions, and by investing excess operating cash in overnight repurchase agreements which are 100% collateralized by U.S. government backed securities with the Company’s bank. The Company has not recognized any losses on its cash and cash equivalents.

5. Accrued Expenses

Accrued expenses and other current liabilities consisted of the following (in thousands):

	September 30, 2015		December 31, 2014
Research and development expenses	$	1,393	$	742
General and administrative expenses	715		769
Share repurchase obligation	—		37
	$	2,108	$	1,548

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6. Stock-Based Compensation

Effective July 2013, the Company adopted the 2013 Equity Incentive Plan, which was amended in November 2013 (the “2013 Plan”). The 2013 Plan provided for the granting of incentive stock options, non-statutory stock options and the issuance of restricted stock awards. As of September 30, 2015, the Company reserved 1,544,615 shares of common stock authorized for issuance in connection with the 2013 Plan. Certain options are eligible for exercise prior to vesting. Exercised but unvested shares are subject to repurchase by the Company at the initial exercise price. In connection with the Company’s initial public offering, no further grants will be made under this plan and all remaining shares available for grant were transferred to the 2014 Equity Incentive Plan.

The Company adopted the 2014 Equity Incentive Plan (the “2014 Plan”) that became effective on July 30, 2014 and serves as the successor to the 2013 Plan. The 2014 Plan provides for the grant of awards to employees, directors, consultants, independent contractors and advisors, provided the consultants, independent contractors, directors and advisors are natural persons that render services other than in connection with the offer and sale of securities in a capital-raising transaction. The exercise price of stock options must be at least equal to the fair market value of the Company’s common stock on the date of grant.

The Company has reserved 1,591,106 shares of its common stock to be issued under the 2014 Plan of which 876,430 shares were available for future issuance as of September 30, 2015. Shares authorized will increase automatically on January 1 of each of 2015 through 2024 by the number of shares equal to 3.0% of the aggregate number of outstanding shares of our common stock as of the immediately preceding December 31. The Company’s Board may reduce the amount of the increase in any particular year. The 2014 Plan authorizes the award of stock options, restricted stock awards, or RSAs, stock appreciation rights, or SARs, restricted stock units, or RSUs, performance awards and stock bonuses.

The following table summarizes stock option activity under the 2014 Plan for the period from January 1, 2015 through September 30, 2015:

						Average
				Weighted-		Remaining	Aggregate
	Number			Average		Contractual	Intrinsic Value
	of Shares			Exercise Price		Term (in years)	(in thousands)
Outstanding at January 1, 2015	2,011,005			$	6.75	9.5	$	11,375
Granted	213,034			16.63
Exercised	(53,373		)	5.92
Cancelled	—			—
Forfeited	(79,584		)	7.50
Outstanding at September 30, 2015	2,091,082			$	7.75	8.8	$	20,725
Vested and expected to vest at September 30, 2015	2,003,058			$	7.67	8.8	$	20,002
Exercisable at September 30, 2015	810,606			$	4.59	8.5	$	10,481
Weighted-average grant date fair value of options granted during the nine months ended September 30, 2015	$	10.69

As of September 30, 2015, there was $12.7 million of total unrecognized compensation expense related to options granted but not yet vested of which $2.5 million is attributable to non-employee awards and subject to re-measurement until vested. The total unrecognized compensation expense of $12.7 million will be recognized as expense over a weighted-average period of 2.7 years.

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The Company uses the Black-Scholes option pricing model to estimate the fair value of option awards with the following weighted-average assumptions, certain of which are based on industry comparative information, for the period indicated:

	Nine Months Ended September 30, 2015
Risk-free interest rate	1.67	%
Expected dividend yield	—	%
Expected stock price volatility	74.41	%
Expected term of options (in years)	5.84
Expected forfeiture rate	9.08	%

The weighted-average valuation assumptions were determined as follows:

· Risk-free interest rate: The Company bases the risk-free interest rate on the interest rate payable on U.S. Treasury securities in effect at the time of grant for a period that is commensurate with the assumed expected option term.

· Expected annual dividends: The estimate for annual dividends is 0%, because the Company has not historically paid, and does not expect for the foreseeable future to pay, a dividend.

· Expected stock price volatility: The expected volatility used is based on historical volatilities of similar entities within the Company’s industry which were commensurate with the Company’s expected term assumption.

· Expected term of options: The expected term of options represents the period of time options are expected to be outstanding. The expected term of the options granted to employees is derived from the “simplified” method as described in Staff Accounting Bulletin 107 relating to stock-based compensation. The expected term for options granted to non-employees is equal to the contractual term of the awards.

· Expected forfeiture rate: The Company’s estimated annual forfeiture rate was 9.08%, based on historical forfeiture experience of its various employee groups.

· Estimated fair value of the Company’s stock-based awards: The estimated fair value of the Company’s stock-based awards is amortized on a straight-line basis over the awards’ service period for those awards with graded vesting and which contain only a service condition. For awards with graded vesting and a performance and service condition, when achievement of the performance condition is deemed probable, the Company recognizes compensation cost using the accelerated recognition method over the awards’ service period.

Share-based compensation expense recognized was as follows (in thousands):

	Three Months Ended September 30, 2015		Three Months Ended September 30, 2014		Nine Months Ended September 30, 2015		Nine Months Ended September 30, 2014
Research and development	$	463	$	1,712	$	1,807	$	2,037
General and administrative	702		323		2,042		535
	$	1,165	$	2,035	$	3,849	$	2,572

The stock-based compensation expense for restricted stock is determined based on the estimated fair value of the Company’s common stock on the grant date of the awards applied to the total number of awards that are anticipated to vest. During 2013, the Company granted 264,189 restricted stock awards and as of December 31, 2014 there were 170,622 shares expected to vest over the next 3 years. During the nine months ended September 30, 2015, 49,536 restricted shares vested and the remaining 121,086 shares are expected to vest over the next 1.8 years. Stock-based compensation for restricted stock was de minimis at their original grant date.

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7. Commitments and Contingencies

Array Collaboration Agreement

On July 3, 2013, the Company signed a multi-year strategic collaboration agreement with Array BioPharma, Inc. (“Array”), and this agreement was subsequently amended on November 26, 2013, April 10, 2014, October 13, 2014 and March 31, 2015.

Under the terms of the collaboration agreement, the Company obtained certain rights to Array’s tropomyosin receptor kinase (TRK) inhibitor program, as well as additional novel oncology targets, including rearranged during transfection (RET), fibroblast growth factor receptor (FGFR) and FMS-like tyrosine kinase 3 (FLT3). The Company has worldwide commercial rights to each product candidate from the collaboration and Array participates in any potential successes through milestones, royalties, and an equity ownership in the Company.

With respect to the discovery and preclinical program, the collaboration agreement runs through July 3, 2016, and the Company has the option to extend the term for up to two additional one-year renewal periods by providing written notice to Array at least three months before the end of the initial discovery and preclinical development programs or the renewal period, if applicable. In addition to LOXO-101, the parties designated 12 discovery targets, of which seven were selected for additional study in January 2015, which will be reduced to four on or before January 2016. The Company has the option to increase the total candidate selection number to five for a modest additional payment.

As part of the agreement, the Company agreed to pay Array a fixed amount per month, based on Array’s commitment to provide full-time equivalents and other support relating to the conduct of the discovery and preclinical development programs. See Note 8 for amounts the Company recorded in related-party research and development expenses.

Milestones

With respect to product candidates directed to TRK, including LOXO-101 and its back-up compounds, the Company could be required to pay Array up to $222 million in milestone payments, the substantial majority of which are due upon the achievement of commercial milestones. With respect to product candidates directed to targets other than TRK, the Company could be required to pay Array up to $213 million in milestone payments, the substantial majority of which are due upon the achievement of commercial milestones. See Note 9 for subsequent event.

Royalties

The Company is required to pay Array mid-single digit royalties on worldwide net sales of products. With respect to the royalty on products directed to targets other than TRK, the Company has the right to credit certain milestone payments against royalties on sales of products directed to such target.

Research and Development Arrangements

In the course of normal business operations, the Company enters into agreements with clinical research organizations, or CROs, to assist in the performance of research and development and preclinical activities. Expenditures to CROs may represent a significant portion of development costs for the Company in future periods. The Company can elect to discontinue the work under these agreements at any time. The Company could also enter into additional collaborative research, contract research, manufacturing, and supplier agreements in the future, which may require upfront payments and even long-term commitments of cash.

Legal Proceedings

The Company is not involved in any legal proceeding that it expects to have a material effect on its business, financial condition, results of operations or cash flows.

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8. Related Party Transactions

The Company recorded related-party research and development expenses of $7.7 million and $5.4 million for the nine months ended September 30, 2015 and 2014, respectively, for services provided by Array under a collaboration agreement. The Company recorded related-party research and development expenses of $2.9 million and $2.4 million for the three months ended September 30, 2015 and 2014, respectively, for services provided by Array under a collaboration agreement. As of September 30, 2015, the Company had $0.9 million in prepaid expenses to Array under the collaboration agreement for services that will be provided in subsequent periods.

Dr. Lori Kunkel, a board member, has a consulting agreement with the Company to assist in the Company’s drug development process. Dr. Kunkel is eligible to receive a maximum of $15,000 monthly for her consulting work. Payments are expensed as incurred and recorded as a component of research and development expenses. During the three and nine months ended September 30, 2015, the Company recognized expenses of $45,000 and $135,000, respectively, in accordance with the terms of the consulting agreement. As of September 30, 2015, there was $15,000 included in accrued expenses to Dr. Kunkel.

9. Subsequent Events

On October 6, 2015, the Company entered into an Office Lease Agreement (the “Lease”) with One Stamford Plaza Owner, LLC (the “Landlord”).

The Lease provides for a term of 84 months (the “Term”), commencing when the Landlord delivers the premise to the Company on or after December 18, 2015 and, unless otherwise terminated, continuing until December 31, 2022.

Pursuant to the Lease, annual base rent will be approximately $47.00 per square foot for the first year following the twelve month period from the commencement of the Term and is subject to annual increases of $1.00 per square foot. The base rent payments do not include the Company’s proportionate share of any operating expenses, including real estate taxes, for the premises.

On October 14, 2015, the Company announced the enrollment of the first patient in its Phase 2 basket trial of LOXO-101. As a result of the enrollment, the Company incurred a $1.0 million milestone payment to Array.

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

The interim unaudited condensed financial statements and this Management’s Discussion and Analysis of Financial Condition and Results of Operations should be read in conjunction with the financial statements and notes thereto for the year ended December 31, 2014 and the related Management’s Discussion and Analysis of Financial Condition and Results of Operations, both of which are contained in our Annual Report on Form 10-K filed with the SEC on March 27, 2015. As used in this report, unless the context suggests otherwise, “we,” “us,” “our,” “the Company” or “Loxo” refer to Loxo Oncology, Inc.

Forward Looking Statements

The information in this discussion contains forward-looking statements and information within the meaning of Section 27A of the Securities Act of 1933, as amended, or the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act, which are subject to the “safe harbor” created by those sections. This Quarterly Report on Form 10-Q contains forward-looking statements that involve substantial risks and uncertainties. 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 Form 10-Q, 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. You should refer to the risks set forth in Part II, Item 1A, “Risk Factors” in this Quarterly Report on Form 10-Q 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. Furthermore, such forward-looking statements speak only as of the date of this report. 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.

Overview

Loxo Oncology is a biopharmaceutical company innovating the development of highly selective medicines for patients with genetically defined cancers. Our pipeline focuses on cancers that are uniquely dependent on single gene abnormalities, such that a single drug has the potential to treat the cancer with dramatic effect. We believe that the most selective, purpose-built medicines have the highest probability of maximally inhibiting the intended target, thereby delivering best-in-class disease control and safety. Our management team seeks out experienced industry partners, world-class scientific advisors and innovative clinical-regulatory approaches to deliver new cancer therapies to patients as quickly and efficiently as possible.

LOXO-101

Pre-clinical research indicates that our lead product candidate, LOXO-101, is a potent and selective inhibitor of tropomyosin receptor kinase, or TRK, a family of signaling molecules that appear to play an important role in the development and perpetuation of certain cancers. In September 2015 we announced that the United States Food and Drug Administration (FDA) granted Loxo orphan drug designation for LOXO-101 for treatment of patients with soft tissue sarcoma.

We are evaluating LOXO-101 in a Phase 1 dose escalation trial for patients with advanced solid tumors refractory to standard therapy, and we reported interim data at the AACR-NCI-EORTC International Conference on Molecular Targets and Cancer Therapeutics Meeting in Boston in November 2015. As of the October 20, 2015 data cutoff date, 30 patients had been enrolled and treated, including six patients with cancers harboring TRK fusions. Three of the six patients with TRK fusion cancers had been on study sufficiently long for their first efficacy assessment, and all three had achieved an objective response at the first response assessment, as defined by standard RECIST criteria. All three of these patients remain in response and on study. The other three patients with TRK fusion cancers were recently enrolled and thus had not yet been evaluated for response as of the data cutoff date, though they all remain on study. LOXO-101 has been well tolerated, including the 100 mg twice-daily dose, which has been selected for Phase 2 study and has shown efficacy in TRK fusion patients. The majority of adverse events reported by investigators have been mild to moderate. A maximum tolerated dose (MTD) has not been defined, though near-term Phase 1 enrollment will focus on further characterizing the pharmacokinetics and safety of the 100 mg twice-daily dose dosing.

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Our Phase 1 clinical trial of LOXO-101 is an open label, multicenter trial that has two stages: dose escalation and expansion. The primary objectives of the dose escalation stage are to determine the maximum tolerated dose and the appropriate dose for further clinical investigation, as well as to determine the safety, tolerability and pharmacokinetic profile of orally administered LOXO-101. Inclusion criteria is for patients with (1) locally advanced or metastatic adult solid tumor that has progressed or was nonresponsive to available therapies and for which no standard or available curative therapy exists, (2) an ECOG score, which measures disease progression, of 0 or 1 and (3) adequate hematologic, hepatic and renal function. We began enrolling patients in our Phase 1 trial in May 2014. We plan to present additional data from the ongoing Phase 1 study of LOXO-101 at a medical meeting in 2016. We also plan to initiate a Phase 1 study of LOXO-101 in pediatric cancer patients, including an oral liquid formulation, in the first half of 2016.

In October 2015, we announced the initiation of our Phase 2 basket trial, a multicenter, international open label study in adult cancer patients whose tumors harbor TRK fusions. A basket trial is a type of clinical trial that seeks to enroll cancer patients with a common genetic feature, in this case, a TRK fusion. The LOXO-101 Phase 2 basket trial will enroll patients with TRK fusions into one of eight cohorts: non-small cell lung cancer, thyroid cancer, sarcoma, colorectal cancer, salivary gland cancer, biliary cancer, primary central nervous system tumors and all other solid tumor histologies. Available scientific evidence suggests that TRK fusions behave similarly across tumor types, but this approach allows for independent statistical analyses of each cohort for the purposes of evaluating efficacy or futility. The total size of the trial is not expected to exceed approximately 150 patients. In order to meet the criteria for enrollment, patients must have received prior standard therapy appropriate for their tumor type and stage of disease, or in the opinion of the investigator, would be unlikely to tolerate or derive clinical benefit from appropriate standard of care therapy. We have plans in place to collaborate with the clinical, laboratory, and molecular pathology communities in both academia and industry to ensure that that TRK fusion patients and their treating physicians are alerted to the LOXO-101 Phase 2 clinical trial, integrating trial recruitment into routine clinical practice.

In October 2015, we also announced the independent committee of the National Cancer Institute-Molecular Analysis for Therapy Choice (NCI-MATCH) clinical trial chose LOXO-101 as the sole, dedicated treatment arm for patients with TRK gene fusions. The NCI-MATCH trial will initially enroll 3,000 patients with tumor biopsies available for comprehensive genomic profiling and assign these patients to an appropriate targeted therapy arm based on the molecular abnormalities of each tumor. Over 700 trial sites in 48 states in the United States are currently open for enrollment.

Pre-clinical Programs

We are working on several pipeline programs in conjunction with our collaboration with Array BioPharma, Inc., or Array. We have identified our Rearranged during Transfection, or RET, or Fibroblast Growth Factor Receptor, or FGFR, programs as the ones most likely to deliver our next Investigational New Drug, or IND, candidates. Activating fusions and mutations in RET have been identified across a range of cancer histologies. We are designing a highly specific RET inhibitor that optimizes on-target potency for RET fusions, activating mutations, and anticipated resistance mutations.Activating fusions and mutations in FGFR3 and FGFR2 have also been identified across a range of cancer histologies. However, most small molecule FGFR inhibitors are functionally equipotent against isoforms FGFR1, FGFR2 and FGFR3, and are associated with metabolic and systemic toxicities that limit dose, duration of therapy and target engagement. We are designing an FGFR1-sparing inhibitor that has the potential to avoid many of the side effects that have been endemic to the FGFR class.

We recently presented preclinical data at the AACR-NCI-EORTC International Conference on Molecular Targets and Cancer Therapeutics meeting in November 2015 in Boston, MA on both our RET and our FGFR preclinical programs. We are on track to initiate a Phase 1 study of our RET inhibitor in late 2016 or early 2017.

Since inception, we have incurred significant operating losses. Our net loss for the nine months ended September 30, 2015 was $23.0 million, including approximately $15.8 million of total research and development expenses, and approximately $7.3 million of total general and administrative expenses. We expect to incur significant expenses and increasing operating losses for the foreseeable future as we continue the discovery, development and clinical trials of, and seek regulatory approval for and pursue potential commercialization of, our product candidates. In addition, we will also incur additional expenses if and as we enter into additional collaboration agreements, acquire or in-license products and technologies, expand our collaboration with Array, establish sales, marketing and distribution infrastructure and/or expand and protect our intellectual property portfolio.

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We will need to obtain substantial additional funding in connection with our continuing operations. We will seek to fund our operations through the sale of equity, debt financings or other sources, including potential collaborations. We may be unable to raise additional funds or enter into such other agreements when needed on favorable terms, or at all. If we fail to raise capital or enter into such other arrangements as, and when, needed, we may have to significantly delay, scale back or discontinue the development and commercialization of one or more of our product candidates.

Liquidity

Our financial statements and related disclosures have been prepared on a going-concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. Accordingly, the financial statements do not include any adjustments that might be necessary should we be unable to continue in existence. We have not generated any revenues and have not yet achieved profitable operations. There is no assurance that profitable operations, if ever achieved, could be sustained on a continuing basis. In addition, development activities, clinical and preclinical testing, and commercialization of our products will require significant additional financing. Our accumulated deficit at September 30, 2015 was approximately $54.0 million, and management expects to incur substantial and increasing losses in future periods. Our ability to successfully pursue our business is subject to certain risks and uncertainties, including among others, uncertainty of product development, competition from third parties, uncertainty of capital availability, uncertainty in our ability to enter into agreements with collaborative partners, dependence on third parties, and dependence on key personnel. We plan to finance future operations with a combination of proceeds from the issuance of equity, debt, licensing fees, and revenues from future product sales, if any. We have not generated positive cash flows from operations, and there are no assurances that we will be successful in obtaining an adequate level of financing for the development and commercialization of our planned products. We believe that our existing cash and cash equivalents and investments as of September 30, 2015 will be sufficient to enable us to continue as a going concern for a reasonable period of time beyond September 30, 2016.

Components of Operating Results

Revenue

To date, we have not generated any revenues. Our ability to generate product revenues, which we do not expect will occur for many years, if ever, will depend heavily on the successful development and eventual commercialization of our product candidates.

Research and Development Expenses with Related Party

Our research and development expenses with Array, a related party, relate to discovery, preclinical and manufacturing activities as defined within our collaboration agreement with Array.

Research and Development Expenses

Research and development costs are charged to expense as incurred. These costs include, but are not limited to, employee-related expenses, including salaries, benefits, stock-based compensation and travel as well as expenses related to third-party collaborations and contract research arrangements.

Research and development activities are central to our business model. Product candidates in later stages of clinical development generally have higher development costs than those in earlier stages of clinical development, primarily due to the increased size and duration of later-stage clinical trials. As we advance our product candidates, we expect the amount of research and development costs will continue to increase for the foreseeable future.

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It is difficult to determine with certainty the duration and completion costs of our current or future preclinical and clinical studies of our product candidates, or if, when, or to what extent we will generate revenue from the commercialization and sale of any of our product candidates that obtain regulatory approval. We may never succeed in achieving regulatory approval for any of our product candidates. The costs relating to the development of our product candidates will depend on a variety of factors, including the uncertainties of future clinical and preclinical study requirements, uncertainties in clinical trial enrollment rate and changing government regulation. In addition, the probability of success for each product candidate will depend on numerous factors, including competition, manufacturing capability and commercial viability. We will determine which programs to pursue and how much to fund each program in response to the scientific and clinical success of each product candidate, as well as an assessment of each product candidate’s commercial potential.

General and Administrative Expenses

General and administrative expenses consist principally of salaries and related costs for executive and other personnel, including stock-based compensation and travel expenses. Other general and administrative expenses include facility-related costs, communication expenses and professional fees for legal, patent prosecution and maintenance consulting and accounting services.

Interest Income (Expense), net

Interest income and expense consist principally of the interest earned from our short-term and long-term investments offset by the amortization of discounts recorded in connection with the purchase of certain investments.

Critical Accounting Policies and Significant Judgments and Estimates

This 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 GAAP. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses and the disclosure of contingent assets and liabilities in our financial statements. On an ongoing basis, we evaluate our estimates and judgments, including those related to accrued expenses, revenue recognition, deferred revenue and stock-based compensation. We base our estimates on historical experience, known trends and events and various other factors that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. We believe there have been no significant changes in our critical accounting policies as discussed in our Form 10-K filed on March 27, 2015 with the SEC.

Results of Operations

Comparison of the Three Months Ended September 30, 2015 and 2014 (in thousands)

	Three Months Ended September 30, 2015			Three Months Ended September 30, 2014			Change
	(unaudited)			(unaudited)
Operating expenses:
Research and development with related party	$	2,874		$	2,413		$	461
Research and development	3,387			2,708			679
General and administrative	2,552			1,622			930
Total operating expenses and loss from operations	$	(8,813	)	$	(6,743	)	$	(2,070	)

Research and development expense with related party

Research and development expenses with related party were $ 2.9 million for the three months ended September 30, 2015, compared to $2.4 million for the three months ended September 30, 2014. This increase was primarily related to additional full-time equivalents and other support dedicated to discovery, preclinical, and manufacturing activities at Array.

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Research and development expense

Research and development expenses were $ 3.4 million for the three months ended September 30, 2015, compared to $2.7 million for the three months ended September 30, 2014. The increase was primarily due to timing in which our clinical development efforts expanded during 2014 and into 2015 including site and patient enrollment in our Phase 1 and 2 clinical trials for LOXO-101. We also increased our internal headcount during 2014 and into 2015. As a result, we had increases in our clinical and preclinical costs, employment costs and other operating costs of $1.1 million, $0.5 million, and $0.3 million, respectively. These increases were offset by a decrease of $1.2 million for stock-based compensation which was due to higher costs incurred during the three months ended September 30, 2014 based on the value of award grants and accelerated vesting of certain awards as well as expense variability for awards granted to non-employees.

General and administrative expense

General and administrative expenses were $2.6 million for the three months ended September 30, 2015, compared to $1.6 million for the three months ended September 30, 2014. The increase was primarily due to increased costs associated with operating as a public company, including increases in our employment costs and stock-based compensation expense of $0.3 million and $0.4 million, respectively. We also incurred increased professional fees related to product patents of $0.2 million.

Comparison of the Nine Months Ended September 30, 2015 and 2014 (in thousands)

	Nine Months Ended September 30, 2015			Nine Months Ended September 30, 2014			Change
	(unaudited)			(unaudited)
Operating expenses:
Research and development with related party	$	7,711		$	5,395		$	2,316
Research and development	8,095			4,543			3,552
General and administrative	7,331			3,612			3,719
Total operating expenses and loss from operations	$	(23,137	)	$	(13,550	)	$	(9,587	)

Research and development expense with related party

Research and development expenses with related party were $ 7.7 million for the nine months ended September 30, 2015, compared to $5.4 million for the nine months ended September 30, 2014. This increase was primarily related to additional full-time equivalents and other support dedicated to discovery, preclinical, and manufacturing activities at Array.

Research and development expense

Research and development expenses were $ 8.1 million for the nine months ended September 30, 2015, compared to $4.5 million for the nine months ended September 30, 2014. The increase was primarily due to timing in which our clinical development efforts expanded during 2014 and into 2015 including site and patient enrollment in our Phase 1 and 2 clinical trials for LOXO-101. We also increased our internal headcount during 2014 and into 2015. As a result we had increases in our clinical and preclinical costs, employment costs and other operating costs of $1.8 million, $1.5 million, and $0.5 million, respectively. These increases were offset by a decrease of $0.2 million for stock-based compensation which was due to higher costs incurred during the nine months ended September 30, 2014 based on the value of award grants and accelerated vesting of certain awards as well as expense variability for awards granted to non-employees.

General and administrative expense

General and administrative expenses were $7.3 million for the nine months ended September 30, 2015, compared to $3.6 million for the nine months ended September 30, 2014. The increase was primarily due to increased costs associated with operating as a public company including increases in our employment costs, stock-based compensation expense and other operating costs of $1.0 million, $1.5 million and $0.9 million, respectively. We also incurred increased professional fees related to product patents of $0.3 million.

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Liquidity and Capital Resources

Since our inception, we have incurred net losses and negative cash flows from our operations. We incurred a net loss of $23.0 million for the nine months ended September 30, 2015. Net cash used in operating activities was $19.5 million during the nine months ended September 30, 2015. At September 30, 2015, we had an accumulated deficit of $54.0 million, and working capital of $93.6 million. We had cash, cash equivalents and investments of $93.4 million at September 30, 2015. Historically, we have financed our operations principally through private placements of preferred stock and our initial public offering of common stock.

Cash Flows

The following table summarizes our cash flows for the nine months ended September 30, 2015 and 2014 (in thousands):

	Nine Months Ended			Nine Months Ended
	September 30,			September 30,
	2015			2014
	(unaudited)			(unaudited)
Net cash (used in) provided by:
Operating activities	$	(19,474	)	$	(12,070	)
Investing activities	9,674			(14		)
Financing activities	279			115,711
Net (decrease) increase in cash and cash equivalents	$	(9,521	)	$	103,627

Net cash used in operating activities

Net cash used in operating activities was $19.5 million for the nine months ended September 30, 2015 and consisted primarily of a net loss of $23.0 million and a $0.6 million increase in our net operating assets. The increase in our net operating assets was primarily due to the timing of payments related to our clinical and preclinical activities. This activity was offset by noncash expenses of $4.1 million, primarily attributable to stock-based-compensation expense.

Net cash used in operating activities was $12.1 million for the nine months ended September 30, 2014 and consisted primarily of a net loss of $13.6 million and net cash outflows to changes in operating assets and liabilities of $1.1 million partially offset by noncash stock compensation expense of $2.6 million. The significant factors that contributed to the change in operating assets and liabilities included a $0.6 million prepayment made under our Array agreement and a $0.6 million prepayment of insurance premiums.

Net cash provided by (used in) investing activities

Net cash provided by investing activities for the nine months ended September 30, 2015 totaled $9.7 million and consisted primarily of $65.6 million of available-for-sale security purchases offset by $75.3 million proceeds from maturing available-for-sale securities.

Net cash used in investing activities for the nine months ended September 30, 2014 totaled $14,000.

Net cash provided by financing activities

Net cash provided by financing activities was $0.3 million for the nine months ended September 30, 2015, which was due to the proceeds from the exercise of stock options.

Net cash provided by financing activities was $115.7 million for the nine months ended September 30, 2014, which was primarily due to $43.2 million in net proceeds from the issuance of our redeemable convertible preferred stock and common stock and $72.4 million in net proceeds in connection with our initial public offering in August 2014. We also received $0.2 million in proceeds from stock option exercises.

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Operating and Capital Expenditure Requirements

We have not achieved profitability since our inception and we expect to continue to incur net losses for the foreseeable future. We expect our cash expenditures to increase in the near term as we fund future clinical trials of LOXO-101, as well as clinical trials of our other preclinical product candidates and continuing preclinical activities.

As a publicly traded company, we incur significant legal, accounting and other expenses that we were not required to incur as a private company. In addition, the Sarbanes-Oxley Act of 2002, as well as rules adopted by the SEC and the NASDAQ Stock Market, requires public companies to implement specified corporate governance practices that were inapplicable to us as a private company. We expect these rules and regulations will increase our legal and financial compliance costs and will make some activities more time-consuming and costly.

We believe that, based upon our current operating plan, our existing capital resources, together with the net proceeds from our offering and the concurrent private placement, will be sufficient to fund our anticipated operations into 2017 including the development of LOXO-101 into the Phase 2 basket trial, as well as discovery and development activities through IND application for one additional product candidate, with additional resources available for other discovery and development activities. However, we anticipate that we will need to raise substantial additional capital in the future to fund our operations. In order to meet these additional cash requirements, we may incur debt, license certain intellectual property and seek to sell additional equity or convertible securities that may result in dilution to our stockholders. If we raise additional funds through the issuance of equity or convertible securities, these securities could have rights or preferences senior to those of our common stock and could contain covenants that restrict our operations. There can be no assurance that we will be able to obtain additional equity or debt financing on terms acceptable to us, if at all. Our future capital requirements will depend on many factors, including:

· the progress and results of the clinical program for LOXO-101;

· the number and development requirements of any other product candidates that we pursue;

· our ability to enter into collaborative agreements for the development and commercialization of our product candidates;

· the scope, progress, results and costs of researching and developing our product candidates or any future product candidates, both in the United States and outside the United States;

· the costs, timing and outcome of regulatory review of our product candidates or any future product candidates, both in the United States and outside the United States;

· the costs and timing of future commercialization activities, including product manufacturing, marketing, sales and distribution, for any of our product candidates for which we receive marketing approval;

· any product liability or other lawsuits related to our products;

· the expenses needed to attract and retain skilled personnel;

· the general and administrative expenses related to being a public company, including developing an internal accounting function;

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· the revenue, if any, received from commercial sales of our product candidates for which we receive marketing approval; and

· the costs involved in preparing, filing and prosecuting patent applications, maintaining and enforcing our intellectual property rights and defending our intellectual property-related claims, both in the United States and outside the United States.

Please see “Risk Factors” for additional risks associated with our substantial capital requirements.

If we are unable to successfully raise sufficient additional capital, through future debt or equity financings, product sales, or through strategic and collaborative ventures with third parties, we will not have sufficient cash flows and liquidity to fund our planned business operations. In that event, we might be forced to limit many, if not all, of our programs and consider other means of creating value for our stockholders, such as licensing to others the development and commercialization of products that we consider valuable and would otherwise likely develop internally.

To the extent that we raise additional capital through marketing and distribution arrangements or other collaborations, strategic alliances or licensing arrangements with third parties, we may have to relinquish valuable rights to our product candidates, future revenue streams, research programs or product candidates or to grant licenses on terms that may not be favorable to us. If we do raise additional capital through public or private equity offerings, the ownership interest of our existing stockholders will be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect our stockholders’ rights. If we raise additional capital through debt financing, we may be subject to covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends.

Contractual Obligations and Commitments

In October 2015, the Company entered into an Office Lease Agreement (the “Lease”) with One Stamford Plaza Owner, LLC (the “Landlord”), pursuant to which the Company will lease approximately 13,400 square feet of space located on the 9th Floor at 281 Tresser Boulevard in Stamford, Connecticut, also known as Two Stamford Plaza (the “Premises”).

The Lease provides for a term of 84 months (the “Term”), commencing when the Landlord delivers the Premise to the Company on or after December 18, 2015 and, unless otherwise terminated, continuing until December 31, 2022.

Array Collaboration Agreement

On July 3, 2013, we signed a multi-year strategic collaboration agreement with Array, and this agreement was subsequently amended on November 26, 2013, April 10, 2014, October 13, 2014 and March 31, 2015. Under the terms of the collaboration agreement, we obtained certain rights to Array’s TRK inhibitor program, as well as additional novel oncology targets, including RET, FGFR, and FLT3. We have worldwide commercial rights to each product candidate from the collaboration and Array participates in any potential successes through milestones, royalties, and an equity ownership in the Company.

With respect to the discovery and preclinical program, the collaboration agreement runs through July 3, 2016, and we have the option to extend the term for up to two additional one-year renewal periods by providing written notice to Array at least three months before the end of the initial discovery and preclinical development programs or the renewal period, if applicable. In addition to LOXO-101, the parties designated 12 discovery targets, of which seven were selected for additional study in January 2015, which will be reduced to four on or before January 2016. We have the option to increase the total candidate selection number to five for a modest additional payment.

As part of the agreement, we agreed to pay Array a fixed amount per month, based on Array’s commitment to provide full-time equivalents and other support relating to the conduct of the discovery and preclinical development programs. We recorded related-party research and development expenses of $7.7 million and $5.4 million for the nine months ended September 30, 2015 and 2014, respectively, for services provided by Array under a collaboration agreement.

Milestones

With respect to product candidates directed to TRK, including LOXO-101 and its back-up compounds, we could be required to pay Array up to $222 million in milestone payments, the substantial majority of which are due upon the achievement of commercial milestones. With respect to product candidates directed to targets other than TRK, we could be required to pay Array up to $213 million in milestone payments, the substantial majority of which are due upon the achievement of commercial milestones.

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Royalties

We are required to pay Array mid-single digit royalties on worldwide net sales of products. With respect to the royalty on products directed to targets other than TRK, we have the right to credit certain milestone payments against royalties on sales of products directed to such target.

Off-Balance Sheet Arrangements

Through September 30, 2015, we do not have any off-balance sheet arrangements, as defined by applicable SEC regulations.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

As a “smaller reporting company” as defined by Item 10 of Regulation S-K, we are not required to provide the information required by Item 3.

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our Chief Executive Officer and principal financial officer, evaluated the effectiveness of our disclosure controls and procedures as of September 30, 2015, the end of the period covered by this Quarterly Report on Form 10-Q.

Based on our evaluation, we concluded that our disclosure controls and procedures as of September 30, 2015 are effective to provide reasonable assurance that the information required to be disclosed by us in reports filed under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our chief executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure. We believe that a control system, no matter how well designed and operated, cannot provide absolute assurance that the objectives of the controls system are met, and no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within a company have been detected.

Neither we nor our independent registered public accounting firm has performed an evaluation of our internal control over financial reporting during any period in accordance with the provisions of the Sarbanes-Oxley Act. As a result it is possible that, had we and our independent registered public accounting firm performed an evaluation of our internal control over financial reporting in accordance with the provisions of the Sarbanes-Oxley Act, material weaknesses and significant control deficiencies may have been identified. However, for as long as we remain an “emerging growth company” as defined in the JOBS Act, we intend to take advantage of the exemption permitting us not to comply with the requirement that our independent registered public accounting firm provide an attestation on the effectiveness of our internal control over financial reporting. We will perform an evaluation of our internal control over financial reporting as of December 31, 2015.

Changes in Internal Control over Financial Reporting

There have been no changes in our internal control over financial reporting during our third fiscal quarter ended September 30, 2015 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II

ITEM 1. LEGAL PROCEEDINGS

None.

ITEM 1A. RISK FACTORS

This Quarterly Report on Form 10-Q contains forward-looking information based on our current expectations. Because our actual results may differ materially from any forward-looking statements that we make or that are made on our behalf, this section includes a discussion of important factors that could affect our actual future results, including, but not limited to, our capital resources, the progress and timing of our clinical programs, the safety and efficacy of our product candidates, risks associated with regulatory filings, risks associated with determinations made by regulatory agencies, the potential clinical benefits and market potential of our product candidates, commercial market estimates, future development efforts, patent protection, effects of healthcare reform, reliance on third parties, and other risks set forth below.

Risks Related to Our Financial Position and Capital Needs

We have incurred significant losses since our inception. We expect to incur losses over the next several years and may never achieve or maintain profitability.

Since inception, we have incurred significant operating losses. Our net loss was $ 20.7 million and $23.0 million for the year ended December 31, 2014 and the nine months ended September 30, 2015, respectively. As of September 30, 2015, we had an accumulated deficit of $54.0 million. We have focused primarily on our discovery collaboration with Array and developing our product candidates. We have recently initiated clinical development of our lead product candidate, LOXO-101, and expect that it will be many years, if ever, before we have a product candidate ready for commercialization. To date, we have financed our operations primarily through private placements of our convertible preferred stock and our initial public offering. We expect to continue to incur significant expenses and increasing operating losses for the foreseeable future. The net losses we incur may fluctuate significantly from quarter to quarter. We anticipate that our expenses will increase substantially if and as we:

· continue development of our product candidates;

· seek to identify additional product candidates;

· enter into additional collaboration arrangements with regards to product discovery or acquire or in-license other products and technologies;

· maintain and leverage our collaboration with Array;

· continue and initiate clinical trials for our product candidates;

· seek marketing approvals for our product candidates that successfully complete clinical trials;

· establish a sales, marketing and distribution infrastructure to commercialize any products for which we may obtain marketing approval;

· maintain, expand and protect our intellectual property portfolio;

· hire additional personnel;

· add operational, financial and management information systems and personnel, including personnel to support our product development and planned future commercialization efforts; and

· incur increased costs as a result of operating as a public company.

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To become and remain profitable, we must develop and eventually commercialize a product or products with significant market potential. This will require us to be successful in a range of challenging activities, including completing clinical trials of our product candidates, obtaining marketing approval for these product candidates and manufacturing, marketing and selling those products for which we may obtain marketing approval. We may never succeed in these activities and, even if we do, may never generate revenues that are significant or large enough to achieve profitability. If we do achieve profitability, we may not be able to sustain or increase profitability on a quarterly or annual basis. Our failure to become and remain profitable would decrease the value of the company and could impair our ability to raise capital, maintain our discovery and preclinical development efforts, expand our business or continue our operations and may require us to raise additional capital that may dilute your ownership interest. A decline in the value of our company could also cause you to lose all or part of your investment.

Our limited operating history may make it difficult to evaluate the success of our business to date and to assess our future viability.

We are a clinical development company. We were incorporated in May 2013 and commenced operations in the third quarter of 2013. We rely on our collaboration with Array and other third parties to provide discovery and preclinical development capability. Our operations to date have been limited to organizing and staffing our company, business planning, raising capital, acquiring and developing our technology, identifying potential product candidates and conducting product development activities for LOXO-101, which we recently advanced into clinical trials, and other product candidates. We have not yet demonstrated our ability to successfully complete any clinical trials, including large-scale, pivotal clinical trials, obtain marketing approvals, 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. Medicines, on average, take ten to 15 years to be developed from the time they are discovered to the time they are available for treating patients. Consequently, any predictions about our future success or viability based on our short operating history to date may not be as accurate as if we had a longer operating history.

In addition, as a new business, we may encounter unforeseen expenses, difficulties, complications, delays and other known and unknown factors. We will need to transition from a company with a research focus to a company capable of supporting commercial activities. We may not be successful in such a transition.

We will need substantial additional funding. If we are unable to raise capital when needed, we would be compelled to delay, reduce or eliminate our product development programs or commercialization efforts.

We expect our expenses to increase in parallel with our ongoing activities, particularly as we continue our discovery and preclinical development collaborations to identify new clinical candidates and initiate clinical trials of, and seek marketing approval for, our product candidates. In addition, if we obtain marketing approval for any of our product candidates, we expect to incur significant commercialization expenses related to product sales, marketing, manufacturing and distribution. Furthermore, we expect to incur additional costs associated with operating as a public company. Accordingly, we will need to obtain substantial additional funding in connection with our continuing operations. If we are unable to raise capital when needed or on attractive terms, we would be forced to delay, reduce or eliminate our discovery and preclinical development programs or any future commercialization efforts.

We believe that, based upon our current operating plan, our existing capital resources will be sufficient to fund our anticipated operations into 2017, including development of LOXO-101 into the Phase 2 basket trial, as well as discovery and development activities through IND for one additional product candidate, with additional resources available for other discovery and clinical development activities. Our future capital requirements will depend on many factors, including:

· the scope, progress, results and costs of compound discovery, preclinical development, laboratory testing and clinical trials for our product candidates;

· the extent to which we enter into additional collaboration arrangements with regard to product discovery or acquire or in-license products or technologies;

· our ability to establish additional discovery collaborations on favorable terms, if at all;

· the costs, timing and outcome of regulatory review of our product candidates;

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· the costs of future commercialization activities, including product sales, marketing, manufacturing and distribution, for any of our product candidates for which we receive marketing approval;

· revenue, if any, received from commercial sales of our product candidates, should any of our product candidates receive marketing approval; and

· the costs of preparing, filing and prosecuting patent applications, maintaining and enforcing our intellectual property rights and defending intellectual property-related claims.

Identifying potential product candidates and conducting preclinical testing and clinical trials is a time-consuming, expensive and uncertain process that takes years to complete, and we may never generate the necessary data or results required to obtain marketing approval and achieve product sales. In addition, our product candidates, if approved, may not achieve commercial success. Our commercial revenues, if any, will be derived from sales of products that we do not expect to be commercially available for many years, if at all. Accordingly, we will need to continue to rely on additional financing to achieve our business objectives. Adequate additional financing may not be available to us on acceptable terms, or at all.

Raising additional capital may cause dilution to our stockholders, restrict our operations or require us to relinquish rights to our technologies or product candidates.

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 and debt financings. We do not 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 stockholder. 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.

We cannot be certain that additional funding will be available on acceptable terms, or at all. If we are unable to raise additional funds when needed, we may be required to delay, limit, reduce or terminate our product development or future commercialization efforts.

Risks Related to the Discovery and Development of Our Product Candidates

Our discovery and preclinical development is focused on the development of targeted therapeutics for well defined patient populations, which is a rapidly evolving area of science, and the approach we are taking to discover and develop drugs is relatively new and may never lead to marketable products.

The discovery and development of targeted therapeutics for well defined patient populations is an emerging field, and the scientific discoveries that form the basis for our efforts to discover and develop product candidates are relatively new. The scientific evidence to support the feasibility of developing product candidates based on these discoveries is both preliminary and limited. The patient populations for our product candidates are not completely defined but are substantially smaller than the general treated cancer population, and we will need to screen and identify these patients. Successful identification of patients is dependent on several factors, including achieving certainty as to how specific genetic alterations respond to our product candidates and developing companion diagnostics to identify such genetic alterations as appropriate. Furthermore, even if we are successful in identifying patients, we cannot be certain that the resulting patient populations will be large enough to allow us to successfully commercialize our products and achieve profitability. Therefore, we do not know if our approach will be successful, and if our approach is unsuccessful, our business will suffer.

We are very early in our development efforts and are substantially dependent on our lead product candidate, LOXO-101. If we or our collaborators are unable to successfully develop and commercialize LOXO-101 or experience significant delays in doing so, our business will be materially harmed.

We currently do not have any products that have gained regulatory approval. We have invested significant financial resources in identifying potential drug candidates and funding our collaboration agreement with Array to conduct preclinical studies.

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Our ability to generate product revenues, which we do not expect will occur for many years, if ever, will depend heavily on the successful development and eventual commercialization of LOXO-101, for which we have initiated Phase 1and Phase 2 clinical trials in patients in advanced solid tumors. As a result, our business is substantially dependent on our ability to complete the development of and obtain regulatory approval for LOXO-101.

We have not yet demonstrated an ability to successfully overcome many of the risks and uncertainties frequently encountered by companies in new and rapidly evolving fields, particularly in the biopharmaceutical area. For example, to execute our business plan, we will need to successfully:

· execute LOXO-101 development activities;

· obtain required regulatory approvals for the development and commercialization of LOXO-101;

· maintain, leverage and expand our intellectual property portfolio;

· build and maintain robust sales, distribution and marketing capabilities, either on our own or in collaboration with strategic partners;

· gain market acceptance for LOXO-101;

· develop and maintain any strategic relationships we elect to enter into, including our collaboration with Array; and

· manage our spending as costs and expenses increase due to drug discovery, preclinical development, clinical trials, regulatory approvals and commercialization.

If we are unsuccessful in accomplishing these objectives, we may not be able to successfully develop and commercialize LOXO-101, and our business will suffer.

Difficulty in enrolling patients could delay or prevent clinical trials of our product candidates. We may find it difficult to enroll patients onto our clinical trials for LOXO-101 given that we do not know how many patients harbor the TRK alterations LOXO-101 is designed to inhibit.

Identifying and qualifying patients to participate in clinical studies of our product candidates is critical to our success. The timing of our clinical studies depends in part on the speed at which we can recruit patients to participate in testing our product candidates, and we may experience delays in our clinical trials if we encounter difficulties in enrollment. The patient population for our product candidates is not completely defined, but is substantially smaller than other cancer indications, because we are often looking for the same type of genetic alterations across different tumor types and the number of patients with these alterations may be small. For example, with respect to LOXO-101, we do not know how many patients will have the target LOXO-101 is designed to inhibit. In addition, the adoption of genetic testing across large populations of patients with cancer will be required for us to identify patients appropriate for our trials that are restricted to genetically defined populations. The sensitivity of these genetic tests may vary with respect to their ability to detect the target of interest.

In addition to the potentially small populations, the eligibility criteria of our clinical trials will further limit the pool of available study participants as we will require that patients have specific characteristics that we can measure and/or that their disease is either severe enough or not too advanced to include them in a study. Additionally, the process of finding and diagnosing patients may prove costly. We also may not be able to identify, recruit, and enroll a sufficient number of patients to complete our clinical studies because of the perceived risks and benefits of the product candidate under study, the availability and efficacy of competing therapies and clinical trials, the proximity and availability of clinical study sites for prospective patients, and the patient referral practices of physicians. If patients are unwilling to participate in our studies for any reason, the timeline for recruiting patients, conducting studies, and obtaining regulatory approval of potential products may be delayed.

If we experience delays in the completion of, or termination of, any clinical trial of our product candidates, the commercial prospects of our product candidates will be harmed, and our ability to generate product revenue from any of these product candidates could be delayed or prevented. In addition, any delays in completing our clinical trials will increase our costs, slow down our product candidate development and approval process, and jeopardize our ability to commence product sales and generate revenue. Any of these occurrences may harm our business, financial condition, and prospects significantly.

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In addition, many of the factors that cause, or lead to, a delay in the commencement or completion of clinical trials may also ultimately lead to the denial of regulatory approval of our product candidates, including:

· unforeseen safety issues or adverse side effects;

· failure of our companion diagnostics in identifying patients;

· modifications to protocols of our clinical trials resulting from FDA or institutional review board, or IRB, decisions; and

· ambiguous or negative interim results of our clinical trials, or results that are inconsistent with earlier results.

Clinical drug development involves a lengthy and expensive process, with an uncertain outcome. We may incur additional costs or experience delays in completing, or ultimately be unable to complete, the development and commercialization of our product candidates.

We have only recently commenced clinical development of our lead product candidate LOXO-101 and the risk of failure for all of our product candidates is high. Before obtaining marketing approval from regulatory authorities for the sale of any product candidate, we must complete preclinical development and then conduct extensive clinical trials to demonstrate the safety and efficacy of our product candidates in humans. Clinical testing is expensive, difficult to design and implement and can take many years to complete, and its outcome is inherently uncertain. Failure can occur at any time during the clinical trial process. Further, the results of preclinical studies and early clinical trials of our product candidates may not be predictive of the results of later-stage clinical trials, and interim results of a clinical trial do not necessarily predict final results. For example, the interim data we have presented from our ongoing Phase 1 dose escalation clinical trial of LOXO-101, including evaluations of efficacy of a small number of patients, may not predict the final results of that clinical trial or the results of later-stage clinical trials, including our Phase 2 basket trial or other clinical trials we may conduct. Moreover, preclinical and clinical data are often susceptible to varying interpretations and analyses, and many companies that have believed their product candidates performed satisfactorily in preclinical studies and clinical trials have nonetheless failed to obtain marketing approval of their products. It is difficult to accurately predict when or if any of our product candidates will prove effective or safe in humans or will receive regulatory approval.

We may experience delays in our clinical trials and we do not know whether planned clinical trials will begin or enroll subjects on time, need to be redesigned or be completed on schedule, if at all. There can be no assurance that the FDA will not put any of our product candidates on clinical hold in the future. We may experience numerous unforeseen events during, or as a result of, clinical trials that could delay or prevent our ability to receive marketing approval or commercialize our product candidates. Clinical trials may be delayed, suspended or prematurely terminated because costs are greater than we anticipate or for a variety of reasons, such as:

· delay or failure in reaching agreement with the FDA or a comparable foreign regulatory authority on a trial design that we are able to execute;

· delay or failure in obtaining authorization to commence a trial or inability to comply with conditions imposed by a regulatory authority regarding the scope or design of a clinical trial;

· delays in reaching, or failure to reach, agreement on acceptable clinical trial contracts or clinical trial protocols with prospective trial sites;

· inability, delay, or failure in identifying and maintaining a sufficient number of trial sites, many of which may already be engaged in other clinical programs;

· delay or failure in recruiting and enrolling suitable subjects to participate in a trial;

· delay or failure in having subjects complete a trial or return for post-treatment follow-up;

· clinical sites and investigators deviating from trial protocol, failing to conduct the trial in accordance with regulatory requirements, or dropping out of a trial;

· lack of adequate funding to continue the clinical trial, including the incurrence of unforeseen costs due to enrollment delays, requirements to conduct additional clinical studies and increased expenses associated with the services of our clinical research organizations (“CROs”) and other third parties;

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· clinical trials of our product candidates may produce negative or inconclusive results, and we may decide, or regulators may require us, to conduct additional clinical trials or abandon product development programs;

· the number of patients required for clinical trials of our product candidates may be larger than we anticipate, enrollment in these clinical trials may be slower than we anticipate or participants may drop out of these clinical trials at a higher rate than we anticipate;

· we may experience delays or difficulties in the enrollment of patients whose tumors harbor the specific genetic alterations that our product candidates are designed to target;

· our third-party contractors may fail to comply with regulatory requirements or meet their contractual obligations to us in a timely manner, or at all;

· we may have difficulty partnering with experienced CROs that can screen for patients whose tumors harbor the applicable genetic alterations and run our clinical trials effectively;

· regulators or IRBs may require that we or our investigators suspend or terminate clinical research for various reasons, including noncompliance with regulatory requirements or a finding that the participants are being exposed to unacceptable health risks;

· the supply or quality of our product candidates or other materials necessary to conduct clinical trials of our product candidates may be insufficient or inadequate; or

· there may be changes in governmental regulations or administrative actions.

If we are required to conduct additional clinical trials or other testing of our product candidates beyond those that we currently contemplate, if we are unable to successfully complete clinical trials of our product candidates or other testing, if the results of these trials or tests are not positive or are only modestly positive or if there are safety concerns, we may:

· be delayed in obtaining marketing approval for our product candidates;

· not obtain marketing approval at all;

· obtain approval for indications or patient populations that are not as broad as intended or desired;

· obtain approval with labeling that includes significant use or distribution restrictions or safety warnings that would reduce the potential market for our products or inhibit our ability to successfully commercialize our products;

· be subject to additional post-marketing restrictions and/or testing requirements; or

· have the product removed from the market after obtaining marketing approval.

Our product development costs will also increase if we experience delays in testing or marketing approvals. We do not know whether any of our preclinical studies or clinical trials will need to be restructured or will be completed on schedule, or at all. Significant preclinical or clinical trial delays also could shorten any periods during which we may have the exclusive right to commercialize our product candidates or allow our competitors to bring products to market before we do and impair our ability to successfully commercialize our product candidates and may harm our business and results of operations.

We may not be successful in advancing the clinical development of our product candidates, including LOXO-101.

In order to execute on our strategy of advancing the clinical development of our product candidates, we have designed our existing Phase 1 and Phase 2 clinical trials of LOXO-101, and expect to design future trials, to include patients whose tumors harbor the applicable genetic alterations that we believe contribute to cancer. Our goal in doing this is to enroll patients who have the highest probability of responding to the drug, in order to show early evidence of clinical efficacy. If we are unable to include patients whose tumors harbor the applicable genetic alterations, or if our product fails to work as we expect, our ability to assess the therapeutic effect, seek participation in FDA expedited review and approval programs, including Breakthrough Therapy, Fast Track Designation, Priority Review and Accelerated Approval, or otherwise to seek to accelerate clinical development and regulatory timelines, could be compromised, resulting in longer development times, larger trials and a greater likelihood of not obtaining regulatory approval. In addition, because the natural history of different tumor types is variable, we will need to study our product candidates, including LOXO-101, in clinical trials specific for a given tumor type and this may result in increased time and cost.

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Even if our product candidate demonstrates efficacy in a particular tumor type, we cannot guarantee that any product candidate, including LOXO-101, will behave similarly in all tumor types, and we may be required to obtain separate regulatory approvals for each tumor type we intend a product candidate to treat. If any of our clinical trials are unsuccessful, our business will suffer.

If serious adverse events or unacceptable side effects are identified during the development of our product candidates, we may need to abandon or limit our development of some of our product candidates.

If our product candidates are associated with undesirable side effects in preclinical or clinical trials or have characteristics that are unexpected, we may need to interrupt, delay or abandon their development or limit development to more narrow uses or subpopulations in which the undesirable side effects or other characteristics are less prevalent, less severe or more acceptable from a risk-benefit perspective. LOXO-101 toxicology studies in rats and monkeys demonstrated reversible increases in liver enzymes, and this may occur in humans. Testing in animals may not uncover all expected side effects or side effects in humans may be more severe. The TRK receptor family targeted by LOXO-101 plays an important role in the nervous system in general and the central nervous system, or CNS, in particular. In animal models no adverse CNS effects were observed. However, no assurance can be given that LOXO-101 will not cause unwanted, and potentially unacceptable, nervous system or CNS side effects when tested in the clinic.

Additional or more severe side effects may be identified in our ongoing Phase 1 dose escalation trial, our Phase 2 basket trial or in future clinical studies. These or other drug-related side effects could affect patient recruitment or the ability of enrolled subjects to complete the trial or result in potential product liability claims. Many compounds developed in the biopharmaceutical industry that initially showed promise in early-stage testing for treating cancer have later been found to cause side effects that prevented further development of the compound. Any of these occurrences may harm our business, financial condition and prospects significantly.

We may expend our limited resources to pursue a particular product candidate or indication and fail to capitalize on product candidates or indications that may be more profitable or for which there is a greater likelihood of success.

Because we have limited financial and managerial resources, we must focus on a limited number of research programs and product candidates and on specific indications. As a result, we may forego or delay pursuit of opportunities with other product candidates or for other indications that later prove to have greater commercial potential. Our resource allocation decisions may cause us to fail to capitalize on viable commercial products or profitable market opportunities. Our spending on current and future discovery and preclinical development programs and product candidates for specific indications may not yield any commercially viable products.

Failure to successfully validate, develop and obtain regulatory approval for companion diagnostics for our product candidates could harm our drug development strategy and operational results.

As one of the central elements of our business strategy and clinical development approach, we often seek to screen and identify subsets of patients with a genetic alteration who may derive meaningful benefit from our development product candidates. To achieve this, our product development programs can be dependent on the development and commercialization of a companion diagnostic by us or by third- party collaborators. Companion diagnostics are developed in conjunction with clinical programs for the associated product and are subject to regulation as medical devices. For example, for LOXO-101, we are working with collaborators to develop an appropriate companion diagnostic. Each agency that approves a product will independently need to approve the companion diagnostic before or concurrently with its approval of the product candidate, and before a product can be commercialized. The approval of a companion diagnostic as part of the product label will limit the use of the product candidate to only those patients who express the specific genetic alteration it was developed to detect. We may also experience delays in developing a sustainable, reproducible and scalable manufacturing process or transferring that process to commercial partners or negotiating insurance reimbursement plans, all of which may prevent us from completing our clinical trials or commercializing our products on a timely or profitable basis, if at all.

Companion diagnostics are subject to regulation by the FDA and comparable foreign regulatory authorities as medical devices and require separate clearance or approval prior to their commercialization. To date, the FDA has required premarket approval of all companion diagnostics for cancer therapies. We and our third-party collaborators may encounter difficulties in developing and obtaining approval for these companion diagnostics. Any delay or failure by us or third-party collaborators to develop or obtain regulatory approval of a companion diagnostic could delay or prevent approval of our related product candidates.

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Failure by us or our third-party collaborators to successfully commercialize companion diagnostics developed for use with our product candidates could harm our ability to commercialize these product candidates.

Even if we or our companion diagnostic collaborators successfully obtain regulatory approval for the companion diagnostics for our product candidates, our collaborators:

· may not perform their obligations as expected;

· may not pursue commercialization of companion diagnostics for our therapeutic product candidates that achieve regulatory approval;

· may elect not to continue or renew commercialization programs based on changes in the collaborators’ strategic focus or available funding, or external factors, such as an acquisition, that divert resources or create competing priorities;

· may not commit sufficient resources to the marketing and distribution of such product or products; and

· may terminate their relationship with us.

Additionally, we or our collaborators may encounter production difficulties that could constrain the supply of the companion diagnostics, affect the ease of use, affect the price or have difficulties gaining acceptance of the use of the companion diagnostics in the clinical community.

If companion diagnostics for use with our product candidates fail to gain market acceptance, our ability to derive revenues from sales of our product candidates could be harmed. If we or our collaborators fail to commercialize these companion diagnostics, we may not be able to enter into arrangements with another diagnostic company to obtain supplies of an alternative diagnostic test for use in connection with our product candidates or do so on commercially reasonable terms, which could adversely affect and delay the development or commercialization of our product candidates.

Risks Related to Regulatory Approval of Our Product Candidates and Other Legal Compliance Matters

If we are not able to obtain, or if there are delays in obtaining, required regulatory approvals, we will not be able to commercialize our product candidates, and our ability to generate revenue will be materially impaired.

Our product candidates must be approved by the FDA pursuant to a new drug application, or NDA, in the United States and by the European Medicines Agency, or EMA, and similar regulatory authorities outside the United States prior to commercialization. The process of obtaining marketing approvals, both in the United States and abroad, is expensive and takes many years, if approval is obtained at all, and can vary substantially based upon a variety of factors, including the type, complexity and novelty of the product candidates involved. Failure to obtain marketing approval for a product candidate will prevent us from commercializing the product candidate. We have not received approval to market any of our product candidates from regulatory authorities in any jurisdiction. We have little experience in filing and supporting the applications necessary to gain marketing approvals and expect to rely on third-party CROs to assist us in this process. Securing marketing approval requires the submission of extensive preclinical and clinical data and supporting information to regulatory authorities for each therapeutic indication to establish the product candidate’s safety and efficacy. Securing marketing approval also requires the submission of information about the product manufacturing process to, and inspection of manufacturing facilities by, the regulatory authorities, among other requirements. Our product candidates may not be effective, may be only moderately effective or may prove to have undesirable or unintended side effects, toxicities or other characteristics that may preclude our obtaining marketing approval or prevent or limit commercial use. Regulatory authorities have substantial discretion in the approval process and may refuse to accept any application or may decide that our data are insufficient for approval and require additional preclinical, clinical or other studies. For example, basket trials such as our Phase 2 trial of LOXO-101 are relatively novel trial designs and the FDA does not have significant experience with such trials. We cannot assure you that the agency will accept a registrational basket trial or that we will be able to obtain broad approval for LOXO-101 across cancers with TRK fusions on the basis of one or more basket trials, if at all. In addition, varying interpretations of the data obtained from preclinical and clinical testing could delay, limit or prevent marketing approval of a product candidate. Changes in marketing approval policies during the development period, changes in or the enactment of additional statutes or regulations, or changes in regulatory review for each submitted product application, may also cause delays in or prevent the approval of an application.

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New cancer drugs frequently are indicated only for patient populations that have not responded to an existing therapy or have relapsed. If any of our product candidates receives marketing approval, the accompanying labeling may limit the approved use of our drug in this way, which could limit sales of the product.

Any marketing approval we ultimately obtain may be limited or subject to restrictions or post-approval commitments that render the approved product not commercially viable.

If we experience delays in obtaining approval or if we fail to obtain approval of our product candidates, the commercial prospects for our product candidates may be harmed and our ability to generate revenues will be materially impaired.

We may seek Orphan Drug Exclusivity for some of our product candidates, and we may be unsuccessful.

Regulatory authorities in some jurisdictions, including the United States and Europe, may designate drugs for relatively small patient populations as orphan drugs. Under the Orphan Drug Act, the FDA may designate a product as an orphan drug if it is a drug intended to treat a rare disease or condition, which is generally defined as a disease with a patient population of fewer than 200,000 individuals in the United States. LOXO-101 was granted orphan drug status for the treatment of soft tissue sarcoma. There can be no assurance that any other product candidate will be granted orphan drug status in the future.

Generally, if a product with an Orphan Drug Designation subsequently receives the first marketing approval for the indication for which it has such designation, the product is entitled to a period of marketing exclusivity, which precludes the EMA or the FDA from approving another marketing application for the same drug for the same indication during the period of exclusivity. The applicable period is seven years in the United States and ten years in Europe. The European exclusivity period can be reduced to six years if a drug no longer meets the criteria for Orphan Drug Designation or if the drug is sufficiently profitable so that market exclusivity is no longer justified. Orphan Drug Exclusivity may be lost if the FDA or EMA determines that the request for designation was materially defective, if the manufacturer is unable to assure sufficient quantity of the drug to meet the needs of patients with the rare disease or condition.

Orphan Drug Exclusivity of LOXO-101 or another product candidate may not effectively protect the product candidate from competition because different drugs can be approved for the same condition. Even after an orphan drug is approved, the FDA can subsequently approve a different drug for the same condition if the FDA concludes that the later drug is clinically superior in that it is shown to be safer, more effective or makes a major contribution to patient care.

A Fast Track Designation by the FDA, even if granted for any of our product candidates, may not lead to a faster development or regulatory review or approval process and does not increase the likelihood that our product candidates will receive marketing approval.

We do not currently have Fast Track Designation for any of our product candidates but may seek such designation if we believe such a designation may be warranted. If a drug is intended for the treatment of a serious or life-threatening condition and the drug demonstrates the potential to address unmet medical needs for this condition, the drug sponsor may apply for the FDA Fast Track Designation. The FDA has broad discretion whether or not to grant this designation. Even if we believe a particular product candidate is eligible for this designation, we cannot assure you that the FDA would decide to grant it. Even if we do receive Fast Track Designation, we may not experience a faster development process, review or approval compared to conventional FDA procedures. The FDA may withdraw Fast Track Designation if it believes that the designation is no longer supported by data from our clinical development program. Many drugs that have received Fast Track Designation have failed to obtain drug approval.

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A Breakthrough Therapy Designation by the FDA, even if granted for any of our product candidates, may not lead to a faster development or regulatory review or approval process, and does not increase the likelihood that our product candidates will receive marketing approval.

We do not currently have Breakthrough Therapy Designation for any of our product candidates but may seek such designation if we believe such a designation may be warranted. A Breakthrough Therapy is defined as a drug that is intended, alone or in combination with one or more other drugs, to treat a serious or life-threatening disease or condition, and preliminary clinical evidence indicates that the drug may demonstrate substantial improvement over existing therapies on one or more clinically significant endpoints, such as substantial treatment effects observed early in clinical development. For drugs that have been designated as Breakthrough Therapies, interaction and communication between the FDA and the sponsor can help to identify the most efficient path for development.

Designation as a Breakthrough Therapy is within the discretion of the FDA. Accordingly, even if we believe, after completing early clinical trials, that one of our product candidates meets the criteria for designation as a Breakthrough Therapy, the FDA may disagree and instead determine not to make such designation.

In any event, the receipt of a Breakthrough Therapy designation for a product candidate may not result in a faster development process, review or approval compared to drugs considered for approval under conventional FDA procedures and does not assure ultimate approval by the FDA. In addition, even if one or more of our product candidates qualify as Breakthrough Therapies, the FDA may later decide that such product candidates no longer meet the conditions for qualification.

Failure to obtain marketing approval in international jurisdictions would prevent our product candidates from being marketed abroad.

In order to market and sell our products in the European Union and many other jurisdictions, we or our third-party collaborators must obtain separate marketing approvals and comply with numerous and varying regulatory requirements. The approval procedure varies among countries and can involve additional testing and different criteria for approval. The time required to obtain approval may differ substantially from that required to obtain FDA approval. The regulatory approval process outside the United States generally includes all of the risks associated with obtaining FDA approval. In addition, in many countries outside the United States, it is required that the product be approved for reimbursement before the product can be approved for sale in that country.

We or these third parties may not obtain approvals from regulatory authorities outside the United States on a timely basis, if at all. Approval by the FDA does not ensure approval by regulatory authorities in other countries or jurisdictions, and approval by one regulatory authority outside the United States does not ensure approval by regulatory authorities in other countries or jurisdictions or by the FDA. In addition, failure to obtain approval in some countries or jurisdictions may prevent marketing authorizations from being considered in some other countries or jurisdictions. We may not be able to file for marketing approvals and may not receive necessary approvals to commercialize our products in any market.

Any product candidate for which we obtain marketing approval will be subject to extensive post-marketing regulatory requirements and could be subject to post-marketing restrictions or withdrawal from the market, and we may be subject to penalties if we fail to comply with regulatory requirements or if we experience unanticipated problems with our products, when and if any of them are approved.

Our product candidates and the activities associated with their development and commercialization, including their testing, manufacture, recordkeeping, labeling, storage, approval, advertising, promotion, sale and distribution, are subject to comprehensive regulation by the FDA and other regulatory authorities. These requirements include submissions of safety and other post-marketing information and reports, registration and listing requirements, current good manufacturing practices, or cGMP, requirements relating to manufacturing, quality control, quality assurance and corresponding maintenance of records and documents, including periodic inspections by the FDA and other regulatory authority, requirements regarding the distribution of samples to physicians and recordkeeping.

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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 use of their products and if we promote our products beyond their approved indications, we may be subject to enforcement action for off-label promotion. Violations of the Federal Food, Drug, and Cosmetic Act relating to the promotion of prescription drugs may lead to investigations alleging violations of federal and state healthcare 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:

· restrictions on such products, manufacturers or manufacturing processes;

· restrictions on the labeling or marketing of a product;

· restrictions on product distribution or use;

· requirements to conduct post-marketing studies or clinical trials;

· warning or untitled letters;

· withdrawal of the products from the market;

· refusal to approve pending applications or supplements to approved applications that we submit;

· recall of products;

· fines, restitution or disgorgement of profits or revenues;

· suspension or withdrawal of marketing approvals;

· refusal to permit the import or export of our products;

· product seizure; or

· injunctions or the imposition of civil or criminal penalties.

Non-compliance with European Union requirements regarding safety monitoring or pharmacovigilance, and with requirements related to the development of products for the pediatric population, can also result in significant financial penalties. Similarly, failure to comply with the European Union’s requirements regarding the protection of personal information can also lead to significant penalties and sanctions.

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Our relationships with customers and third-party payors will be subject to applicable anti-kickback, fraud and abuse and other healthcare laws and regulations, which could expose us to criminal sanctions, civil penalties, contractual damages, reputational harm and diminished profits and future earnings.

Healthcare providers, physicians and third-party payors will play a primary role in the recommendation and prescription of any product candidates for which we obtain marketing approval. Our future arrangements with third-party payors and customers may expose us to broadly applicable fraud and abuse and other healthcare laws and regulations that may constrain the business or financial arrangements and relationships through which we market, sell and distribute any products for which we obtain marketing approval. Restrictions under applicable federal and state healthcare laws and regulations include the following:

· the federal Anti-Kickback Statute prohibits, among other things, persons from knowingly and willfully soliciting, offering, receiving or providing remuneration, directly or indirectly, in cash or in kind, to induce or reward, or in return for, either the referral of an individual for, or the purchase, order or recommendation of, any good or service, for which payment may be made under a federal healthcare program such as Medicare and Medicaid;

· the federal False Claims Act imposes criminal and civil penalties, including civil whistleblower or qui tam actions, against individuals or entities for knowingly presenting, or causing to be presented, to the federal government, claims for payment that are false or fraudulent or making a false statement to avoid, decrease or conceal an obligation to pay money to the federal government;

· the federal Health Insurance Portability and Accountability Act of 1996, or HIPAA, imposes criminal and civil liability for executing a scheme to defraud any healthcare benefit program or making false statements relating to healthcare matters;

· HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act and its implementing regulations, also imposes obligations, including mandatory contractual terms, with respect to safeguarding the privacy, security and transmission of individually identifiable health information;

· federal law requires applicable manufacturers of covered drugs to report payments and other transfers of value to physicians and teaching hospitals, which includes data collection and reporting obligations. The information is to be made publicly available on a searchable website in September 2014; and

· analogous state and foreign laws and regulations, such as state anti-kickback and false claims laws, may apply to sales or marketing arrangements and claims involving healthcare items or services reimbursed by non-governmental third-party payors, including private insurers.

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Some state laws require pharmaceutical companies to comply with the pharmaceutical industry’s voluntary compliance guidelines and the relevant compliance guidance promulgated by the federal government and may require drug manufacturers to report information related to payments and other transfers of value to physicians and other healthcare providers or marketing expenditures. State and foreign laws also govern the privacy and security of health information in some circumstances, many of which differ from each other in significant ways and often are not preempted by HIPAA, thus complicating compliance efforts.

Efforts to ensure that our 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 may not comply with current or future statutes, regulations or case law involving applicable fraud and abuse or other healthcare laws and regulations. If our operations are found to be in violation of any of these laws or any other governmental regulations that may apply to us, we may be subject to significant civil, criminal and administrative penalties, damages, fines, imprisonment, exclusion of products from government funded healthcare programs, such as Medicare and Medicaid, and the curtailment or restructuring of our operations. If any of the physicians or other healthcare providers or entities with whom we expect to do business is found to be not in compliance with applicable laws, they may be subject to criminal, civil or administrative sanctions, including exclusions from government funded healthcare programs.

Recently enacted and future legislation may increase the difficulty and cost for us to obtain marketing approval of and commercialize our product candidates 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 prevent or delay marketing approval of our product candidates, restrict or regulate post-approval activities and affect our ability to profitably sell any product candidates for which we obtain marketing approval.

In the United States, the Medicare Prescription Drug, Improvement, and Modernization Act of 2003, or the MMA, changed the way Medicare covers and pays for pharmaceutical products. The legislation expanded Medicare coverage for drug purchases by the elderly and introduced a new reimbursement methodology based on average sales prices for physician-administered drugs. In addition, this legislation provided authority for limiting the number of drugs that will be covered in any therapeutic class. Cost reduction initiatives and other provisions of this legislation could decrease the coverage and price that we receive for any approved products. While the MMA only applies to drug benefits for Medicare beneficiaries, private payors often follow Medicare coverage policy and payment limitations in setting their own reimbursement rates. Therefore, any reduction in reimbursement that results from the MMA may result in a similar reduction in payments from private payors.

More recently, in March 2010, President Obama signed into law the Patient Protection and Affordable Care Act, as amended by the Health Care and Education Affordability Reconciliation Act, or collectively the PPACA, a sweeping law intended 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 the healthcare and health insurance industries, impose new taxes and fees on the health industry and impose additional health policy reforms.

Among the provisions of the PPACA of importance to our potential product candidates are the following:

· an annual, nondeductible fee on any entity that manufactures or imports specified branded prescription drugs and biologic agents;

· an increase in the statutory minimum rebates a manufacturer must pay under the Medicaid Drug Rebate Program;

· expansion of healthcare fraud and abuse laws, including the False Claims Act and the Anti-Kickback Statute, new government investigative powers, and enhanced penalties for noncompliance;

· a new Medicare Part D coverage gap discount program, in which manufacturers must agree to offer 50% point-of-sale discounts off negotiated prices;

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· extension of manufacturers’ Medicaid rebate liability;

· expansion of eligibility criteria for Medicaid programs;

· expansion of the entities eligible for discounts under the Public Health Service pharmaceutical pricing program;

· new requirements to report financial arrangements with physicians and teaching hospitals;

· a new requirement to annually report drug samples that manufacturers and distributors provide to physicians; and

· a new Patient-Centered Outcomes Research Institute to oversee, identify priorities in, and conduct comparative clinical effectiveness research, along with funding for such research.

In addition, other legislative changes have been proposed and adopted since the PPACA was enacted. These changes included aggregate reductions to Medicare payments to providers of up to 2% per fiscal year, starting in 2013. In January 2013, President Obama signed into law the American Taxpayer Relief Act of 2012, which, among other things, 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. These new laws may result in additional reductions in Medicare and other healthcare funding.

We expect that the PPACA, as well as other healthcare reform measures that may be adopted in the future, may result in more rigorous coverage criteria and in additional downward pressure on the price that we receive for any approved product. Any reduction in reimbursement from Medicare or other government programs may result in a similar reduction in payments from private payors. The implementation of cost containment measures or other healthcare reforms may prevent us from being able to generate revenue, attain profitability, or commercialize our products.

Legislative and regulatory proposals have been made to expand post-approval requirements and restrict sales and promotional activities for pharmaceutical products. We cannot be sure whether additional legislative changes will be enacted, or whether the FDA regulations, guidance or interpretations will be changed, or what the impact of such changes on the marketing approvals of our product candidates, if any, may be. In addition, increased scrutiny by the U.S. Congress of the FDA’s approval process may significantly delay or prevent marketing approval, as well as subject us to more stringent product labeling and post-marketing testing and other requirements.

Governments outside the United States tend to impose strict price controls, which may adversely affect our revenues, if any.

In some countries, particularly the countries of the European Union, the pricing of prescription pharmaceuticals is subject to governmental control. In these countries, pricing negotiations with governmental authorities can take considerable time after the receipt of marketing approval for a product. To obtain reimbursement or pricing approval in some countries, we may be required to conduct a clinical trial that compares the cost-effectiveness of our product candidate to other available therapies. If reimbursement of our products is unavailable or limited in scope or amount, or if pricing is set at unsatisfactory levels, our business could be harmed, possibly materially.

If we fail to comply with environmental, health and safety laws and regulations, we could become subject to fines or penalties or incur costs that could harm our business.

We are subject to numerous environmental, health and safety laws and regulations, including those governing laboratory procedures and the handling, use, storage, treatment and disposal of hazardous materials and wastes. Our operations involve the use of hazardous and flammable materials, including chemicals and biological materials. Our operations also produce hazardous waste products. We generally contract with third parties for the disposal of these materials and wastes. We cannot eliminate the risk of contamination or injury from these materials. In the event of contamination or injury resulting from our use of hazardous materials, we could be held liable for any resulting damages, and any liability could exceed our resources. We also could incur significant costs associated with civil or criminal fines and penalties for failure to comply with such laws and regulations.

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Although we maintain workers’ compensation insurance to cover us for costs and expenses we may incur due to injuries to our employees resulting from the use of hazardous materials, this insurance may not provide adequate coverage against potential liabilities. We do not maintain insurance for environmental liability or toxic tort claims that may be asserted against us in connection with our storage or disposal of biological, hazardous or radioactive materials.

In addition, we may incur substantial costs in order to comply with current or future environmental, health and safety laws and regulations. These current or future laws and regulations may impair our discovery, preclinical development or production efforts. Our failure to comply with these laws and regulations also may result in substantial fines, penalties or other sanctions.

Risks Related to Our Dependence on Third Parties

Our existing discovery collaboration with Array is important to our business. If we are unable to maintain this collaboration, or if this collaboration is not successful, our business could be adversely affected.

On July 3, 2013, we entered into a Drug Discovery Collaboration Agreement with Array, which was subsequently amended on November 26, 2013, April 10, 2014, October 13, 2014, and March 31, 2015 or the Array Agreement. Pursuant to the Array Agreement, Array agreed to design, conduct and perform research and preclinical testing for certain compounds that we select, including LOXO-101, targeted at TRKA, TRKB and TRKC, and identify IND candidates for TRK and other targets, while undertaking manufacturing activities sufficient to conduct Phase 1 clinical trials for a subset of these programs.

Array granted us exclusive licenses worldwide, for clinical and commercial development of these compounds. Array has an obligation to test targets during our discovery phase, but we cannot be certain that our collaboration will lead to the discovery of any additional product candidates beyond LOXO-101 or that any of these product candidates will be successfully commercialized and developed. We and Array jointly own the intellectual property developed by the combined efforts of both our employees, and we each retain ownership of intellectual property that we develop independently pursuant to the collaboration. Array has granted us an exclusive license under all intellectual property for our product candidates.

Because we currently rely on Array for a substantial portion of our discovery and preclinical capabilities, including reliance on employees of Array whom we fund to conduct preclinical development of our product candidates pursuant to the Array Agreement, if Array delays or fails to perform its obligations under the Array Agreement, disagrees with our interpretation of the terms of the collaboration or our discovery plan or terminates the Array Agreement, our pipeline of product candidates would be adversely affected. In addition, we rely on Array’s expertise in drug discovery and preclinical testing, and our results will suffer if the Array employees who conduct work on our behalf lack expertise in this area. In some cases, Array subcontracts and hires consultants to conduct work on our program. If these subcontractors or consultants fail to perform their obligations as agreed, our program could suffer. Array may also fail to properly maintain or defend the intellectual property we have licensed from them, or even infringe upon, our intellectual property rights, leading to the potential invalidation of our intellectual property or subjecting us to litigation or arbitration, any of which would be time-consuming and expensive. Additionally, in the event that Array commits a material breach of the Array Agreement, our only recourse is to terminate the collaboration. If we terminate our collaboration with Array, especially during our discovery phase, the development of our product candidates would be materially delayed or harmed. Furthermore, we are dependent on the success of Array’s business. If Array continues to be unprofitable and if it is unsuccessful in retaining employees or obtaining future financing, we would need to identify a new collaboration partner for discovery and preclinical development. If we are unsuccessful or significantly delayed in identifying a new collaboration partner, or unable to reach an agreement with such a partner on commercially reasonable terms, development for our pipeline of products will suffer and our business would be materially harmed.

Furthermore, if Array changes its strategic focus, or if external factors cause it to divert resources from our collaboration, or if it independently develops products that compete directly or indirectly with our product candidates using resources it acquires from our collaboration, our business and results of operations could suffer. For example, while Array has granted us a license for compounds designed to target at least two of the three known TRK kinases. Array has retained ownership and rights to development of compounds targeting only one TRK kinase. We were notified by Array regarding their efforts and use of third parties for the development and/or commercialization of compounds that selectively modulate TRKA for oncology indications. We have not elected to be a third party partner for such efforts, as permitted under our collaboration agreement with Array. If Array or its partners develop such compounds in direct competition with our product candidates, our business would be adversely impacted.

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Future discovery and preclinical development collaborations may be important to us. If we are unable to maintain these collaborations, or if these collaborations are not successful, our business could be adversely affected.

For some of our product candidates, we may in the future determine to collaborate with pharmaceutical and biotechnology companies for development of products. We face significant competition in seeking appropriate collaborators. Our ability to reach a definitive agreement for any collaboration will depend, among other things, upon our assessment of the collaborator’s resources and expertise, the terms and conditions of the proposed collaboration and the proposed collaborator’s evaluation of a number of factors. If we are unable to reach agreements with suitable collaborators on a timely basis, on acceptable terms, or at all, we may have to curtail the development of a product candidate, reduce or delay its development program or one or more of our other development programs, delay its potential development schedule or reduce the scope of research activities, or increase our expenditures and undertake discovery or preclinical development activities at our own expense. If we fail to enter into collaborations and do not have sufficient funds or expertise to undertake the necessary development activities, we may not be able to further develop our product candidates or continue to develop our product candidates and our business may be materially and adversely affected.

Future collaborations we may enter into may involve the following risks:

· collaborators may have significant discretion in determining the efforts and resources that they will apply to these collaborations;

· collaborators may not perform their obligations as expected;

· changes in the collaborators’ strategic focus or available funding, or external factors, such as an acquisition, may divert resources or create competing priorities;

· collaborators may delay discovery and preclinical development, provide insufficient funding for product development of targets selected by us, stop or abandon discovery and preclinical development for a product candidate, repeat or conduct new discovery and preclinical development for a product candidate;

· collaborators could independently develop, or develop with third parties, products that compete directly or indirectly with our products or product candidates if the collaborators believe that competitive products are more likely to be successfully developed than ours;

· product candidates discovered in collaboration with us may be viewed by our collaborators as competitive with their own product candidates or products, which may cause collaborators to cease to devote resources to the development of our product candidates;

· disagreements with collaborators, including disagreements over proprietary rights, contract interpretation or the preferred course of development, might cause delays or termination of the discovery, preclinical development or commercialization of product candidates, might lead to additional responsibilities for us with respect to product candidates, or might result in litigation or arbitration, any of which would be time-consuming and expensive;

· collaborators may not properly maintain or defend our intellectual property rights or intellectual property rights licensed to us or may use our proprietary information in such a way as to invite litigation that could jeopardize or invalidate our intellectual property or proprietary information or expose us to potential litigation;

· collaborators may infringe the intellectual property rights of third parties, which may expose us to litigation and potential liability; and

· collaborations may be terminated for the convenience of the collaborator and, if terminated, we could be required to raise additional capital to pursue further development or commercialization of the applicable product candidates.

Additionally, subject to its contractual obligations to us, if a collaborator of ours is involved in a business combination, the collaborator might deemphasize or terminate the development of any of our product candidates. If one of our collaborators terminates its agreement with us, we may find it more difficult to attract new collaborators and our perception in the business and financial communities could be adversely affected.

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If we are unable to maintain our collaborations, development of our product candidates could be delayed and we may need additional resources to develop them. All of the risks relating to product development, regulatory approval and commercialization described in this prospectus also apply to the activities of our collaborators.

We expect to rely on third-party contractors and organizations to conduct our clinical trials, and those third parties may not perform satisfactorily, including failing to meet deadlines for the completion of such trials.

We will rely on third-party clinical research contractors and organizations, to conduct our ongoing clinical trials of LOXO-101; and we will rely on third party contractors, clinical data management organizations, independent contractors, medical institutions and clinical investigators to conduct our clinical trials beyond our current trials, and for our clinical trials for other development molecules. These agreements may terminate for a variety of reasons, including a failure to perform by the third parties. If we needed to enter into alternative arrangements, our product development activities could be delayed.

We compete with many other companies, some of which may be our competitors, for the resources of these third parties. Large pharmaceutical companies often have significantly more extensive agreements and relationships with such third-party providers, and such third-party providers may prioritize the requirements of such large pharmaceutical companies over ours. The third parties on whom we rely may terminate their engagements with us at any time, which may cause delay in the development and commercialization of our product candidates. If any such third party terminates its engagement with us or fails to perform as agreed, we may be required to enter into alternative arrangements, which would result in significant cost and delay to our product development program. Moreover, our agreements with such third parties generally do not provide assurances regarding employee turnover and availability, which may cause interruptions in the research on our product candidates by such third parties.

Our reliance on these third parties to conduct our clinical trials will reduce our control over these activities but will not relieve us of our responsibilities. For example, we will remain responsible for ensuring that each of our clinical trials is conducted in accordance with the general investigational plan and protocols for the trial. Moreover, the FDA and other regulatory authorities require us to comply with standards, commonly referred to as good clinical practices, or GCPs, for conducting, recording and reporting the results of clinical trials to assure that data and reported results are credible and accurate and that the rights, integrity and confidentiality of trial participants are protected. We are also required to register ongoing clinical trials and post the results of completed clinical trials on a government-sponsored database, ClinicalTrials.gov, within specified timeframes. Failure to do so can result in fines, adverse publicity and civil and criminal sanctions.

Additionally, we expect to rely substantially on third-party data managers for our clinical trial data. There is no assurance that these third parties will not make errors in the design, management or retention of our data or data systems. There is no assurance that these third parties will pass FDA or other regulatory audits, which could delay or prevent regulatory approval.

If these third parties do not successfully carry out their contractual duties, meet expected deadlines or conduct our clinical trials in accordance with regulatory requirements or our stated protocols, we will not be able to obtain, or may be delayed in obtaining, marketing approvals for our product candidates and will not be able to, or may be delayed in our efforts to, successfully commercialize our product candidates.

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We contract with third parties for the manufacture of our product candidates for preclinical and clinical testing and expect to continue to do so for commercialization. This reliance on third parties increases the risk that we will not have sufficient quantities of our product candidates or products at an acceptable cost and quality, which could delay, prevent or impair our development or commercialization efforts.

We do not own or operate facilities for the manufacture of our product candidates, and we do not have any manufacturing personnel. We currently have no plans to build our own clinical or commercial scale manufacturing capabilities. We rely, and expect to continue to rely, on third parties, including Array, for the manufacture of our product candidates for preclinical and clinical testing. We will rely on third parties as well for commercial manufacture if any of our product candidates receive marketing approval. This reliance on third parties increases the risk that we will not have sufficient quantities of our product candidates or products or such quantities at an acceptable cost or quality, which could delay, prevent or impair our development or commercialization efforts.

Any performance failure on the part of our existing or future manufacturers could delay clinical development or marketing approval.

The formulation used in early studies is not a final formulation for commercialization. Additional, changes may be required by the FDA or other regulatory authorities on specifications and storage conditions. These may require additional studies, and may delay our clinical trials.

We expect to rely on third-party manufacturers or third-party collaborators for the manufacture of commercial supply of any other product candidates for which our collaborators or we obtain marketing approval.

We also expect to rely on other third parties to store and distribute drug supplies for our clinical trials. Any performance failure on the part of our distributors could delay clinical development or marketing approval of our product candidates or commercialization of our products, producing additional losses and depriving us of potential product revenue.

We may be unable to establish any agreements with third-party manufacturers or to do so on acceptable terms. Even if we are able to establish agreements with third-party manufacturers, reliance on third-party manufacturers entails additional risks, including:

· reliance on the third party for regulatory compliance and quality assurance;

· the possible breach of the manufacturing agreement by the third party;

· the possible misappropriation of our proprietary information, including our trade secrets and know-how; and

· the possible termination or nonrenewal of the agreement by the third party at a time that is costly or inconvenient for us.

Third-party manufacturers may not be able to comply with cGMP regulations or similar regulatory requirements outside the United States. Our failure, or the failure of our third-party manufacturers, to comply with applicable regulations could result in sanctions being imposed on us, including clinical holds, fines, injunctions, civil penalties, delays, suspension or withdrawal of approvals, license revocation, seizures or recalls of product candidates or products, operating restrictions and criminal prosecutions, any of which could significantly and adversely affect supplies of our products.

Our product candidates and any products that we may develop may compete with other product candidates and products for access to manufacturing facilities. There are a limited number of manufacturers that operate under cGMP regulations and that might be capable of manufacturing for us.

Our current and anticipated future dependence upon others for the manufacture of our product candidates or products may adversely affect our future profit margins and our ability to commercialize any products that receive marketing approval on a timely and competitive basis.

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Risks Related to the Commercialization of Our Product Candidates

Even if any of our product candidates receives marketing approval, it may fail to achieve the degree of market acceptance by physicians, patients, third-party payors and others in the medical community necessary for commercial success.

If any of our product candidates receives marketing approval, it may nonetheless fail to gain sufficient market acceptance by physicians, patients, third-party payors and others in the medical community. For example, current cancer treatments like chemotherapy and radiation therapy are well established in the medical community, and doctors may continue to rely on these treatments to the exclusion of our product candidates. In addition, physicians, patients and third-party payors may prefer other novel products to ours. If our product candidates do not achieve an adequate level of acceptance, we may not generate significant product revenues and we may not become profitable. The degree of market acceptance of our product candidates, if approved for commercial sale, will depend on a number of factors, including:

· the efficacy and safety and potential advantages and disadvantages compared to alternative treatments;

· our ability to offer our products for sale at competitive prices;

· the convenience and ease of administration compared to alternative treatments;

· the willingness of the target patient population to try new therapies and of physicians to prescribe these therapies;

· the strength of our marketing and distribution support;

· the availability of third-party coverage and adequate reimbursement, including patient cost-sharing programs such as copays and deductibles;

· our ability to develop or partner with third-party collaborators to develop companion diagnostics;

· the prevalence and severity of any side effects; and

· any restrictions on the use of our products together with other medications.

We currently have no marketing and sales force. If we are unable to establish effective sales or marketing capabilities or enter into agreements with third parties to sell or market our product candidates, we may not be able to effectively sell or market our product candidates, if approved, or generate product revenues.

We currently do not have a marketing or sales team for the marketing, sales and distribution of any of our product candidates that are able to obtain regulatory approval. In order to commercialize any product candidates, we must build on a territory-by-territory basis marketing, sales, distribution, managerial and other non-technical capabilities or make arrangements with third parties to perform these services, and we may not be successful in doing so. If our product candidates receive regulatory approval, we intend to establish an internal sales or marketing team with technical expertise and supporting distribution capabilities to commercialize our product candidates, which will be expensive and time consuming and will require significant attention of our executive officers to manage. Any failure or delay in the development of our internal sales, marketing and distribution capabilities would adversely impact the commercialization of any of our products that we obtain approval to market. With respect to the commercialization of all or certain of our product candidates, we may choose to collaborate, either globally or on a territory-by-territory basis, with third parties that have direct sales forces and established distribution systems, either to augment our own sales force and distribution systems or in lieu of our own sales force and distribution systems. If we are unable to enter into such arrangements when needed on acceptable terms or at all, we may not be able to successfully commercialize any of our product candidates that receive regulatory approval or any such commercialization may experience delays or limitations. If we are not successful in commercializing our product candidates, either on our own or through collaborations with one or more third parties, our future product revenue will suffer and we may incur significant additional losses.

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We face substantial competition, which may result in others discovering, developing or commercializing competing products before or more successfully than we do.

The development and commercialization of new drug products is highly competitive. We face competition with respect to our current product candidates, and will face competition with respect to any product candidates that we may seek to develop or commercialize in the future, from major pharmaceutical companies, specialty pharmaceutical companies and biotechnology companies worldwide. There are a number of large pharmaceutical and biotechnology companies that currently market and sell products or are pursuing the development of products for the treatment of the disease indications for which we are developing our product candidates. Some of these competitive products and therapies are based on scientific approaches that are the same as or similar to our approach, and others are based on entirely different approaches. Potential competitors also include academic institutions, government agencies and other public and private research organizations that conduct research, seek patent protection and establish collaborative arrangements for research, development, manufacturing and commercialization.

Specifically, there are a large number of companies developing or marketing treatments for cancer, including many major pharmaceutical and biotechnology companies. In addition, many companies are developing cancer therapeutics that work by inhibiting multiple kinases that may directly compete with our lead product candidate and future product candidates. For LOXO-101, examples of such potential competitors include, Daiichi Sankyo and its subsidiary Plexxikon (PLX-7486), Tesaro (TSR-011), Ignyta (RXDX-101), Novartis AG (dovitinib), and Mirati (MGDC516). For RET, competitors may include Eisai (lenvatinib), Exelixis (cabozantinib), AstraZeneca (vandetanib), Ariad (ponatinib), Novartis (dovitinib), Roche (alectinib), Blueprint Medicines (no name yet), Pfizer (sunitinib). For FGFR, competitors may include J&J (JNJ- 42756493), Novartis (BGJ-398, dovitinib), AstraZeneca (AZD4547), Clovis Oncology (lucitinib), Chugai (CH5183284), Bayer (BAY 1163877, BAY 1179470), Lilly (LY2874455), Eisai (E7090), Taiho (TAS-120), BI (Nintedanib), Ariad (ponatinib), FivePrime (FP-1039, FPA144), Incyte (INCB54828), ArQule (ARQ087), BioClinica (MFGR1877S), Principia (PRN1371), Blueprint Medicines (BLU-554). For FLT3 competitors may include, Daiichi Sankyo (quizartinib, PLX3397), Arog (crenolanib), Novartis (midostaurin), CTI BioPharma (pacritinib), Takeda (TAK-659), Flexus (FLX925), Astellas (ASP2215).

Our commercial opportunity could be reduced or eliminated if our competitors develop and commercialize products that are safer, more effective, have fewer or less severe side effects, are more convenient or are less expensive than any products that we may develop. Our competitors also may obtain FDA or other regulatory approval for their products more rapidly than we may obtain approval for ours, which could result in our competitors establishing a strong market position before we are able to enter the market and or slow our regulatory approval. In addition, our ability to compete may be affected in many cases by insurers or other third-party payers seeking to encourage the use of generic products. Generic products are currently on the market for the indications that we are pursuing, and additional products are expected to become available on a generic basis over the coming years. If our product candidates achieve marketing approval, we expect that they will be priced at a significant premium over competitive generic products.

Many of the companies against which we are competing or against which we may compete in the future have significantly greater financial resources and expertise in research and development, manufacturing, preclinical testing, conducting clinical trials, obtaining regulatory approvals and marketing approved products than we do. Mergers and acquisitions in the pharmaceutical and biotechnology industries may result in even more resources being concentrated among a smaller number of our competitors. Smaller and other early-stage companies may also prove to be significant competitors, particularly through collaborative arrangements with large and established companies. These third parties compete with us in recruiting and retaining qualified scientific and management personnel, establishing clinical trial sites and patient registration for clinical trials, as well as in acquiring technologies complementary to, or necessary for, our programs.

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The insurance coverage and reimbursement status of newly approved products is uncertain. Failure to obtain or maintain adequate coverage and reimbursement for new or current products could limit our ability to market those products and decrease our ability to generate revenue.

The availability and extent of reimbursement by governmental and private payors is essential for most patients to be able to afford expensive treatments. Sales of our product candidates will depend substantially, both domestically and abroad, on the extent to which the costs of our product candidates will be paid by health maintenance, managed care, pharmacy benefit and similar healthcare management organizations, or reimbursed by government health administration authorities, private health coverage insurers and other third-party payors. If reimbursement is not available, or is available only to limited levels, we may not be able to successfully commercialize our product candidates. Even if coverage is provided, the approved reimbursement amount may not be high enough to allow us to establish or maintain pricing sufficient to realize a sufficient return on our investment.

There is significant uncertainty related to the insurance coverage and reimbursement of newly approved products. In the United States, the principal decisions about reimbursement for new medicines are typically made by the Centers for Medicare & Medicaid Services, or CMS, an agency within the U.S. Department of Health and Human Services, as CMS decides whether and to what extent a new medicine will be covered and reimbursed under Medicare. Private payors tend to follow CMS to a substantial degree. It is difficult to predict what CMS will decide with respect to reimbursement for fundamentally novel products such as ours, as there is no body of established practices and precedents for these new products. Reimbursement agencies in Europe may be more conservative than CMS.

For example, a number of cancer drugs have been approved for reimbursement in the United States and have not been approved for reimbursement in certain European countries. Outside the United States, international operations are generally subject to extensive governmental price controls and other market regulations, and we believe the increasing emphasis on cost-containment initiatives in Europe, Canada, and other countries has and will continue to put pressure on the pricing and usage of our product candidates. In many countries, the prices of medical products are subject to varying price control mechanisms as part of national health systems. In general, the prices of medicines under such systems are substantially lower than in the United States. Other countries allow companies to fix their own prices for medicines, but monitor and control company profits. Additional foreign price controls or other changes in pricing regulation could restrict the amount that we are able to charge for our product candidates. Accordingly, in markets outside the United States, the reimbursement for our products may be reduced compared with the United States and may be insufficient to generate commercially reasonable revenues and profits.

Moreover, increasing efforts by governmental and third-party payors, in the United States and abroad, to cap or reduce healthcare costs may cause such organizations to limit both coverage and level of reimbursement for new products approved and, as a result, they may not cover or provide adequate payment for our product candidates. We expect to experience pricing pressures in connection with the sale of any of our product candidates, due to the trend toward managed healthcare, the increasing influence of health maintenance organizations and additional legislative changes. The downward pressure on healthcare costs in general, particularly prescription drugs and surgical procedures and other treatments, has become very intense. As a result, increasingly high barriers are being erected to the entry of new products into the healthcare market.

In addition to CMS and private payors, professional organizations such as the National Comprehensive Cancer Network and the American Society of Clinical Oncology can influence decisions about reimbursement for new medicines by determining standards for care. In addition, many private payors contract with commercial vendors who sell software that provide guidelines that attempt to limit utilization of, and therefore reimbursement for, certain products deemed to provide limited benefit to existing alternatives. Such organizations may set guidelines that limit reimbursement or utilization of our products.

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

We face an inherent risk of product liability exposure related to the testing of our product candidates in human clinical trials and will face an even greater risk if we commercially sell any products that we may develop. If we cannot successfully defend ourselves against claims that our product candidates or products caused injuries, we will incur substantial liabilities. Regardless of merit or eventual outcome, liability claims may result in:

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· decreased demand for any product candidates or products that we may develop;

· injury to our reputation and significant negative media attention;

· withdrawal of clinical trial participants;

· significant costs to defend the related litigation;

· substantial monetary awards to trial participants or patients;

· loss of revenue;

· reduced resources of our management to pursue our business strategy; and

· the inability to commercialize any products that we may develop.

We currently hold $5 million in product liability insurance coverage in the aggregate, with a per incident limit of $5 million, which may not be adequate to cover all liabilities that we may incur. We may need to increase our insurance coverage as we expand our clinical trials or if we commence commercialization of our product candidates. Insurance coverage is increasingly expensive. We may not be able to maintain insurance coverage at a reasonable cost or in an amount adequate to satisfy any liability that may arise.

Risks Related to Our Intellectual Property

If we are unable to obtain and maintain intellectual property protection for our technology and products, or if the scope of the intellectual property protection obtained is not sufficiently broad, our competitors could develop and commercialize technology and products similar or identical to ours, and our ability to successfully commercialize our technology and products may be impaired.

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 our proprietary technology and products, including any companion diagnostic developed by us or a third-party collaborator. We seek to protect our proprietary position by filing patent applications in the United States and abroad related to our novel technologies and product candidates. Our patent portfolio includes patents and patent applications we exclusively licensed from Array as well as exclusive worldwide licenses for all therapeutic indications for new intellectual property developed in our Array collaboration. This patent portfolio includes issued patents and pending patent applications covering compositions of matter and methods of use.

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. We may choose not to seek patent protection for certain innovations and may choose not to pursue patent protection in certain jurisdictions, and under the laws of certain jurisdictions, patents or other intellectual property rights may be unavailable or limited in scope. It is also possible that we will fail to identify patentable aspects of our discovery and preclinical development output before it is too late to obtain patent protection. Moreover, in some circumstances, we do not have the right to control the preparation, filing and prosecution of patent applications, or to maintain the patents, covering technology that we license from third parties. Therefore, these patents and applications may not be prosecuted and enforced in a manner consistent with the best interests of 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 United States. For example, India and China do not allow patents for methods of treating the human body. Publications of discoveries in the 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.

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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 U.S. patent law. These include provisions that affect the way patent applications are prosecuted and may also affect patent litigation. The U.S. Patent and Trademark Office, or U.S. PTO, 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 a material adverse effect on our business and financial condition.

Moreover, we may be subject to a third-party preissuance submission of prior art to the U.S. PTO, 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. Even if our owned and licensed patent applications issue as patents, they may not issue in a form that will provide us with any meaningful protection, prevent competitors from competing with us or otherwise provide us with any competitive advantage. Our competitors may be able to circumvent our owned or licensed patents by developing similar or alternative technologies or products in a non-infringing manner.

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. 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.

The risks described elsewhere pertaining to our patents and other intellectual property rights also apply to the intellectual property rights that we license, and any failure to obtain, maintain and enforce these rights could have a material adverse effect on our business. In some cases we may not have control over the prosecution, maintenance or enforcement of the patents that we license, and our licensors may fail to take the steps that we believe are necessary or desirable in order to obtain, maintain and enforce the licensed patents. Any inability on our part to protect adequately our intellectual property may have a material adverse effect on our business, operating results and financial position.

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, renewal fees, annuity fees and various other governmental fees on patents and/or applications will be due to be paid to the U.S. PTO and various governmental patent agencies outside of the United States in several stages over the lifetime of the patents and/or applications. We have systems in place to remind us to pay these fees, and we employ an outside firm and rely on our outside counsel to pay these fees due to non-U.S. patent agencies. The U.S. PTO and various non-U.S. governmental patent agencies require compliance with a number of procedural, documentary, fee payment and other similar provisions during the patent application process.

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We employ reputable law firms and other professionals to help us comply, and in many cases, an inadvertent lapse can be cured by payment of a late fee or by other means in accordance with the applicable rules.

However, there are situations in which non-compliance 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. In such an event, our competitors might be able to enter the market and this circumstance would have a material adverse effect on our business.

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

Because competition in our industry is intense, competitors may infringe or otherwise violate our issued patents, patents of our licensors or other intellectual property. To counter infringement or unauthorized use, we may be required to file infringement claims, which can be expensive and time consuming. Any claims we assert against perceived infringers could provoke these parties to assert counterclaims against us alleging that we infringe their patents. In addition, in a patent infringement proceeding, a court may decide that a patent of ours is invalid or unenforceable, in whole or in part, construe the patent’s claims narrowly or 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 proceeding could put one or more of our patents at risk of being invalidated or interpreted narrowly. We may also elect to enter into license agreements in order to settle patent infringement claims or to resolve disputes prior to litigation, and any such license agreements may require us to pay royalties and other fees that could be significant. 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.

We may need to license certain intellectual property from third parties, and such licenses may not be available or may not be available on commercially reasonable terms.

A third party may hold intellectual property, including patent rights that are important or necessary to the development of our products. It may be necessary for us to use the patented or proprietary technology of third parties to commercialize our products, in which case we would be required to obtain a license from these third parties on commercially reasonable terms, or our business could be harmed, possibly materially. Although we believe that licenses to these patents are available from these third parties on commercially reasonable terms, if we were not able to obtain a license, or were not able to obtain a license on commercially reasonable terms, our business could be harmed, possibly materially.

Third parties may initiate legal proceedings alleging that we are infringing their intellectual property rights, the outcome of which would be uncertain and could have a material adverse effect on the success of our business.

Our commercial success depends upon our ability, and the ability of our collaborators, to develop, manufacture, market and sell our product candidates and use our proprietary technologies without infringing the proprietary rights of third parties. There is considerable intellectual property litigation in the biotechnology and pharmaceutical industries. We may become party to, or threatened with, future adversarial proceedings or litigation regarding intellectual property rights with respect to our products and technology, including interference or derivation proceedings before the U.S. PTO. Third parties may assert infringement claims against us based on existing patents or patents that may be granted in the future.

If we are found to infringe a third party’s intellectual property rights, we could be required to obtain a license from such third party to continue developing and marketing our products and technology. However, we may not be able to obtain any required license on commercially reasonable terms or at all. Even if we were able to obtain a license, it could be non-exclusive, thereby giving our competitors access to the same technologies licensed to us. We could be forced, including by court order, to cease commercializing the infringing technology or product. In addition, we could be found liable for monetary damages, including treble damages and attorneys’ fees if we are found to have willfully infringed a patent. A finding of infringement could prevent us from commercializing our product candidates or force us to cease some of our business operations, which could materially harm our business. Claims that we have misappropriated the confidential information or trade secrets of third parties could have a similar negative impact on our business.

We may not be successful in obtaining or maintaining necessary rights for our development pipeline through acquisitions and in-licenses.

Presently we have rights to intellectual property to develop our product candidates, including patents and patent applications we exclusively licensed from Array as well as exclusive worldwide licenses for all therapeutic indications for new intellectual property developed in our Array collaboration.

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Because our programs may involve additional product candidates that may require the use of proprietary rights held by third parties, the growth of our business may depend in part on our ability to acquire, in-license or use these proprietary rights. Additionally, a companion diagnostic may require that we or a third-party collaborator developing the diagnostic acquire use or proprietary rights held by third parties. We may be unable to acquire or in-license any compositions, methods of use, or other third-party intellectual property rights from third parties that we identify. The licensing and acquisition of third-party intellectual property rights is a competitive area, and a number of more established companies are also pursuing strategies to license or acquire third-party intellectual property rights that we may consider attractive. These established companies may have a competitive advantage over us due to their size, cash resources and greater clinical development and commercialization capabilities.

For example, we may collaborate with U.S. and foreign academic institutions to accelerate our discovery and preclinical development work under written agreements with these institutions. Typically, these institutions provide us with an option to negotiate a license to any of the institution’s rights in technology resulting from the collaboration. Regardless of such right of first negotiation for intellectual property, we may be unable to negotiate a license within the specified time frame or under terms that are acceptable to us. If we are unable to do so, the institution may offer the intellectual property rights to other parties, potentially blocking our ability to pursue our program.

In addition, companies that perceive us to be a competitor may be unwilling to assign or license rights to us. We also may be unable to license or acquire third-party intellectual property rights on terms that would allow us to make an appropriate return on our investment. If we are unable to successfully obtain rights to required third-party intellectual property rights, our business, financial condition and prospects for growth could suffer.

We may be subject to claims by third parties asserting that our employees or we have misappropriated their intellectual property, or claiming ownership of what we regard as our own intellectual property.

Many of our employees were previously employed at universities or other biotechnology or pharmaceutical companies, including our competitors or potential competitors. Although we try to ensure that our employees do not use the proprietary information or know-how of others in their work for us, we may be subject to claims that these employees or we have used or disclosed intellectual property, including trade secrets or other proprietary information, of any such employee’s former employer. Litigation may be necessary to defend against these claims.

In addition, while it is our policy to require our employees and contractors who may be involved in the development of intellectual property to execute agreements assigning such intellectual property to us, we may be unsuccessful in executing such an agreement with each party who in fact develops intellectual property that we regard as our own. Our and their assignment agreements may not be self-executing or may be breached, and we may be forced to bring claims against third parties, or defend claims they may bring against us, to determine the ownership of what we regard as our intellectual property.

If we fail in prosecuting or defending any such claims, in addition to paying monetary damages, we may lose valuable intellectual property rights or personnel. Even if we are successful in prosecuting or defending against such claims, litigation could result in substantial costs and be a distraction to management.

If we are unable to protect the confidentiality of our trade secrets, our business and competitive position would be harmed.

In addition to seeking patents for some of our technology and product candidates, we also rely on trade secrets, including unpatented know-how, technology and other proprietary information, to maintain our competitive position. We seek to protect these trade secrets, in part, by entering into non-disclosure and confidentiality agreements with parties who have access to them, such as our employees, corporate collaborators, outside scientific collaborators, contract manufacturers, consultants, advisors and other third parties. We seek to protect our confidential proprietary information, in part, by entering into confidentiality and invention or patent assignment agreements with our employees and consultants, however, we cannot be certain that such agreements have been entered into with all relevant parties. Moreover, to the extent we enter into such agreements, any of these parties may breach the agreements and disclose our proprietary information, including our trade secrets, and we may not be able to obtain adequate remedies for such breaches. Enforcing a claim that a party illegally disclosed or misappropriated a trade secret is difficult, expensive and time-consuming, and the outcome is unpredictable. In addition, some courts inside and outside the United States are less willing or unwilling to protect trade secrets. If any of our trade secrets were to be lawfully obtained or independently developed by a competitor, we would have no right to prevent them, or those to whom they communicate it, from using that technology or information to compete with us. If any of our trade secrets were to be disclosed to or independently developed by a competitor, our competitive position would be harmed.

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Risks Related to Employee Matters, Managing Growth and Macroeconomic Conditions

We currently have a limited number of employees, are highly dependent on our Chief Executive Officer and our future success depends on our ability to retain key executives and to attract, retain and motivate qualified personnel.

We are an early-stage clinical development company with a limited operating history and, as of September 30, 2015, had only fifteen employees and three executive officers. We are highly dependent on the research and development, clinical and business development expertise of Joshua H. Bilenker, M.D. our President and Chief Executive Officer, as well as the other principal members of our management, scientific and clinical team. Although we have entered into employment letter agreements with our executive officers, each of them may terminate their employment with us at any time. We do not maintain “key person” insurance for any of our executives or other employees.

Recruiting and retaining qualified scientific, clinical, manufacturing and sales and marketing personnel will also be critical to our success. The loss of the services of our executive officers or other key employees could impede the achievement of our research, development and commercialization objectives and seriously harm our ability to successfully implement our business strategy. Furthermore, replacing executive officers and key employees may be difficult and may take an extended period of time because of the limited number of individuals in our industry with the breadth of skills and experience required to successfully develop, gain regulatory approval of and commercialize products. Competition to hire from this limited pool is intense, and we may be unable to hire, train, retain or motivate these key personnel on acceptable terms given the competition among numerous pharmaceutical and biotechnology companies for similar personnel. We also experience competition for the hiring of scientific and clinical personnel from universities and research institutions. In addition, we rely on consultants and advisors, including scientific and clinical advisors, to assist us in formulating our discovery and preclinical development and commercialization strategy. Our consultants and advisors may be employed by employers other than us and may have commitments under consulting or advisory contracts with other entities that may limit their availability to us. If we are unable to continue to attract and retain high quality personnel, our ability to pursue our growth strategy will be limited.

We expect to expand our development and regulatory capabilities and potentially implement sales, marketing and distribution capabilities, and as a result, we may encounter difficulties in managing our growth, which could disrupt our operations.

We expect to experience significant growth in the number of our employees and the scope of our operations, particularly in the areas of drug development, regulatory affairs and, if any of our product candidates receives marketing approval, sales, marketing and distribution. To manage our anticipated future growth, we must continue to implement and improve our managerial, operational and financial systems, expand our facilities and continue to recruit and train additional qualified personnel. Due to our limited financial resources and the limited experience of our management team in managing a company with such anticipated growth, we may not be able to effectively manage the expansion of our operations or recruit and train additional qualified personnel. The expansion of our operations may lead to significant costs and may divert our management and business development resources. Any inability to manage growth could delay the execution of our business plans or disrupt our operations.

Unfavorable global economic conditions could adversely affect our business, financial condition or results of operations.

Our results of operations could be adversely affected by general conditions in the global economy and in the global financial markets. The recent global financial crisis caused extreme volatility and disruptions in the capital and credit markets. A severe or prolonged economic downturn, such as the recent global financial crisis, could result in a variety of risks to our business, including our ability to raise additional capital when needed on acceptable terms, if at all. This is particularly true in Europe, which is undergoing a continued severe economic crisis. A weak or declining economy could also strain our suppliers, possibly resulting in supply disruption. Any of the foregoing could harm our business and we cannot anticipate all of the ways in which the current economic climate and financial market conditions could adversely impact our business.

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Failure to protect our information technology infrastructure against cyber-based attacks, network security breaches, service interruptions, or data corruption could significantly disrupt our operations and adversely affect our business and operating results.

We rely on information technology and telephone networks and systems, including the Internet, to process and transmit sensitive electronic information and to manage or support a variety of business processes and activities. We use enterprise information technology systems to record, process, and summarize financial information and results of operations for internal reporting purposes and to comply with regulatory financial reporting, legal, and tax requirements. Our information technology systems, some of which are managed by third-parties, such as those of our CROs, may be susceptible to damage, disruptions or shutdowns due to computer viruses, attacks by computer hackers, failures during the process of upgrading or replacing software, databases or components thereof, power outages, hardware failures, telecommunication failures, user errors or catastrophic events. Although we have developed systems and processes that are designed to protect proprietary or confidential information and prevent data loss and other security breaches, including systems and processes designed to reduce the impact of a security breach at a third party vendor, such measures cannot provide absolute security. If our systems are breached or suffer severe damage, disruption or shutdown and we are unable to effectively resolve the issues in a timely manner, our business and operating results may significantly suffer and we may be subject to litigation, government enforcement actions or potential liability. Security breaches could also cause us to incur significant remediation costs, result in product development delays, disrupt key business operations, including development of our product candidates, and divert attention of management and key information technology resources.

Risks Related to Our Common Stock

Our executive officers, directors and principal stockholders, if they choose to act together, will continue to have the ability to control all matters submitted to stockholders for approval.

As of September 30, 2015, our executive officers and directors, combined with our stockholders who individually own more than 5% of our outstanding common stock, in the aggregate, beneficially owned shares representing approximately 70.6% of our capital stock. As a result, if these stockholders were to choose to act together, they would be able to control all matters submitted to our stockholders for approval, as well as our management and affairs. For example, these persons, if they choose to act together, would control the election of directors and approval of any merger, consolidation or sale of all or substantially all of our assets. This concentration of ownership control may:

· delay, defer or prevent a change in control;

· entrench our management and the board of directors; or

· impede a merger, consolidation, takeover or other business combination involving us that other stockholders may desire.

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Provisions in our corporate charter documents and under Delaware law could make an acquisition of our company, which may be beneficial to our stockholders, more difficult and may prevent attempts by our stockholders to replace or remove our current management.

Provisions in our certificate of incorporation and our bylaws may discourage, delay or prevent a merger, acquisition or other change in control of our company that stockholders may consider favorable, including transactions in which you might otherwise receive a premium for your shares. These provisions could also limit the price that investors might be willing to pay in the future for shares of our common stock, thereby depressing the market price of our common stock. In addition, because our board of directors is responsible for appointing the members of our management team, these provisions may frustrate or prevent any attempts by our stockholders to replace or remove our current management by making it more difficult for stockholders to replace members of our board of directors. Among other things, these provisions:

· establish a classified board of directors such that only one of three classes of directors is elected each year;

· allow the authorized number of our directors to be changed only by resolution of our board of directors;

· limit the manner in which stockholders can remove directors from our board of directors;

· establish advance notice requirements for stockholder proposals that can be acted on at stockholder meetings and nominations to our board of directors;

· require that stockholder actions must be effected at a duly called stockholder meeting and prohibit actions by our stockholders by written consent;

· limit who may call stockholder meetings;

· authorize our board of directors to issue preferred stock without stockholder approval, which could be used to institute a “poison pill” that would work to dilute the stock ownership of a potential hostile acquirer, effectively preventing acquisitions that have not been approved by our board of directors; and

· require the approval of the holders of at least two-thirds of the voting power of all of the then-outstanding shares of capital stock that would be entitled to vote generally in the election of directors to amend or repeal specified provisions of our certificate of incorporation or bylaws.

Moreover, because we are incorporated in Delaware, we are governed by the provisions of Section 203 of the Delaware General Corporation Law, which prohibits a person who owns in excess of 15% of our outstanding voting stock from merging or combining with us for a period of three years after the date of the transaction in which the person acquired in excess of 15% of our outstanding voting stock, unless the merger or combination is approved in a prescribed manner.

Future sales and issuances of our common stock or rights to purchase common stock, including pursuant to our equity incentive plans or otherwise, could result in dilution to the percentage ownership of our stockholders and could cause our stock price to fall.

We expect that significant additional capital will be needed in the future to continue our planned operations. To raise capital, we may sell common stock, convertible securities or other equity securities in one or more transactions at prices and in a manner we determine from time to time. If we sell additional common stock, convertible securities or other equity securities, investors in a prior transaction may be materially diluted. Additionally, new investors could gain rights, preferences and privileges senior to those of existing holders of our common stock. Further, any future sales of our common stock by us or resale of our common stock by our existing stockholders could cause the market price of our common stock to decline.

As of September 30, 2015, there were 876,430 shares of our common stock available for future grant under our 2014 Equity Incentive Plan. Additionally, as of September 30, 2015, there were outstanding options to purchase up to 2,091,082 shares of our common stock. Any future grants of options, warrants or other securities exercisable or convertible into our common stock, or the exercise or conversion of such shares, and any sales of such shares in the market, could have an adverse effect on the market price of our common stock.

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The price of our common stock may be volatile and fluctuate substantially.

Our stock price is likely to be volatile. The stock market in general and the market for smaller biopharmaceutical companies in particular have experienced extreme volatility that has often been unrelated to the operating performance of particular companies. As a result of this volatility, the market price of our common stock may experience material adverse impacts. The market price for our common stock may be influenced by many factors, including:

· the success of competitive products or technologies;

· results of clinical trials of our product candidates or those of our competitors;

· events affecting our collaboration partners, including Array;

· regulatory or legal developments in the United States and other countries;

· developments or disputes concerning patent applications, issued patents or other proprietary rights;

· the recruitment or departure of key personnel;

· the level of expenses related to any of our product candidates or clinical development programs;

· the results of our efforts to discover, develop, acquire or in-license additional product candidates or products;

· actual or anticipated changes in estimates as to financial results, development timelines or recommendations by securities analysts;

· variations in our financial results or those of companies that are perceived to be similar to us;

· changes in the structure of healthcare payment systems;

· market conditions in the pharmaceutical and biotechnology sectors;

· general economic, industry and market conditions; and

· the other factors described in this “Risk Factors” section.

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We may be subject to securities litigation, which is expensive and could divert management attention .

Our share price may be volatile, and in the past companies that have experienced volatility in the market price of their stock have been subject to an increased incidence of securities class action litigation. We may be the target of this type of litigation in the future. Securities litigation against us could result in substantial costs and divert our management’s attention from other business concerns, which could seriously harm our business.

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

The trading market for our common stock 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. There can be no assurance that analysts will cover us or provide favorable coverage. If one or more of the analysts who cover us downgrade our stock or change their opinion of our stock, our stock 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 stock price or trading volume to decline.

A significant portion of our total outstanding shares are eligible to be sold into the market, which could cause the market price of our common stock to drop significantly, even if our business is doing well.

Sales of a substantial number of shares of our common stock in the public market, or the perception in the market that the holders of a large number of shares intend to sell shares, could reduce the market price of our common stock. Sales of a substantial number of shares of our common stock in the public market could occur at any time.

We are an “emerging growth company,” and the reduced disclosure requirements applicable to emerging growth companies may make our common stock less attractive to investors.

We are an “emerging growth company,” as defined in the Jumpstart Our Business Startups Act of 2012, or the JOBS Act, and may remain an emerging growth company for up to five years. For so long as we remain an emerging growth company, we are permitted and intend to rely on exemptions from certain disclosure requirements that are applicable to other public companies that are not emerging growth companies. These exemptions include:

· being permitted to provide only two years of audited financial statements, in addition to any required unaudited interim financial statements, with correspondingly reduced “Management’s Discussion and Analysis of Financial Condition and Results of Operations” disclosure;

· not being required to comply with the auditor attestation requirements in the assessment of our internal control over financial reporting;

· not being required to comply with any requirement that may be adopted by the Public Company Accounting Oversight Board regarding mandatory audit firm rotation or a supplement to the auditor’s report providing additional information about the audit and the financial statements;

· reduced disclosure obligations regarding executive compensation; and

· exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved.

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We have taken advantage of reduced reporting burdens. In particular, we have not included all of the executive compensation-related information that would be required if we were not an emerging growth company. We cannot predict whether investors will find our common stock less attractive if we rely on these exemptions. If some investors find our common stock less attractive as a result, there may be a less active trading market for our common stock and our stock price may be more volatile. In addition, 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. This allows an emerging growth company to delay the adoption of these accounting standards until they would otherwise apply to private companies. We have irrevocably elected not to avail ourselves of this exemption and, therefore, we will be subject to the same new or revised accounting standards as other public companies that are not emerging growth companies.

We will continue to incur increased costs as a result of operating as a public company, and our management is required to devote substantial time to new compliance initiatives 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-Oxley Act of 2002, the Dodd-Frank Wall Street Reform and Consumer Protection Act, the listing requirements of The NASDAQ Stock Market and other applicable securities rules and regulations impose various requirements on public companies, including establishment and maintenance of effective disclosure and financial controls and corporate governance practices. Our management and other personnel will need to devote a substantial amount of time to these compliance initiatives. 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 director and officer liability insurance, which in turn could make it more difficult for us to attract and retain qualified members of our board of directors.

We are evaluating these rules and regulations, and cannot predict or estimate the amount of additional costs we may incur or the timing of such costs. These rules and regulations are often subject to varying interpretations, in many cases due to their lack of specificity, and, as a result, their application in practice may evolve over time as new guidance is provided by regulatory and governing bodies. This could result in continuing uncertainty regarding compliance matters and higher costs necessitated by ongoing revisions to disclosure and governance practices.

Pursuant to Section 404 of the Sarbanes-Oxley Act of 2002, or Section 404, we will first be required to furnish a report by our management on our internal control over financial reporting for the year ending December 31, 2015. However, while we remain an emerging growth company, we will not be required to include an attestation report on internal control over financial reporting issued by our independent registered public accounting firm. To achieve compliance with Section 404 within the prescribed period, we will be engaged in a process to document and evaluate our internal control over financial reporting, which is both costly and challenging. In this regard, we will need to continue to dedicate internal resources, potentially engage outside consultants and adopt a detailed work plan to assess and document the adequacy of internal control over financial reporting, continue steps to improve control processes as appropriate, validate through testing that controls are functioning as documented and implement a continuous reporting and improvement process for internal control over financial reporting. Despite our efforts, there is a risk that we will not be able to conclude, within the prescribed timeframe or at all, that our internal control over financial reporting is effective as required by Section 404. If we identify one or more material weaknesses, it could result in an adverse reaction in the financial markets due to a loss of confidence in the reliability of our financial statements.

Our ability to use our net operating loss carryforwards and certain other tax attributes may be limited.

Under Section 382 of the Internal Revenue Code of 1986, as amended, if a corporation undergoes an “ownership change,” generally defined as a greater than 50% change (by value) in its equity ownership over a three-year period, the corporation’s ability to use its pre-change net operating loss carryforwards, or NOLs, and other pre-change tax attributes (such as research tax credits) to offset its post-change income or taxes may be limited. It is possible that we may have triggered an “ownership change” limitation. We may also experience ownership changes in the future as a result of subsequent shifts in our stock ownership (some of which are outside our control). As a result, if we earn net taxable income, our ability to use our pre-change NOL carryforwards to offset U.S. federal taxable income may be subject to limitations, which could potentially result in increased future tax liability to us. In addition, at the state level, there may be periods during which the use of NOLs is suspended or otherwise limited, which could accelerate or permanently increase state taxes owed.

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

We have never declared or paid cash dividends on our capital stock. We currently intend to retain all of our future earnings, if any, to finance the growth and development of our business. In addition, the terms of any future debt agreements may preclude us from paying dividends. As a result, capital appreciation, if any, of our common stock will be your sole source of gain for the foreseeable future.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

(a) Sales of Unregistered Securities

None.

(b) Use of Proceeds from Sales of Registered Securities

On July 31, 2014, our registration statements on Form S-1 (File Nos. 333-197123 and 333-197779) were declared effective by the SEC for our initial public offering pursuant to which we sold an aggregate of 5,903,538 shares of our common stock, including shares subject to the underwriters’ overallotment, at a price to the public of $13.00 per share. There has been no material change in the planned use of proceeds from our initial public offering as described in our final prospectus filed with the SEC on August 1, 2014 pursuant to Rule 424(b).

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

Not applicable.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5. OTHER INFORMATION

None.

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ITEM 6. EXHIBITS

The following is a list of exhibits filed as part of this Quarterly Report on Form 10-Q. Where so indicated by footnote, exhibits that were previously filed are incorporated by reference. For exhibits incorporated by reference, the location of the exhibit in the previous filing is indicated.

Exhibit Number		Description

10.01*		Office Lease Agreement by and between One Stamford Plaza Owner, LLC, and the Registrant, dated as of October 6, 2015

31.1*		Certification of the Principal Executive Officer pursuant to Rule 13a-14(a) or 15d-14(a) of the Securities Exchange Act of 1934.

31.2*		Certification of the Principal Financial Officer pursuant to Rule 13a-14(a) or 15d-14(a) of the Securities Exchange Act of 1934.

32.1*(1)		Certification of the Principal Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2*(1)		Certification of the Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101.INS		XBRL Report Instance Document

101.SCH		XBRL Taxonomy Extension Schema Document

101.CAL		XBRL Taxonomy Calculation Linkbase Document

101.LAB		XBRL Taxonomy Label Linkbase Document

101.PRE		XBRL Presentation Linkbase Document

101.DEF		XBRL Taxonomy Extension Definition Linkbase Document

* Filed herewith.

(1) The certifications on Exhibit 32 hereto are deemed not “filed” for purposes of Section 18 of the Exchange Act or otherwise subject to the liability of that Section. Such certifications will not be deemed incorporated by reference into any filing under the Securities Act or the Exchange Act.

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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Date: November 10, 2015

	LOXO ONCOLOGY, INC.

	By:	/s/ JOSHUA H. BILENKER, M.D.
		Joshua H. Bilenker, M.D.
		President, Chief Executive Officer and Director
		(Principal Executive Officer)

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SIGNATURES

Date: November 10, 2015

	LOXO ONCOLOGY, INC.

	By:	/s/ JENNIFER BURSTEIN
		Jennifer Burstein
		Vice President of Finance
		(Principal Accounting Officer and
		Principal Financial Officer)

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EXHIBIT INDEX

Exhibit Number		Description

10.01*		Office Lease Agreement by and between One Stamford Plaza Owner, LLC, and the Registrant, dated as of October 6, 2015

31.1*		Certification of the Principal Executive Officer pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2*		Certification of the Principal Financial Officer pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1*(1)		Certification of the Principal Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2*(1)		Certification of the Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101.INS(2)		XBRL Report Instance Document

101.SCH(2)		XBRL Taxonomy Extension Schema Document

101.CAL(2)		XBRL Taxonomy Calculation Linkbase Document

101.LAB(2)		XBRL Taxonomy Label Linkbase Document

101.PRE(2)		XBRL Presentation Linkbase Document

101.DEF(2)		XBRL Taxonomy Extension Definition Linkbase Document

* Filed herewith.

Exhibit 10.1

TWO STAMFORD PLAZA

STAMFORD, CONNECTICUT

OFFICE LEASE AGREEMENT

BETWEEN

ONE STAMFORD PLAZA OWNER LLC

(“LANDLORD”)

AND

LOXO ONCOLOGY, INC.

(“TENANT”)

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		Page

	TABLE OF CONTENTS

1.	Basic Lease Information	1
2.	Lease Grant	3
3.	Adjustment of Commencement Date; Possession	3
4.	Rent	4
5.	Compliance with Laws; Use; Hazardous Materials	4
6.	Security Deposit	6
7.	Building Services	7
8.	Leasehold Improvements	9
9.	Repairs and Alterations	10
10.	Entry by Landlord	11
11.	Assignment and Subletting	11
12.	Liens	15
13.	Indemnity and Waiver of Claims	16
14.	Insurance	16
15.	Waiver of Claims and Subrogation	17
16.	Casualty Damage	17
17.	Condemnation	18
18.	Events of Default	18
19.	Remedies	19
20.	Limitation of Liability	20
21.	Relocation	20
22.	Holding Over	20
23.	Subordination to Mortgages; Estoppel Certificate	20
24.	Notice	21
25.	Surrender of Premises	21
26.	Miscellaneous	21

EXHIBITS
EXHIBIT A	Outline and Location of Premises
EXHIBIT B	Expenses and Taxes
EXHIBIT C	Work Letter
EXHIBIT C-1	Landlord Approved General Contractors
EXHIBIT C-2	Plans
EXHIBIT D	Form of Letter of Credit
EXHIBIT E	Form Commencement Letter
EXHIBIT F	Additional Provisions
EXHIBIT G	Rules and Regulations
EXHIBIT H	Cleaning Specifications

OFFICE LEASE AGREEMENT

THIS OFFICE LEASE AGREEMENT (this “ Lease ”) is made and entered into as of , 2015, by and between ONE STAMFORD PLAZA OWNER LLC ( Landlord ”), and LOXO ONCOLOGY, INC., a Delaware corporation (“ Tenant ”). The following exhibits and attachments are incorporated into and made a part of this Lease: EXHIBIT A (Outline and Location of Premises), EXHIBIT B (Expenses and Taxes), EXHIBIT C (Work Letter), EXHIBIT C-1 (Landlord Approved General Contractors), EXHIBIT C-2 (Plans), EXHIBIT D (Form of Letter of Credit), EXHIBIT E (Form Commencement Letter), EXHIBIT F (Additional Provisions), EXHIBIT G (Rules and Regulations) and EXHIBIT H (Cleaning Specifications).

1. Basic Lease Information.

1.01 “ Building ” shall mean the building located at 281 Tresser Boulevard, Stamford, Connecticut, also known as Two Stamford Plaza. “ Rentable Square Footage of the Building ”, without representation, is deemed to be 258,647 rentable square feet.

1.02 “ Premises ” shall mean the area shown on Exhibit A to this Lease. The Premises are located on the ninth (9 th ) floor in Suite No. 906. If the Premises include one or more floors in their entirety, all corridors and restroom facilities located on such full floor(s) shall be considered part of the Premises. The “ Rentable Square Footage of the Premises ”, without representation, is deemed to be an aggregate of 13,393 rentable square feet (“ RSF ”). Landlord and Tenant stipulate and agree that the Rentable Square Footage of the Building and the Rentable Square Footage of the Premises are correct.

1.03 “ Base Rent ”:

Full Calendar Months	Annual Rate		Annual		Monthly
of Term	Per RSF		Base Rent		Base Rent
1-12	$	47.00	$	629,471.00	$	52,455.92
13-24	$	48.00	$	642,864.00	$	53,572.00
25-36	$	49.00	$	656,257.00	$	54,688.08
37-48	$	50.00	$	669,650.00	$	55,804.17
49-60	$	51.00	$	683,043.00	$	56,920.25
61-72	$	52.00	$	696,436.00	$	58,036.33
73-84	$	53.00	$	709,829.00	$	59,152.42

Notwithstanding anything to the contrary contained herein, as long as Tenant is not in Default, Tenant shall be entitled to an abatement of Base Rent in the amount of $52,455.92 for each of the first six (6) calendar months of the Term (defined below) (the “ Initial Base Rent Abatement Period ”). The total amount of Base Rent abated during the Initial Base Rent Abatement Period shall equal $314,735.52 (the “ Initial Abated Base Rent ”). In addition, as long as Tenant is not in Default, Tenant shall be entitled to an additional abatement of Base Rent in the amounts of (i) $11,679.50 for each of the six (6) months following the end of the Initial Base Rent Abatement Period and (ii) $11,928.00 for each of the six (6) months thereafter (the twelve (12) months following the Initial Base Rent Abatement Period are referred to herein as the “ Supplemental Base Rent Abatement Period ”). The total amount of Base Rent abated during the Supplemental Base Rent Abatement Period shall equal $141,645.00 (the “ Supplemental Abated Base Rent ”). The Initial Abated Base Rent and the Supplemental Abated Base Rent are collectively referred to herein as the “Abated Base Rent”. The total amount of Abated Base Rent shall equal $456,380.52. In the event Tenant Defaults at any time during either the Initial Base Rent Abatement Period or the Supplemental Base Rent Abatement Period, all Abated Base Rent shall become due and payable within five (5) days, and all future Base Rent that would have otherwise been abated but for such Default shall be due and payable as and when Base Rent is payable hereunder. The payment by Tenant of the Abated Base Rent in the event of a Default shall not limit or affect any of Landlord’s other rights, pursuant to this Lease or at Law (defined below) or in equity as a result of a Default. During the Base Rent Abatement Periods, only Base Rent shall be abated, and all Additional Rent (defined below) and other costs and charges specified in the Lease shall remain as due and payable pursuant to the provisions of this Lease.

1.04 “ Tenant’s Pro Rata Share ”: 5.1781%. If during any Renewal Term (as defined below), the Rentable Square Footage of the Building or the Rentable Square Footage of the Premises shall increase or decrease, Tenant’s Pro Rata Share shall be equitably adjusted.

1.05 “ Base Year ” for Taxes (defined in Exhibit B ): Calendar Year 2016; “ Base Year ” for Expenses (defined in Exhibit B ): Calendar Year 2016.

1.06 “ Term ”: A period of eighty-four (84) months. Subject to Section 3, the Term shall commence on December 18, 2015 (the “ Commencement Date ”) and, unless terminated early or otherwise extended in accordance with this Lease, end on December 31, 2022 (the “ Expiration Date ”).

1.07 “ Security Deposit ”: $314,735.52, which is subject to reduction pursuant to the terms of Article 6 below.

1.08 “ Broker(s) ”: Jones Lang LaSalle Americas, Inc.

1.09 “ Permitted Use ”: General, executive and administrative offices and all legal ancillary purposes related thereto.

1.10 “ Notice Address(es) ”:

Landlord:	Tenant:

One Stamford Plaza Owner LLC	Prior to the Commencement Date:
c/o RFR Realty LLC	LOXO Oncology, Inc.
263 Tresser Boulevard, 4 th Floor	One Landmark Square, Suite 1122
Stamford, Connecticut 06901	Stamford, Connecticut 06901
Attn: Property Manager	Attn: VP-Finance

With a copy to:	From and after the Commencement
	Date:
RFR Realty LLC
390 Park Avenue	LOXO Oncology, Inc.
New York, New York 10022	Two Stamford Plaza, Suite 906
Attn: President	281 Tresser Boulevard
	Stamford, Connecticut 06901
with a copy of any default notices to:	Attn: VP-Finance

Day Pitney LLP	with a copy to:
One Canterbury Green	McDermott Will & Emery
201 Broad Street	340 Madison Avenue
Stamford, Connecticut 06901	New York, New York 10173
Attn: Real Estate Department	Attn:

A copy of any notices to Landlord shall also be sent to any Mortgagee (as hereinafter defined) who may have requested the same in writing.

1.11 “ Business Day(s) ” are Monday through Friday of each week, exclusive of the days observed for New Year’s Day, Memorial Day, Independence Day, Labor Day, Thanksgiving Day and Christmas Day and, at Landlord’s discretion, other days observed as holidays by the State of Connecticut, the federal government or the labor unions serving the Building (“Holidays”). “ Building Service Hours ” are 8 A.M. to 6 P.M. on Business Days.

1.12 “ Property ” means the Building and the parcel(s) of land on which it is located and, at Landlord’s discretion, the parking facilities and other improvements, if any, serving the Building and the parcel(s) of land on which they are located.

1.13 “ Premises Electric Charge ”: Landlord shall install a demand watt hour check meter for the Premises, at Landlord’s expense, as part of Landlord’s Work (as defined below), subject to the provisions of Section 7.02 below.

1.14 “ Parking Spaces ”: Three (3) unreserved parking spaces per 1,000 rentable square feet of the Premises in the Building’s garage, at no additional charge to Tenant (for a total of 40 spaces based on the initial square footage of the Premises of 13,393 RSF). Tenant may lease reserved parking spaces in the Building garage at the then current rates, which as of the date hereof are $150.00 per month per reserved parking space.

1.15 “ Guarantor(s) ”: Intentionally Omitted.

1.16 “ Landlord’s Work ”: shall have the meaning ascribed to it in Exhibit C hereto.

1.17 “ Initial Alterations ”: Intentionally Omitted.

1.18 “ Tenant’s Property ” means, collectively, any signs, furnishings, trade fixtures, inventory, equipment, Tenant’s personal property and other removable property installed in the Premises by Tenant.

2. Lease Grant.

The Premises are hereby leased to Tenant from Landlord, together with the right to use any portions of the Property that are designated by Landlord for the common use of tenants and others (the “ Common Areas ”).

3. Adjustment of Commencement Date; Possession.

3.01 If Landlord is required to perform Landlord’s Work prior to the Commencement Date: (a) the date set forth in Section 1.06 as the Commencement Date shall instead be defined as the “ Target Commencement Date ”; (b) the actual Commencement Date shall be the date on which Landlord’s Work is Substantially Complete (defined below); and (c) the Expiration Date will be the last day of the Term as determined based upon the actual Commencement Date. Landlord’s failure to Substantially Complete Landlord’s Work by the Target Commencement Date shall not be a default by Landlord or otherwise render Landlord liable for damages. After the determination of the Commencement Date, Landlord shall send to Tenant a commencement date letter in the form attached hereto as Exhibit E . Tenant’s failure to execute and return the letter, or to provide written objection to the statements contained in the letter, within thirty (30) days after the date of the letter shall be deemed an approval by Tenant of the statements contained therein. If the Expiration Date does not fall on the last day of a calendar month, Landlord and Tenant may elect to adjust the Expiration Date to the last day of the calendar month in which the Expiration Date occurs by the mutual execution of a commencement letter agreement setting forth such adjusted date. Landlord’s Work shall be deemed to be “ Substantially Complete ” on the date that a certain portion of Landlord’s Work has been performed, so that Tenant may occupy that portion of the Premises for the operation of Tenant’s business. Tenant acknowledges and agrees that all of Landlord’s Work will not be completed as of the Commencement Date and Landlord may complete the remainder of Landlord’s Work within thirty (30) days following the Commencement Date and the Commencement Date shall not be adjusted or postponed due to Landlord’s Work not being completed prior to the Commencement Date. Landlord shall notify Tenant of the date that Landlord’s Work is Substantially Complete. Following completion of Landlord’s Work, Landlord and Tenant shall mutually prepare a list of “punch-list items” to be completed by Landlord within a reasonable time. If Landlord is delayed in the performance of Landlord’s Work as a result of any acts of Tenant or its contractors or vendors, including, without limitation, changes requested by Tenant to approved plans, Tenant’s failure to timely comply with any of its obligations under this Lease, or the specification of any materials or equipment with long lead times (any such delay, a “ Tenant Delay ”), Landlord’s Work shall be deemed to be Substantially Complete on the date that Landlord could reasonably have been expected to Substantially Complete Landlord’s Work absent any Tenant Delay. Notwithstanding anything contained herein to the contrary, if Landlord’s Work has not been fully performed, other than punch list items, prior to February 1, 2016 for any reason other than a Tenant Delay or a delay due to Force Majeure, then for each day between February 1, 2016 and the date that Landlord’s Work is fully performed, Tenant shall receive one (1) day of Rent abatement in addition to the Abated Base Rent set forth in Section 1.03 . Further, if the Landlord’s Work is not fully performed, other than the punch list items, prior to March 17, 2016 for any reason other than a Tenant Delay or a delay due to Force Majeure, Tenant shall have the right to terminate this Lease by providing written notice to Landlord.

3.02 Subject to Landlord’s obligation, if any, to perform Landlord’s Work (and any punch-items resulting from Landlord’s Work), the Premises are accepted by Tenant in “as is” condition and configuration without any representations or warranties by Landlord. By taking possession of the Premises, subject to this Section 3.02, Tenant agrees that the Premises are in good order and satisfactory condition. Notwithstanding the foregoing, Landlord shall be responsible for latent defects in Landlord’s Work of which tenant notifies Landlord. Landlord, at its option, may assign any valid and enforceable warranties given to Landlord by contractors or subcontractors performing Landlord’s Work directly to Tenant for enforcement. Landlord shall not be liable for a failure to deliver possession of the Premises or any other space due to the holdover or unlawful possession of such space by another party, however Landlord shall use reasonable efforts to obtain possession of the space. The Commencement Date for the Premises, in such event, shall be postponed until the date Landlord delivers possession of the Premises to Tenant free from occupancy by any party. If Tenant takes possession of the Premises for the conduct of its business before the Commencement Date, such possession shall be subject to the terms and conditions of this Lease and Tenant shall pay Rent (defined in Section 4.01) to Landlord for each day of possession before the Commencement Date. However, except for the cost of services requested by Tenant (e.g. freight elevator usage), Tenant shall not be required to pay Rent for any days of possession before the Commencement Date during which Tenant, with the approval of Landlord, is in possession of the Premises for the sole purpose of performing improvements or installing furniture, equipment or other personal property.

4. Rent.

4.01 Tenant shall pay Landlord, without any setoff or deduction, unless expressly set forth in this Lease, all Base Rent and Additional Rent (as hereinafter defined) due for the Term (collectively referred to as “ Rent ”). Base Rent shall commence on the Commencement Date, subject to the Base Rent Abatement Periods. Anything herein to the contrary notwithstanding, an amount equal to the first full monthly installment of Base Rent, which shall be applied toward the seventh (7th) month of the Term, plus any fraction of a monthly payment for any portion of a month at the commencement of the Term, shall be due and payable together with the Security Deposit (as defined herein) upon the execution hereof. Landlord’s receipt of the foregoing payments shall be a condition precedent to the effectiveness of this Lease. All Additional Rent shall commence on the Commencement Date except as expressly provided otherwise. “ Additional Rent ” means all sums (exclusive of Base Rent) that Tenant is required to pay Landlord under this Lease. Tenant shall pay and be liable for all rental, sales and use taxes (but excluding income taxes), if any, imposed upon or measured by Rent. Base Rent and recurring monthly charges of Additional Rent shall be due and payable in advance on the first day of each calendar month without notice or demand. Unless otherwise specified herein to the contrary, all other items of Rent shall be due and payable by Tenant on or before thirty (30) days after billing by Landlord. Rent shall be made payable to the entity, and sent to the address, Landlord otherwise designates and shall be made by good and sufficient check drawn on a local bank or by other means acceptable to Landlord. Tenant shall pay Landlord an administration fee equal to five percent (5%) of all past due Rent, provided that Tenant shall be entitled to a grace period of five (5) days for the first two (2) late payments of Rent in a calendar year. In addition, past due Rent shall accrue interest at twelve percent (12%) per annum or the maximum rate permitted by law, whichever is less. Landlord’s acceptance of less than the correct amount of Rent shall be considered a payment on account of the earliest Rent due. Rent for any partial month during the Term shall be prorated. No endorsement or statement on a check or letter accompanying payment shall be considered an accord and satisfaction. Tenant’s covenant to pay Rent is independent of every other covenant in this Lease.

4.02 Tenant shall pay Tenant’s Pro Rata Share of Taxes and Expenses in accordance with Exhibit B of this Lease.

5. Compliance with Laws; Use; Hazardous Materials.

5.01 The Premises shall be used for the Permitted Use and for no other use whatsoever. Tenant shall comply with all laws, statutes, codes, ordinances, orders, rules and regulations of any municipal or governmental entity whether in effect now or later (“ Law(s) ”), including, without limitation, the Americans with Disabilities Act (the “ ADA ”), regarding the operation of Tenant’s business and the use, condition, configuration and occupancy of the Premises provided, that as part of Landlord’s Work, Landlord shall deliver the Premises in compliance with the ADA, except for any compliance requirements triggered by Tenant’s particular occupancy and

use of the Premises. In addition, Tenant shall, at its sole cost and expense, promptly comply with any Laws that relate to the Base Building (defined below), but only to the extent such obligations are triggered by Tenant’s use of the Premises, other than for general office use, or Alterations or improvements in the Premises performed or requested by Tenant. “ Base Building ” shall include the structural portions of the Building, the public restrooms and the Building mechanical, electrical and plumbing systems and equipment located in the internal core of the Building on the floor or floors on which the Premises are located. Tenant shall promptly provide Landlord with copies of any notices it receives regarding an alleged violation of Law. Tenant shall comply with the rules and regulations of the Building attached hereto as Exhibit G and such other reasonable rules and regulations adopted by Landlord from time to time, including rules and regulations for the performance of Alterations (defined in Section 9 ).

5.02 Tenant shall not use the Premises or any part thereof, or permit the Premises or any part thereof to be used, (1) for the business of photographic, multilith or multigraph reproductions or offset printing (other than those which are ancillary to an otherwise Permitted Use), (2) for an off-the-street retail commercial banking, thrift institution, loan company, trust company, depository or safe deposit business accepting deposits from the general public, (3) for the off-the-street retail sale of travelers checks, money orders, drafts, foreign exchange or letters of credit or for the receipt of money for transmission, (4) by the United States government, the City of Stamford, any foreign government, the United Nations or any agency or department of any of the foregoing having or asserting sovereign immunity, (5) for the preparation, dispensing or consumption of food or beverages in any manner whatsoever, except for the preparation, dispensing and consumption of food by Tenant’s employees who work in the Premises and not for the sale of food to any Persons other than such employees (other than vending machines), (6) as an employment agency, day-care facility, labor union, school, or vocational training center (except for the training of employees of Tenant intended to be employed at the Premises), (7) as a barber shop, beauty salon or manicure shop, (8) for product display activities (such as those of a manufacturer’s representative), (9) as offices of any public utility company, (10) for data processing activities (other than those which are ancillary to an otherwise Permitted Use), (11) for clerical support services or offices of public stenographers or typists (other than those which are ancillary to an otherwise Permitted Use), (12) as reservation centers for airlines or travel agencies, (13) for retail or manufacturing use, (14) as studios for radio, television or other media, (15) for offices for a real estate brokerage firm or (16) for any obscene or pornographic purpose or any sort of commercial sex establishment or for exhibition to the public of any obscene or pornographic materials. For purposes of the preceding clause (16), “pornographic” shall mean that the material or purpose has prurient appeal or relates, directly or indirectly, to lewd or prurient sexual activity and “obscene” shall have the meaning ascribed thereto in New York Penal Law Section 235.00. Furthermore, the Premises shall not be used for any purpose that would, in Landlord’s reasonable judgment, tend to lower the first-class character of the Building (provided that the operation of a biotechnology company shall not lower the first-class character of the Building), create unreasonable or excessive elevator or floor loads, violate the certificate of occupancy of the Building, impair or interfere with any of the Building operations or the proper and economic heating, air-conditioning, cleaning or any other services of the Building, interfere with the use of the other areas of the Building by any other tenants, or impair the appearance of the Building. In the event that Landlord reasonably and in good faith determines that Tenant is a high-density user of the Premises (such that Tenant is using a disproportionate amount of the Base Building facilities), Tenant shall pay Landlord Additional Rent for the costs actually incurred by Landlord resulting from Tenant’s high-density use.

5.03 Tenant covenants and agrees that Tenant shall, at Tenant’s sole cost and expense, comply at all times with all Laws governing the use, generation, storage, treatment and/or disposal of any Hazardous Materials (as defined below), the presence of which results from or in connection with the act or omission of Tenant or Tenant Related Parties or the breach of this Lease by Tenant or Tenant Related Parties. The term “ Hazardous Materials ” shall mean any biologically or chemically active or other toxic or hazardous wastes, pollutants or substances, including, without limitation, asbestos, PCBs, petroleum products and by-products, substances defined or listed as “hazardous substances” or “toxic substances” or similarly identified in or pursuant to the Comprehensive Environmental Response, Compensation and Liability Act, 42 U.S.C. § 9601 et seq., and as hazardous wastes under the Resource Conservation and Recovery Act, 42 U.S.C. § 6010, et seq., any chemical substance or mixture regulated under the Toxic Substance Control Act of 1976, as amended, 15 U.S.C. § 2601, et seq., any “toxic pollutant” under the Clean Water Act, 33 U.S.C. § 466 et seq., as amended, any hazardous air pollutant

under the Clean Air Act, 42 U.S.C. § 7401 et seq., hazardous materials identified in or pursuant to the Hazardous Materials Transportation Act, 49 U.S.C. § 1802, et seq., and any hazardous or toxic substances or pollutant regulated under any other Laws. Tenant shall agree to execute, from time to time, at Landlord’s request, affidavits, representations and the like concerning Tenant’s best knowledge and belief regarding the presence of Hazardous Materials in, on, under or about the Premises or the Property. Tenant shall cooperate with Landlord in satisfying any Laws imposed upon Landlord relating to Tenant’s operations, and shall, upon request, furnish complete information to Landlord concerning the use or existence of any Hazardous Materials, contamination or pollution at the Building, including, without limitation, execution and submission of a “negative declaration” with regard to its operations in connection with any “transfer of establishment” consistent with the requirements of C.G.S.A. Section 22a-134 to 22a-134d inclusive. The terms “negative declaration” and “transfer of establishment” are defined in C.G.S.A. Section 22a-134. Tenant shall indemnify and hold harmless all Landlord Related Parties from and against any loss, cost, damage, liability or expense (including attorneys’ fees and disbursements) arising by reason of any clean up, removal, remediation, detoxification action or any other activity required or recommended of any Landlord Related Parties by any governmental authority by reason of the presence in or about the Premises or the Property of any Hazardous Materials, as a result of or in connection with the act or omission of Tenant or Tenant Related Parties or the breach of this Lease by Tenant or Tenant Related Parties. Landlord shall indemnify and hold harmless Tenant from and against any loss, cost, damage, liability or expense (including attorneys’ fees and disbursements) arising by reason of any clean up, removal, remediation, detoxification action or any other activity required or recommended of Tenant by any governmental authority by reason of the presence in or about the Premises or the Property of any Hazardous Materials prior to the Commencement Date. The foregoing covenants and indemnities shall survive the expiration or any termination of this Lease.

6. Security Deposit.

6.01 Tenant shall deposit with Landlord on the signing of this Lease the Security Deposit either in the form of cash or Letter of Credit (as defined and further described in Section 6.02 ), as security for the faithful performance and observance by Tenant of the terms, provisions and conditions of this Lease. If the Security Deposit is in the form of a Letter of Credit, the remainder of this Section 6.01 through Section 6.05 shall govern and if the Security Deposit is in the form of cash, Section 6.06 shall govern. Tenant agrees that in the event (i) of the occurrence of a Default or (ii) Tenant has defaulted beyond the expiration of applicable notice and cure periods, if any, in the performance of any of its obligations under this Lease, including the payment of any item of Rent, and the transmittal of a Notice of default by Landlord is barred by applicable law, Landlord may draw the entire amount of the Letter of Credit and use, apply or retain the whole or any part of such proceeds, to the extent required for the payment of any Base Rent, Additional Rent, or any other sum as to which Tenant is in Default, or for any sum that Landlord may reasonably expend or may be required to expend by reason of the Default (including any damages or deficiency accrued before or after summary proceedings or other reentry by Landlord). If Landlord applies or retains any portion or all of the proceeds of the Letter of Credit, Tenant shall forthwith restore the amount so applied or retained by delivering an additional or new Letter of Credit so that, at all times, the amount of the Security Deposit shall be the amount set forth in the Basic Lease Information. Provided there is no uncured Default, any balance of the proceeds of the Letter of Credit held by Landlord and not used, applied or retained by Landlord as above provided, and any remaining Letter of Credit, shall be returned to Tenant within forty-five (45) days after the Expiration Date and after delivery of possession of the entire Premises to Landlord in accordance with the terms of this Lease.

6.02 Tenant shall deliver to Landlord a clean, irrevocable and unconditional letter of credit (such letter of credit, and any replacement thereof as provided herein, is called a “ Letter of Credit ”) issued and drawn upon any commercial bank reasonably approved by Landlord with offices for banking purposes in the State of New York or Connecticut (“ Issuing Bank ”), which Letter of Credit shall have a term of not less than one year, be in form and content reasonably satisfactory to Landlord, be for the account of Landlord and be in the amount of the Security Deposit set forth in the Basic Lease Information. The form of letter of credit annexed to this Lease as Exhibit D is satisfactory. The Letter of Credit shall provide that:

(1) The Issuing Bank shall pay to Landlord or its duly authorized representative an amount up to the face amount of the Letter of Credit upon presentation of the Letter of Credit and a sight draft in the amount to be drawn;

(2) The Letter of Credit shall be deemed to be automatically renewed, without amendment, for consecutive periods of one year each during the Term, unless the Issuing Bank sends written notice (the “ Non-Renewal Notice ”) to Landlord by certified or registered mail, return receipt requested, at least thirty (30) days prior to the expiration date of the Letter of Credit, to the effect that it elects not to have such Letter of Credit renewed;

(3) The Letter of Credit delivered in respect of the last year of the Term shall have an expiration date of not earlier than sixty (60) days after the Expiration Date; and

(4) The Letter of Credit shall be transferable by Landlord as provided in Section 6.04 .

6.03 Landlord, after receipt of the Non-Renewal Notice, shall have the right to draw the entire amount of the Letter of Credit and to hold the proceeds as a cash Security Deposit. Landlord shall release such proceeds to Tenant upon delivery to Landlord of a replacement Letter of Credit complying with the terms hereof.

6.04 In the event of the sale or lease of the Building or the Property, Landlord shall have the right, at no cost to Landlord, to transfer the Security Deposit, without charge for such transfer (unless such charge is payable by Tenant), to the purchaser or lessee, and Landlord shall thereupon be released by Tenant from all liability for the return of such Security Deposit. In such event, Tenant agrees to look solely to the new landlord for the return of said Security Deposit. It is agreed that the provisions hereof shall apply to every transfer or assignment made of the Security Deposit to a new Landlord. Tenant shall execute such documents as may be reasonably necessary to accomplish such transfer or assignment of the Letter of Credit.

6.05 Tenant covenants that it will not assign or encumber, or attempt to assign or encumber, the Security Deposit held hereunder, and that neither Landlord nor its successors or assigns shall be bound by any such assignment, encumbrance, attempted assignment, or attempted encumbrance. In the event that any bankruptcy, insolvency, reorganization or other debtor-creditor proceedings shall be instituted by or against Tenant, its successors or assigns, or any guarantor of Tenant hereunder, the security shall be deemed to be applied to the payment of the Base Rent and Additional Rent due Landlord for periods prior to the institution of such proceedings and the balance, if any, may be retained by Landlord in partial satisfaction of Landlord’s damages.

6.06 If the Security Deposit is in the form of cash, the Security Deposit shall be delivered to Landlord upon the execution of this Lease by Tenant and held by Landlord without liability for interest (unless required by Law) as security for the performance of Tenant’s obligations. The Security Deposit is not an advance payment of Rent or a measure of damages. Landlord may use all or a portion of the Security Deposit to satisfy past due Rent or to cure any Default (defined in Section 18) by Tenant. If Landlord uses any portion of the Security Deposit, Tenant shall, within 5 days after demand, restore the Security Deposit to its original amount. Landlord shall return any unapplied portion of the Security Deposit to Tenant within 45 days after the later to occur of: (a) determination of the final Rent due from Tenant; or (b) the later to occur of the Expiration Date or the date Tenant surrenders the Premises to Landlord in compliance with Section 25. Landlord may assign the Security Deposit to a successor or transferee and, following the assignment, Landlord shall have no further liability for the return of the Security Deposit. Landlord shall not be required to keep the Security Deposit separate from its other accounts.

6.07 Notwithstanding anything to the contrary herein, upon Tenant’s written notice to Landlord (the “ Reduction Notice ”) and provided no Default in then occurring under this Lease, the aggregate amount of the Security Deposit (whether in the form of cash or Letter of Credit) shall be reduced to $157,367.76 after the thirty-sixth (36 th ) month following the end of the Initial Base Rent Abatement Period. If Tenant provides Landlord with a Reduction Notice and Tenant is entitled a reduction of the Security Deposit as provided for herein, (i) Landlord shall return the applicable portion of the Security Deposit to Tenant within forty-five (45) days after the later to occur of (A) Landlord’s receipt of the Reduction Notice, and (B) the date upon which Tenant is entitled to a reduction in the Security Deposit as provided above, if the Security Deposit is held in the form of cash, or (ii) Landlord, at no cost to Landlord, shall execute and deliver such documents as are reasonably necessary to reduce the amount of the Letter of Credit in accordance with the terms hereof, if the Security Deposit is held in the form of a Letter of Credit.

Notwithstanding anything to the contrary contained herein, if Tenant has been in Default under this Lease at any time prior to the effective date of the reduction of the Security Deposit and Tenant has failed to cure such Default within any applicable cure period, then Tenant shall have no right to reduce the amount of the Security Deposit as described herein.

7. Building Services.

7.01 Landlord shall furnish Tenant with the following services: (a) hot and cold water for use in the Building lavatories; (b) customary heat and air conditioning in season during Building Service Hours, although Tenant shall have (i) the right to receive HVAC service during hours other than Building Service Hours by paying Landlord’s then standard charge for additional HVAC service (which is currently $100 per hour per floor with a two (2) hour minimum, subject to additional charges for supplemental HVAC units) and providing such prior notice as is reasonably specified by Landlord, and (ii) access to supplemental air conditioning by paying Landlord’s then standard charge therefor (which is currently a tap in charge of $200.00 per ton) to connect to the Building condenser water, plus a current monthly fee of $40 per ton; (c) standard janitorial service on Business Days in accordance with the Cleaning Specifications attached hereto as Exhibit H; (d) elevator service; (e) electricity in accordance with the terms and conditions in Section 7.02 ; (f) access to the Building for Tenant and its employees 24 hours per day/7 days per week, subject to the terms of this Lease and such protective services or monitoring systems, if any, as Landlord may reasonably impose, including, without limitation, sign-in procedures and/or presentation of identification cards; and (g) such other services as Landlord reasonably determines are necessary or appropriate for the Property. In the event Tenant installs any private restroom(s) and/or shower(s) in the Premises or any above standard kitchen, pantry(ies), fitness center and/or any other above standard improvements, Tenant shall be solely responsible for any and all cleaning, repairs and replacements to such restroom(s), shower(s), above-standard kitchen, pantry(ies), fitness center and/or any other above standard improvements. If any additional cleaning of the Premises above the Building standard specifications is to be done by Tenant, it shall be done at Tenant’s sole expense, in a manner reasonably satisfactory to Landlord and no one other than persons approved by Landlord shall be permitted to enter the Premises or the Building for such purpose. Tenant shall pay to Landlord the cost of removal of any of Tenant’s refuse and rubbish from the Premises and the Building (i) to the extent that the same, in any one day, unreasonably exceeds the average daily amount of refuse and rubbish usually attendant upon the use of such Premises as offices, as described and included in Landlord’s cleaning contract for the Building or recommended by Landlord’s cleaning contractor, and (ii) related to or deriving from the preparation or consumption of food or drink (other than typical office use). Bills for the same shall be rendered by Landlord to Tenant at such time as Landlord may elect and shall be due and payable as Additional Rent within ten (10) days after the time rendered. Tenant shall cause all portions of the Premises used for the storage, preparation, service or consumption of food or beverages to be cleaned daily in a manner reasonably satisfactory to Landlord, and to be treated against infestation by vermin, rodents or roaches, whenever there is evidence of any infestation. Tenant shall not permit any person to enter the Premises or the Building for the purpose of providing such extermination services, unless such persons have been reasonably approved by Landlord.

7.02 All electricity consumed by Tenant in the Premises shall be paid for by Tenant as Additional Rent in accordance with the terms of this Lease. In addition, Landlord may, at its option, furnish and install, at Tenant’s expense, all lighting tubes, lamps, bulbs, and ballasts required in the Premises at reasonable and customary rates; provided, however, Landlord shall not be liable if it elects, in its sole discretion, not to replace any lighting tube, lamp, bulb or ballast, or if it is delayed in replacing same for any reason, including without limitation delays in deliveries or unavailability of non building standard items. During each calendar year, or portion thereof, falling within the Term, Tenant shall pay to Landlord a charge for consumption of electricity in the Premises as stated by the meter described in Section 1.13 hereof together with a monthly administrative charge thereon of 3%. Without the consent of Landlord, Tenant’s use of electrical service shall not exceed 6 watts per rentable square foot of the Premises. Electrical service to the Premises may be furnished by one or more companies providing electrical generation, transmission and distribution services, and the cost of electricity may consist of several different components or separate charges for such services, such as generation, distribution and standard cost charges. Landlord shall have the exclusive right to select any company providing electrical service to the Premises, to aggregate the electrical service for the Property and Premises with other buildings, to purchase electricity through a broker and/or buyers group and to change the providers and manner of purchasing electricity. Landlord shall

be entitled to receive a fee (if permitted by Law) for the selection of utility companies and the negotiation and administration of contracts for electricity, provided that the amount of such fee shall not exceed 50% of any savings obtained by Landlord. Landlord shall not be liable in any way to Tenant for any interruption or failure of or defect in the supply, character, quantity or quality of electric energy furnished to the Premises or for any loss, damage or expense Tenant may sustain if either the supply, character, quantity or quality of electric service is changed or is no longer suitable for Tenant’s requirements, whether by reason of any requirement, act or omission of the public utility serving the Building with electricity or for any other reason. Notwithstanding anything set forth herein to the contrary, Tenant acknowledges and agrees that in the event at any time during the Term Tenant installs any type of supplemental equipment (including, but not limited to, supplemental HVAC equipment) in or serving the Premises (subject to Landlord’s consent), then Landlord may require, at Tenant’s sole cost and expense, that Tenant separately meter the electrical usage for the Premises (or separately meter the electrical usage for such supplemental equipment using Landlord’s approved metering equipment and electrician) or, at Landlord’s option, Landlord may use any other method of measuring electrical usage that Landlord deems appropriate and Tenant shall be required to pay Landlord for such additional electrical usage.

7.03 Landlord reserves the right to stop the furnishing of the Building services and to stop service of the Base Building, when necessary, by reason of accident, or emergency, or for alterations in the judgment of Landlord desirable or necessary to be made, until such accident or emergency shall have ceased or said alterations shall have been completed; and Landlord shall have no responsibility or liability for failure to supply air-conditioning, ventilation, heat, elevator, plumbing, electric, or other services during said period or when prevented from so doing by strikes, lockouts, labor troubles, difficulty of obtaining materials, accidents or by any cause beyond Landlord’s reasonable control, or by Laws or failure of electricity, water, steam, coal, oil or other suitable fuel or power supply, or inability by exercise of reasonable diligence to obtain electricity, water, steam, coal, oil or other suitable fuel or power. Except as expressly provided in Section 16.02 in the event of a Casualty, no diminution or abatement of rent or other compensation shall or will be claimed by Tenant as a result therefrom, nor shall this Lease or any of the obligations of Tenant be affected or reduced by reason of such interruption, curtailment or suspension, nor shall the same constitute an actual or constructive eviction. Without limiting events that may constitute “any cause beyond Landlord’s reasonable control,” the following are items which Landlord and Tenant agree are beyond Landlord’s reasonable control:

(a) Lack of access to the Property, Building or the Premises (which shall include, but not be limited to, the lack of access to the Building or the Premises when it or they are structurally sound but inaccessible due to evacuation of the surrounding area or damage to nearby structures or public areas);

(b) any cause outside the Building or the Property;

(c) Reduced air quality or other contaminants within the Building that would adversely affect the Building or its occupants (including, but not limited to, the presence of biological or other airborne agents within the Building or the Premises);

(d) Disruption of mail and deliveries to the Building or the Premises resulting from a casualty;

(e) Disruption of telephone and telecommunications services to the Building or the Premises resulting from a casualty; or

(f) Blockages of any windows, doors, or walkways to the Building or the Premises resulting from a casualty.

8. Leasehold Improvements.

All improvements in and to the Premises, including any Alterations (defined in Section 9.03 ) but excluding Tenant’s Property (collectively, “ Leasehold Improvements ”) shall remain upon the Premises at the end of the Term without compensation to Tenant (including, but not limited to, any pantry and kitchen appliances installed by or for Tenant), provided that Tenant, at its expense, removes any Required Removables (as hereinafter defined), including any Cable (defined in Section 9.01 below), in compliance with the National Electric Code or other

applicable Law. Landlord, by written notice to Tenant (the “ Removal Notice ”) delivered prior to the Expiration Date, may require Tenant, at its expense, to remove any Alterations that, in Landlord’s reasonable judgment, are of a nature that would require removal and repair costs that are materially in excess of the removal and repair costs associated with standard office improvements (the Cable and such other items collectively are referred to as “ Required Removables ”). Required Removables shall include, without limitation, vending machines, internal stairways, raised floors, personal baths and showers, vaults, rolling file systems and structural alterations and modifications and, notwithstanding anything to the contrary in this Lease, Tenant shall have an obligation to remove the Required Removables specifically enumerated in this sentence upon the expiration or earlier termination of this Lease whether or not Landlord delivers notice to Tenant requiring removal of the same as contemplated by the immediately preceding sentence. The Required Removables shall be removed by Tenant before the Expiration Date or earlier termination of this Lease or within thirty (30) days following the date of the Removal Notice if the date of the Removal Notice is not at lease thirty (30) days prior to the Expiration Date or earlier termination date. Tenant shall repair damage caused by the installation or removal of Required Removables. If Tenant fails to perform its obligations in a timely manner, Landlord may perform such work at Tenant’s expense. Tenant, at the time it requests approval for a proposed Alteration, may request in writing that Landlord advise Tenant whether the Alteration, or any portion thereof, is a Required Removable. Within ten (10) days after receipt of Tenant’s request, Landlord shall advise Tenant in writing as to which portions of the Alteration are Required Removables.

9. Repairs and Alterations.

9.01 Tenant shall periodically inspect the Premises to identify any conditions that are dangerous or in need of maintenance or repair. Tenant shall promptly provide Landlord with notice of any such conditions. Tenant shall, at its sole cost and expense, perform all maintenance and repairs to the Premises that are not Landlord’s express responsibility under this Lease, and keep the Premises in good condition and repair, reasonable wear and tear excepted. Tenant’s repair and maintenance obligations include, without limitation, repairs to: (a) floor covering; (b) interior partitions; (c) doors; (d) the interior side of demising walls; (e) electronic, fiber, phone and data cabling, wiring and related equipment that is installed by or for the exclusive benefit of Tenant (collectively, “ Cable ”); (f) supplemental HVAC conditioning units, kitchens, including, without limitation, hot water heaters, plumbing and similar facilities, systems and/or equipment exclusively serving Tenant; and (g) Alterations. Subject to the terms of Section 15 below, to the extent Landlord is not reimbursed by insurance proceeds and so long as Landlord maintains insurance as required in Section 14 of this Lease, Tenant shall reimburse Landlord for the cost of repairing damage to the Building caused by the acts of Tenant, Tenant Related Parties (as hereinafter defined) and their respective contractors and vendors. Tenant shall, prior to the Commencement Date and at its sole cost and expense, enter into a service contract for all supplemental HVAC units, which service contract shall provide for quarterly maintenance of such units and which service contract shall be reasonably acceptable to Landlord. Tenant shall provide a copy of such service contract to Landlord promptly following execution thereof, but in no event later than the Commencement Date. If Tenant fails to make any repairs to the Premises or otherwise fails to fulfill its obligations under this Section 9 for more than fifteen (15) days after notice from Landlord (although notice shall not be required in an emergency), Landlord may make the repairs and/or take any other reasonable action to cure such failure by Tenant, and Tenant shall pay the reasonable cost of same, together with an administrative charge in an amount equal to 8% of such cost as Additional Rent.

9.02 Landlord shall keep and maintain in good repair and working order and perform maintenance upon the: (a) structural elements of the Building; (b) Base Building systems, mechanical (including HVAC), electrical, plumbing and fire/life safety systems serving the Building in general; (c) Common Areas; (d) roof of the Building; (e) exterior windows of the Building; and (f) elevators serving the Building. Landlord shall promptly make repairs for which Landlord is responsible.

9.03 Tenant shall not make alterations, repairs, additions or improvements or install any Cable in or to the Premises (collectively referred to as “ Alterations ”) without first obtaining the written consent of Landlord in each instance, which consent shall not be unreasonably withheld or delayed, provided that (1) the outside appearance or the strength of the Building shall not be affected; and (2) the structural parts of the Building and the proper functioning of the Base Building shall not be adversely affected. However, Landlord’s consent shall not be required for

any Alteration that satisfies all of the following criteria (a “ Cosmetic Alteration ”): (a) is of a cosmetic nature such as painting, wallpapering, hanging pictures and installing carpeting; (b) is not visible from the exterior of the Premises or Building; (c) will not affect the Base Building or require a building permit; (d) does not require work to be performed inside the walls or above the ceiling of the Premises; and (e) such Alterations (or a related series of Alterations) do not exceed $25,000.00. Landlord’s consent to Cosmetic Alterations, the cost of which exceeds $25,000.00, will not be unreasonably withheld, conditioned or delayed. Cosmetic Alterations shall be subject to all the other provisions of this Section 9.03 relating to non-Cosmetic Alterations. All non-Cosmetic Alterations shall be performed by a Landlord Approved General Contractor, each charging commercially competitive rates, a current list of which is annexed hereto as Exhibit C-1 , however, Landlord may designate specific contractors with respect to specific Base Building items. Prior to starting any non-Cosmetic Alterations, Tenant shall furnish Landlord, for its approval, with plans and specifications; names of sub-contractors reasonably acceptable to Landlord (provided such sub-contractors are not selected by Landlord’s Approved General Contractor); required permits and approvals; evidence of contractor’s and subcontractor’s insurance (including workers’ compensation insurance) in amounts reasonably required by Landlord and naming Landlord as an additional insured; and any security for performance in amounts reasonably required by Landlord. Changes to the plans and specifications must also be submitted to Landlord for its approval. Alterations shall be constructed in a good and workmanlike manner, in accordance with all applicable Laws and using new materials of a quality reasonably approved by Landlord. Tenant shall reimburse Landlord for any sums paid by Landlord for third party examination of Tenant’s plans for Alterations (other than the Plans for Landlord’s Work attached hereto as Exhibit C-2). In addition, Tenant shall pay Landlord a fee for Landlord’s oversight and coordination of any non-Cosmetic Alterations equal to 8% of the cost of the non-Cosmetic Alterations; provided however, notwithstanding anything contained herein to the contrary, Tenant shall not be required to pay such fee in connection with Landlord’s Work.

10. Entry by Landlord.

Landlord may enter the Premises to inspect or clean the Premises or to perform or facilitate the performance of repairs, alterations or additions to the Premises or any portion of the Building at reasonable times and upon reasonable notice (provided that no notice shall be required for cleaning or emergencies). Landlord may enter the Premises without notice to show the Premises within the last twelve (12) months of the Lease Term, provided that when practicable, Landlord will attempt to give oral notice prior to entry to show the Premises during the last twelve months of the Term. If reasonably necessary, Landlord may temporarily close all or a portion of the Premises to perform repairs, alterations and additions. However, except in emergencies, Landlord will not close the Premises if the work can reasonably be completed on weekends and after Building Service Hour. Entry by Landlord shall not constitute a constructive eviction or entitle Tenant to an abatement or reduction of Rent.

11. Assignment and Subletting.

11.01 Except as otherwise provided in this Article 11 , Tenant shall not (a) assign this Lease (whether by operation of law, transfers of interests in Tenant or otherwise); or (b) mortgage or encumber Tenant’s interest in this Lease, in whole or in part; or (c) sublet, or permit the subletting of, the Premises or any part thereof; or (d) permit the Premises or any part thereof to be occupied or used for desk space, mailing privileges or otherwise by any person other than Tenant. Tenant shall not advertise or authorize a broker to advertise for a subtenant or assignee, without in each instance, obtaining the prior written consent of Landlord, which shall not be unreasonably withheld or delayed.

Landlord agrees that Tenant is entering into this Lease for itself and the benefit of certain of its affiliated entities, as described below (“ Affiliated Entities ”), and therefore the Premises may be used by any Affiliated Entities without separate prior written consent of the Landlord, provided that Tenant delivers prior written notice to Landlord of the occupancy by the Affiliated Entities and the identity of the Affiliated Entities, and further provided that (a) Tenant does not separately demise the space used by the Affiliated Entities and the Affiliated Entities shall utilize with Tenant one common entryway to the Premises as well as certain shared central services, such as reception, photocopying and the like; (b) the Affiliated Entities shall not occupy, in the aggregate, more than 10% of the rentable area in the Premises; (c) the Affiliated Entities operate their business in the Premises for the Permitted Use and for no other purpose; and (d) the

business of the Affiliated Entities is suitable for the Building considering the business of other tenants and the Building’s prestige. If any Affiliated Entities occupy any portion of the Premises as described herein, it is agreed that (i) the Affiliated Entities must comply with all provisions of this Lease, and a Default by any Affiliated Entities shall be deemed a Default by Tenant under this Lease; (ii) all notices required of Landlord under the Lease shall be sent only to Tenant in accordance with the terms of the Lease, and in no event shall Landlord be required to send any notices to any Affiliated Entities; (iii) in no event shall any such occupancy or use by the Affiliated Entities release or relieve Tenant from any of its obligations under the Lease; (iv) the Affiliated Entities and their employees, contractors and invitees visiting or occupying space in the Premises shall be deemed contractors of Tenant for purposes of Tenant’s indemnification obligations in Section 13 of this Lease; and (v) if the Affiliated Entities pay Rent for the Premises directly to Landlord, Landlord, at its option, may accept the Rent and the Rent shall be considered to be for the account of Tenant and applied against the Rent owed by Tenant as deemed appropriate by Landlord. Neither the occupancy of any portion of the Premises by the Affiliated Entities, nor the payment of any Rent directly by the Affiliated Entities shall be deemed to create a landlord and tenant relationship between Landlord and the Affiliated Entities, and, in all instances, Tenant shall be considered the sole tenant under the Lease. As used herein, an entity shall be deemed to be an Affiliated Entity of Tenant if such entity controls, is controlled by, or is under common control with, Tenant.

11.02 If Tenant’s interest in this Lease shall be assigned in violation of the provisions of this Article 11 , such assignment shall be invalid and of no force or effect against Landlord; provided, however, that Landlord may collect an amount equal to the then Base Rent plus any other item of Rent from the assignee as a fee for its use and occupancy. If the Premises or any part thereof are sublet to, or occupied by, or used by, any person other than Tenant, whether or not in violation of this Article 11 , Landlord, after default by Tenant under this Lease, may collect any item of Rent or other sums paid by the subtenant, user or occupant as a fee for its use and occupancy, and shall apply the net amount collected to the Base Rent and the items of Rent reserved in this Lease. No such assignment, subletting, occupancy, or use, whether with or without Landlord’s prior consent, nor any such collection or application of Rent or fee for use and occupancy, shall be deemed a waiver by Landlord of any term, covenant or condition of this Lease or the acceptance by Landlord of such assignee, subtenant, occupant or user as Tenant hereunder, nor shall the same, in any circumstances, relieve Tenant of any of its obligations under this Lease. The consent by Landlord to any assignment, subletting, occupancy or use shall not relieve Tenant from its obligation to obtain the express prior consent of Landlord to any further assignment, subletting, occupancy or use. Any person to which this Lease is assigned with Landlord’s consent shall be deemed without more to have assumed all of the obligations arising under this Lease from and after the date of such assignment and shall execute and deliver to Landlord, upon demand, an instrument confirming such assumption. Notwithstanding and subsequent to any assignment, Tenant’s primary liability hereunder shall continue notwithstanding (a) any subsequent amendment hereof, or (b) Landlord’s forbearance in enforcing against Tenant any obligation or liability, without notice to Tenant, to each of which Tenant hereby consents in advance.

11.03 (a) For purposes of this Article 11 , (i) the transfer of a majority of the issued and outstanding capital stock of any corporate tenant, or of a corporate subtenant, or the transfer of a majority of the total interest in any partnership tenant or subtenant, or the transfer of control in any general or limited liability partnership tenant or subtenant, or the transfer of a majority of the issued and outstanding membership interests in a limited liability company tenant or subtenant, however accomplished, whether in a single transaction or in a series of related or unrelated transactions, involving the tenant, subtenant and/or its parent (including, without limitation, and by way of example only, the transfer of a majority of the outstanding capital stock of a company, which company owns 100% of a second tier company, which in turn owns 51% of the outstanding capital stock of a corporate tenant hereunder), shall be deemed an assignment of this Lease, or of such sublease, as the case may be, except that the transfer of the outstanding capital stock of any corporate tenant, subtenant or parent, shall be deemed not to include the sale of such stock by persons or parties, other than those deemed “affiliates” of Tenant within the meaning of Rule 144 promulgated under the Securities Act of 1933, as amended, through the “over-the-counter market” or through any recognized stock exchange, (ii) any increase in the amount of issued and/or outstanding capital stock of any corporate tenant, or of a corporate subtenant, or such tenant’s or subtenant’s parent, or of the issued and outstanding membership interests in a limited liability company tenant or subtenant, or such tenant’s or subtenant’s parent,

and/or the creation of one or more additional classes of capital stock of any corporate tenant or any corporate subtenant, or such tenant’s or subtenant’s parent, in a single transaction or a series of related or unrelated transactions involving the tenant, subtenant and/or its parent, resulting in a change in the legal or beneficial ownership of such tenant, subtenant or parent so that the shareholders or members of such tenant, subtenant or parent existing immediately prior to such transaction or series of transactions shall no longer own a majority of the issued and outstanding capital stock or membership interests of such entity, shall be deemed an assignment of this Lease, (iii) an agreement by any other person or entity, directly or indirectly, to assume Tenant’s obligations under this Lease shall be deemed an assignment, (iv) any person or legal representative of Tenant, to whom Tenant’s interest under this Lease passes by operation of law, or otherwise, shall be bound by the provisions of this Article 11 , (v) a modification, amendment or extension of a sublease shall be deemed a sublease, and (vi) the change or conversion of Tenant from an entity in which the partners or members have personal liability to a limited liability company, a limited liability partnership or any other entity which possesses the characteristics of limited liability shall be deemed an assignment. Tenant agrees to furnish to Landlord on request at any time such information and assurances as Landlord may reasonably request that neither Tenant, nor any previously permitted subtenant, has violated the provisions of this Article 11 .

(b) The provisions of clauses (a), (c) and (d) of Section 11.01 , Section 11.04 , Section 11.05 and Section 11.06 shall not apply to, and Landlord’s consent shall not be required with respect to transactions with a Related Entity (as hereinafter defined), provided such related entity has a net worth at least equal to or in excess of the net worth of Tenant as of the date of this Lease or as of the date immediately prior to such merger, consolidation or transfer, whichever is greater. As used herein, “ Related Entity ” means (i) a corporation or limited liability company into or with which Tenant is merged or consolidated or with a person or entity to which substantially all of Tenant’s assets are transferred, (ii) if Tenant is a general, limited or limited liability partnership, transactions with a successor partnership, or (iii) an entity that controls or is controlled by Tenant or is under common control with Tenant. Tenant shall notify Landlord before any such transaction is consummated.

(c) The term “control” as used in this Lease (i) in the case of a corporation shall mean ownership of more than fifty (50%) percent of the outstanding capital stock of that corporation, (ii) in the case of a general or limited liability partnership, shall mean ownership of more than fifty (50%) percent of the general partnership or membership interests of the partnership, (iii) in the case of a limited partnership, shall mean ownership of more than fifty (50%) percent of the general partnership interests of such limited partnership, and (iv) in the case of a limited liability company, shall mean ownership of more than fifty (50%) percent of the membership interests of such limited liability company.

11.04 (a) In the event that Landlord shall not exercise its rights pursuant to paragraph (b)(x) or (y) of this Section 11.04 , Landlord shall not unreasonably withhold or delay its consent to a proposed subletting of the Premises, or an assignment of this Lease, provided that in each such instance, the following requirements shall have been satisfied (if Tenant proposes a partial sublet, references in this Section 11.04 to the Premises shall, unless the context otherwise requires, refer to such portion):

(1) in the case of a proposed subletting, the listing or advertising for subletting of the Premises shall not have included a proposed rental rate, provided, however, that Tenant may quote in writing directly to prospective subtenants the proposed rental rate;

(2) no Default shall have occurred and be continuing;

(3) the proposed subtenant or assignee shall have a financial standing, be engaged in a business, and propose to use the Premises in a manner in keeping with the standards in such respects of the other tenancies in the Building;

(4) the proposed subtenant or assignee shall not be (x) a person or entity with whom Landlord is then negotiating or discussing the leasing of comparable space in the Building or in One Stamford Plaza owned by an affiliate of Landlord; or (y) a tenant in or occupant of the Building or in One Stamford Plaza owned by an affiliate of Landlord or any person or entity that, directly or indirectly, is controlled by, controls or is under common control with any such tenant or occupant;

(5) any subletting shall be expressly subject to all of the terms, covenants, conditions and obligations on Tenant’s part to be observed and performed under this Lease and any assignment or subletting shall be subject to the further condition and restriction that this Lease or the sublease shall not be further assigned, encumbered or otherwise transferred or the subleased premises further sublet by the subtenant in whole or in part, or any part thereof suffered or permitted by the assignee or subtenant to be used or occupied by others, without the prior written consent of Landlord in each instance, which consent shall be granted or withheld in Landlord’s sole discretion, and if Landlord shall consent to any further subletting by the subtenant or the assignment of the sublease, Sections 11.05 and 11.06 of this Lease shall apply to any such transactions as if the further subletting or assignment of the sublease were a proposed subletting or assignment being made by Tenant under this Lease so that Landlord shall be entitled to receive all amounts described in such sections;

(6) no subletting shall be for less than one-half of the Premises and shall be regular in shape and at no time shall there be more than two (2) occupants, including Tenant, in the Premises, all of whom shall have direct access through existing public corridors to elevators, fire stairs and core rest rooms;

(7) Tenant shall, at the time Tenant delivers to Landlord an executed assignment or sublease (as applicable), deliver to Landlord $2,500 as reimbursement for Landlord’s administrative costs and fees in connection with each assignment or sublease, as the case may be;

(8) any sublease shall expressly provide that in the event of termination, reentry or dispossession of Tenant by Landlord under this Lease, Landlord may, at its option, take over all of the right, title and interest of Tenant as sublessor under such sublease, and such subtenant shall, at Landlord’s option, attorn to Landlord pursuant to the then executory provisions of such sublease, except that Landlord shall not be (i) liable for any previous act or omission of Tenant under such sublease, (ii) subject to any offset that theretofore accrued to such subtenant against Tenant, (iii) bound by any previous modification of such sublease or by any previous prepayment of more than one month’s rent unless previously approved by Landlord, (iv) bound by any covenant to undertake or complete or make payment to or on behalf of a subtenant with respect to any construction of the Premises or any portion thereof demised by such sublease, and/or (v) bound by any obligations to make any other payment to or on behalf of the subtenant, except for ordinary services, repairs, maintenance and restoration provided for under the sublease to be performed after the date of such termination, reentry or dispossession by Landlord under this Lease and which Landlord is required to perform hereunder with respect to the subleased space at Landlord’s expense;

(9) The nature of the occupancy of the proposed assignee or subtenant will not cause an excessive density of employees or traffic or make excessive demands on the Base Building or present a greater security risk to the Building than is presented by Tenant;

(10) The nature of the occupancy, the use and the manner of use of the Premises by the proposed subtenant or assignee shall not impose on Landlord any requirements of the ADA in excess of those requirements imposed on Landlord in the absence of such proposed subtenant or assignee or such occupancy, use or manner of use, unless such proposed subtenant or assignee shall have agreed to comply with each of such excess requirements at such subtenant’s or assignee’s cost and expense and, at Landlord’s option, shall have furnished Landlord with such security as Landlord may require to assure that such subtenant or assignee shall so comply; and

(11) Landlord and Tenant shall have agreed on the computation required under Section 11.05 or Section 11.06 , as applicable.

(b) Upon obtaining a proposed assignee or subtenant, upon terms satisfactory to Tenant, Tenant shall submit to Landlord in writing (the following documents and information being collectively referred to as the “ Sublease or Assignment Statement ”): (i) the name and business address of the proposed assignee or subtenant; (ii) the nature and character of the business and credit of the proposed assignee or subtenant; (iii) an original counterpart of the executed assignment or sublease and all related agreements, the effective or commencement date of which shall be at least 45 days after the date Tenant’s notice to Landlord is given; (iv) current financial information with respect to the proposed assignee or subtenant, including, without

limitation, its most recent financial statements, certified by an independent certified public accountant (“ CPA ”) if such financial statements are certified by a CPA (or, if not, certified by the chief financial officer of the proposed assignee or subtenant as being true and correct) and (v) any other information that Landlord may reasonably request. Landlord shall have the following rights, exercisable within thirty (30) days after Landlord’s receipt of the Sublease or Assignment Statement (including any additional information reasonably requested by Landlord): (x) in the case of an assignment of this Lease or a subletting of the entire Premises, to terminate this Lease or to take an assignment of this Lease from Tenant or (y) in the case of a subletting of a portion of the Premises, to terminate this Lease with respect only to the portion of the Premises proposed to be sublet or (z) to approve or disapprove the proposed assignment or sublease in accordance with the provisions of Section 11.04 (a) . If Landlord shall fail to notify Tenant within said thirty (30) day period of Landlord’s intention to exercise its rights pursuant to clauses (x) or (y) of this Section 11.04(b) , or to have approved or disapproved the transaction, Landlord shall be deemed to have not exercised its right to terminate or take an assignment of this Lease and shall be deemed to have disapproved such transaction. If pursuant to the exercise of any of Landlord’s options pursuant to this Section 11.04 , this Lease is terminated as to only a portion of the Premises, then the Base Rent and Additional Rent shall be adjusted in proportion to the portion of the Premises affected by such termination. If Tenant fails to enter into a binding sublease or assignment within ninety (90) days after delivery of the Sublease or Assignment statement, then Tenant shall notify Landlord of same and Landlord shall again have the options set forth in this Section 11.04(b) .

(c) The failure by Landlord to exercise its option under Section 11.04(b)(x) or (y) with respect to any subletting or assignment shall not be deemed a waiver of such option with respect to any extension of such subletting or assignment or any subsequent subletting or assignment.

11.05 If Tenant sublets all or any portion of the Premises to a person or entity in a transaction for which Landlord’s consent is required, Landlord shall be entitled to and Tenant shall pay to Landlord, as Additional Rent (the “ Sublease Additional Rent ”), fifty percent (50%) of any and all rents, additional charges and other consideration payable under the sublease to Tenant by the subtenant in excess of the Base Rent and Additional Rent accruing during the term of the sublease in respect of the subleased space (at the rate per square foot payable by Tenant under this Lease) pursuant to the terms of this Lease (including, but not limited to, sums paid for the sale or rental of Tenant’s Property and Alterations less, in the case of a sale thereof, the then net unamortized or undepreciated cost thereof determined on the basis of Tenant’s federal income tax or federal information returns) and less the actual out-of-pocket expenses reasonably incurred by Tenant in connection with such sublease on account of brokerage commissions, advertising expenses, legal fees, free rent, work contributions and the cost of work performed by Tenant to prepare the Premises for the subtenant’s occupancy, all amortized on a straight-line basis over the term of the sublease. Such Sublease Additional Rent shall be payable as and when received by Tenant.

11.06 If Tenant shall assign this Lease to a person or entity in a transaction for which Landlord’s consent is required, Landlord shall be entitled to and Tenant shall pay to Landlord, as Additional Rent, fifty percent (50%) of all sums and other consideration paid to Tenant by the assignee for or by reason of such assignment (including, but not limited to, sums paid for the sale or rental of Tenant’s Property and Alterations less, in the case of a sale thereof, the then net unamortized or undepreciated cost thereof determined on the basis of Tenant’s federal income tax or federal information returns) and less the actual out-of-pocket expenses reasonably incurred by Tenant in connection with such assignment on account of brokerage commissions, advertising expenses, legal fees, work contributions and the cost of work performed by Tenant to prepare the Premises for the assignee’s occupancy. Such Additional Rent shall be payable as and when received by Tenant from the assignee.

12. Liens.

Tenant shall not permit mechanics’ or other liens to be placed upon the Property, Premises or Tenant’s leasehold interest in connection with any work or service done or purportedly done by or for the benefit of Tenant or its transferees. Tenant shall give Landlord notice at least fifteen (15) days prior to the commencement of any work in the Premises to afford Landlord the opportunity, where applicable, to post and record notices of non-responsibility. Tenant, within thirty (30) days of notice from Landlord, shall fully discharge any lien by

settlement, by bonding or by insuring over the lien in the manner prescribed by the applicable lien Law and, if Tenant fails to do so, Tenant shall be deemed in Default under this Lease and, in addition to any other remedies available to Landlord as a result of such Default by Tenant, Landlord, at its option, may bond, insure over or otherwise discharge the lien. Tenant shall reimburse Landlord for any amount paid by Landlord, including, without limitation, reasonable attorneys’ fees in connection with Tenant breach of its obligations hereunder and/or bonding, insuring over or otherwise discharging the lien.

13. Indemnity and Waiver of Claims.

Except to the extent caused by the gross negligence or willful misconduct of Landlord or any Landlord Related Parties (defined below), Tenant shall indemnify, defend and hold Landlord and the Landlord Related Parties harmless against and from all liabilities, obligations, damages, penalties, claims, actions, costs, charges and expenses, including, without limitation, reasonable attorneys’ fees and other professional fees (if and to the extent permitted by Law) (collectively referred to as “ Losses ”), which may be imposed upon, incurred by or asserted against Landlord and/or any of the Landlord Related Parties and arising out of or in connection with: (a) any damage or injury occurring in the Premises, and/or (b) any acts or omissions (including violations of Law) of Tenant, the Tenant Related Parties (defined below) and/or any of Tenant’s transferees, contractors or licensees, and/or (c) any breaches by Tenant of its obligations under this Lease. Notwithstanding the foregoing, except for Losses resulting from a breach by Tenant under Section 5.03 (Hazardous Materials) and Section 22 (Holding Over) of this Lease, Tenant shall not be liable for any consequential, incidental, indirect, special or punitive damages resulting from any breaches by Tenant of its obligations under the Lease. Except to the extent caused by the negligence or willful misconduct of Tenant or any Tenant Related Parties, Landlord shall indemnify, defend and hold Tenant, its trustees, members, principals, beneficiaries, partners, officers, directors, employees and agents (“ Tenant Related Parties ”) harmless against and from all Losses which may be imposed upon, incurred by or asserted against Tenant or any of the Tenant Related Parties by any third party and arising out of or in connection with the acts or omissions (including violations of Law) of Landlord or the Landlord Related Parties. Tenant hereby waives all claims against and releases Landlord and its trustees, members, principals, beneficiaries, partners, shareholders, officers, directors, employees, Mortgagees (defined in Section 23 ) and agents (the “ Landlord Related Parties ”) from all claims for any injury to or death of persons, damage to property or business loss in any manner related to (a) Force Majeure, (b) acts of third parties, (c) the bursting or leaking of any tank, water closet, drain or other pipe, (d) the inadequacy or failure of any security or protective services, personnel or equipment, or (e) any matter not within the reasonable control of Landlord.

14. Insurance.

Tenant, at its sole cost and expense, shall procure and continue in full force during the Term of this Lease (as the same may be extended) (including any period prior to the Commencement Date of the Term of this Lease during which Tenant is engaged in any alterations or repairs to the Premises or has otherwise entered upon the Premises to install fixtures or furnishings or for any purpose) such insurances as will protect Tenant, Landlord, Landlord’s managing agent, and their respective officers, directors, shareholders, affiliates, partners, agents and employees from claims under workers’ compensation acts and other employee benefits acts, from claims for injury to persons or damage to property, which may arise out of or result from operations under this Lease, whether by Tenant or anyone directly or indirectly employed by it, or anyone for whose acts it may be liable, for not less than the limits of liability prescribed in subparagraphs below, or as required by law, whichever is greater:

(a) Commercial general liability insurance with respect to the Premises and the business operated by Tenant (the business operated by Tenant includes, but is not limited to, any activities conducted or services provided at the Premises by any subtenants, licensees, concessionaires or vendors of Tenant), including coverage for bodily injury, personal injury and death, property damage and contractual liability (including “Insured Contracts”) recognizing provisions of this Lease, written on an occurrence form with limits of not less than One Million ($1,000,000.00) Dollars for each occurrence and Two Million ($2,000,000.00) Dollars general aggregate per location.

(b) Intentionally Omitted.

(c) Excess (umbrella) liability insurance for not less than Five Million ($5,000,000.00) Dollars for each occurrence and Five Million ($5,000,000.00) Dollars annually in the aggregate.

(d) Workers’ compensation and occupational disease insurance, employee benefit insurance and any other insurance in the statutory amounts required by the laws of the state in which the Building is located, with broad form all-states endorsement; and (ii) employer’s liability insurance with a limit of One Million ($1,000,000.00) Dollars for each accident.

(e) “All Risk” insurance against fire with extended coverage, vandalism, malicious mischief and all risk endorsements (Special Form), including terrorism, in an amount adequate to cover the full replacement value of all trade fixtures, fittings, installations, decorations, improvements, Alterations, betterments, furnishings, contents and signs, plate glass for all plate glass at the Premises and any other personal property in or on the Premises in the event of fire or other casualty.

(f) Business interruption insurance fully compensating for the amount of charges and additional rent owed to Landlord by Tenant for a period of not less than twelve (12) months. The coverage will be “All Risk” as stated in the above paragraph (e).

Such insurance shall be written by one or more insurance companies authorized to issue such in the State of Connecticut and which have an “A.M. Best” rating of “A-VIII” or better, or an equivalent rating by another recognized rating organization acceptable to Landlord. There shall be delivered to Landlord a certificate or certificates of each such insurance and of all renewals and replacements thereof with proof satisfactory to Landlord or payment of premiums therefor. All such policies (i) shall name Landlord, and its managing agent as additional insureds and any other party reasonably requested by Landlord; (ii) shall contain a provision that they may not be cancelled or amended without at least thirty (30) days’ prior written notice to Landlord; (iii) shall be procured and maintained at the sole cost and expense of Tenant; and (iv) shall be primary and non-contributing. In the event that Tenant fails to procure or maintain any insurance pursuant to this Section, Landlord may but is not obligated to obtain same on behalf of Tenant and any premiums paid by Landlord therefor shall be deemed Additional Rent to be paid by Tenant to Landlord within ten (10) days after demand therefor.

Landlord shall carry and maintain throughout the Term, comprehensive “all-risk” fire and casualty insurance covering the Building and comprehensive general liability insurance coverage in amounts held by reasonably prudent commercial landlords of comparable first-class office properties in Stamford, Connecticut.

15. Waiver of Claims and Subrogation.

Landlord and Tenant hereby waive any and all rights of recovery, claims, actions and causes of action against the other for any loss or damage with respect to Tenant’s Property, Leasehold Improvements, Alterations, the Building, the Premises, or any contents thereof, including rights, claims, actions and causes of action based on negligence, which loss or damage is (or would have been, had the insurance required by this Lease been carried) covered by insurance. For the purposes of this waiver, any deductible with respect to a party’s insurance shall be deemed covered by and recoverable by such party under valid and collectable policies of insurance. Landlord and Tenant shall procure an appropriate clause in, or endorsement on, any fire or extended coverage insurance covering the Tenant’s Property, Leasehold Improvements, Alterations, the Building, the Premises, or any contents thereof, pursuant to which the insurer waives subrogation, or consents to a waiver of right of recovery.

16. Casualty Damage.

16.01 If all or any portion of the Premises becomes untenantable by fire or other casualty to the Premises (collectively a “ Casualty ”), Landlord, with reasonable promptness, shall cause a general contractor selected by Landlord to provide Landlord and Tenant with a written estimate of the amount of time required using standard working methods to Substantially Complete the repair and restoration of the Premises and any Common Areas necessary to provide

access to the Premises (“ Completion Estimate ”). If the Completion Estimate indicates that the Premises or any Common Areas necessary to provide access to the Premises cannot be made tenantable within one year from the date the repair is started, then either party shall have the right to terminate this Lease upon written notice to the other within 10 days after receipt of the Completion Estimate. Tenant, however, shall not have the right to terminate this Lease if the Casualty was caused by the negligence or intentional misconduct of Tenant or any Tenant Related Parties. In addition, Landlord, by notice to Tenant within 90 days after the date of the Casualty, shall have the right to terminate this Lease if: (1) the Premises have been materially damaged and there is less than two (2) years of the Term remaining on the date of the Casualty; (2) any Mortgagee requires that the insurance proceeds be applied to the payment of the mortgage debt; (3) a material uninsured loss to the Building or Premises occurs or (4) such portion of the Building has been so damaged so that substantial alteration or reconstruction of the Building shall, in Landlord’s opinion, be required.

16.02 If this Lease is not terminated, Landlord shall promptly and diligently, subject to reasonable delays for insurance adjustment or other matters beyond Landlord’s reasonable control and to the extent of insurance proceeds received by Landlord, restore the Premises and Common Areas. Such restoration shall be to substantially the same condition that existed prior to the Casualty, except for modifications required by Law or any other modifications to the Common Areas deemed desirable by Landlord, and Landlord shall have no obligation to restore Tenant’s Property or any Alterations or any other improvements that Tenant is required to insure hereunder. Within thirty (30) days of demand, Tenant shall also pay Landlord for any additional excess costs that are determined for improvements requested by Tenant during the performance of the repairs. In no event shall Landlord be required to spend more for the restoration than the proceeds received by Landlord, whether insurance proceeds or proceeds from Tenant. Landlord shall not be liable for any inconvenience to Tenant, or injury to Tenant’s business resulting in any way from the Casualty or the repair thereof. Provided that Tenant is not in Default, during any period of time that all or a material portion of the Premises is rendered untenantable as a result of a Casualty, the Rent shall abate for the portion of the Premises that is untenantable and not used by Tenant.

17. Condemnation.

Either party may terminate this Lease if any material part of the Premises is taken or condemned for any public or quasi-public use under Law, by eminent domain or private purchase in lieu thereof (a “ Taking ”). Landlord shall also have the right to terminate this Lease if there is a Taking of any portion of the Building or Property which would have a material adverse effect on Landlord’s ability to profitably operate the remainder of the Building. The terminating party shall provide written notice of termination to the other party within forty-five (45) days after it first receives notice of the Taking. The termination shall be effective as of the effective date of any order granting possession to, or vesting legal title in, the condemning authority. If this Lease is not terminated, Base Rent and Tenant’s Pro Rata Share shall be appropriately adjusted to account for any reduction in the square footage of the Building or Premises. All compensation awarded for a Taking shall be the property of Landlord. The right to receive compensation or proceeds are expressly waived by Tenant, however, Tenant may file a separate claim for Tenant’s Property and Tenant’s reasonable relocation expenses, provided the filing of the claim does not diminish the amount of Landlord’s award. If only a part of the Premises is subject to a Taking and this Lease is not terminated, Landlord, with reasonable diligence, will restore the remaining portion of the Premises as nearly as practicable to the condition immediately prior to the Taking; provided, however, Landlord shall have no obligation to restore Tenant’s Property or any Alterations or any other improvements that Tenant is required to insure hereunder.

18. Events of Default.

In addition to any other default specifically described in this Lease, each of the following occurrences shall be a “ Default ”: (a) Tenant’s failure to pay any portion of Rent when due, if the failure continues for three (3) days after written notice to Tenant (“ Monetary Default ”), provided however, notwithstanding the foregoing, it shall not be a Default for Tenant’s failure to pay non-regularly recurring payments of Additional Rent when due unless such failure continues for ten (10) Business Days after written notice to Tenant (b) Tenant’s failure (other than a Monetary Default) to comply with any term, provision, condition or covenant of this Lease, if the failure is not cured within twenty (20) days after written notice to Tenant provided, however, if Tenant’s

failure to comply cannot reasonably be cured within 20 days, Tenant shall be allowed additional time (not to exceed an additional thirty (30) days) as is reasonably necessary to cure the failure so long as Tenant begins the cure within twenty (20) days and diligently pursues the cure to completion; (c) Tenant permits a Transfer without Landlord’s required approval or otherwise in violation of Article 11 of this Lease; (d) Tenant or any Guarantor becomes insolvent, makes a transfer in fraud of creditors, makes an assignment for the benefit of creditors, admits in writing its inability to pay its debts when due or forfeits or loses its right to conduct business; (e) Tenant’s leasehold estate is taken by process or operation of Law; (f) in the case of any ground floor or retail Tenant, Tenant does not take possession of or abandons or vacates all or any portion of the Premises; or (g) if any case, proceeding or other action is commenced or instituted against Tenant (i) seeking to have an order for relief entered against it as debtor or to adjudicate it bankrupt or insolvent, or seeking reorganization, arrangement, adjustment, winding-up, liquidation, dissolution or other relief with respect to it or its debts under any existing or future law of any jurisdiction domestic or foreign, relating to bankruptcy, insolvency, reorganization or relief of debtors; or (ii) seeking appointment of a receiver, trustee, custodian or other similar official for it or for all or any substantial part of its property. If Landlord provides Tenant with notice of Tenant’s failure to comply with any specific provision of this Lease on three (3) separate occasions during any twelve (12) month period, Tenant’s subsequent violation of such provision shall, at Landlord’s option, be an incurable Default by Tenant. All notices sent under this Section shall be in satisfaction of, and not in addition to, notice required by Law.

19. Remedies.

19.01 Upon Default, Landlord shall have the right to pursue any one or more of the following remedies:

(a) Terminate this Lease, in which case Tenant shall immediately surrender the Premises to Landlord. If Tenant fails to surrender the Premises, Landlord, in compliance with Law, may enter upon and take possession of the Premises and remove Tenant, Tenant’s Property and any party occupying the Premises. Tenant shall pay Landlord, on demand, all past due Rent and other losses and damages Landlord suffers as a result of Tenant’s Default, including, without limitation, all Costs of Reletting (defined below) and any deficiency that may arise from reletting or the failure to relet the Premises. “ Costs of Reletting ” shall include all reasonable costs and expenses incurred by Landlord in reletting or attempting to relet the Premises, including, without limitation, legal fees, brokerage commissions, the cost of alterations and the value of other concessions or allowances granted to a new tenant.

(b) Terminate Tenant’s right to possession of the Premises and, in compliance with Law, remove Tenant, Tenant’s Property and any parties occupying the Premises. Landlord may (but shall not be obligated to) relet all or any part of the Premises, without notice to Tenant, for such period of time and on such terms and conditions (which may include concessions, free rent and work allowances) as Landlord in its absolute discretion shall determine. Landlord may collect and receive all rents and other income from the reletting. Tenant shall pay Landlord on demand all past due Rent, all Costs of Reletting and any deficiency arising from the reletting or failure to relet the Premises. The re-entry or taking of possession of the Premises shall not be construed as an election by Landlord to terminate this Lease. Upon a Default by Tenant, Landlord shall use commercially reasonable efforts to mitigate its damages, provided that such commercially reasonable efforts shall not require Landlord to relet the Premises in preferences to any other space in the Building or to relet the Premises to any party that Landlord could reasonably reject as a transferee pursuant to Article 11 of this Lease.

19.02 In lieu of calculating damages under Section 19.01 , Landlord may elect to receive as damages the sum of (a) all Rent accrued through the date of termination of this Lease or Tenant’s right to possession, and (b) an amount equal to the total Rent that Tenant would have been required to pay for the remainder of the Term discounted to present value at the Prime Rate (defined below) then in effect, minus the then present fair rental value of the Premises for the remainder of the Term, similarly discounted, after deducting all anticipated Costs of Reletting. “ Prime Rate ” shall be the per annum interest rate publicly announced as its prime or base rate by a federally insured bank selected by Landlord in the state in which the Building is located.

19.03 If Tenant is in Default of any of its non-monetary obligations under the Lease beyond any applicable notice and/or cure periods, Landlord shall have the right to perform such obligations. Tenant shall reimburse Landlord for the cost of such performance upon demand

together with an administrative charge equal to ten (10%) of the cost of the work performed by Landlord. The repossession or re-entering of all or any part of the Premises shall not relieve Tenant of its liabilities and obligations under this Lease. No right or remedy of Landlord shall be exclusive of any other right or remedy. Each right and remedy shall be cumulative and in addition to any other right and remedy now or subsequently available to Landlord at Law or in equity.

20. Limitation of Liability.

NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED IN THIS LEASE, THE LIABILITY OF LANDLORD (AND OF ANY SUCCESSOR LANDLORD) SHALL BE LIMITED TO THE INTEREST OF LANDLORD IN THE PROPERTY (INCLUDING RENTAL INCOME, SALES AND INSURANCE PROCEEDS THEREFROM). TENANT SHALL LOOK SOLELY TO LANDLORD’S INTEREST IN THE PROPERTY FOR THE RECOVERY OF ANY JUDGMENT OR AWARD AGAINST LANDLORD OR ANY LANDLORD RELATED PARTY. NEITHER LANDLORD NOR ANY LANDLORD RELATED PARTY SHALL BE PERSONALLY LIABLE FOR ANY JUDGMENT OR DEFICIENCY, AND IN NO EVENT SHALL LANDLORD OR ANY LANDLORD RELATED PARTY BE LIABLE TO TENANT FOR ANY LOST PROFIT, DAMAGE TO OR LOSS OF BUSINESS OR ANY FORM OF SPECIAL, INDIRECT OR CONSEQUENTIAL DAMAGE. BEFORE FILING SUIT FOR AN ALLEGED DEFAULT BY LANDLORD, TENANT SHALL GIVE LANDLORD AND THE MORTGAGEE(S) WHOM TENANT HAS BEEN NOTIFIED HOLD MORTGAGES (DEFINED IN SECTION 23 BELOW), NOTICE AND REASONABLE TIME TO CURE THE ALLEGED DEFAULT.

21. Relocation.

Intentionally Omitted.

22. Holding Over.

If Tenant fails to surrender all or any part of the Premises at the termination of this Lease, occupancy of the Premises after termination shall be that of a tenancy at sufferance. Tenant’s occupancy shall be subject to all the terms and provisions of this Lease, and Tenant shall pay an amount (on a per month basis without reduction for partial months during the holdover) equal to the greater of (i) two hundred percent (200%) of the sum of the Base Rent and Additional Rent due for the monthly period immediately preceding the holdover, and (ii) the then fair market rental value of the Premises, as determined by Landlord. No holdover by Tenant or payment by Tenant after the termination of this Lease shall be construed to extend the Term or prevent Landlord from immediate recovery of possession of the Premises by summary proceedings or otherwise. If Landlord is unable to deliver possession of the Premises to a new tenant or to perform improvements for a new tenant as a result of Tenant’s holdover and Tenant fails to vacate the Premises within thirty (30) days after notice from Landlord, Tenant shall be liable for all damages that Landlord suffers from the holdover, including, without limitation, any claims made by any succeeding tenant founded upon such delay, any payment or rent concession which Landlord may be required to make to such tenant to induce such tenant not to terminate its lease by reason of the holding over by Tenant, and the loss of the benefit of the bargain if any such tenant shall terminate its lease by reason of such holding over by Tenant.

23. Subordination to Mortgages; Estoppel Certificate.

Tenant accepts this Lease subject and subordinate to any mortgage(s), deed(s) of trust, ground lease(s) or other lien(s) now or subsequently arising upon the Premises, the Building or the Property, and to renewals, modifications, refinancings and extensions thereof (collectively referred to as a “ Mortgage ”). The party having the benefit of a Mortgage shall be referred to as a “ Mortgagee ”. This clause shall be self-operative, but upon request from a Mortgagee, Tenant shall execute a commercially reasonable subordination agreement in favor of the Mortgagee. As an alternative, a Mortgagee shall have the right at any time to subordinate its Mortgage to this Lease. Upon request, Tenant, without charge, shall attorn to any successor to Landlord’s interest in this Lease. Any such attornment shall be made upon the condition that no such Mortgagee shall be (a) liable for any act or omission of any prior landlord (including, without limitation, the then defaulting landlord); or (b) subject to any defense or offsets (except as expressly set forth in this Lease) which Tenant may have against any prior landlord (including, without limitation, the

then defaulting landlord); or (c) bound by any payment of Rent which Tenant might have paid for more than the current month to any prior landlord (including, without limitation, the then defaulting landlord); or (d) bound by any obligation to make any payment to Tenant which was required to be made by the prior landlord hereunder; or (e) bound by any obligation to perform any work or to make improvements to the Premises except for (i) repairs and maintenance pursuant to the provisions of Article 9 , (ii) repairs to the Premises or any part thereof as a result of damage by fire or other casualty pursuant to Article 16 , but only to the extent that such repairs can be reasonably made from the net proceeds of any insurance actually made available to such Mortgagee and (iii) repairs to the Premises as a result of a partial condemnation pursuant to Article 17 , but only to the extent that such repairs can be reasonably made from the net proceeds of any award made available to such Mortgagee. Landlord shall use reasonable efforts to obtain a subordination, non-disturbance and attornment agreement (“ SNDA ”) from Landlord’s current Mortgagee on Mortgagee’s current standard form of agreement. Landlord and Tenant shall each, within 10 days after receipt of a written request from the other, execute and deliver a commercially reasonable estoppel certificate to those parties as are reasonably requested by the other (including a Mortgagee or prospective purchaser). Without limitation, such estoppel certificate may include a certification as to the status of this Lease, the existence of any defaults and the amount of Rent that is due and payable.

24. Notice.

24.01 All demands, approvals, consents and notices (collectively referred to as a “ notice ”) shall be in writing and delivered by hand or sent by registered or certified mail with return receipt requested or sent by nationally-recognized overnight courier service at the party’s respective Notice Address(es) set forth in Article 1 . Each notice shall be deemed to have been received on the earlier to occur of actual delivery or the date on which delivery is refused, or, if Tenant has vacated the Premises or any other Notice Address of Tenant without providing a new Notice Address, three (3) days after notice is deposited in the U.S. mail or with a courier service in the manner described above. Either party may, at any time, change its Notice Address (other than to a post office box address) by giving the other party written notice of the new address. Notice given by counsel for either party on behalf of such party or by Landlord’s managing agent on behalf of Landlord shall be deemed valid notices if addressed and sent in accordance with the provisions of this Article.

24.02 Notwithstanding the provisions of Section 24.01 , (i) Notices requesting services for overtime periods may be given by delivery to the Building superintendent or any other person in the Building designated by Landlord to receive such notices, and (ii) Landlord statements for Taxes and Expenses and bills may be rendered by delivering them to Tenant at the Premises without the necessity of a receipt, and without providing a copy of such Landlord statements or bills to any other party.

25. Surrender of Premises.

Upon the Expiration Date or termination of Tenant’s right to possession to the Premises, Tenant shall remove Tenant’s Property and Required Removables from the Premises, and quit and surrender the Premises to Landlord, broom clean, and in good order, condition and repair, ordinary wear and tear and damage which Landlord is obligated to repair hereunder excepted. If Tenant fails to remove any of Tenant’s Property within two (2) days after termination of this Lease or Tenant’s right to possession, Landlord, at Tenant’s sole cost and expense, shall be entitled (but not obligated) to remove and store Tenant’s Property. Landlord shall not be responsible for the value, preservation or safekeeping of Tenant’s Property. Tenant shall pay Landlord, upon demand, the expenses and storage charges incurred. If Tenant fails to remove Tenant’s Property from the Premises or storage, within 30 days after notice, Landlord may deem all or any part of Tenant’s Property to be abandoned and title to Tenant’s Property shall vest in Landlord. The obligations of Tenant under this Section 25 shall survive the expiration or earlier termination of this Lease.

26. Miscellaneous.

26.01 This Lease shall be interpreted and enforced in accordance with the Laws of the State of Connecticut and Landlord and Tenant hereby irrevocably consent to the jurisdiction and proper venue of State of Connecticut. If any term or provision of this Lease shall to any extent be void or unenforceable, the remainder of this Lease shall not be affected. If there is more than

one Tenant or if Tenant is comprised of more than one party or entity, the obligations imposed upon Tenant shall be joint and several obligations of all the parties and entities, and requests or demands from any one person or entity comprising Tenant shall be deemed to have been made by all such persons or entities. Notices to any one person or entity shall be deemed to have been given to all persons and entities. Tenant represents and warrants to Landlord that each individual executing this Lease on behalf of Tenant is authorized to do so on behalf of Tenant and that Tenant is not, and the entities or individuals constituting Tenant or which may own or control Tenant or which may be owned or controlled by Tenant are not, (i) in violation of any Laws relating to terrorism or money laundering, or (ii) among the individuals or entities identified on any list compiled pursuant to Executive Order 13224 for the purpose of identifying suspected terrorists or on the most current list published by the U.S. Treasury Department Office of Foreign Assets Control at its official website, http://www.treas.gov/ofac/tllsdn.pdf or any replacement website or other replacement official publication of such list.

26.02 If either party institutes a suit against the other for violation of or to enforce any covenant, term or condition of this Lease, the prevailing party shall be entitled to reimbursement of all of its costs and expenses, including, without limitation, reasonable attorneys’ fees. Landlord and Tenant hereby waive any right to trial by jury in any proceeding based upon a breach of this Lease. No failure by either party to declare a default immediately upon its occurrence, nor any delay by either party in taking action for a default, nor Landlord’s acceptance of Rent with knowledge of a default by Tenant, shall constitute a waiver of the default, nor shall it constitute an estoppel.

26.03 Whenever a period of time is prescribed for the taking of an action by Landlord or Tenant (other than the payment of Rent), the period of time for the performance of such action shall be extended by the number of days that the performance is actually delayed due to strikes, acts of God, shortages of labor or materials, war, terrorist acts, civil disturbances and other causes beyond the reasonable control of the performing party (“ Force Majeure ”).

26.04 Landlord shall have the right to transfer and assign, in whole or in part, all of its rights and obligations under this Lease and in the Building and Property. Upon transfer Landlord shall be released from any further obligations hereunder and Tenant agrees to look solely to the successor in interest of Landlord for the performance of such obligations, provided that, any successor pursuant to a voluntary, third party transfer (but not as part of an involuntary transfer resulting from a foreclosure or deed in lieu thereof) shall have assumed Landlord’s obligations under this Lease.

26.05 Landlord has delivered a copy of this Lease to Tenant for Tenant’s review only and the delivery of it does not constitute an offer to Tenant or an option. Tenant represents that it has dealt directly with and only with the Broker as a broker in connection with this Lease. Tenant shall indemnify and hold Landlord and the Landlord Related Parties harmless from Tenant’s breach of the foregoing representation.

26.06 Time is of the essence with respect to Tenant’s exercise of any expansion, renewal or extension rights granted to Tenant. Anything herein to the contrary notwithstanding, any expansion rights (whether such rights are described as an expansion option, right of first refusal, right of first offer or otherwise) described herein, in any exhibit hereto or any amendment or modification hereto, shall automatically expire and be deemed of no further force or effect immediately following any reduction, contraction or surrender by Tenant of any portion of the Premises. The expiration of the Term, whether by lapse of time, termination or otherwise, shall not relieve either party of any obligations which accrued prior to or which may continue to accrue after the expiration or termination of this Lease.

26.07 Tenant may peacefully have, hold and enjoy the Premises, subject to the terms of this Lease, provided Tenant pays the Rent and fully performs all of its covenants and agreements. This covenant shall be binding upon Landlord and its successors only during its or their respective periods of ownership of the Building.

26.08 This Lease does not grant any rights to light or air over or about the Property or the Building. Landlord excepts and reserves exclusively to itself any and all rights not specifically granted to Tenant under this Lease. This Lease constitutes the entire agreement between the parties and supersedes all prior agreements and understandings related to the Premises, including all lease proposals, letters of intent and other documents. Neither party is

relying upon any warranty, statement or representation not contained in this Lease. This Lease may be modified only by a written agreement signed by an authorized representative of Landlord and Tenant.

26.09 Neither this Lease nor any memorandum of this Lease shall be recorded.

26.10 Except as otherwise expressly stated in this Lease, any consent or approval required to be obtained from Landlord may be granted by Landlord in its sole discretion. In any instance in which Landlord agrees not to act unreasonably, Tenant hereby waives any claim for damages against or liability of Landlord that Tenant may have based upon any assertion that Landlord has unreasonably withheld or unreasonably delayed any consent or approval requested by Tenant, and Tenant agrees that its sole remedy shall be an action or proceeding to enforce any related provision or for specific performance, injunction or declaratory judgment. If with respect to any required consent or approval Landlord is required by the express provisions of this Lease not to unreasonably withhold or delay its consent or approval, and if it is determined in any such proceeding referred to in the preceding sentence that Landlord acted unreasonably, the requested consent or approval shall be deemed to have been granted; however, Landlord shall have no liability whatsoever to Tenant for its refusal or failure to give such consent or approval. Tenant’s sole remedy for Landlord’s unreasonably withholding or delaying consent or approval shall be as provided in this Section 26.10 .

26.11 From and after the date of this Lease, Tenant and Tenant Related Parties shall maintain the terms and conditions of this Lease confidential and, without Landlord’s prior written consent, shall neither discuss nor disclose the terms and conditions of this Lease with any tenant or occupant of the Building or with any other person, other than (i) the Broker, (ii) the attorneys who are representing Tenant in connection with this Lease, (iii) Tenant’s accountants and (iv) any proposed subtenant of the Premises or assignee of this Lease and only if and to the extent such other parties listed in clauses (i) to (iv) inclusive are informed by Tenant of the confidential nature of this Lease and shall agree to act in accordance with the provisions of this Section, or (v) if required to do so to enforce the terms of this Lease, or as may otherwise be required to be disclosed by law (including without limitation any disclosures required by securities acts or any required disclosures from public companies) and, if disclosure is required by law, Tenant shall only disclose those terms required by law or judicial process; provided that, if Tenant is required or requested by legal process to disclose the terms and conditions of this Lease, Tenant shall provide Landlord with prompt notice of such requirement or request and unless Landlord waives the confidentiality requirements of this Lease, Tenant shall cooperate with Landlord in obtaining an appropriate protective order regarding such disclosure. Tenant acknowledges that a breach or threatened breach of this Section will cause irreparable injury and damage to Landlord, and, therefore, agrees that, in addition to any other remedies that may be available to Landlord, Landlord shall be entitled to an injunction and/or other equitable relief (without the requirement of posting a bond or other security) as a remedy for a breach or threatened breach of this section and to secure its enforcement.

26.12 Landlord and Tenant hereby acknowledge that this Lease constitutes a commercial transaction, as such term is used and defined in Section 52-278a of the Connecticut General Statutes, as amended, and Tenant hereby waives any and all rights to any notice to or to any hearing provided and set forth in Chapter 903A, as amended.

[ REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

Landlord and Tenant have executed this Lease as of the day and year first above written.

	LANDLORD:

	ONE STAMFORD PLAZA OWNER LLC, a Delaware
	limited liability company


	By:
	Name:
	Title:


	TENANT:

	LOXO ONCOLOGY, INC., a Delaware corporation


	By:
	Name:
	Title:

	Tenant’s Tax ID Number (SSN or FEIN):
	46-2996673

EXHIBIT A

OUTLINE AND LOCATION OF PREMISES

This Exhibit is attached to and made a part of the Lease by and between ONE STAMFORD PLAZA OWNER LLC, a Delaware limited liability company (“Landlord”) and LOXO ONCOLOGY, INC., a Delaware corporation (“Tenant”) for space in the Building located at 281 Tresser Boulevard, Stamford, Connecticut.

2 Stamford Plaza

Floor 9

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EXHIBIT B

EXPENSES AND TAXES

1. Payments.

1.01 Tenant shall pay Tenant’s Pro Rata Share of the amount, if any, by which Expenses (defined below) for each calendar year during the Term exceed Expenses for the Base Year (the “ Expense Excess ”) and also the amount, if any, by which Taxes (defined below) for each calendar year during the Term exceed Taxes for the Base Year (the “ Tax Excess ”). If Expenses or Taxes in any calendar year decrease below the amount of Expenses or Taxes for the Base Year, Tenant’s Pro Rata Share of Expenses or Taxes, as the case may be, for that calendar year shall be $0. Landlord shall provide Tenant with a good faith estimate of the Expense Excess and of the Tax Excess for each calendar year during the Term. On or before the first day of each month, Tenant shall pay to Landlord a monthly installment equal to one-twelfth of Tenant’s Pro Rata Share of Landlord’s estimate of both the Expense Excess and Tax Excess. After its receipt of the revised estimate, Tenant’s monthly payments shall be based upon the revised estimate. If Landlord does not provide Tenant with an estimate of the Expense Excess or the Tax Excess by January 1 of a calendar year, Tenant shall continue to pay monthly installments based on the previous year’s estimate(s) until Landlord provides Tenant with the new estimate.

1.02 As soon as is practical following the end of each calendar year, Landlord shall furnish Tenant with a statement of the actual Expenses and Expense Excess and the actual Taxes and Tax Excess for the prior calendar year. If the estimated Expense Excess or estimated Tax Excess for the prior calendar year is more than the actual Expense Excess or actual Tax Excess, as the case may be, for the prior calendar year, Landlord shall either provide Tenant with a refund or apply any overpayment by Tenant against Additional Rent due or next becoming due, provided if the Term expires before the determination of the overpayment, Landlord shall refund any overpayment to Tenant after first deducting the amount of Rent due. If the estimated Expense Excess or estimated Tax Excess for the prior calendar year is less than the actual Expense Excess or actual Tax Excess, as the case may be, for such prior year, Tenant shall pay Landlord, within 30 days after its receipt of the statement of Expenses or Taxes, any underpayment for the prior calendar year. Landlord’s failure to render any Landlord’s statement with respect to any year shall not prejudice Landlord’s right thereafter to render a Landlord’s statement with respect thereto or with respect to any subsequent year, as the case may be, nor shall the rendering of a Landlord’s statement prejudice Landlord’s right thereafter to render a corrected Landlord’s statement for that year. Notwithstanding anything contained herein to the contrary, Landlord agrees that the Expense Excess for the Premises for each year after calendar year 2016 shall be capped at a maximum increase amount per year of five percent (5%) of controllable expenses. There shall be no cap to the increase amount per year of the Tax Excess.

2. Expenses.

2.01 “ Expenses ” means all costs and expenses incurred in each calendar year in connection with operating, maintaining, repairing, replacing, cleaning and managing the Property, including, without limitation, the Building. Expenses include, without limitation: (a) all labor and labor related costs, including wages, salaries, bonuses, taxes, insurance, uniforms, training, retirement plans, pension plans and other employee benefits; (b) customary management fees; (c) the cost of equipping, staffing and operating an on-site and/or off-site management office for the Building, provided if the management office services one or more other buildings or properties, the shared costs and expenses of equipping, staffing and operating such management office(s) shall be equitably prorated and apportioned between the Building and the other buildings or properties; (d) accounting costs; (e) the cost of repairs, maintenance and services; (f) rental and purchase cost of parts, supplies, tools and equipment; (g) insurance

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premiums and deductibles; (h) electricity, gas, oil, steam, water and other utility costs; and (i) the amortized cost of capital improvements (as distinguished from replacement parts or components installed in the ordinary course of business) made subsequent to the Base Year which are: (1) performed primarily to upgrade Building security, reduce current or future operating expense costs or otherwise improve the operating efficiency of the Property; or (2) required to comply with any Laws that are enacted, or first interpreted to apply to the Property, after the date of the Lease; or (3) in lieu of a repair. The cost of capital improvements shall be amortized by Landlord over the lesser of the Payback Period (defined below) or the useful life of the capital improvement as reasonably determined by Landlord. The amortized cost of capital improvements may, at Landlord’s option, include actual or imputed interest at the rate that Landlord would reasonably be required to pay to finance the cost of the capital improvement. “ Payback Period ” means the reasonably estimated period of time that it takes for the cost savings resulting from a capital improvement to equal the total cost of the capital improvement. Landlord, by itself or through an affiliate, shall have the right to directly perform, provide and be compensated for any services under the Lease which compensation shall be generally consistent with industry standard charges for such services. If Landlord incurs Expenses for the Building or Property together with one or more other buildings or properties, whether pursuant to a reciprocal easement agreement, common area agreement or otherwise, the shared costs and expenses shall be equitably prorated and apportioned between the Building and Property and the other buildings or properties.

2.02 Expenses shall not include: the cost of capital improvements (except as set forth above); depreciation; principal payments of mortgage and other non-operating debts of Landlord; the cost of repairs or other work to the extent Landlord is reimbursed by insurance or condemnation proceeds; costs in connection with leasing space in the Building, including brokerage commissions, lease concessions, rental abatements and construction allowances granted to specific tenants; costs incurred in connection with the sale, financing or refinancing of the Building; fines, interest and penalties incurred due to the late payment of Taxes or Expenses; organizational expenses associated with the creation and operation of the entity which constitutes Landlord; or any penalties or damages that Landlord pays to Tenant under the Lease or to other tenants in the Building under their respective leases.

2.03 If at any time during a calendar year the Building is not at least ninety-five percent (95%) occupied or Landlord is not supplying services to at least 95% of the total Rentable Square Footage of the Building, Taxes and Expenses shall, at Landlord’s option, be determined as if the Building had been ninety-five percent (95%) occupied and Landlord had been supplying services to ninety-five percent (95%) of the Rentable Square Footage of the Building. If Taxes or Expenses for a calendar year are determined as provided in the prior sentence, Taxes or Expenses, as the case may be, for the Base Year shall also be determined in such manner. Notwithstanding the foregoing, Landlord may calculate the extrapolation of Taxes or Expenses under this Section based on one hundred percent (100%) occupancy and service so long as such percentage is used consistently for each year of the Term (including the Base Year). The extrapolation of Taxes or Expenses under this Section shall be performed in accordance with the methodology specified by the Building Owners and Managers Association.

3. Taxes.

3.01 “ Taxes ” mean: (a) all real property taxes and other assessments on the Building and Property, including, but not limited to, gross receipts taxes, assessments for special improvement districts and building improvement districts, governmental charges, fees and assessments for police, fire, traffic mitigation and other governmental services of purported benefit to the Property, taxes and assessments levied in substitution or supplementation in whole or in part of any such taxes and assessments and the Property’s share of any real estate taxes and assessments under any reciprocal easement agreement, common area agreement or similar agreement as to the Property; (b) all personal property taxes for property that is owned by Landlord and used in connection with the operation, maintenance and repair of the Property; and (c) all costs and fees incurred in connection with seeking reductions in any tax liabilities described in (a) and (b), including, without limitation, any costs incurred by Landlord for compliance, review and appeal of tax liabilities. Taxes shall not include any income, capital levy, transfer, capital stock, gift, estate or inheritance tax. If a change in Taxes is obtained for any year of the Term during which Tenant paid Tenant’s Pro Rata Share of any Tax Excess, then Taxes for that year will be retroactively adjusted and Landlord shall provide Tenant with a credit, if any, based on the adjustment or Tenant shall reimburse Landlord for any deficiency.

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Likewise, if a change is obtained for Taxes for the Base Year, Taxes for the Base Year shall be restated and the Tax Excess for all subsequent years shall be recomputed; provided, that in no event shall any abatement or other tax credit be applicable to the calculation of Taxes for the Base Year. Tenant shall pay Landlord the amount of Tenant’s Pro Rata Share of any such increase in the Tax Excess within thirty (30) days after Tenant’s receipt of a statement from Landlord.

4. Audit Rights .

4.01 Tenant, within ninety (90) days after receiving Landlord’s statement of Expenses, may give Landlord written notice (“ Review Notice ”) that Tenant intends to review Landlord’s records of the Expenses for the calendar year to which the statement applies and specifying, to the extent reasonably practicable, the respects in which Landlord’s statement is disputed. Within a reasonable time after receipt of the Review Notice, Landlord shall make all pertinent records available for inspection that are reasonably necessary for Tenant to conduct its review. If any records are maintained at a location other than the management office for the Building, Tenant may either inspect the records at such other location or pay for the reasonable cost of copying and shipping the records. If Tenant retains an agent to review Landlord’s records, the agent must be with a CPA firm licensed to do business in the state or commonwealth where the Property is located and which is not being compensated by Tenant, in whole or in part, on a contingency basis. Tenant shall be solely responsible for all costs, expenses and fees incurred for the audit. Within ninety (90) days after the records are made available to Tenant, Tenant shall have the right to give Landlord written notice (an “ Objection Notice ”) stating in reasonable detail any objection to Landlord’s statement of Expenses for that year. If Tenant fails to give Landlord an Objection Notice within the ninety (90) day period or fails to provide Landlord with a Review Notice within the ninety (90) day period described above, Tenant shall be deemed to have approved Landlord’s statement of Expenses and shall be barred from raising any claims regarding the Expenses for that year. If Tenant provides Landlord with a timely Objection Notice, Landlord and Tenant shall work together in good faith to resolve any issues raised in Tenant’s Objection Notice. If Landlord and Tenant determine that Expenses for the calendar year are less than reported, Landlord shall provide Tenant with a credit against the next installment of Rent in the amount of the overpayment by Tenant. Likewise, if Landlord and Tenant determine that Expenses for the calendar year are greater than reported, Tenant shall pay Landlord the amount of any underpayment within thirty (30) days. Notwithstanding anything to the contrary contained herein, Tenant’s audit rights contained herein are subject to Tenant and its applicable agents first executing and delivering to Landlord Landlord’s standard confidentiality agreement, which provides that any records and information gathered and/or reviewed by Tenant and/or its agents shall be treated as strictly confidential. In no event shall Tenant be permitted to examine Landlord’s records or to dispute any statement of Expenses unless Tenant has paid and continues to pay all Rent when due.

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EXHIBIT C

WORK LETTER

1. Landlord shall perform improvements to the Premises in accordance with the approved plans prepared by MAF Architects, dated September 28, 2015, together with the additional work described on and attached hereto as Exhibit C-2 (collectively, the “ Plans ”). The improvements to be performed by Landlord in accordance with the Plans are hereinafter referred to as “ Landlord’s Work .” It is agreed that construction of Landlord’s Work will be completed at Landlord’s sole cost and expense (subject to the terms of Section 2 below) using Building Standard methods, materials and finishes. Landlord shall enter into a direct contract for Landlord’s Work with a general contractor selected by Landlord. In addition, Landlord shall have the right to select and /or approve any subcontractors used in connection with Landlord’s Work. Landlord’s supervision or performance of any work for or on behalf of Tenant shall not be deemed a representation by Landlord that such Plans or the revisions thereto comply with applicable insurance requirements, building codes, ordinances, Laws or regulations, or that the improvements constructed in accordance with the Plans and any revisions thereto will be adequate for Tenant’s use, it being agreed that Tenant shall be responsible for all elements of the design of Tenant’s plans (including, without limitation, compliance with Law, functionality of design the structural integrity of the design, the configuration of the Premises and the placement of Tenant’s furniture, appliances and equipment).

2. If Tenant shall request any revisions to the Plans, Landlord shall have such revisions prepared at Tenant’s sole cost and expense and Tenant shall reimburse Landlord for the cost of preparing any such revisions to the Plans, plus any applicable state sales or use tax thereon, upon demand. Promptly upon completion of the revisions, Landlord shall notify Tenant in writing of the increased cost in Landlord’s Work, if any, resulting from such revisions to the Plans. Tenant, within three (3) Business Days of receiving such notice, shall notify Landlord in writing whether it desires to proceed with such revisions. In the absence of such written authorization, Landlord shall have the option to continue work on the Premises disregarding the requested revision. Tenant shall be responsible for any Tenant Delay in completion of the Premises resulting from any revision to the Plans. If such revisions result in an increase in the cost of Landlord’s Work, such increased costs, plus any applicable state sales or use tax thereon, shall be payable by Tenant upon demand. Notwithstanding anything herein to the contrary, all revisions to the Plans shall be subject to the prior approval of Landlord.

3. Landlord and Tenant agree to cooperate with each other in order to enable Landlord’s Work to be performed in a timely manner and with as little inconvenience to the operation of Tenant’s business as is reasonably possible. Notwithstanding anything herein to the contrary any delay in the completion of Landlord’s Work or inconvenience suffered by Tenant during the performance of Landlord’s Work shall not delay the Commencement Date nor shall it subject Landlord to any liability for any loss or damage resulting therefrom or entitle Tenant to any credit, abatement or adjustment of Rent or other sums payable under the Lease.

4. This Exhibit shall not be deemed applicable to any additional space added to the Premises at any time or from time to time, whether by any options under the Lease or otherwise, or to any portion of the original Premises or any additions to the Premises in the event of a renewal or extension of the original Term of the Lease, whether by any options under the Lease or otherwise, unless expressly so provided in the Lease or any amendment or supplement to the Lease.

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EXHIBIT C-1

Landlord Approved General Contractors

SIGNATURE CONSTRUCTION GROUP OF CONNECTICUT, INC.

745 East Main Street

Stamford, Connecticut

Attention: Tel: Fax:

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Exhibit C-2

Plans

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Additional Landlord Work:

Any necessary demising of walls

Architect fees

Reception

New floor — wood or tile

Existing reception desk

Drop lights — Tenant to evaluate style

Pantry

New appliances (2 new refrigerators (with ice) and dish washer)

New upper cabinets

Existing Corian countertop and lower cabinets

New high counter for seating

Drop lights

New floor

Frosting on all glass walls

Any construction of new offices, moving walls

New carpet throughout Premises

Paint throughout Premises

Furniture

Cubes from 4 Stamford Plaza

Existing office furniture throughout

Conference room

Existing conference room furniture

If current tenant leaves equipment: TVs, polycom and video equipment

Boardroom

Landlord to provide glass that fogs up to create privacy

Landlord to remove existing perimeter heat pumps and replace with a ceiling AC unit

IT room

Move walls to make smaller

Leave 1 AC unit

Existing wiring

Assessment of wiring

2 drops per cube/office

Copier room

Keep existing cabinets

Existing window treatments to remain and Landlord shall repair or replace as needed

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EXHIBIT D

FORM LETTER OF CREDIT

[ISSUING BANK]

[Date]

One Stamford Plaza Owner LLC

c/o RFR Realty LLC

390 Park Avenue

New York, New York 10022

Attn: President

· Ref: Irrevocable Letter of Credit No.

Gentlemen:

By order of our client, [name of Tenant], [address of Tenant], we hereby open in your favor our clean irrevocable Letter of Credit No. for the aggregate sum of [amount of Security Deposit] United States Dollars, (U.S. $ ) effective immediately and expiring at our [address of Bank] New York Office on or any automatically extended date.

Funds under this Credit are available to you against presentation of your sight draft(s) drawn on us marked “drawn under Irrevocable Letter of Credit No. date [date of Letter of Credit]”, and accompanied by the following:

Beneficiary’s signed statement that [name of Tenant] has failed to comply with the terms and conditions of a contract described as Agreement of Lease between , Landlord, and [name of Tenant], Tenant, dated [date of Lease].

It is a condition of this Letter of Credit that it shall be deemed automatically extended without amendment for one year from the present or any future expiration date hereof, unless thirty (30) days prior to any such date we shall notify you by registered mail that we elect not to consider this Letter of Credit renewed for any such additional period. Upon receipt by you of such notice, you may draw hereunder by means of your draft on us at sight, accompanied by the original Letter of Credit.

This Letter of Credit is transferable in whole but not in part by the beneficiary upon notice to the undersigned, without charge. Requests for transfer will be in the form of Annex A attached hereto, duly completed by an officer of your company and accompanied by the original of this Letter of Credit.

If we receive your sight draft as mentioned above, in accordance with the terms and conditions of this credit, we will promptly honor the same.

This Letter of Credit is subject to the Uniform Customs and Practice for Documentary Credits (1993 Revision) International Chamber of Commerce Brochure No. 500, shall be deemed to be a contract made under, and as to matters not governed by the UCP, shall be governed by and construed in accordance with the laws of the State of New York and applicable U.S. Federal Law.

[Name of Bank]

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By:
	Authorized Signature
	Title:

[ANNEX A TO BE ADDED BY ISSUING BANK, IF REQUIRED]

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EXHIBIT E

FORM COMMENCEMENT LETTER

DATE:

TENANT: LOXO Oncology, Inc.

ADDRESS:

Two Stamford Plaza, Suite 906

281 Tresser Boulevard

Stamford, Connecticut 06901

Re: Delivery of Space with respect to that certain Lease dated as of the day of , 2015, by and between ONE STAMFORD PLAZA OWNER, LLC., a Delaware limited liability company, as Landlord, and LOXO ONCOLOGY, INC., a Delaware corporation as Tenant, for 10,411 rentable square feet on the 9th floor of the Building located at 281 Tresser Boulevard, Stamford, Connecticut, 06901.

Dear :

In accordance with the terms of the Lease, the Landlord has hereby delivered exclusive possession of the Premises to the Tenant and Tenant has accepted possession of the Premises as of:

Lease Commencement Date: ,

Please call RFR Realty, LLC at (203) 328-3600 with any questions.

Sincerely,


RFR Realty LLC
as Agent for One Stamford Plaza Owner LLC

cc: RFR Realty — Legal

RFR Realty — Lease Administrator

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EXHIBIT F

ADDITIONAL PROVISIONS

1. Parking.

1.01 (a) During the Term, Tenant agrees to lease the Parking Spaces set forth in the Basic Lease Information (collectively, the “ Spaces ”) in the Building garage (“ Garage ”) for the use of Tenant and its employees at the cost specified in the Basic Lease Information. Except as otherwise specifically stated in the Basic Lease Information, the Spaces shall be leased on an unreserved basis. No deduction or allowances shall be made for days when Tenant or any of its employees does not utilize the parking facilities or for Tenant utilizing less than all of the Spaces.

(b) The Garage is managed by a third-party operator (“ Garage Operator ”). Tenant, upon request of Landlord, shall enter into a parking agreement with the Garage Operator, and Landlord shall have no liability for claims arising through acts or omissions of the Garage Operator unless caused by Landlord’s negligence or willful misconduct. It is understood and agreed that the identity of the Garage Operator may change from time to time during the Term. In connection therewith, any parking lease or agreement entered into between Tenant and a Garage Operator shall be freely assignable by such Garage Operator or any successors thereto.

(c) During the Term, if Tenant desires to lease additional parking spaces, it may do so subject to availability and the terms, conditions and rates then imposed by the Garage Operator.

(d) Except for particular spaces and areas designated by Landlord for reserved parking, all parking in the Garage and surface parking areas serving the Building shall be on an unreserved, first-come, first-served basis.

(e) Landlord shall not be responsible for money, jewelry, automobiles or other personal property lost in or stolen from the Garage or the surface parking areas regardless of whether such loss or theft occurs when the Garage or other areas therein are locked or otherwise secured. Except as caused by the negligence or willful misconduct of Landlord and without limiting the terms of the preceding sentence, Landlord shall not be liable for any loss, injury or damage to persons using the Garage or the surface parking areas or automobiles or other property therein, it being agreed that, to the fullest extent permitted by law, the use of the Spaces shall be at the sole risk of Tenant and its employees.

(f) Landlord shall have the right from time to time to designate the location of the Spaces and to promulgate reasonable rules and regulations regarding the Garage, the surface parking areas, if any, the Spaces and the use thereof, including, but not limited to, rules and regulations controlling the flow of traffic to and from various parking areas, the angle and direction of parking and the like. Tenant shall comply with and cause its employees to comply with all such rules and regulations as well as all reasonable additions and amendments thereto.

(g) Tenant shall not store or permit its employees to store any automobiles in the Garage or on the surface parking areas without the prior written consent of Landlord. Except for emergency repairs, Tenant and its employees shall not perform any work on any automobiles while located in the Garage or on the Property. If it is necessary for Tenant or its employees to leave an automobile in the Garage or on the surface parking areas overnight, Tenant shall provide Landlord with prior notice thereof designating the license plate number and model of such automobile.

(h) Landlord shall have the right to temporarily close the Garage or certain areas therein in order to perform necessary repairs, maintenance and improvements to the Garage or the surface parking areas, if any.

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(i) Tenant shall not assign or sublease any of the Spaces without the consent of Landlord. Landlord shall have the right to terminate this Lease with respect to any Spaces that Tenant desires to sublet or assign.

(j) Landlord may elect to provide cards or keys to control access to the Garage or surface parking areas, if any. In such event, Landlord shall provide Tenant with one card or key for each Space that Tenant is leasing hereunder, provided that Landlord shall have the right to require Tenant or its employees to place a deposit on such access cards or keys and to pay a fee for any lost or damaged cards or keys.

2. Renewal Option.

2.01 Grant of Option; Conditions . Tenant shall have the right to extend the Term (the “ Renewal Option ”) for one (1) additional period of five (5) years (the “ Renewal Term ”), if:

(a) Landlord receives notice of exercise (“ Initial Renewal Notice ”) not less than twelve (12) full calendar months prior to the expiration of the initial Term; and

(b) Tenant is not in Default under the Lease at the time that Tenant delivers its Initial Renewal Notice or at the time Tenant delivers its Binding Notice (as defined below); and

(c) No part of the Premises is sublet (other than as permitted under the Lease) at the time that Tenant delivers its Initial Renewal Notice or at the time Tenant delivers its Binding Notice; and

(d) The Lease has not been assigned (other than as permitted under the Lease) prior to the date that Tenant delivers its Initial Renewal Notice or prior to the date Tenant delivers its Binding Notice.

2.02 Terms Applicable to Premises During Renewal Term .

(a) The initial Base Rent rate per rentable square foot for the Premises during the Renewal Term shall equal the Prevailing Market (hereinafter defined) rate per rentable square foot for the Premises. Base Rent during the Renewal Term shall increase, if at all, in accordance with the increases assumed in the determination of Prevailing Market rate. Base Rent attributable to the Premises shall be payable in monthly installments in accordance with the terms and conditions of Article 4 of the Lease.

(b) Tenant shall pay Additional Rent (i.e. Taxes and Expenses) for the Premises during the Renewal Term in accordance with Exhibit B of the Lease, and the manner and method in which Tenant reimburses Landlord for Tenant’s share of Taxes and Expenses and the Base Year, if any, applicable to such matter, shall be some of the factors considered in determining the Prevailing Market rate for the Renewal Term.

2.03 Procedure for Determining Prevailing Market . Within 30 days after receipt of Tenant’s Initial Renewal Notice, Landlord shall advise Tenant in writing of Landlord’s proposed applicable Base Rent rate for the Premises for the Renewal Term, which shall be based on Landlord’s good faith estimate of the annual Prevailing Market rate for the Renewal Term. Tenant, within 15 days after the date on which Landlord advises Tenant of the applicable Base Rent rate for the Renewal Term, shall either (i) give Landlord final binding written notice (“ Binding Notice ”) of Tenant’s exercise of its Renewal Option, or (ii) if Tenant disagrees with Landlord’s determination, provide Landlord with written notice of rejection (the “ Rejection Notice ”). If Tenant fails to provide Landlord with either a Binding Notice or Rejection Notice within such 15 day period, Tenant’s Renewal Option shall be null and void and of no further force and effect. If Tenant provides Landlord with a Binding Notice, Landlord and Tenant shall enter into the Renewal Amendment (as defined below) upon the terms and conditions set forth herein. If Tenant provides Landlord with a Rejection Notice, Landlord and Tenant shall work together in good faith, for a period not to exceed thirty (30) days following the date Landlord receives the Rejection Notice (such 30-day period, the “ Negotiation Period ”), to agree upon the Prevailing Market rate for the Premises during the Renewal Term. If Landlord and Tenant have agreed, during the Negotiation Period, upon the Prevailing Market rate for the Premises for the

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Renew Term, such agreement shall be reflected in a written agreement between Landlord and Tenant, whether in a letter or otherwise, and Landlord and Tenant shall enter into the Renewal Amendment in accordance with the terms and conditions hereof.

In the event that Landlord and Tenant fail to mutually agree upon such Prevailing Market rate for the Premises for the Renewal Term within the Negotiation Period, Landlord and Tenant shall, within fifteen (15) days after the conclusion of such Negotiation Period, mutually appoint a Qualified Appraiser (as hereinafter defined) to determine such Prevailing Market rate. If Landlord and Tenant are unable to agree on the appointment of such Qualified Appraiser at the end of such fifteen (15) day period, Landlord and Tenant shall, within the following five (5) day period, each select a Qualified Appraiser who shall, within the following five (5) day period, designate a third Qualified Appraiser and the three Qualified Appraisers shall cooperate jointly. Within five (5) days of the date that the Qualified Appraisers are appointed, Landlord and Tenant shall each deliver its estimate of such Prevailing Market rate to the Qualified Appraisers. Within fifteen (15) days after the appointment of the third Qualified Appraiser, the Qualified Appraisers shall select either the Landlord’s or the Tenant’s determination of the Prevailing Market rate and submit such determination to Landlord and Tenant in writing, which determination shall be the Base Rent for the Renewal Term. The decision of the single Qualified Appraiser or that in which at least two (2) of the three (3) Qualified Appraisers concur shall be final and binding upon the parties. The Qualified Appraiser(s) shall have no power to modify the provisions of this Lease and shall have no power to select an alternative position or a decision different from that proposed by either party. The determination of the Qualified Appraiser(s) shall be binding on the parties and the fees and expenses of the Qualified Appraiser(s) shall be divided equally between Landlord and Tenant.

An appraiser shall be a “ Qualified Appraiser ” only if he or she has not less than fifteen (15) years’ experience in the appraisal of real property of the type to be appraised, is a member of the American Institute of Real Estate Appraisers or any successor thereto, and shall not have been employed by Landlord or Tenant or any of their affiliates in the twenty-four (24) months preceding his or her engagement hereunder. If the Term expires prior to the Qualified Appraisers’ determination, the Landlord’s estimate of Prevailing Market rate shall apply during such time period and Landlord shall credit Tenant any excess paid if the Qualified Appraisers select Tenant’s estimate of the Prevailing Market rate.

2.04 Renewal Amendment . If Tenant is entitled to and properly exercises its Renewal Option, Landlord shall prepare an amendment (the “ Renewal Amendment ”) to reflect changes in the Base Rent, Term, Expiration Date and other appropriate business terms. The Renewal Amendment shall be sent to Tenant within a reasonable time after Landlord’s receipt of the Binding Notice or other written agreement by Landlord and Tenant regarding the Prevailing Market rate, and Tenant shall execute and return the Renewal Amendment to Landlord within 15 days after Tenant’s receipt of same, but, upon final determination of the Prevailing Market rate applicable during the Renewal Term as described herein, an otherwise valid exercise of the Renewal Option shall be fully effective whether or not the Renewal Amendment is executed.

2.05 Definition of Prevailing Market . For purposes of this Renewal Option, “Prevailing Market” shall mean the arm’s length fair market annual rental rate per rentable square foot (based on the RSF of the Premises) under five (5) year renewal leases and amendments entered into on or about the date on which the Prevailing Market is being determined hereunder for space comparable to the Premises in the Building and office buildings comparable to the Building in the Stamford, Connecticut central business district area. The determination of Prevailing Market shall take into account any material economic differences between the terms of the Lease and any comparison lease or amendment, such as rent abatements, construction costs and other concessions and the manner, if any, in which the landlord under any such lease is reimbursed for operating expenses and taxes. The determination of Prevailing Market shall also take into consideration any reasonably anticipated changes in the Prevailing Market rate from the time such Prevailing Market rate is being determined and the time such Prevailing Market rate will become effective under the Lease.

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3. Termination Right .

3.01 Tenant shall have the one time right to terminate the Lease as of the last day of the sixty-sixth (66 th ) full calendar month following the expiration of the Initial Base Rent Abatement Period, provided (i) Tenant is not in default under the terms of the Lease, and (ii) Tenant provides Landlord with a minimum of twelve (12) months prior written notice of its exercise of this right. In addition, in the event Tenant exercises this termination option, Tenant shall pay to Landlord at the time Tenant notifies Landlord of the exercise of its option a sum (the “ Termination Fee ”) equal to the unamortized portion (using a 6% interest factor) of (i) Abated Base Rent, (ii) the cost of Landlord’s Work, and (iii) the brokerage commission and reasonable legal costs paid by Landlord on account of the Lease. As of the date hereof, Landlord estimates the Termination Fee to be $181,917.63, which is subject to change based on actual costs and expenses.

4. Right of First Offer .

4.01 If any portion of the 9 th floor of the Building contiguous to the Premises (“ First Offer Space ”) is or will become available during the initial Term, Landlord shall offer to lease the First Offer Space to Tenant, as set forth in a notice to Tenant which identifies the First Offer Space (“ First Offer Notice ”), describing the term, commencement date and all other material business terms acceptable to Landlord and Landlord shall offer to lease the First Offer Space to Tenant upon the business terms set forth in the First Offer Notice. Such terms shall represent Landlord’s good faith estimate of fair market rental terms for such First Offer Space based on comparable space in the Building.

(a) Tenant shall have a period of ten (10) Business Days after receipt of the First Offer Notice to give to Landlord notice that Tenant (i) accepts Landlord’s offer, or (ii) rejects Landlord’s offer. Time shall be of the essence with respect to Tenant’s notice, and Tenant’s failure to give any such notice within the ten (10) Business Day period shall be deemed a rejection of Landlord’s offer, any principles of law or equity to the contrary notwithstanding. A First Offer Notice may only be accepted in whole, not in part.

(b) If Tenant rejects, or is deemed to have rejected, Landlord’s offer, Landlord shall be free to lease such First Offer Space to any party upon any terms and conditions that Landlord may determine from time to time during the Term, with no further obligation to Tenant under this Section with respect to such First Offer Space.

(c) Anything herein to the contrary notwithstanding, Landlord shall not be obligated to give a First Offer Notice, Tenant shall have no right to exercise its option to lease the First Offer Space, and any attempted exercise shall be void and of no effect, if: (i) the original named Tenant herein (i.e., LOXO Oncology, Inc.) has assigned the Lease or has at any time subleased any portion of the Premises (other than sublets to parties that do not require Landlord’s consent under the Lease); or (ii) a Default shall have occurred and such Default shall not have been cured at the time that Landlord would otherwise be obligated to give the First Offer Notice or, if such Default occurs after Tenant’s attempted exercise of its option, at the time of the proposed commencement of the lease of the First Offer Space; or (iii) the original Term shall have expired. Notwithstanding anything to the contrary contained herein, Tenant’s Right of First Offer is subject and subordinate to the tenancies, rights and options of other parties (if any) predating this Lease.

(d) This Section shall not preclude Landlord from extending a lease for an existing tenant or entering into a new lease with a then existing tenant for the First Offer Space or a portion thereof.

5. Right of First Refusal .

5.01 Grant of Option; Conditions . Tenant shall have a continuing right of first refusal (the “ Right of First Refusal ”) following its Right of First Offer with respect to any portion of the 9 th floor of the Building contiguous to the Premises as such space becomes available (the “ First Refusal Space ”).

(a) Tenant’s Right of First Refusal shall be exercised as follows: At any time that Landlord receives an offer that Landlord intends to accept for all or a portion of

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the First Refusal Space that is then vacant or to become vacant, Landlord shall advise Tenant of the terms of such offer (the “ ROFR Notice ”) and Tenant shall thereafter have seven (7) Business Days to waive or exercise its Right of First Refusal (the “ Notice of Exercise ”). Time shall be of the essence with respect to Tenant’s Notice of Exercise, and Tenant’s failure to give such notice within the ten Business Day period shall be deemed a rejection of Landlord’s offer, any principles of law or equity to the contrary notwithstanding. A ROFR Notice may only be accepted in whole, not in part. Should Tenant not match the terms and conditions of the proposed new lease (or if Tenant waives its Right of First Refusal or if Tenant does not timely respond to Landlord) the Landlord has a four (4) month period to execute the lease on terms substantially similar to those set forth in the ROFR Notice, after which Tenant will again have a Right of First Refusal as to such First Refusal Space. If Landlord does not enter into a lease with a third party within the above-described four (4) month period or the terms are not substantially the same terms as set forth in the ROFR Notice, Landlord shall again offer the First Refusal Space to tenant on the terms set forth in this Section 5 .

(b) Tenant may lease such First Refusal Space in its entirety only, under such terms, by delivering its Notice of Exercise to Landlord within the timeframe described above for responding to the ROFR Notice, except that Tenant shall have no such Right of First Refusal and Landlord need not provide Tenant with a ROFR Notice and any attempted exercise shall be void and of no effect, if:

(i) A Default shall have occurred and such Default shall not have been cured at the time that Landlord would otherwise be obligated to give the ROFR Notice or, if such Default occurs after Tenant’s attempted exercise of its Right of First Refusal, at the time of the proposed commencement of the lease of the First Refusal Space; or

(ii) Any part of the Premises is sublet (other than as permitted under the Lease) at the time that Landlord would otherwise deliver the ROFR Notice; or

(iii) Tenant has assigned the Lease (other than as permitted under the Lease) or has at any time subleased any portion of the Premises prior to the date that Landlord would otherwise deliver the ROFR Notice; or

(iv) Tenant is not occupying the Premises on the date that Landlord would otherwise deliver the ROFR Notice; or

(v) The existing tenant in the First Refusal Space is interested in extending or renewing its lease for the First Refusal Space or entering into a new lease for the First Refusal Space; or

(vi) The original Term shall have expired.

Notwithstanding anything to the contrary contained herein, Tenant’s Right of First Refusal is subject and subordinate to the tenancies, rights and options of other parties (if any) predating this Lease. This section shall not preclude Landlord from extending a lease for an existing tenant or entering into a new lease with a then existing Tenant for the First Refusal space or a portion thereof.

5.02 Terms for First Refusal Space for Tenant’s Right of First Refusal .

(a) The term for the First Refusal Space shall commence on the commencement date stated in the ROFR Notice and thereupon such First Refusal Space shall be considered part of the Premises, provided that all of the terms stated in the ROFR Notice shall govern Tenant’s leasing of the First Refusal Space and only to the extent that they do not conflict with the ROFR Notice, the terms and conditions of the Lease shall apply to the First Refusal Space, provided, however that the term of the lease for the First Refusal Space shall be coterminous with the existing space except that if the Expiration Date of the Lease would occur within twenty-

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four (24) months prior to the expiration of the term of the lease of the First Refusal Space as set forth in the ROFR Notice, Tenant may not exercise the Right of First Refusal unless Tenant has one or more remaining Renewal Options available and concurrently exercises its Renewal Option.

(b) Tenant shall pay Base Rent and Additional Rent for the First Refusal Space in accordance with the terms and conditions of the ROFR Notice.

(c) The First Refusal Space (including improvements and personalty, if any) shall be accepted by Tenant in its condition and as-built configuration existing on the earlier of the date Tenant takes possession of the First Refusal Space or as of the date the term for such First Refusal Space commences, unless the ROFR Notice specifies any work to be performed by Landlord in the First Refusal Space, in which case Landlord shall perform such work in the First Refusal Space. If Landlord is delayed in delivering possession of the First Refusal Space due to the holdover or unlawful possession of such space by any party, Landlord shall use reasonable efforts to obtain possession of the space, and the commencement of the term for the First Refusal Space shall be postponed until the date Landlord delivers possession of the First Refusal Space to Tenant free from occupancy by any party in the condition described in the ROFR Notice.

5.3 Termination of Right of First Refusal . The rights of Tenant hereunder with respect to the First Refusal Space and the ROFR Notice shall terminate on the earlier to occur of: (i) twenty-four (24) months prior to the Expiration Date (unless Tenant exercises a Renewal option); (ii) Tenant’s failure to exercise its Right of First Refusal within the time frame provided in Section 5.01 above; and (iii) the date Landlord would have provided Tenant a ROFR Notice if Tenant had not been in violation of one or more of the conditions set forth in Section 5.01 above.

5.4 ROFR Amendment . If Tenant is entitled to and properly exercises its Right of First Refusal, Landlord shall prepare an amendment (the “ ROFR Amendment ”) adding the First Refusal Space to the Premises on the terms set forth in the ROFR Notice and reflecting the changes in the Base Rent, rentable square footage of the Premises, Tenant’s Pro Rata Share and other applicable business terms. The ROFR Amendment shall be sent to Tenant within a reasonable time after Landlord’s receipt of the Notice of Exercise executed by Tenant and Tenant shall execute and return the ROFR Amendment to Landlord within fifteen (15) days after Tenant’s receipt of same, but an otherwise valid exercise of the Right of First Refusal shall be fully effective whether or not the ROFR Amendment is executed.

6 . Signage . Landlord, at Landlord’s cost, shall provide Tenant with initial Building-standard signage, which signage shall consist of initial Building-standard Premises entry signage (both in the 9 th floor elevator lobby and adjacent to the Premises) as well as an initial listing on the existing Building directory, if any. Tenant may upgrade suite signage at Tenant’s cost and expense, subject to Landlord’s prior written approval. Any permitted assignees or subtenants shall be entitled to such Building-standard signage, at Tenant’s sole cost and expense.

7 . Fitness Center Memberships . At no additional cost to Tenant, Landlord shall provide Tenant up to twenty-five (25) two-year memberships to the fitness center in the Building for use by Tenant’s employees.

8. Temporary Space .

8.01 Landlord shall permit Tenant to use Suite 875 located on the 8 th floor of the building owned by an affiliate of Landlord located at Four Stamford Plaza, 107 Elm Street, Stamford, Connecticut containing approximately 8,718 rentable square feet (the “ Temporary Space ”) from the date hereof through the Commencement Date for the Premises. All of the terms and conditions of this Lease shall apply to the Temporary Space, except that: (i) Tenant shall not be entitled to receive any allowances or abatements with respect to the Temporary Space except as expressly set forth in this Section 8.01 , (ii) the Temporary Space shall be accepted by Tenant in “as is” condition and configuration without any representations or warranties by Landlord and without any obligation of Landlord to perform any of Landlord’s Work in the Temporary Space, (iii) Tenant shall not be required to pay Base Rent or Tenant’s Pro Rata Share of Taxes and Expenses pursuant to Exhibit B for the Temporary Space, (iv) Tenant shall pay a “ Temporary Space Electric and Cleaning Charge ” of $5.00 per RSF of the

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Temporary Space on an annual basis ($43,590.00), payable in monthly installments of $3,632.50. The Temporary Space Electric and Cleaning Charge shall be pro-rated for the duration of the term of Tenant’s occupancy of the Temporary Space and shall be pro-rated for any partial month during Tenant’s occupancy of the Temporary Space. The Temporary Space Electric and Cleaning Charge shall be due and payable in advance on the first day of each calendar month without notice or demand. Landlord shall provide office furniture from its inventory of furniture in the Temporary Space for Tenant’s use for the duration of the term of Tenant’s occupancy of the Temporary Space at no additional cost to Tenant. All furniture provided by Landlord shall remain at the Temporary Space. Tenant shall be responsible for any damage to Landlord’s furniture, reasonable wear and tear excepted.

8.02 Effective as of the Commencement Date for the Premises, Tenant shall vacate and surrender the Temporary Space in accordance with the provisions of Section 25 of this Lease. If Tenant fails to vacate and surrender the Temporary Space by the Commencement Date for the Premises, as aforesaid, the provisions of Section 22 of this Lease shall apply to any such holdover by Tenant in the Temporary Space.

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EXHIBIT G

BUILDING RULES AND REGULATIONS

The following rules and regulations shall apply, where applicable, to the Premises, the Building, the parking facilities (if any), the Property and the appurtenances. In the event of a conflict between the following rules and regulations and the Lease, the Lease shall control. Capitalized terms have the same meaning as defined in the Lease.

1. Sidewalks, doorways, vestibules, halls, stairways and other similar areas shall not be obstructed by Tenant or used by Tenant for any purpose other than ingress and egress to and from the Premises. No rubbish, litter, trash, or material shall be placed, emptied, or thrown in those areas. At no time shall Tenant permit Tenant’s employees to loiter in Common Areas or elsewhere about the Building or Property.

2. Plumbing fixtures and appliances shall be used only for the purposes for which designed and no sweepings, rubbish, rags or other unsuitable material shall be thrown or placed in the fixtures or appliances.

3. No signs, advertisements or notices shall be painted or affixed to windows, doors or other parts of the Building, except those of such color, size, style and in such places as are first approved in writing by Landlord. All tenant identification and suite numbers at the entrance to the Premises shall be installed by Landlord, at Tenant’s cost and expense, using the standard graphics for the Building. Except in connection with the hanging of lightweight pictures and wall decorations, no nails, hooks or screws shall be inserted into any part of the Premises or Building except by the Building maintenance personnel without Landlord’s prior approval, which approval shall not be unreasonably withheld.

4. Landlord may provide and maintain in the first floor (main lobby) of the Building an alphabetical directory board or other directory device listing tenants and no other directory shall be permitted unless previously consented to by Landlord in writing.

5. Tenant shall not place any lock(s) on any door in the Premises or Building without Landlord’s prior written consent, which consent shall not be unreasonably withheld, and Landlord shall have the right at all times to retain and use keys or other access codes or devices to all locks within and into the Premises. A reasonable number of keys to the locks on the entry doors in the Premises shall be furnished by Landlord to Tenant at Tenant’s cost and Tenant shall not make any duplicate keys. All keys shall be returned to Landlord at the expiration or early termination of the Lease.

6. All contractors, contractor’s representatives and installation technicians performing work in the Building shall be subject to Landlord’s prior approval, which approval shall not be unreasonably withheld, and shall be required to comply with Landlord’s standard rules, regulations, policies and procedures, which may be revised from time to time.

7. Movement in or out of the Building of furniture and office equipment, or dispatch or receipt by Tenant of merchandise or materials requiring the use of elevators, stairways, lobby areas or loading dock areas, shall be restricted to hours reasonably designated by Landlord. Tenant shall obtain Landlord’s prior approval by providing a detailed listing of the activity, which approval shall not be unreasonably withheld. If approved by Landlord, the activity shall be under the supervision of Landlord and performed in the manner required by Landlord. Tenant shall assume all risk for damage to articles moved and injury to any persons resulting from the activity. If equipment, property, or personnel of Landlord or of any other party is damaged or injured as a result of or in connection with the activity, Tenant shall be solely liable for any resulting damage, loss or injury.

8. Landlord shall have the right to approve the weight, size, or location of heavy equipment or articles in and about the Premises, which approval shall not be unreasonably withheld.

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Damage to the Building by the installation, maintenance, operation, existence or removal of Tenant’s Property shall be repaired at Tenant’s sole expense.

9. Corridor doors, when not in use, shall be kept closed.

10. Tenant shall not: (1) make or permit any improper, objectionable or unpleasant noises or odors in the Building, or otherwise interfere in any way with other tenants or persons having business with them; (2) solicit business or distribute or cause to be distributed, in any portion of the Building, handbills, promotional materials or other advertising; or (3) conduct or permit other activities in the Building that might, in Landlord’s sole opinion, constitute a nuisance.

11. No animals, except those assisting handicapped persons, shall be brought into the Building or kept in or about the Premises.

12. No inflammable, explosive or dangerous fluids or substances shall be used or kept by Tenant in the Premises, Building or about the Property, except for those substances as are typically found in similar premises used for general office purposes and are being used by Tenant in a safe manner and in accordance with all applicable Laws.

13. Tenant shall not use or occupy the Premises in any manner or for any purpose which might injure the reputation or impair the present or future value of the Premises or the Building. Tenant shall not use, or permit any part of the Premises to be used for lodging, sleeping or for any illegal purpose.

14. Tenant shall not take any action which would violate Landlord’s labor contracts or which would cause a work stoppage, picketing, labor disruption or dispute or interfere with Landlord’s or any other tenant’s or occupant’s business or with the rights and privileges of any person lawfully in the Building (“ Labor Disruption ”). Tenant shall take the actions necessary to resolve the Labor Disruption, and shall have pickets removed and, at the request of Landlord, immediately terminate any work in the Premises that gave rise to the Labor Disruption, until Landlord gives its written consent for the work to resume. Tenant shall have no claim for damages against Landlord or any of the Landlord Related Parties nor shall the Commencement Date of the Term be extended as a result of the above actions.

15. Tenant shall not install, operate or maintain in the Premises or in any other area of the Building, electrical equipment that would overload the electrical system beyond six (6) watts per rentable square foot of the Premises. Tenant shall not furnish cooling or heating to the Premises, including, without limitation, the use of electric or gas heating devices, without Landlord’s prior written consent. Tenant shall not use more than its proportionate share of telephone lines and other telecommunication facilities available to service the Building.

16. Tenant shall not operate or permit to be operated a coin or token operated vending machine or similar device (including, without limitation, telephones, lockers, toilets, scales, amusement devices and machines for sale of beverages, foods, candy, cigarettes and other goods), except for machines for the exclusive use of Tenant’s employees and invitees.

17. Bicycles and other vehicles are not permitted inside the Building or on the walkways outside the Building, except in areas designated by Landlord.

18. Landlord may from time to time adopt systems and procedures for the security and safety of the Building and Property, its occupants, entry, use and contents. Tenant, its agents, employees, contractors, guests and invitees shall comply with Landlord’s systems and procedures.

19. Landlord shall have the right to prohibit the use of the name of the Building or any other publicity by Tenant that in Landlord’s sole opinion may impair the reputation of the Building or its desirability. Upon written notice from Landlord, Tenant shall refrain from and discontinue such publicity immediately.

20. Neither Tenant nor its agents, employees, contractors, guests or invitees shall smoke or permit smoking in the Common Areas, unless a portion of the Common Areas have been declared a designated smoking area by Landlord, nor shall the above parties allow smoke from the Premises to emanate into the Common Areas or any other part of the Building. Landlord

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shall have the right to designate the Building (including the Premises) as a non-smoking building.

21. Landlord shall have the right to designate and approve standard window coverings for the Premises and to establish rules to assure that the Building presents a uniform exterior appearance. Tenant shall ensure, to the extent reasonably practicable, that window coverings are closed on windows in the Premises while they are exposed to the direct rays of the sun.

22. Deliveries to and from the Premises shall be made only at the times in the areas and through the entrances and exits reasonably designated by Landlord. Tenant shall not make deliveries to or from the Premises in a manner that might interfere with the use by any other tenant of its premises or of the Common Areas, any pedestrian use, or any use which is inconsistent with good business practice.

23. The work of cleaning personnel shall not be hindered by Tenant after 5:30 P.M., and cleaning work may be done at any time when the offices are vacant. Windows, doors and fixtures may be cleaned at any time. Tenant shall provide adequate waste and rubbish receptacles to prevent unreasonable hardship to the cleaning service.

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EXHIBIT H

CLEANING SPECIFICATIONS

OFFICE AREAS (All Floors):

Nightly Services (5 nights per week)

· Empty all waste receptacles. Clean, and reline when needed. Remove material to designated areas.

· Vacuum all carpeted main traffic and use areas, including conference rooms, reception areas, interior stairwells, hallways and corridors with the exception of individual offices (see Weekly). Spot vacuum/clean all others areas as needed.

· Wash and sanitize all drinking fountains.

· Arrange chairs at desk and conference room tables and turn off lights.

· Clean conference room tables and remove any remaining food items.

Weekly Services

· Remove recycling material from centrally located container when container is full.

· Vacuum all carpeted areas completely, private offices and cubicle interiors, desk knee area spaces and under waste containers.

· Dust and wipe clean with damp or treated cloth all office furniture, files, and cubicle partition tops (DO NOT MOVE PAPERS).

· Remove all finger marks and smudges from all vertical surfaces, including doors, door frames, around light switches, private entrance glass, and partitions.

· Damp wipe and polish all glass furniture tops.

· Damp mop hard surfaced floors and/or uncarpeted surface floors.

· Sweep uncarpeted floors employing dust control techniques.

· Damp mop spillage in uncarpeted office areas.

· Clean and sweep all lunchroom/eating areas. Wash and wipe tables and counter tops and clean sinks.

Monthly Services

· Dust and wipe clean chair bases and arms, cubicle shelves, window sills, relite ledges and all other horizontal surfaces as needed to maintain clean appearance (DO NOT MOVE PAPERS).

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· Edge vacuum all carpeted areas, as needed.

CORRIDOR and/or COMMON AREA RESTROOMS (if applicable)(Not Applicable to any Private Restrooms or Showers):

Nightly Services (5 nights per week)

· Clean and sanitize all mirrors, brightwork, countertops and enameled surfaces.

· Wash and disinfect all basins, urinals, bowls (cleaning underside of rim) and fixtures using scouring powder to remove stains.

· Wash both sides of all toilet seats with soap and/or disinfectant.

· Clean flushometers, piping, toilet seat hinges, and other metal.

· Empty, clean, and damp wipe all waste receptacles.

· Sweep, wet mop, and sanitize entire floor, including around toilet seats and under urinals.

· Damp wipe all walls, partitions, doors, and outside surfaces of all dispensers, as needed.

· Fill toilet paper, soap, towels, and sanitary napkin dispensers (if applicable).

· Wash and disinfect all showers including shower walls, floors, brightwork and doors (if applicable).

· Replace trash liner.

Weekly Services

· Flush water through P-trap weekly to ensure elimination of odor.

Monthly Services

· Machine scrub floors.

EXCLUSIONS: Landlord shall not be responsible for the cleaning of any private bathrooms, showers, private pantries or fitness Centers

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Exhibit 31.1

Certification of Principal Executive Officer of Loxo Oncology, Inc.

Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, Joshua H. Bilenker, M.D., certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Loxo Oncology, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b. Evaluated the effectiveness of the registrant’s disclosure controls and procedures, and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

c. Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 10, 2015

		/s/ JOSHUA H. BILENKER, M.D.
		Joshua H. Bilenker, M.D.
		President, Chief Executive Officer and Director
		(Principal Executive Officer)

Exhibit 31.2

Certification of Principal Financial Officer of Loxo Oncology, Inc.

Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, Jennifer Burstein, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Loxo Oncology, Inc.;

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 10, 2015

		/s/ JENNIFER BURSTEIN
		Jennifer Burstein
		Vice President of Finance (Principal Accounting Officer and Principal Financial Officer)

Exhibit 32.1

Certification Of

Principal Executive Officer

Pursuant To 18 U.S.C. Section 1350,

As Adopted Pursuant To

Section 906 of The Sarbanes-Oxley Act Of 2002

In connection with the Quarterly Report of Loxo Oncology, Inc. (the “Company”) on Form 10-Q for the period ended September 30, 2015, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Joshua H. Bilenker, M.D., President and Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:

1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2) The information contained in the Report fairly presents, in all material respects, the financial condition of the Company at the end of the period covered by the Report and results of operations of the Company for the period covered by the Report.

Date: November 10, 2015		/s/ JOSHUA H. BILENKER, M.D.
		Joshua H. Bilenker, M.D.
		President, Chief Executive Officer and Director
		(Principal Executive Officer)

This certification accompanies the Report and shall not be deemed “filed” by the Company with the Securities and Exchange Commission and is not to be incorporated by reference into any filing of the Company under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended (whether made before or after the date of the Report), irrespective of any general incorporation language contained in such filing.

Exhibit 32.2

Certification Of

Principal Financial Officer

Pursuant To 18 U.S.C. Section 1350,

As Adopted Pursuant To

Section 906 Of The Sarbanes-Oxley Act Of 2002

In connection with the Quarterly Report of Loxo Oncology, Inc. (the “Company”) on Form 10-Q for the period ended September 30, 2015, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Jennifer Burstein, Vice President of Finance of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:

1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

Dated: November 10, 2015		/s/ JENNIFER BURSTEIN
		Jennifer Burstein
		Vice President of Finance
		(Principal Financial Officer and Principal Accounting Officer)